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2023-5 - Approving and Authorizing Submittal of a Local Coastal Program Amendment to the California Coastal Commission Amending Title 21
ORDINANCE NO. 2023-5 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, APPROVING AND AUTHORIZING SUBMITTAL OF A LOCAL COASTAL PROGRAM AMENDMENT TO THE CALIFORNIA COASTAL COMMISSION AMENDING TITLE 21 (LOCAL COASTAL PROGRAM IMPLEMENTATION PLAN) OF THE NEWPORT BEACH MUNICIPAL CODE RELATED TO TIME SHARES (PA2022-0202) WHEREAS, Article XI Section 7 of the California Constitution authorizes cities to make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws; WHEREAS, California Government Code Section 65850 et seq. authorizes a city to adopt ordinances that regulate land uses as a valid use of its police powers; WHEREAS, Section 200 of the City of Newport Beach ("City") Charter vests the City Council with the authority to make and enforce all laws, rules, and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers and privileges, or procedures granted or prescribed by any law of the State of California; WHEREAS, in 1982, the City Council adopted Ordinance No. 82-14 which is attached hereto as Exhibit "A," and incorporated herein by reference prohibiting the development of time share projects within Newport Beach to protect against unique problems associated with transient occupancy; WHEREAS, in 1996, the City Council adopted Ordinance 96-7 which is attached hereto as Exhibit "B," and incorporated herein by reference providing a narrow exception to allow time share projects in commercial districts subject to a conditional use permit but continuing to prohibit the use of residential property for time shares; WHEREAS, the City is a popular tourist destination known for its beaches and temperate weather; WHEREAS, over the past three years, Newport Beach and cities that serve as tourist destinations, have experienced a wave of purchases of single -unit residences, which are then re -sold to persons purchasing fractional shares; Ordinance No. 2023-5 Page 2 of 10 WHEREAS, for example, over the past 15 months, the number of fractional - owned residences has nearly tripled with at least 12 fractionally owned homes in Newport Beach; WHEREAS, under this new model, the ownership of the residence is usually divided into eight shares and sold to different persons with stays ranging from two to fourteen nights in duration with back-to-back stays prohibited resulting in frequent turnover of the properties' occupants and its commercial management; WHEREAS, a representative of a commercial management company who manages this type of use, Pacaso, Inc. ("Pacaso") has stated in correspondence to the California Department of Real Estate, which is attached hereto as Exhibit T," and incorporated herein by reference, that Pacaso homes are sold as time share interests as defined in Business and Professions Code Section 11212(z); WHEREAS, fractionally owned homes create impacts on the City's housing supply and character of residential neighborhoods by converting dwelling units from a full-time owner -occupied residence to a frequent rotation of vacation stays of less than a month, WHEREAS, public testimony indicates that this change in the use of dwelling units results in an increase in traffic and noise in residential neighborhoods, as well a change to the fabric of the community due to the short-term nature of the stays; WHEREAS, with respect to the housing supply, Governor Gavin Newsom declared a housing crisis in the State of California and called for the development of 3.5 million new homes to be built by 2025, to meet the population's housing needs, WHEREAS, as a result, the State of California has adopted a number of housing bills such as Senate Bill Nos. 8, 9, 10, 35 and 330, and an aggressive Regional Housing Needs Assessment ("RHNA") for the 6th Cycle Housing Element covering the period 2021-2029 ("6th Cycle Housing Element"); WHEREAS, the City's RHNA for the 6th Cycle Housing Element is 4,845 new housing units, which units are intended to meet the housing needs of existing and future residents within the jurisdictional boundaries of Newport Beach; Ordinance No. 2023-5 Page 3 of 10 WHEREAS, according to the V Cycle Housing Element, which is attached hereto as Exhibit "D," and incorporated herein by reference, whereas the median home price in the State of California was $579,770 as of 2020, the median home value of single -unit homes and condominiums in Newport Beach was $2,407,454; WHEREAS, the fractional ownership of single -unit residences as a second home further exacerbates the housing supply in Newport Beach making it harder to meet housing demand; WHEREAS, in accordance with Ewinq v. Carmel -by -the -Sea, (1991) 234 Cal. App. 3d 1579, which upheld the City of Carmel-by-the-Sea's right to impose zoning restrictions on short-term rentals, the Newport Beach City Council adopted Ordinance No. 92-13, which is attached hereto as Exhibit "E," and incorporated herein by reference on May 11, 1992, establishing regulations for the operation of short-term lodging units to mitigate the impact of this use on the residents of the City; WHEREAS, on May 11, 2004, the City Council adopted Ordinance No. 2004-6, which is attached hereto as Exhibit T," and incorporated herein by reference prohibiting the issuance of new short-term lodging permits after June 1, 2004, to any dwelling unit on a parcel zoned as a single -unit residence or designated for single-family residential use as part of a Planned Community Development Plan, Specific Area Plan or Planned Residential District; WHEREAS, in 2020 and 2021, the City Council adopted Ordinance Nos. 2020- 15, 2020-26, and 2021-28, which are attached hereto as Exhibits "G" — "I," and incorporated herein by reference amending the City's short-term lodging regulations based upon evidence and documentation attesting to the need to further regulate and control short-term lodging units in residential zones to ensure that, among other things, short-term lodging units are regulated in a way to maintain harmony with surrounding uses; WHEREAS, due to the proliferation of short-term rentals and their impact on neighborhoods and long-term housing, Ordinance No. 2021-28 placed a cap of 1,550 on the number of short-term lodging permits allowed in the City; WHEREAS, fractionally owned homes are a time share and operate much like short-term lodgings in that they limit occupancy by owners of a fractional interest in a property to less than 30 consecutive days; Ordinance No. 2023-5 Page 4 of 10 WHEREAS, Section 30500 of the California Public Resources Code requires each county and city to prepare a Local Coastal Program ("LCP") for that portion of the coastal zone within its jurisdiction; WHEREAS, in 2005, the City adopted the City of Newport Beach Local Coastal Program Coastal Land Use Plan as amended from time to time; WHEREAS, the California Coastal Commission effectively certified the City's Local Coastal Program Implementation Plan on January 13, 2017, and the City added Title 21 (Local Coastal Program Implementation Plan) ("Title 21 ") to the City of Newport Beach Municipal Code ("NBMC") whereby the City assumed coastal development permit - issuing authority on January 30, 2017; WHEREAS, on November 16, 2021, the City Council conducted a study session to address concerns raised by the public regarding impacts of fractional homeownership; WHEREAS, during this study session public testimony was given that these homes operate as short-term lodging with residents expressing displeasure with the impacts that these homes were causing including an increase in the noise and traffic in the residential neighborhood; WHEREAS, on September 13, 2022, the City Council conducted a second study session to discuss the fractional ownership uses a report on how other jurisdictions were addressing fractional ownership uses and was presented with a report, which is attached hereto as Exhibit "J," and incorporated herein by reference that 15 of the 22 jurisdictions surveyed classify fractional ownership as a time share; WHEREAS, additional public testimony included concerns about increases in traffic, noise, and trash, as well as fractional ownership uses having an adverse impact on the character of the existing residential neighborhoods consistent with the impacts identified by the cities of Carmel -by -the Sea, Hermosa Beach, Palm Desert, Sonoma and St. Helena whose ordinances and evidence in support of such ordinances are attached hereto and incorporated herein by reference as Exhibits "K" - "O"; Ordinance No. 2023-5 Page 5 of 10 WHEREAS, on September 27, 2022, the City Council adopted Resolution 2022- 61, initiating code amendments to Title 20 (Planning and Zoning) ("Zoning Code Amendment No. PA2022-0202") and Title 21 (Local Coastal Program Implementation Plan) ("Local Coastal Program Amendment No. 2020-0202") of the NBMC and directed staff to work with the Planning Commission to develop regulations related to fractional ownership uses in the best manner that would protect the character of residential neighborhoods; WHEREAS, on October 6, 2022, the Planning Commission conducted a study session to discuss fractional ownership uses and receive public testimony; WHEREAS, public testimony included fractional owners in favor of allowing the use, and neighbors who expressed frustration with the increased impacts caused by the operation of fractional ownership homes; WHEREAS, at the conclusion of study session, the Planning Commission expressed the desire to form an ad -hoc committee to work closely with staff to formulate appropriate regulations to ensure that they were able to thoroughly investigate the appropriate approach to fractional ownership uses; WHEREAS, on October 20, 2022, the Planning Commission formed an Ad -Hoc Committee to evaluate potential amendments to Title 20 and Title 21 of the NBMC related to fractional ownership uses within the City; WHEREAS, the Ad -Hoc Committee met a total of seven times, during which the Committee discussed potential regulatory schemes with the Community Development Department, City Attorney's Office, representatives from Pacaso and several concerned citizens to ensure the Committee members had a full understanding of the issue; WHEREAS, during this process, Pacaso proposed an ordinance, which is attached hereto as Exhibit "P," and incorporated herein by reference, regulating, Pacaso- managed homes by way of a regulatory permit with a cap of 500 on the number of regulatory permits the City would be required to issue to such fractionally owned homes; Ordinance No. 2023-5 Page 6 of 10 WHEREAS, on February 3, 2023, the Ad -Hoc Committee presented their findings to the Planning Commission with the Planning Commission making two recommendations to the City Council including the preferred recommendation which was to broaden the definition of time shares to include fractional ownership uses, and an alternative recommendation of creating a separate regulatory scheme to allow fractional ownership uses in all zones, except the Single -Unit Residential (R-1) Zoning Districts; WHEREAS, on March 14, 2023, the City Council considered the Planning Commission's recommendations and, after receiving further public testimony, the City Council directed staff to move forward with the Planning Commission's preferred option of broadening the definition of time share; WHEREAS, the Planning Commission held a public hearing on April 20, 2023, in the City Council Chambers, located at 100 Civic Center Drive, Newport Beach, California. A notice of time, place and purpose of the hearing was given in accordance with California Government Code Section 54950 et seq. ("Ralph M. Brown Act") and Chapter 21.62 (Public Hearings) of the NBMC. Evidence, both written and oral, was presented to, and considered by, the Planning Commission at this hearing; WHEREAS, at the conclusion of the hearing, the Planning Commission adopted Resolution No. PC2023-018 by a unanimous vote (6 ayes - 0 nays) recommending the City Council authorize submittal of the amendment to Title 21 of the NBMC to the California Coastal Commission; WHEREAS, pursuant to Title 14 of the California Code of Regulations ("CCR") Section 13515 (Public Participation), drafts of the Local Coastal Program Amendment were made available and a Notice of Availability was distributed at least six weeks prior to the final action date; WHEREAS, the City Council held a public hearing on May 9, 2023, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California. Notice of time, place and purpose of the public hearing was given in accordance with the Ralph M. Brown Act, Chapter 21.62 (Public Hearings) of the NBMC, and 14 CCR Section 13515. Evidence, both written and oral, was presented to, and considered by, the City Council at this public hearing; and WHEREAS, the City Council and Planning Commission agenda item and supporting evidence, attached hereto as Exhibits "Q" — "V" and incorporated herein by reference. Ordinance No. 2023-5 Page 7 of 10 NOW, THEREFORE, the Newport Beach City Council does hereby ordain as follows: Section 1: The City Council of the City of Newport Beach does hereby authorize City staff to submit the Local Coastal Program Amendment No. PA2022-0202 to the California Coastal Commission to amend Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code related to time shares as set forth in Exhibit "W," which is attached hereto and incorporated herein by reference. This decision is made based upon the evidence in the record and is consistent with the General Plan and Coastal Land Use Plan Policies set forth in Exhibit "X," which is attached hereto and incorporated herein by reference. Section 2: The Local Coastal Program Amendment No. PA2022-0202 shall not become effective until approval by the California Coastal Commission and adoption, including any modifications suggested by the California Coastal Commission, by resolution and/or ordinance of the City Council of the City of Newport Beach. Findings that Local Coastal Program Amendment No. PA2022-0202 is de minimis are attached hereto as Exhibit "Y," and incorporated herein by reference. Section 3: The LCP, including this Local Coastal Program Amendment No. PA2022-0202, will be carried out in full conformity with the California Coastal Act. Section 4: The recitals provided in this ordinance are true and correct and are incorporated into the substantive part of this ordinance. Ordinance No. 2023-5 Page 8 of 10 Section 5: The City Council of the City of Newport Beach finds the Local Coastal Program Amendment No. PA2022-0202 is not subject to environmental review under the California Environmental Quality Act ("CEQA") pursuant to Section 15060(c)(2) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, which states that an activity is not subject to CEQA if the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment or will not have the potential for causing a significant effect on the environment. Time share uses are not permitted in residential zones, however, the City has seen a trend in the fractional use of residences wherein the property is usually divided into eight shares and sold to different persons with stays ranging from two to fourteen nights in duration with back- to-back stays prohibited resulting in frequent turnover of the properties' occupants and its commercial management. This Local Coastal Program Amendment will not result in a direct or indirect physical change to the environment nor does it have the potential for causing a significant effect on the environment since it would simply clarify definitions related to time share uses. This Local Coastal Program Amendment does not alter the manner in which time shares are regulated and therefore would not result in a physical change in the environment. Additionally, the Local Coastal Program Amendment is categorically exempt pursuant to Section 15308 because the ordinances involve regulatory actions to assure protection of the environment. Section 6: If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases may be declared invalid or unconstitutional. Section 7: Except as expressly modified in this ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. Ordinance No. 2023-5 Page 9 of 10 Section 8: The Mayor shall sign, and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance shall be effective thirty calendar days after its adoption and approval by the California Coastal Commission. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 9th day of May, 2023, and adopted on the 23rd day of May, 2023, by the following vote, to wit: AYES: Mayor Blom, Mayor Pro Tern O'Neill Council Member Avert/ Council Member Grant, Council Member Kleiman Council Member Stapleton, Council Member Weigand NAYS: ABSENT: ATTEST: WNW—ITMINE eC per CITY CLERKiD APPROVED AS TO FORM: CITY TTORNEY'S OFFICE C, / ",-, AAR N C. HARP, CI TTORNEY Attachment(s): P Exhibit A - July 26, 1982, City Council Meeting Minutes and Ordinance No. 82-14 Ordinance No. 2023-5 Page 10 of 10 Exhibit B - March 11, 1996, City Council Meeting Minutes and Ordinance No. 96-7 Exhibit C - Correspondence from Pacaso to the California Department of Real Estate Exhibit D - 6t" Cycle Housing Element Exhibit E - April 27, 1992, City Council Meeting Minutes and Ordinance No. 92-13 Exhibit F - April 27, 2004, City Council Agenda Item No. 3 Adopting Ordinance No. 2004-6 and Supporting Material Exhibit G - June 23, 2020, City Council Agenda Item No. 19 Adopting Ordinance No. 2020-15 and Supporting Material Exhibit H - October 13, 2020, City Council Agenda Item No. 18 Adopting Ordinance No. 2020-26 and Supporting Material Exhibit I - November 30, 2021, City Council Agenda Item No. 26 Adopting Ordinance No. 2021-28 and Supporting Material Exhibit J - Sage Crest Planning + Environmental Report Exhibit K - City of Carmel -by -the Sea Time Share Ordinance and Supporting Evidence Exhibit L - City of Hermosa Beach Time Share Ordinance and Supporting Evidence Exhibit M - City of Palm Desert Time Share Ordinance and Supporting Evidence Exhibit N - City of Sonoma Time Share Ordinance and Supporting Evidence Exhibit O - City of St. Helena Time Share Ordinance and Supporting Evidence Exhibit P - Ordinance Proposed by Pacaso Adding Chapter 5.98 Exhibit Q - September 13, 2022, City Council Agenda Item No. SS2 Exhibit R - September 27, 2022, City Council Agenda Item No. 1 Exhibit S - October 6, 2022, Planning Commission Agenda Item No. SS.2 Exhibit T - October 20, 2022, Planning Commission Agenda Item No. 6 Exhibit U - February 23, 2023, Planning Commission Agenda Item No. 6 Exhibit V - March 14, 2023, City Council Agenda Item No.12 Exhibit W - Local Coastal Program Amendment No. PA2022-0202 Exhibit X - Findings of Local Coastal Program Amendment No. PA2022-0202 Consistency with the General Plan and Coastal Land Use Plan Exhibit Y - Local Coastal Program Amendment No. PA2022-0202 De Minimis Findings Exhibit A July 26, 1982, City Council Meeting Minutes and Ordinance No. 82-14 https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=21155&dbid=0&repo=CNB https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=35606&dbid=0&repo=CNB Exhibit B March 11, 1996, City Council Meeting Minutes and Ordinance No. 96-7 https:Hecros. newportbeachca.gov/WEB/DocView.aspx?id=22280&dbid=0&repo=CN B https://ecros. newportbeachca.gov/WEB/DocView.aspx?id=36439&dbid=0&repo=CN B Exhibit C Correspondence from Pacaso to the California Department of Real Estate Exhibit C From: Andy Sirkin <dasirkin@gmail.com> Sent: Saturday, July 24, 2021 10:19 AM To: Aiu, Joseph@DRE <Joseph.Aiu@dre.ca.gov> Cc: Bruce, David@DRE <David.Bruce@dre. ca.gov>; Neri, Chris@DRE <Chris.Neri@dre.ca.gov>; Patrick Abell <patrick@pacaso.com>; David J. Willbrand <david@pacaso.com> Subject: Re: Pacaso (DRE No. 121-0701-006) CAUTION: THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATE! DO NOT: click links or open attachments unless you know the content is safe. NEVER: provide credentials on websites via a clicked link in an Email. Dear Mr. Aiu, Yes, I confirm that Pacaso Homes are within that exemption. We sincerely appreciate your prompt response and attention. All the best, Andy Sirkin SirkinLaw APC +1-415-462-5925 (US) On Jul 24, 2021, at 5:37 PM, Aiu, Joseph@DRE <Joseph.Aiukdre.ca.gov> wrote: Dear Mr. Sirkin, Thank you for your email response and explanation dated 7/21/21. Based on your response and explanation, we understand that your clients, Pacaso Inc. and Pacaso Homes, are selling time-share interests as defined in B&P Code section 11212(z), but are exempt from needing to file for a time-share public report since they fall below the reporting threshold of 11 or more units. Please confirm. Thank you. Sincerely, Joseph Aiu Investigations & Compliance From: Andy Sirkin <dasirkin@gmail.com> Sent: Wednesday, July 21, 2021 2:28 AM To: Aiu, Joseph@DRE <Joseph.Aiu@dre.ca.gov> Cc: Bruce, David@DRE <David.Bruce@dre.ca.gov>; Neri, Chris@DRE <Chris.Neri@dre.ca.gov>; Patrick Abell <patrick@pacaso.com>; David J. Willbrand <david@pacaso.com> Subject: Re: Pacaso (DRE No. 121-0701-006) CAUTION: THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATE! DO NOT: click links or open attachments unless you know the content is safe. NEVER: provide credentials on websites via a clicked link in an Email. Dear Mr. Aiu, I received an email late yesterday from David Bruce saying that, since an investigation has been initiated by the Department, all correspondence should be routed to you. He also mentioned that I was welcome to "cc" him on that correspondence, so I will continue to do so. Although you may already have a basic understanding of Pacaso's business, I will begin with a brief explanation of the key elements. Pacaso only organizes group purchases of single- family residences. Each owner gets a 1/8th share along with the right to use the home for 1/8th of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves. Once all eight ownership slots are filled, the eight owners own and control the house; Pacaso retains no ownership interest. B&P Code Section 11212(z) defines "Time -Share Plan" as any "arrangement ... whereby a purchaser, in exchange for consideration, receives ownership rights in or the right to use accommodations for a period of time less than a full year during any given year, on a recurring basis for more than one year." This description matches exactly the arrangement among owners of a Pacaso home. Specifically, each purchaser gets the right to use the home for 1/8th of each year on a recurring basis every year for as long as he/she is an owner. However, since each Pacaso offering involves only eight interests, each home is below the threshold for needing a Time -Share public report under Section 11211.5(b)(1). B&P Code Section 11004.5(g) provides that "time-share plans ... are not "subdivisions" or "subdivided lands" subject to this chapter." Based on this language, I had always assumed that Time -Share offerings, regardless of size, did not require a subdivision public report under B&P Code Section 11000 et seq.; rather, large Time -Share offerings (more than 10 interests) require a Time -Share public report, and small Time -Share offerings (10 or fewer interests) require no public report. Your communications suggest that Time -Share offerings too small to require a Time -Share public report instead need a subdivision public report. I am having difficulty understanding the logic of this position. As you may know, prior to 2004, California law required a Time - Share public report only for projects involving more than 12 interests. When the legislature enacted the Vacation Ownership and Time -Share Act Of 2004, it reduced the threshold from 12 to 10. This change shows that the legislature specifically considered the appropriate threshold for when a Time -Share offering needs a public report. The legislature did not choose nine, or eight, or six for the threshold; it specifically chose 10. The idea that Time -Share offerings too small to require a Time -Share public report instead need a subdivision public report seems contrary to this legislative intent. What meaning could the 10-share threshold in Section 11211.5(b)(1) have if an offering below the threshold still had to obtain a subdivision public report? Moreover, when the legislature enacted the Vacation Ownership and Time -Share Act Of 2004, the legislature could have said that Time -Share offerings require a subdivision public report under B&P Code Section 11000 et seq., and that the application for a Time -Share public report should be the same as the application for a subdivision public report. Instead, the legislature carefully specified the types of information it deemed appropriate for DRE to obtain and consider when "vetting" a proposed Time -Share offering. The application submittal for a Time -Share public report makes sense in the context of what a Time -Share offering is and what the purchasers buy. If, as you suggest, Time -Share offerings too small to require a Time -Share public report instead need a subdivision public report, it would mean that the public report application for a small Time -Share offering would ignore the carefully -crafted specifics of the Time -Share law (which make perfect sense in the context of a Time -Share offering), and instead comply with the public report application requirements for a subdivision (which make no sense in the context of a Time -Share offering). To illustrate this point with just one of many examples, consider B&P Code Section I I234(c), under which a Time -Share public report requires "a description of the type of interest and usage rights the purchaser will receive" and "a representation about the percentage of useable time authorized for sale, and if that percentage is 100 percent, then a statement describing how adequate periods of time for maintenance and repair will be provided." This requirement is perfectly logical for a Time -Share public report, since the fairness and adequacy of the usage assignment structure is absolutely critical from a consumer protection standpoint. So, why would the subdivision public report you suggest is needed for a small Time -Share offering not require this critical information? Is this information suddenly less important if the offering involves 10 or fewer Time -Share interests? For all of these reasons, I respectfully suggest that Pacaso offerings do not require a Public Report. My assertion is based specifically on B&P Code Sections I I211.5(b)(1) and I I004.5(g), and on the legislative history and context of the Vacation Ownership and Time - Share Act Of 2004. To simplify your job when responding, you can ignore the other arguments made in my client's letter of July 9. Cordially, Andy Sirkin SirkinLaw APC +1-415-462-5925 (US) On Jul 17, 2021, at 1:28 AM, Aiu, Joseph@DRE <Joseph.Aiugdre.ca. oovv> wrote: Dear Mr. Sirkin, Your request for an extension to the deadline imposed in my "Notice to show cause was taken under consideration and you are granted an extension until July 23, 2021. Please note the following. The Department of Real Estate (DRE), investigates violations of the Real Estate Law (Licensees), the Subdivided Lands Act (Subdividers), the Vacation Ownership and Time Share Act (Developers), and endeavors to safeguard the public interests in real estate matters. In your initial response, your letter alluded to 11001.[a](b)(2), 11004.5(g), 11212.5(b)(1), and Pacaso Homes purchases are resales. Please be aware that your marketing concept is also under consideration. Sincerely, Joseph Aiu Investigations and Compliance From: Andy Sirkin <dasirkin@gmail.com> Sent: Friday, July 16, 2021 3:04 PM To: Aiu, Joseph@DRE <Joseph.Aiu@dre.ca.gov> Cc: Bruce, David@DRE <David.Bruce@dre.ca.gov>; Neri, Chris@DRE <Chris.Neri@dre.ca.gov>; Patrick Abell <patrick@pacaso.com>; David J. Willbrand <david@pacaso.com> Subject: Pacaso (DRE No. 121-0701-006) CAUTION: THIS EMAIL ORIGINATED OUTSIDE THE DEPARTMENT OF REAL ESTATE! DO NOT: click links or open a_ :: , unless you know the content is safe. NEVER: provide credentials on websites via a clicked link in an Email. Our office has been engaged by Pacaso in connection with your inquiry. Over the past four days, I have been corresponding with David Bruce about my analysis of the situation and potential options to move forward in a manner that would be satisfactory to DRE. I had hoped to provide a formal response to your email by this afternoon in accordance with your deadline. However, I have not yet received Davids's response to my most recent email (sent late yesterday), and I would very much like to get that before responding to you. Might I ask your indulgence in getting a short extension so that I might complete my interchange with David? I will commit to keeping you advised on the progress of that exchange. Please be assured that resolving this matter to the satisfaction of DRE is Pacaso's highest priority. We are in no way interested in delaying a resolution; however, we want to make sure to proceed in the manner most likely to lead to a mutually acceptable outcome. Thank you in advance for your consideration. All the best, Andy Sirkin SirkinLaw APC +1-415-462-5925 (o) +1-415-350-6296 (m) ---------- Forwarded message --------- From: Aiu, Joseph@DRE <Joseph.Aiu(ir),dre.ca. og_v> Date: Fri, Jul 9, 2021 at 11:42 AM Subject: RE: Pacaso response to DRE notice letter (DRE No. 121- 0701-006) To: Patrick Abell <patrick(c&pacaso.com> Cc: David Willbrand <davidgpacaso.com>, Charlie Tanner <charliegbrokerzoo.com>, Aiu, Joseph@DRE <Joseph.Aiugdre.ca. ov> Dear Mr. Abell, Thank you for your letter explaining the position of Paseo Homes as to its sales of "1/8th undivided interests in a residential homes." The key phrase in our letter is the sale of undivided interest. Please refer to Section 11000.1 of the Code. Further, your letter appear to allude to the "Exemption" pursuant to Subsection 11000.1(b)(2), which requires satisfactory evidence presented to DRE — this has not been done. Hence, Section 11010 is applicable. Please respond by July 16, 2021 as to whether Pacaso Homes and its affiliates will comply with applying for a Public Report, since advertising the sales must have a Preliminary Public Report. Sincerely, Joseph Aiu Statewide Subdivisions Investigations & Compliance (213) 576-6927 Direct (213) 576-6942 Fax Department of Real Estate 320 W. 4th Street, Suite 350 Los Angeles, CA 90013 joseph.aiu(a�,dre.ca. og_v <image001.png> Exhibit D 6t" Cycle Housing Element https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2833796&dbid=0&repo=CNB City of Newport Beach 2021-2029 HOUSING ELEMENT xiolowm"�-P-2-4v City of Newport Beach 2021-2029 HOUSING ELEMENT City of Newport Beach HOUSING ELEMENT 2021-2029 City of Newport Beach 2021-2029 HOUSING ELEMENT section 1: Introduction A. Role of the Housing Element.......................................................................................................................................1-1 B. State Policy and Authorization....................................................................................................................................1-1 1. Background..........................................................................................................................................................1-2 2. State Requirements............................................................................................................................................1-2 3. Regional Housing Needs Assessment................................................................................................................ 1-4 4. Relationship to Other Community Plan Elements...........................................................................................1-4 5. Public and Stakeholder Participation...............................................................................................................1-5 6. Data Sources.....................................................................................................................................................1-6 7. Housing Element Organization............................................................................................................................ 1-7 Section 2: Community Profile A. Population Characteristics.......................................................................................................................................2-1 1. Population Growth..............................................................................................................................................2-1 2. Age Characteristics..............................................................................................................................................2-2 3. Race/Ethnicity Characteristics............................................................................................................................2-3 B. Economic Characteristics.........................................................................................................................................2-5 1. Employment and Wage Scale............................................................................................................................. 2-5 C. Household Characteristics....................................................................................................................................... 2-9 1. Household Type and Size.................................................................................................................................... 2-9 2. Household Income............................................................................................................................................2-11 D. Housing Problems...................................................................................................................................................2-14 1. Overcrowding.................................................................................................................................................... 2-15 2. Overpayment (Cost Burden) In Relationship to Income................................................................................2-16 E. Special Needs Groups.............................................................................................................................................2-18 1. Seniors................................................................................................................................................................2-18 2. Persons with Physical and Developmental Disabilities..................................................................................2-20 3. Large Households..............................................................................................................................................2-24 4. Single -Parent Households.................................................................................................................................2-25 5. Farmworkers......................................................................................................................................................2-26 6. Extremely Low-income Households and Poverty Status................................................................................2-27 7. Persons Experiencing Homelessness...............................................................................................................2-31 8. Students.............................................................................................................................................................2-33 Table of Contents (DRAFTJANUARY 2022) ii ������ �*� N�NN����0����� ���������� n�'N��� ��N Newport ���°~=-�NN 20 21 -2 02 9 HOUSING ELEMENT F.Housing Stock Characte_----'_'..................................................... 1. Housing Growth ................................................................................................................................................ 2-33 2. Housing Type ..................................................................................................................................................... 2'34 3. Housing Availability and Tenure ....................................................................................................................... Z-34 4. HousingAgeand Condition .............................................................................................................................. Z'36 S. Housing Costs and Affordability ....................................................................................................................... 2-39 Section 3: Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing A. Nongovernmental Constraints ................................................................................................................................ 3'1 1. Land Costs and Construction Costs .................................................................................................................... 3'1 2. Availability Financing .......................................................................................................................................... J'Z 3. Economic Constraints ......................................................................................................................................... 3'3 B. Governmental Constraints .--------------------------------------------'3-4 1. Land Use Controls ............................................................................................................................................... 3-4 2. infrastructure Constraints ................................................................................................................................ 3'47 3. Environmental Constraints ............................................................................................................................... 3-54 C. Affirmatively Furthering Fair Housing (AFFH)....................................................................................................... 3-S8 1. Affirmatively Furthering Fair Housing .............................................................................................................. 3`S8 2. Summary ofLocal Data ........................................................................................................................................ 3'59 3. Analysis ofFederal, State, and Local Data and Local Knowledge .................................................................. 3'6I 4. Analysis ofSites Pursuant toA86Q6............................................................................................................... 3'119 5. Analysis ofFair Housing Priorities and Goals .................................................................................................. 3-l3U D. Housing Resources ................................................................................................................................................. 3'130 1. Regional Housing NeedsAJ|ocaton................................................................................................................. 3'13U 2. Financial Resources ........................................................................................................................................... 3-139 3. Opportunities for Energy Conservation ........................................................................................................... 3'141 A.Regional Housing Needs Assessment ......................................................................................................................... 4-1 1. Housing Goals ...................................................................................................................................................... 4-1 2. Housing Policies and Program Actions .............................................................................................................. 4-2 Table of Contents (September 2022 Final Housing Element) ta'.'l i I • -w a NiAh i Z�� City of Newport Beach 2021-2029 HOUSING ELEMENT Acknowledgments The Newport Beach Community City Council Mayor Kevin Muldoon Mayor Pro Tern Noah Blom Diane B. Dixon Brad Avery Duffy Duffield Joy Brenner Will O'Neill Planning Commission Lee Lowrey, Chair Lauren Kleiman, Vice Chair Curtis Ellmore, Secretary Sarah Klaustermeier Peter Koetting Mark Rosene Erik Weigand General Plan Update Steering Committee Nancy Gardner, Chair James Carlson Catherine O'Hara Ed Selich Debbie Stevens Larry Tucker Paul Watkins Then -Mayor Diane Dixon, Ex-Officio Member ,_- Housing Element Update Advisory Committee Larry Tucker, Chair Jeff Bloom Susan DeSantis Paul Fruchbom Beth Kiley Geoffrey LePlastrier Stephen Sandland Debbie Stevens Michelle Thrakulchavee Councilmember Will O'Neill, Ex-Officio Member City Staff Grace Leung, City Manager Seimone Jurjis, Community Development Director Jim Campbell, Deputy Community Development Director Jaime Murillo, Principal Planner Benjamin Zdeba, Principal Planner Dan Campagnolo, Systems Administrator Aaron Harp, City Attorney Yolanda Summerhill, Assistant City Attorney Tony Brine, City Traffic Engineer Consultants Kimley-Horn and Associates, Inc. Kearns & West, Inc. Section 1: Introduction (September 2022 Final Housing Element) 1-1 City of Newport Beach 2021-2029 HOUSING ELEMENT The Housing Element of the Newport Beach General Plan identifies and analyzes the City's existing and projected housing needs and contains a detailed outline and work program of the City's goals, policies, quantified objectives, and programs for the preservation, improvement, and development of housing for a sustainable future. It is one of the seven mandatory elements to be included in a city's General Plan. The policy program identifies ways in which housing needs of current and future residents can be met. It also ensures that the City establishes policies, procedures and incentives in its land use planning and development activities to address the maintenance and expansion of the housing supply to adequately accommodate households currently living and expected to live in Newport Beach. The policies identified will help guide future City decision -making and establishes an implementation program to achieve the City's housing goals for the 2021-2029 period. 1. Background The Housing Element identifies and analyzes the City's existing and projected housing needs. The Housing Element contains a detailed outline and work program of the City's goals, policies, and quantified objectives for the preservation, improvement, and development of housing for a sustainable future. This includes timelines for the City to accomplish each identified action within the Housing Plan. z. State Requirements California State Housing Element Law (California Government Code Article 10.6) establishes the requirements for the Housing Element. California Government Code Section 65588 requires that local governments review and revise the Housing Element of their comprehensive General Plans not less than once every eight years. The California Legislature has determined that a primary housing goal for the State is ensuring every resident has a decent home and suitable living environment. Section 655880 of the California Government Code states: a. The availability of housing is of vital statewide importance, and the early attainment of decent housing and a suitable living environment for every Californian, including farmworkers, is a priority of the highest order. b. The early attainment of this goal requires cooperative participation of government and the private sector in an effort to expand housing opportunities and accommodate the housing needs of Californians in all economic levels. c. The provisions of housing, affordable to low- and moderate -income households, requires the cooperation of all levels of the government. d. Local and State governments have a responsibility to use the powers vested in them to facilitate the improvement and development of housing to make adequate provision for housing needs of Section 1: Introduction (September 2022 Final Housing Element) 1-2 City of Newport Beach 2021-2029 HOUSING ELEMENT all economic segments of the community. The Legislature recognizes that in carrying out this responsibility, each local government also has the responsibility to consider economic, environmental, and fiscal factors and community goals set forth in the general plan and to cooperate with other local governments and the state in addressing regional housing needs. Table 1-1 summarizes State requirements for Housing Element and identifies the applicable sections in the 2021-2029 Housing Element where these requirements are addressed. Table 1-1: Housing Element Requirements Reference in Issues Requiring Analysis Gov. Code Section Housing Element Analysis of employment trends. Section 65583.a Section 2 Projection and quantification of existing and projected housing Section 65583.a Section 3 needs for all income groups. Analysis and documentation of the City's housing characteristics, including cost for housing compared to ability to Section 65583.a Section 2 pay, overcrowding, and housing condition. An inventory of land suitable for residential development Section 65583.a Section 3 including vacant sites and sites having redevelopment potential. Analysis of existing and potential governmental constraints upon the maintenance, improvement or development of Section 65583.a Section 3 housing for all income levels. Analysis of existing and potential nongovernmental (private sector) constraints upon maintenance, improvement or Section 65583.a Section 3 development of housing for all income levels. Analysis concerning the needs of the homeless. Section 65583.a Section 2. Analysis of special housing needs: handicapped, elderly, large Section 65583.a Section 2 families, farmworkers, and female -headed households. Analysis of opportunities for energy conservation with respect Section 65583.a Section 3 to residential development. Identification of Publicly Assisted Housing Developments. Section 65583.a Section 3 Identification of Units at Risk of Conversion to Market Rate Section 65583.a Section 3 Housing. Identification of the City's goal relative to the maintenance, Section 65583.a Section 4 improvement, and development of housing. Analysis of quantified objectives and policies relative to the Section 65583.b Section 4 maintenance, improvement, and development of housing. Identification of adequate sites that will be made available through appropriate action with required public services and Section 65583.c(1) Appendix B facilities for a variety of housing types for all income levels. Identification of strategies to assist in the development of adequate housing to meet the needs of low and moderate- Section 65583.c(2) Section 4 income households. Description of the Public Participation Program in the Section 65583.d Appendix C formulation of Housing Element Goals, Policies, and Programs. Section 1: Introduction (September 2022 Final Housing Element) 1-3 City of Newport Beach 2021-2029 HOUSING ELEMENT Reference in Issues Requiring Analysis Gov. Code Section Housing Element Description of the Regional Housing Needs Assessment (RHNA) prepared by the Southern California Association of Section 65583.e Section 1 Governments. Analysis of Fair Housing, including Affirmatively Furthering Fair Section 8899.50 Section 3 Housing. Review of the effectiveness of the past Element, including the Section 65583.E Appendix A City's accomplishments during the previous planning period. Source: State of California, Department of Housing and Community Development. The City's Housing Element was last updated in September 2013 for the 51h cycle from years 2014 to 2021, as part of the new update cycle for jurisdictions within the SCAG (Southern California Association of Governments) region to allow for synchronization with the Regional Transportation Plan and Sustainable Communities Strategy (RTP/SCS). The Element sets forth an 8-year strategy to address the City's identified housing needs, including implementing specific programs and activities. Amendments have been made to Housing Element law since the adoption of the City's 51h Cycle Housing Element; such amendments and subsequent housing laws change the required analysis, reporting and policies contained in the Housing Element. The contents of this updated Housing Element comply with these amendments to state housing law and all other federal, state and local requirements. 3. Regional Housing Needs Assessment Section 65583 of the Government Code sets forth the specific content requirements of a jurisdiction's housing element. Included in these requirements are obligations on the part of local jurisdictions to provide their "fair share" of regional housing needs. Local governments and Councils of Governments (COGS) are required to determine existing and future housing need and the allocation of this need must be approved by the California Department of Housing and Community Development (HCD). Newport Beach is a member agency of the Southern California Association of Governments (SCAG). SCAG is responsible for preparing the Regional Housing Needs Assessment (RHNA) for all jurisdictions within the SCAG region. HCD established the planning period for the current Regional Housing Needs Assessment (RHNA) from October 15, 2021 to October 15, 2029. For the 2021-2029 planning period the City was allocated a total of 4,845 units, including 1,456 for very low-income, 930 for low-income, 1,050 for moderate -income, and 1,409 for above -moderate income households. 4. Relationship to Other Community Plan Elements The Housing Element is one element of the City of Newport Beach General Plan. The goals, policies, actions, and programs within the Housing Element relate directly to, and are consistent with, all other elements in the Newport Beach General Plan. The City's Housing Element identifies programs and resources required for the preservation, improvement, and development of housing to meet the existing and projected needs of its population. Section 1: Introduction (September 2022 Final Housing Element) 1-4 City of Newport Beach 2021-2029 HOUSING ELEMENT The Housing Element works in tandem with development policies contained in the Land Use Element, most recently amended in 2013. The Land Use Element establishes the location, type, intensity and distribution of land uses throughout the City, and defines the land use build -out potential. By designating residential development, the Land Use Element places an upper limit on the densities and types of housing units constructed in the City. The Land Use Element also identifies lands designated for a range of other uses, including employment creating uses, open space, and public uses. The presence and potential for jobs affect the current and future demand for housing at the various income levels in the City. The Circulation Element of the General Plan also affects the implementation of the Housing Element. The Circulation Element establishes policies for a balanced circulation system in the City. Consequently, the Housing Element must include policies and incentives that consider the types of infrastructure essential for residential housing units in addition to mitigating the effects of growth in the City. The Housing Element has been reviewed for consistency with the City's other General Plan components, and the policies and programs in this Element are consistent with the policy direction contained in other parts of the General Plan. As portions of the General Plan are amended in the future, the Housing Element will be reviewed to ensure that internal consistency is maintained. 5. Public and Stakeholder Participation Section 65583 of the Government Code states that, "The local government shall make diligent effort to achieve public participation of all economic segments of the community in the development of the housing element, and the program shall describe this effort." Meaningful community participation is also required in connection with the City's Assessment of Fair Housing (AFH). A discussion of citizen participation is provided below. As part of the 6tn Cycle Housing Element Update process, the City of Newport Beach conducted extensive public outreach activities beginning in 2019. Outreach for the 6th Cycle Housing Element to the community, includes the following actions: • Community Workshop #1 (October 20, 2020) — Provided an overview of the Housing Element Update process, community and housing characteristics, and engagement activities. • Community Workshops #2 and #3 (November 16 and 17, 2020) — Engaged participants in a suitability analysis for housing types and densities for focus areas in Newport Beach. Community Workshop #4 (February 24, 2021) — Discussion of opportunity sites and policy strategies. • Community Workshop #5 (March 22, 2021) — Presented the initial draft of the Housing Element. • Community Workshop #6 (June 21, 2021) — Presented a revised draft of the Housing Element's sites analysis and discussed inclusionary housing, housing overlays, and accessory dwelling units. • Online Community Survey — Participants considered potential policies and programs to include in the Housing Element, as well as potential housing types and opportunities for housing. The Section 1: Introduction (September 2022 Final Housing Element) 1-5 City of Newport Beach 2021-2029 HOUSING ELEMENT survey also solicited feedback regarding potential barriers to housing access and constraints to the development of housing. • Planning Commission Study Session - Provided a presentation with an overview of the Public Review Draft Housing Element and Housing Element update process to date. Community members had the opportunity to give public comments. • City Council Study Sessions - Provided an overview of the Public Review Draft Housing Element and Housing Element update process to date. Follow up study sessions explored a variety of site identification options and policy modifications. Community members had the opportunity to give public comments. • Housing Element Update Advisory Committee (HEUAC) Meetings — Tracked and provided feedback on outreach efforts, made recommendations and provided guidance on policies and programs, provided general comments and feedback. • Housing Element Update Website (www.NewportTogether.com) - Provided relevant information about the update process, key features of the housing element, project timeline and a calendar of events for outreach activities. The website also provided a link to the community survey tool, past recorded meetings and summaries, as well as the contact information of the City for residents and community members to send additional comments or request additional information. • Listen & Learn — Series of community workshops in each Council District to guide and inform the General Plan Update in 2019. As required by Government Code Section 65585(b)(2), all written comments regarding the Housing Element made by the public will be provided to each member of the City Council. Appendix C will contain a summary of all public comments regarding the Housing Element received by the City during the update process. 6. Data Sources The data used for the completion of this Housing Element comes from a variety of sources. These include, but are not limited to: • 2010 Census • American Community Survey • Regional Analysis of Impediments to Fair Housing (AI) • Point -in -Time Homeless Census by the Regional Task Force on the Homeless, 2019 • Home Mortgage Disclosure Act (HMDA) lending data • California Department of Economic Development • California Employment Development Division Occupational Wage data, 2002 Section 1: Introduction (September 2022 Final Housing Element) 1-6 City of Newport Beach 2021-2029 HOUSING ELEMENT • Department of Housing and Urban Development, Comprehensive Housing Affordability Strategy (CHAS), 2013-2017 • California Department of Finance ■ Southern California Association of Governments (SCAG) Local Housing Report The data sources represent the best data available at the time this Housing Element Update was prepared. The original source documents contain the assumptions and methods used to compile the data. 7. Housing Element Organization This Housing Element represents the City's policy program for the 2021-2029 6th Cycle Planning Period. The Housing Element is comprised of the following Chapters: Section 1: Introduction contains a summary of the content, organization and statutory considerations of the Housing Element; Section 2: Community Profile contains an analysis of the City's population, household and employment base, and the characteristics of the housing stock; Section 3: Housing Constraints, Resources, and Affirmatively Furthering Fair Housing examines governmental and non -governmental constraints on production, maintenance, and affordability of housing and provides a summary of housing resources, including sites identification and funding and financial considerations; and Section 4: Housing Plan addresses the City's identified housing needs, including housing goals, policies and programs. Appendices provides various appendices with supplementary background resources including: • Appendix A — Review of Past Performance of 5th Cycle Programs • Appendix B — Summary of Adequate Sites Analysis • Appendix C — Summary of Community Outreach • Appendix D — Accessory Dwelling Unit Analysis Section 1: Introduction (September 2022 Final Housing Element) 1-7 :;-Ikvf port,, ether. Section 2.0 COMMUNITY PROFILE s City of Newport Beach 2021-2029 HOUSING ELEMENT ` •.�. �.. , . ice= � � . The Community Profile for the City of Newport Beach provides an overview of the City's housing and population conditions. The community profile serves as the foundation for the Housing Elements policies by describing and assessing the factors and characteristics that contribute to the supply and demand for housing in Newport Beach. Specifically, the community profile describes the community's population, employment, economics, and household characteristics. Special Needs groups and housing stock characteristics are also described. The community profile develops context for the goals, programs, and policies, established in the Housing Element. The data used for this community profile has been collected using the most current available data from the Southern California Association of Governments (SCAG), 2010 U.S. Census, 2010-2018 American Community Survey, the California Department of Finance, the California Employment Development Department, the California Department of Education and other currently available real estate market data. Data has also been collected from the SCAG Local Housing report for Newport Beach, which provides facts and Figures pre -certified by the California Department of Housing and Community Development (HCD) for use in the 61" Cycle Housing Elements. Population characteristics affect current and future housing demands in a community. Population growth, age compositions and race/ethnicity influence the type and extent of housing needed and the ability of the local population to afford housing costs. The following section describes and analyzes the various population characteristics and local trends in Newport Beach. ,. Population Growth Table 2-1 below displays the forecasted population growth for Newport Beach, as it compares to the County and other surrounding jurisdictions/cities. The U.S. Census reported a population of 85,186 individuals for the City in 2010. This is the second smallest population for this area after Laguna Beach, which has a population of 22,723. The 2010 population of Newport Beach represents about 3 percent of the Orange County total population. The Southern California Association of Government (SCAG) Final Growth Reports calculates estimates for future population counts and economic and housing trends through 2045. The SCAG data shown in Table 2-1 estimates a population growth for Newport Beach of 7,100 individuals, or an 8.4-percent increase, between 2016 and 2045. The growth calculation is consistent with that expected in Costa Mesa and is double that of Huntington Beach. In comparison, the City of Irvine anticipates a population surge of about 25 percent through 2045. Between 2016 and 2045, Newport Beach population is forecasted to grow by about 2 percent less than Orange County. Section 2: Community Profile (September 2022 Final Housing Element) 2-1 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-1: Population Growth Forecast, 2016-2045 Jurisdictions Population Percent Change 2016 Actual 2045 Projected 2016-2045 Costa Mesa 113,900 123,700 8.6% Newport Beach 84,900 92,000 8.4% Huntington Beach 196,900 205,300 4.3% Laguna Beach 23,400 23,500 0.4% Irvine 261,600 327,700 25.3% Orange County 3,180,000 3,535,000 11.2% Represents an estimate from the SCAG Connect SoCal 2016-2045 Demographics and Growth Forecast. Sources: SCAG 2020 Connect SoCal Demographics and Growth Forecast. 2, Age Characteristics The age composition of a community affects housing needs because housing demand within the market is often determined by the preferences of certain age groups. For example, young adults generally favor apartments, low to moderate -cost condominiums, and smaller or more affordable single -unit homes because they tend to live on smaller incomes and have smaller households. As population moves through different stages of life, housing is required to accommodate new or adjusted needs. To produce a well- balanced and healthy community, a community must provide appropriate housing to accommodate needs of all ages. Figure 2-1: Age Distribution in Newport Beach, 2010-2018 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% ,•r• 0.0% 5 to 19 20 to 34 35 to 44 45 to 64 65 and Above ■ 2010 4.5% 14.7% 20.8% 13.0% 28.6% 18.3% 2014 3.9% 15.6% 18.7% 12.3% 29.8% 19.7% 2018 3.9% 14.6% 17.8% 10.7% 30.2% 22.7% Source: American Community Survey, 5-Year Estimates, 2010, 2014, and 2018. Newport Beach population that falls within the ages of 45 to 64 represents the largest age group, as shown in Figure 2-1. In 2018, 30.2 percent of the population was between the ages of 45 and 64. Children under 5 years of age make up about 4 percent of the population, and 18.5 percent are 19 years or younger. Adults in the 35 to 44 age group have the second lowest population representation at 10.7 percent. Section 2: Community Profile (September 2022 Final Housing Element) 2-2 City of Newport Beach 2021-2029 HOUSING ELEMENT From 2010 to 2018, Newport Beach shows an aging population trend. All age groups under 45 years have consistently been decreasing. The 20 to 34 age group has experienced the greatest population loss at 3 percent between 2010 to 2018. In comparison, seniors over 65 years have increased by 4.4 percent during the same time. The middle-aged and senior populations both make up the largest age groups and can be expected to continue increasing given the decreasing distribution of young adults and children. Table 2-2 compares the age distribution of Newport Beach to the rest of the county and surrounding cities. The City has a below -average age distribution for those ages 44 and under as compared to Orange County. The City of Laguna Beach and Newport Beach both exceed 22 percent of senior populations, while the surrounding cities and county range from 9 to 16 percent. All municipalities in Table 2-2 have lower distributions of individuals ages 15 to 17 and higher distributions of individuals 45 to 64 years of age. Table 2-2: Age Distribution by Jurisdiction Jurisdiction Under 5 5 to 14 15 to 17 18 to 24 25 to 44 45 to 64 65+ years Costa Mesa 5.7% 11.4% 3.2% 9.6% 35.2% 24.3% 10.7% Newport Beach 3.9% 10.0% 3.5% 6.3% 23.4% 30.2% 22.7% Huntington Beach 5.2% 10.9% 3.5% 7.6% 27.0% 29.0% 16.9% Laguna Beach 3.4% 8.5% 4.1% 5.9% 16.3% 38.4% 23.3% Irvine 6.4% 12.4% 3.6% 13.0% 30.8% 23.9% 9.9% Orange County 6.0% 12.5% 4.0% 9.5% 27.4% 26.6% 13.9% Source: American Community Survey, 5-Year Estimates, 2018 3. Race/Ethnicity Characteristics Racial and ethnic composition contribute to housing needs due to varying household characteristics, income levels, and cultural backgrounds which may affect their housing needs, housing choice and housing types. Cultural influences may reflect preference for a specific type of housing. As summarized in Figure 2-2, Newport Beach is comprised mainly of White individuals at 85.3 percent of the population in 2018. American Indian/Alaska Natives and Native Hawaiian/other Pacific Islanders comprise the lowest percentage; both populations in Newport Beach and Orange County add up to less than 1 percent of the population. The White population in Newport Beach is 23.6 percent greater than the county and the Hispanic or Latino population is 25.1 percent less than that of the county. The Black population represents 0.8 percent of the Newport Beach population, which is half that of Orange County. The Asian population of Newport Beach is 11.8 percent smaller than that of Orange County and there are 9.6 percent less individuals in the City who identify as some other race than in the County. Section 2: Community Profile (September 2022 Final Housing Element) 2-3 City of Newport Beach Figure 2-2: Racial and Ethnic Composition, 2018 90% 80% 70% 60% 50% 40% 30% 20% 10% American Native Black or Indian and Hawaiian Some Two or Hispanic White African Alaska Asian and Other Other more or Latino American Native Pacific Race Race Islander ■ Newport Beach 85.3% 0.8% 0.3% 8.3% 0.2% 2.1 % 3.1 % 9.0% Orange County 61.7% 1.7% 0.5% 20.1 % 0.3% 11.7% 4.1 % 34.1 % Source: American Community Survey, 5-Year Estimates, 2018. Table 2-3 shows that all cities around Newport Beach and Orange County have a majority White population. The second largest population group in this area are those who identify as Hispanic or Latino. The Black population in Newport Beach and Laguna Beach are both the smallest of the area at 0.8 percent and both cities are below the county percentage by just under 1 percent. Both American Indian/Alaska Native and Native Hawaiian/other Pacific Islanders represent the smallest population groups with neither exceeding 1 percent in any of the listed cities. Table 2-3: Racial and Ethnic Composition, 2018 American Native Indian/ Hawaiian/ Some Two or Hispanic p Jurisdiction White Black Asian Other More Alaska Other Pacific or Latino Native Islander Race Races Origin Costa Mesa 71.6% 1.9% 0.4% 8.4% 0.7% 13.0% 4.0% 36.1% Newport 85.3% 0.8% 0.3% 8.3% 0.2% 2.1% 3.1% 9.0% Beach Huntington 72 4% 1.4% 0.6% 12.1% 0.4% 7.3% 5.4% 20.0% Beach Laguna 90.8% 0.8% 0.1% 3.7% 0.3% 1.5% 2.8% 7.4% Beach Irvine 47.6% 1.9% 0.2% 42.3% 0.2% 2.8% 5.2% 10.3% Orange g 61.7% 1.7% 0.5% 20.1% 0.3% 11.7% 4.1% 34.1% County Note: (1) Persons of Hispanic or Latino Origin is an ethnicity that may be included in other racial groups. Source: American Community Survey, 5-Year Estimates, 2018. Section 2: Community Profile (September 2022 Final Housing Element) 2-4 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-4 identifies the change in composition of Newport Beach between 2010 to 2018. The population who reported White experienced the greatest population loss between 2010 and 2015 (4 percent), but then increased byjust under a percent point between 2015 and 2018. The City's population who identifies as Hispanic or Latino increased by a total of 1.6 percent; this was the greatest population increase between these three survey years. Overall, majority of the different racial and ethnic populations within Newport Beach remained stable in population from 2010 to 2018. Table 2-4: Chanees in Racial and Ethnic Composition. 2010-2018 Percent Percent Race/Ethnicity 2010 2015 2018 Change 2010 Change 2015 to 2015 to 2018 White 88.4% 84.4% 85.3% -4.0% 0.9% Black 0.6% 0.4% 0.8% -0.2% 0.4% American Indian and 0.1% 0.2% 0.3% 0.1% 0.0% Alaska Native Asian 7.2% 8.2% 8.3% 1.0% 0.1% Native Hawaiian or Other 0.0% 0.2% 0.2% 0.2% 0.0% Pacific Islander Some Other Race 1.9% 3.1% 2.1% 1.2% -1.1% Two or More Races 1.7% 3.4% 3.1% 1.7% -0.3% Hispanic or Latino* 7.4% 8.3% 9.0% 0.9% 0.7% *Of any race. Source: American Community Survey, 5-Year Estimates, 2010, 2015, and 2018. Reporting and analyzing economic characteristics of a community provides valuable information on the community's ability to access the housing market. Incomes associated with different types of employment and the number of workers in a household affect housing affordability and choice. Therefore, to consider a healthy balance between jobs and housing, the employment characteristics of a community must be considered. Local employment growth is linked to local housing demand, and the reverse is true with employment contracts. Employment and Wage Scale Employment directly affects housing needs, as employment and income inform a population's ability to purchase housing and the types of housing they would be inclined to purchase. Table 2-5 summarizes projected employment growth for Newport Beach and its surrounding cities and Orange County between 2012 to 2040. These projections are provided by the Southern California Association of Government's (SCAG) Regional Transportation Plan/Sustainable Communities Strategy (RTP/SCS). The report is a long- range plan that considers future mobility and housing needs with economic, environmental, and public health goals and was adopted on April 7, 2016. Section 2: Community Profile (September 2022 Final Housing Element) 2-5 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-5 shows that Newport Beach is estimated to experience an employment growth of 1.8 percent between 2016 to 2045. The total employment growth in the City is significantly less in percentage than the forecast for the surrounding cities. City of Irvine is estimated to experience a 24.5 percent increase through 2045, which is about 10 percent more than the percentage projected for the whole county. While Newport Beach is projected to experience the least employment growth as a percent, the growth represents an increase in 1,500 new employees; this is a greater numeric change than Laguna Beach. The number of new employees projected for Newport Beach represent 0.5 percent of employment growth for the county. Table 2-5: Emplovment Growth Trends, 2016-2045 Jurisdiction 2016 2045 % Change 2016-2045 Numeric Change 2016-2045 Costa Mesa 95,700 104,000 8.7% 8,300 Newport Beach 83,400 84,900 1.8% 1,500 Huntington Beach 83,400 90,800 8.9% 7,400 Laguna Beach 5,800 6,100 5.2% 300 Irvine 265,300 330,200 24.5% 64,900 Orange County 1 1,710,000 1,980,000 15.8% 270,000 Source: SCAG 2020 Connect SoCal Demographics and Growth Forecast. Based on data from the United States Census Bureau American Community Survey (ACS) 5-Year Estimates, the number of employed people in Newport Beach reached 43,892 in 2018. This value is less than the amount projected by the SCAG RTP/SCS. A contributing factor for this may be the increasing amount of the population over the retirement age, as shown in Figure 2-1. Table 2-6 identifies employment sectors in Newport Beach and the changes in employment for each sector between 2010 and 2018. Most employed people in the City work in professional, scientific, management, and administrative services (19.4 percent). The sector with the least amount of residents employed was agriculture, forestry, fishing and hunting, and mining, with only 0.2 percent in 2018. Two other popular sectors in the City in 2018 were finance and insurance, and real estate and rental leasing at 18.7 percent as well as education services, health care, and social assistance at 17.1 percent. None of the employment sectors in Newport Beach have experienced changes in employment greater than 1 percent between the two survey years. This has resulted in a decrease of 0.5 percent in total employment, rather than an increase as forecasted in Table 2-5. Section 2: Community Profile (September 2022 Final Housing Element) 2-6 City of Newport Beach 2021 f--? ", NG ELEMENT Table 2-6: Employment in Newport Beach by Sector, 2018 2010 2018 Percent # of people % of City # of people % of City Industry Sector Change employed Employment employed Employment 2010-2018 Agriculture, forestry, fishing 1,324 0.3% 92 0.2% 0.1/ ° and hunting, and mining Construction 2,118 4.8% 1741 4.0% 0.8% Manufacturing 3,529 8.0% 3929 9.0% -1.0% Wholesale trade 2,074 4.7% 2165 4.9% -0.3% Retail trade 4,411 10.0% 4149 9.5% 0.6% Transportation and 839 1.9% 1020 2.3% -0.4% warehousing, and utilities Information 1,059 2.4% 991 2.3% 0.2% Finance and insurance, and 8,072 18.3% 8196 18.7% -0.4/0 ° real estate and rental leasing Professional, scientific, management, and 8,999 20.4% 8517 19.4% 1.0% administrative services Education services, health 7,234 16.4% 7507 17.1% -0.7% care, and social assistance Arts, entertainment, recreation, accommodation, 3,353 7.6% 3425 7.8% -0.2% and food services Other services (except public 1,324 3.0% 1472 3.4% -0.4% administration) Public Administration 971 2.2% 688 1.6% 0.7% Total 44,109 100% 43,892 100% -0.5% Source: American Community Survey, 5-Year Estimates, 2010 and 2018. Table 2-6 shows that employment decreased slightly from 2010 to 2018 despite a projected growth and estimated employment amount much larger than that reached. Nonetheless, unemployment rates displayed in Table 2-7 show a drop by 1 percent during the same period. Unemployment factors into housing needs as the lack of income necessitates the availability of affordable housing. Newport Beach has maintained an unemployment rate of 3.4 percent in 2018 - the lowest unemployment rate for this area, and 1.7 percent below Orange County. Section 2: Community Profile (September 2022 Final Housing Element) 2-7 City of Newport Beach 2021-2029 HOUSING ELEMENT p.j E W�:,M '. Table 2-7: Unemployment Rate, 2018 Jurisdiction Unemployment Rate* Percent Change 2010-2018 2010 2018 Costa Mesa 7.3% 4.8% -2.5% Newport Beach 4.4% 3.4% -1% Huntington Beach 7% 4.3% -2.7% Laguna Beach 4.4% 6.8% 2.4% Irvine 5.5% 4.9% 1 -0.6% Orange County 7.4% 5.1% -2.3% *Population 16 years and over Source: American Community Survey, 5-Year Estimates, 2010 and 2018. Based on the data in Table 2-7, approximately 2,492 Newport Beach residents were without work in 2018 and would therefore be more likely to require more affordable housing options. For those that are employed, income level further identifies housing types that may need to be provided within the City. According to the SCAG Draft Regional Housing Needs Assessment (RHNA) Methodology, housing needs by income are broken down into four income levels: • Very Low -Income (50 percent or less of the county's median family income) • Low -Income (50-80 percent of the county median family income) • Moderate -Income (80-120 percent of the county median family income) • Above Moderate -Income (120 and above of the county median family income) Orange County's median family income is $85,398 according to the 2018 ACS estimates. The occupations that fall below 50 percent of this amount are Protective Services; Sales; Office and Administration Support; Production; Transportation and Material Moving; Healthcare Support; Building, Grounds Cleaning, and Maintenance; Personal Care and Service; Farming, Fishing and Forestry; and Food Preparation and Serving Related. Most occupations in Orange County have an average income that is either low or very low. Table 2-8: Mean Salary by Occupation in Orange County, 2020 Occupation Salary Management $120,871 Legal $105,406 Healthcare Practitioners and Technical $79,755 Architecture and Engineering $87,635 Computer and Mathematical $92,631 Life, Physical and Social Sciences $67,488 Business and Financial Operations $73,913 Education, Training and Library $52,043 Arts, Design, Entertainment, Sports and Media $47,351 Construction and Extraction $52,684 Protective Services $37,236 Section 2: Community Profile (September 2022 Final Housing Element) 2-8 City of Newport Beach 2021-2029 HOUSIMG ELEMENT Table 2-8: Mean Salary by Occupation in Orange County, 2020 Occupation Salary Community and Social Service $48,834 Installation, Maintenance and Repair $48,928 Sales $32,262 Office and Administration Support $38,845 Production $31,669 Transportation and Material Moving $29,254 Healthcare Support $34,397 Building, Grounds Cleaning, and Maintenance $27,824 Personal Care and Service $24,666 Farming, Fishing and Forestry $25,487 Food Preparation and Serving Related $24,841 Source: California Employment Development Division, Occupational Wage data, 2020. A household includes all persons who occupy a housing unit, as defined by the Census. This may include single persons living alone, families related through marriage, blood or adoption, domestic partnerships and unrelated individuals living together. Nursing facilities, residential care facilities, dormitories, and other group living, as well as the persons living with them are not considered a housing unit. Income and affordability are best measured at the household level, as well as the special needs of certain groups, such as large families, single parent households, or low and extremely low-income households. For example, if a city has a prominent aging population who are homeowners but live on fixed incomes, it may consider implementing a home beautification assistance program. 1. Household Typ,, and Size Newport Beach contains 37,870 total households, which is the second smallest household amount behind Laguna Beach with 10,542 total households. Female households with no spouse present represent the lowest amount at 4.9 percent and is 6.9 percent below the regional percentage. Orange County has 28.2 percent non -family households, but all cities in this area, including Newport Beach, have percentages that exceed 33 percent. Newport Beach non -family households account for the second largest percentage at 42.5 percent. When combined with senior households over the age of 65 and living alone, as shown in Figure 2-3, it amounts to 56 percent of households in the City. These two groups of people tend to occupy apartments or smaller age centric living areas and would also be considered in determining housing needs. Section 2: Community Profile (September 2022 Final Housing Element) 2-9 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-9: Household Characteristics Married- Female couple % of Total Householder, % of Total Non -Family % of Total Total Jurisdiction Family Households No Spouse Households Household Households Households Households Present Costa Mesa 17,568 42.8% 4,191 10.2% 16,509 40.2% 41,019 Newport 18,965 50.1% 1,870 4.9% 16,088 42.5% 37,870 Beach Huntington 37,588 48.9% 8,263 10.8% 26,961 35.1% 76,821 Beach Laguna 5,116 48.5% 539 5.1% 4,537 43% 10,542 Beach Irvine 51,682 54.2% 8,418 8.8% 31,636 33.2% 95,371 Orange 564,685 54.7% 121,753 11.8% 290,652 28.2% 1,032,373 County Source: American Community Survey, 5-Year Estimates, 2018 Figure 2-3: Newport Beach Household Characteristics in Percent, 2018 bur° 50% 40% 30% 20% 10% Married -Couple Male Female Non -Family Householder Family Householder, No Householder, No Household Age 65 or Above Household Spouse Present Spouse Present Newport Beach 50.1 % 2.5% 4.9% 42.5% 13.5% Source: American Community Survey, 5-Year Estimates, 2018. Table 2-10 below illustrates the changes in household types between 2010 and 2018. During these years, Newport Beach experienced a growth in population of married -couple family households (5.3 percent) and of householders 65 years and over who live alone (5.5 percent). Non -family households dropped by 4.2 percent in the same time period, with 3.8 percent occurring between 2010 and 2015. In 2010, non -family households were the largest household type in Newport Beach at 46.7 percent, but in 2018 the married -couple family households became the largest with 47.6 percent of the population. Section 2: Community Profile (September 2022 Final Housing Element) 2-10 City of Newport Beach 2021 - Table 2-10: Changes in Household Types, 2010-2018 2010 Percent 2015 Percent 2018 Percent Married -couple Family 16,936 44.8% 18,122 47.6% 18,965 50.1% Households Female Household, 2,155 5.7% 2,665 7.0% 1,870 4.9% No Spouse Present Male Household, 1,058 2.8% 990 2.6% 947 2.5% No Spouse Present Non -Family Household 17,654 46.7% 16,332 42.9% 16,088 42.5% Householder 65 Years and Over 3,024 8.0% 4,797 12.6% 5,112 13.5% Total Households 37,803 100% 38,071 100% 37,870 100% Source: American Community Survey, 5-Year Estimates, 2010, 2015 and 2018. Newport Beach represents 1 of the smallest average household sizes in the area, as shown in Table 2-11. The average household size for the region is 3 persons and the average household size for the City is 2.2 persons per home. All the neighboring cities have comparable household sizes under the regional amount. Table 2-11: Average Household Size Jurisdiction Average Persons per Household Costa Mesa 2.7 Newport Beach 2.2 Huntington Beach 2.6 Laguna Beach 2.1 Irvine 2.6 Orange County 3 Source: California Department of Finance — Population and Housing Estimates, 2018. 2. Household Income Household income is an indicator of housing needs in a community because household income is directly connected to affordability. As household income increases, it is more likely that the household can afford market rate housing units, larger units and/or pursue ownership opportunities. However, as household income decreases, households tend to pay a disproportionate amount of their income for housing. This may influence increased incidences of overcrowding and substandard living conditions. The California State Department of Housing and Community Development (HCD) has identified the following income categories based on the Area Median Family Income (AMFI) of Orange County: • Extremely Low-income: households earning up to 30 percent of the AMFI • Very Low-income: households earning between 31 and 50 percent of the AMFI • Low-income: households earning between 51 percent and 80 percent of the AMFI • Moderate -income: households earning between 81 percent and 120 percent of the AMFI • Above Moderate -income: households earning over 120 percent of the AMFI Section 2: Community Profile (September 2022 Final Housing Element) 2-11 City of Newport Beach _ Combined, the extremely low, very low, and low-income groups are referred to as lower -income.' Comprehensive Housing Affordability Strategy (CHAS) estimates based on 2006-2017 American Community Survey (ACS) data is used below. Table 2-12 shows a greater percentage of homeowners (57 percent) than renters (43 percent) in Newport Beach. Just under 70 percent of households are estimated to have a moderate or above income and 21.6 percent earn a lower -income. A greater number of renters are estimated to earn a lower -income than of homeowners. About 60 percent of households in the extremely low-income category identified as renters, as for very low- and low-income households. Homeownership was more likely for households in the moderate or above moderate -income groups. Table 2-12: Households by Income Cateeorv. 2013-2017 Income Category (% of County AMI) Owner Renter Households Total Percent Total Percent Total Percent Extremely Low (30%AMFI or less) 1,575 40.8% 2,280 59.2% 3,855 10.15% Very Low (31 to 50%AMFI) 1,310 40.1% 1,960 59.9% 3,270 8.61% Low (51 to 80%AMFI) 1,920 42.9% 2,550 57.1% 4,470 11.77% Moderate or Above (over 80% AMFI) 16,840 63.8% 9,540 36.2% 26,380 69.5% Total 21,645 57.0% 16,325 43.0% 37,970 100% Source: Department of Housing and Urban Development (HUD) Comprehensive Housing Affordability Strategy (CHAS), 2013-2017. The ACS 2018 data shown in Figure 2-4 below depicts median household income for Newport Beach, surrounding jurisdictions, and the County of Orange. The figure shows a much higher median household income in the City that exceeds the regional median by $37,311 annually. At $122,709, Newport Beach has the highest median household income than any of the neighboring cities. Laguna Beach is in close second with an annual median household income of $121,474. Costa Mesa is the only nearby city with a median household income below the regional median and $43,502 below Newport Beach. Table 2-13 also compares median household incomes by percent points above or below the regional amount. All cities around Newport Beach, except for Costa Mesa, exceed the Orange County median household income of $85,398. Federal housing and community development programs typically assist households with incomes up to 80 percent of the AMFI and use different terminology. For example, the Federal Community Development Block Grant (CDBG) program refers households with incomes between 51 and 80 percent AMFI as moderate income (compared to low-income based on State definition). Section 2: Community Profile (September 2022 Final Housing Element) 2-12 City of Newport Beach Figure 2-4: Median Household Income by City, 2018 $140,000 $122,709 $120,000 $100,000 $80,000 $79�- $60,000 $40,000 $20,000 $121,474 Costa Mesa Newport Beach Huntington Beach Laguna Beach Median Income -Orange County Median Income Source: American Community Survey, 5-Year Estimates, 2018. Table 2-13: Median Household Income Jurisdiction Median -income Percent Above/Below Regional Median Costa Mesa $79,207 -7.2% Newport Beach $122,709 43.7% Huntington Beach $91,318 6.9% Laguna Beach $121,474 42.2% Irvine $95,371 11.7% Orange County $85,398 100% Source: American Community Survey, 5-Year Estimates, 2018. r Irvine E $85,398 Further explaining the income gap between Orange County and Newport Beach is an income breakdown for the City in Figure 2-5. Most employed City residents fall in the high -income category as about 31 percent of residents earn $200,000 per year and 60 percent earn over $100,000. About 15 percent of the Newport Beach population earns under $35,000 annually. Section 2: Community Profile (September 2022 Final Housing Element) 2-13 City of Newport Beach _ Figure 2-5: Newport Beach Income Breakdown by Income Category 35% 30% 25% 20% 15% 10% 0 /o Less 00 $150 ,, $10000 $10,000 $15,000 $25,000 $35,000 $50,000 $75,000 $200,00 than to to to to to to 0 to 0 to 0 or $10,000 $149 99 $199 99 $14,999 $24,999 $34,999 $49,999 $74,999 $99,999 more 9 9 Newport Beach 4.0% 2.6% 4.2% 4.5% 6.0% 9.9% 9.3% 17.6% 11.1 % 30.8% Source: American Community Survey, 5-Year Estimates, 2018. The Comprehensive Housing Affordability Strategy (CHAS) developed by the Census Bureau for the Department of Housing and Urban Development (HUD) provides detailed information on housing needs by income level for different types of households in Newport Beach. The most recent available CHAS data for the City was published in August 2020 and was based on 2006-2017 ACS data. Housing problems considered by CHAS included: • Units with physical defects (lacking complete kitchen or bathroom); • Overcrowded conditions (housing units with more than one person per room); • Housing cost burdens, including utilities, exceeding 30 percent of gross income; or • Severe housing cost burdens, including utilities, exceeding 50 percent of gross income. As is the case with many cities, there is strong variation between homeowners and renters who experience housing problems in the City, as shown in Table 2-14. Of all homeowners in the City, 35.3 percent experience at least one housing problem, while 45.1 percent of renters experience one these problems. Over half of all households in the City have at least one housing problem (58.5 percent). Severe housing problems are comprised of incomplete kitchen facilities, incomplete plumbing facilities, more than 1.5 persons per room, and a cost burden greater than 50 percent. The CHAS reports that just under a quarter of Newport Beach households experience at least one of these problems (23 percent). Similarly to general housing problems, renters here are also more likely to be affected; in the City, 27.2 percent of renter -occupied units are subject to at least one severe housing problem. A lower — yet substantial — percentage of homeowners live with at least one severe housing problem (19.8 percent). Section 2: Community Profile (September 2022 Final Housing Element) 2-14 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-14: Housing Problems Overview, 2013-2017 Owner Renter Total Housing Problem Percent of Percent of Percent of Overview* Count owner Count renter Count total households households households Household has at least 1 of 7,635 35.3% 7,355 45.1% 14,990 39.5% 4 Housing Problems Household has none of 4 13,835 63.9% 8,365 51.2% 22,200 58.5% Housing Problems Cost Burden not available, 175 0.8% 610 3.7% 785 2.1% no other problems Total 21,645 57.0% 16,325 43.0% 37,970 100.0% Owner Renter Total Severe Housing Problem Percent Percent of Percent of Overview** Count owner Count renter Count total households households households Household has at least 1 of 4 Severe Housing 4,285 19.8% 4,435 27.2% 8,720 23.0% Problems Household has none of 4 17,180 79.4% 11,285 69.1% 28,465 75.0% Severe Housing Problems Cost Burden not available, 175 0.8% 610 3.7% 785 2.1% no other problems Total 21,645 57.0% 16,325 43.0% 37,970 100% * The four housing problems are: incomplete kitchen facilities, incomplete plumbing facilities, more than 1 person per room, and cost burden greater than 30%. ** The four severe housing problems are: incomplete kitchen facilities, incomplete plumbing facilities, more than 1.5 persons per room, and cost burden greater than 50%. Source: U.S. Department of Housing and Urban Development (HUD), Comprehensive Housing Affordability Strategy (CHAS) 2013-2017. 1. Overcrowding "Overcrowding" is generally defined as a housing unit occupied by more than one person per room in house (including living room and dining rooms, but excluding hallways, kitchen, and bathrooms). An overcrowded household results from either a lack of affordable housing, which forces more than one household to live together, and/or a lack of available housing units of adequate size. Overcrowding can indicate that a community does not have an adequate supply of affordable housing, especially for large families. However, overcrowding can also be a result of different cultural or demographic housing preferences. For example, the option to live with an existing family member in a new country may be an opportunity for an immigrant family or person to transition from an old home to a new one securely and help maintain cultural values. Overcrowded and severely overcrowded households can lead to neighborhood deterioration due to the intensive use of individual housing units leading to excessive wear and tear, and the potential cumulative overburdening of community infrastructure and service capacity. Overcrowding in neighborhoods can lead to an overall decline in social cohesion and environmental quality. Such decline can often spread Section 2: Community Profile (September 2022 Final Housing Element) 2-15 City of Newport Beach 2021-2029 HOUSING ELEMENT geographically and impact the quality of life and the economic value of property and the vitality of commerce within a city. The combination of lower -incomes and high housing costs result in many households living in overcrowded housing conditions. Table 2-15: Overcrowding by Tenure. 2018 Overcrowded Housing Units Severely Overcrowded Total Overcrowded Occupied Housing Units (>1.51 (1.0 to 1.50 persons/room) persons/room) Housing Units Tenure Percent of Percent of Total Number of Percent of Number of Number of Total Occupied Occupied Units Total Occupied Units Units Housing Units Housing Units Housing Units Owner 65 units 0.2% 0 units 0% 65 units ° 0.2/° Occupied Renter 252 units 0.7% 253 units 0.7% 505 units 1.3% Occupied Total 317 units 0.8% 253 units 0.7% 570 units 1.5% Source: American Community Survey, 5-Year Estimates, 2018. Table 2-15 breaks down the severity of overcrowding in Newport Beach by household tenure. As the table shows, there is a very low percentage of units that are overcrowded (1.5 percent). About 80 percent of those overcrowded units are renter -occupied, with 1.3 percent of households being overcrowded and severely overcrowded. Only 0.2 percent of owner -occupied units exceed 1 person per bedroom. In comparison to the surrounding cities, as outlined in Table 2-16, Newport Beach has kept the lowest percentages of overcrowding for both renters and homeowners. Costa Mesa reported the largest total percentage of overcrowded cities (9 percent), which is 7.5 percent over that of Newport Beach. Orange County reported 21,800 overcrowded units and 8.9 percent of total households. Table 2-16: Overcrowded Housing Units by Tenure. 2018 Jurisdiction Owner Occupied Overcrowded Units (>1.0 persons/room) Renter Occupied Overcrowded Units (>1.0 persons/room) Number of Units Percent of Total Occupied Units Number of Units Percent of Total Occupied Units Costa Mesa 435 units 1.1% 3,251 units 7.9% Newport Beach 65 units 0.2% 505 units 1.3% Huntington Beach 557 units 0.7% 2,291 units 3.0% Laguna Beach 62 units 0.6% 127 units 1.2% Irvine 958 units 1.0% 4,921 units 5.2% Orange County 21,800 units 2.1% 69,713 units 6.8% Source: American Community Survey, 5-Year Estimates, 2018. ?. Overpayment (Cost Burden) In Relationship to Income State and federal standards indicate that a household paying more than 30 percent of its income for housing is overpaying. Overpayment for housing can cause an imbalance on the remainder of a household's budget. Section 2: Community Profile (September 2022 Final Housing Element) 2-16 City of Newport Beach 2021-2029 HOUSING ELEMENT As reported by the CHAS and presented in Table 2-17, a large portion of households are subject to some form of overpayment in Newport Beach. Renters in the City represent a greater portion of the community that is overpaying for housing, but homeowners are 12 percent behind and exceed renters in total count —there are 11,810 homeowners overpaying and 10,880 renters overpaying for housing. Homeowners who earn over 100 percent of the HUD area median family income (AMFI), and are considered high -income, make up the largest group experiencing cost burdens greater than 30 percent and 50 percent. For renters, those who experience housing burdens are those who earn a moderate to low-income. Table 2-17: Summary of Housing Overpayment, 2013-2017 Owner Renter Income by Cost % of Cost % of Cost % of Cost % of Cost Burden* Burden > Owner Burden > Owner Burden > Renter Burden > Renter 30% HH 50% HH 30% HH 50% HH Household Income is less- 1,335 6.2% 1,225 5.7% 1,485 9.1% 1,455 8.9% than or = 30% Household Income >30% 1,010 4.7% 820 3.8% 1,696 10.4% 1,350 8.3% to less -than or = 50% AMFI Household Income >50% 1,210 5.6% 815 3.8% 1,980 12.1% 910 5.6% to less -than or = 80% AMFI Household Income >80% 615 2.8% 450 2.1% 815 5.0% 170 1.0% to less -than or = 100%AMFI Household Income 3,420 15.8% 910 4.2% 965 5.9% 55 0.3% >100% AMFI Total 7,590 35.1% 4,220 19.5% 6,940 42.5% 3,940 24.1% * Cost burden is the ratio of housing costs to household income. For renters, housing cost is gross rent (contract rent plus utilities). For owners, housing cost is "select monthly owner costs", which includes mortgage payment, utilities, association fees, insurance, and real estate taxes. Note: AMFI = Area Median Family Income, this is the median family income calculated by HUD for each jurisdiction, to determine Fair Market Rents (FMRs) and income limits for HUD programs. AMFI will not necessarily be the same as other calculations of median incomes (such as a simple Census number), due to a series of adjustments that are made. Source: Source: U.S. Department of Housing and Urban Development (HUD), Comprehensive Housing Affordability Strategy (CHAS) 2013-2017. Section 2: Community Profile (September 2022 Final Housing Element) 2-17 City of Newport Beach 2021-2029 HOUSING ELEMENT State law recognizes that certain households may have more difficulty in finding adequate and affordable housing due to special circumstances. Special needs populations include seniors, persons with disabilities, female -headed households, large households, and farmworkers. Special circumstances may be related to one's employment and income, family characteristics, disability and household characteristics, or other factors. Consequently, certain residents in Newport Beach may experience higher incidences of housing overpayment (cost burden), overcrowding, or other housing problems. The special needs groups analyzed in the Housing Element include the elderly, persons with disabilities (including persons with developmental disabilities), people experiencing homelessness, single parents, large households, and farmworkers (Table 2-18). These groups may overlap, for example elderly people may also have a disability of some type. The majority of these special needs groups could be assisted by an increase in affordable housing. Table 2-18: Special Needs Groups in Newport Beach # of People or Percent of Total Percent of Total Special Needs Groups Households Population Households Senior Headed Households (65 years and over) 12,187 households -- 32.2% Seniors 19,574 persons 22.7% -- Seniors Living Alone 5,119 households -- 13.5% Persons with Disabilities 6,943 persons 8.1% -- Large Households (5 or more persons 1,945 households -- 5.1% per household) Single -Parent Households 1,358 households -- 3.6% Single -Parent, Female Headed Households 936 households -- 2.5% with Children (under 18 years) People Living in Poverty 5,670 persons 6.6% -- Farmworkers* 92 persons 0.2% -- Persons Experiencing Homelessness** 64 persons 0.09% -- Student 5,273 persons 6.1% -- *Farmworker data is taken of the population 16 years and over, not total population. **The Everyone Counts report is updated annually, therefore the most recent data is from 2019, and there is no percentage of total population available. Source: American Community Survey, 5-Year Estimates, 2018 and Orange County Point in Time Count, Everyone Counts Report 2019. 1 Seniors The senior population, which is generally defined as those over 65 years of age, has several concerns: limited and fixed incomes, high healthcare costs, higher incidence of mobility and self -care limitations, transit dependency, and living alone. Specific housing needs of the senior population include affordable Section 2: Community Profile (September 2022 Final Housing Element) 2-18 City of Newport Beach 2021-2029 HOUSING ELEMENT housing, supportive housing (such as intermediate care facilities), group homes, and other housing that includes a planned service component. Newport Beach has the second largest population of seniors over the age of 65 at 22.7 percent, as shown in Table 2-19. This is 8.8 percent above the percentage for the County. Laguna Beach is reported to have the largest senior population of the area (23.3 percent) and Irvine has the lowest at 9.9 percent of its population. Table 2-19: Persons Age 65 and Over. 2018 Jurisdiction PopulationPercent Count Costa Mesa 12,138 10.7% Newport Beach 19,574 22.7% Huntington Beach 34,002 16.9% Laguna Beach 5,398 23.3% Irvine 26,228 9.9% Orange County 440,488 13.9% Source: American Community Survey, 5-Year Estimates, 2018. In addition to overpayment problems faced by seniors due to their relatively fixed incomes, many seniors are faced with various disabilities. In 2018, the American Community Survey (ACS) reported 4,134 seniors with disabilities. Among these disabilities, the most common were ambulatory disabilities, independent living disabilities and hearing disabilities. Challenges and Resources to Address Senior Housing Needs Seniors in Newport Beach generally have exhibited the following unique challenges to housing: • Having Limited and fixed incomes, • Disproportionately higher healthcare costs, adding monthly living costs • Higher incidence of mobility and self -care limitations requiring customized housing features • Transit dependency • Limited in -home support, due to living alone. To address these challenges, the City must consider a variety of solutions to address the above issues: these may include: • More affordable housing options for Seniors • Supportive City programs to help sustain decent, safe and affordable housing for dependent Seniors. • Housing with included supportive services • Group Homes options for persons with self -care limitations Resources currently available at the City includes a robust Senior Services program. Section 2: Community Profile (September 2022 Final Housing Element) 2-19 City of Newport Beach 2021-2029 HOUSING ELEMENT Section 3.C.3 of this Housing Element includes an analysis on deed -restricted affordable housing units and affordable units at -risk of converting to market -rate. The City of Newport Beach currently has one affordable housing project for senior residents. Seaview Lutheran Plaza includes 100 deed -restricted affordable housing units reserved for extremely low and very low-income seniors through 2039; it is not considered at -risk of converting to market -rate over the next 10 years. To address unique needs of senior residents living in the City, the following three programs have been included in Section 4: • Policy Action 613: Repair Loans and Grant Programs for Seniors, Persons with Physical and Developmental Disabilities and Lower -Income Households • Policy Action 6E: Housing Assistance for Seniors • Policy Action 6G: Senior Housing Priority Program The City will continue providing housing resources to its senior population through community partnerships and by facilitating the development of senior housing units. Dersons with Physical and Develoomental Disabilities Physical and developmental disabilities can hinder access to traditionally designed housing units, as well as potentially limit the ability to earn adequate income. Physical, mental, and/or developmental disabilities may deprive a person from earning income, restrict one's mobility, or make self -care difficult. Thus, persons with disabilities often have special housing needs related to limited earning capacity, a lack of accessible and affordable housing, and higher healthcare costs associated with a disability. Some residents suffer from disabilities that require living in a supportive or institutional setting. Although no current comparisons of disability with income, household size, or race/ethnicity are available, it is reasonable to assume that a substantial portion of persons with disabilities would have annual incomes within Federal and State income limits. Furthermore, many lower -income persons with disabilities are likely to require housing assistance and services. Housing needs for disabled persons are further compounded by design issues and location factors, which can often be costly. For example, special needs of households with wheelchair -bound or semi -ambulatory individuals may require ramps, holding bars, special bathroom designs, wider doorways, lower cabinets, elevators, and other interior and exterior design features. Housing opportunities for persons with disabilities can be addressed through the provision of affordable, barrier -free housing. Rehabilitation assistance can be targeted toward renters and homeowners with disabilities for unit modification to improve accessibility. As addressed in Table 2-20, the 2018 ACS identifies six disability types: hearing disability, vision disability, cognitive disability, ambulatory disability, self -care disability and independent living disability. The Census and the ACS provide clarifying questions to determine persons with disabilities and differentiate disabilities within the population. Section 2: Community Profile (September 2022 Final Housing Element) 2-20 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-20: Disabilitv Status. 2018 Under 18 18 to 64 65 years and Percent of percent of Disability Type with a with a Over with a Total Population Total with Disability Disability Disability Disability population Population with a Hearing Difficulty 96 402 1,832 2,330 33.6% 2 7% Population with a Vision Difficulty 60 561 909 1,530 22% 1.8% Population with a Cognitive Difficulty 398 962 1,155 2,515 36.2% 2 9% Population with an Ambulatory Difficulty 72 705 2,411 3,188 45.9% 3.7% Population with a Self -care Difficulty 112 406 894 1,412 20.3% 1.6% Population with an independent Living -- 714 1,885 2,599 37.4% 3% Difficulty Total 480 2,329 4,134 6,943 100% 86,015 *This number may double count as some persons report having one or more disabilities, therefore this total number differs from the total number of persons with a disability in Table 2-18. Source: American Community Survey, 5-Year Estimates, 2018. The ACS defines a disability as a report of one of the six disabilities identified by the following questions: • Hearing Disability: Is this person deaf or does he/she have serious difficulty hearing? • Visual Disability: Is this person blind or do they have serious difficulty seeing even when wearing glasses? • Cognitive Difficulty: Because of a physical, mental, or emotional condition, does this person have serious difficulty concentrating, remembering, or making decisions? • Ambulatory Difficulty: Does this person have serious difficulty walking or climbing stairs? • Independent Living Difficulty: Because of a physical, mental, or emotional condition, does this person have difficulty doing errands alone such as visiting a doctor's office or shopping? State law requires that the Housing Element discuss the housing needs of persons with developmental disabilities. As defined by federal law, "developmental disability" means a severe, chronic disability of an individual that: • Is attributable to a mental or physical impairment or combination of mental and physical impairments; • Is manifested before the individual attains age 22; • Is likely to continue indefinitely; Section 2: Community Profile (September 2022 Final Housing Element) 2-21 City of Newport Beach _ • Results in substantial functional limitations in three or more of the following areas of major life activity: a) self -care; b) receptive and expressive language; c) learning; d) mobility; e) self -direction; f) capacity for independent living; or g) economic self-sufficiency; and • Reflects the individual's need for a combination and sequence of special, interdisciplinary, or generic services, individualized supports, or other forms of assistance that are of lifelong or extended duration and are individually planned and coordinated. Per Section 4512 of the Welfare and Institutions Code a "developmental disability" means a disability that originates before an individual attains age 18 years, continues, or can be expected to continue, indefinitely, and constitutes a substantial disability forthat individual which includes intellectual disability, cerebral palsy, epilepsy, and autism. This term also includes disabling conditions found to be closely related to intellectual disability or to require treatment like that required for individuals with intellectual disability but shall not include other handicapping conditions that are solely physical in nature. According to the Regional Center of Orange County's (RCOC) Total Annual Expenditures and Authorized Services for Fiscal Year 2019-2020, a total of 25,163 individuals received services. RCOC represents the fifth -largest regional center in California and has over 300 service coordinators. Of those who received services, 31.6 percent reported their race as White, 16 percent reported Asian, 16.1 percent reported Other Ethnicity or Race/Multi-Cultural, and 2 percent reporter Black/African American. Approximately 34 percent of those who received services also reported their ethnicity as Hispanic or Latino. Ages of the 25,163 individuals includes 21.1 percent 2 years or younger, 39.9 percent 3 to 21 years, and 39 percent over the age of 22. The majority of those who received services lived at the home of a parent or guardian (82.3 percent), but 6.8 percent live in a Community Care Facility and 5.6 percent live in Independent Living or Supported Living. Diagnosis reported by the individuals who received services include the following: • Intellectual Disability: 37.6% • Autism:31% • Cerebral Palsy: 2.5.% • Epilepsy:1 • Category 5: 3.9% • Other:24.1% For Newport Beach, the California Department of Developmental Services provides estimates of persons with developmental disabilities in Newport Beach. As of June 2019, 232 juvenile persons have been and 123 adults have been identified as have a developmental disability. The majority of these residents are juveniles who live at home with a parent or guardian. Section 2: Community Profile (September 2022 Final Housing Element) 2-22 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-21 Developmental Disabilitv Status. 2019 Disability Type # of Residents BY RESIDENT Home of Parent/Guardian 202 Independent/Supported Living 15 Community Care Facility 5 Intermediate Care Facility 0 Foster/Family Home 10 Other 0 BY AGE 0-17 Years Old 232 18* Years Old 123 CA DDS data by ZIP Code, June 2019. Many people with developmental disabilities can live and work independently within a conventional housing environment. Individuals with more severe developmental disabilities may require a group living environment where supervision is provided. The most severely affected individuals may require an institutional environment where medical attention and physical therapy are provided. Because developmental disabilities exist before adulthood, the first issue in supportive housing for persons with developmental disabilities is the transition from the person's living situation as a child to an appropriate level of independence as an adult. There are several housing types appropriate for people living with a development disability: rent - subsidized homes, licensed and unlicensed single -unit homes, inclusionary housing, Section 8 vouchers, special programs for home purchase, Department of Housing and Urban Development (HUD) housing, and SB 962 (veterans) homes. The design of housing -accessibility modifications, the proximity to services and transit, and the availability of group living opportunities represent some of the types of considerations that are important in serving the needs of this group. Incorporating 'barrier -free design in all, new multi- unit housing (as required by California and Federal Fair Housing laws) is especially important to provide the widest range of choices for residents with disabilities. Special consideration should also be given to the affordability of housing, as people with disabilities may be living on a fixed income. Key Challenges and Resources to Address Persons with Physical and Developmental Disabilities Persons with physical and developmental disabilities in Newport Beach have exhibited the following unique challenges to housing: • Need for specialized housing to accommodate disabilities • Need for supportive services • Higher incidence of dependent living needs Section 2: Community Profile (September 2022 Final Housing Element) 2-23 City of Newport Beach _ P 2021-2029 HOUSING ELEMENT _ - • High incidence of unemployment To address these challenges, the City must consider a variety of solutions to address the above issues: these may include: • Regional coordination and support for services • Permitting of housing for persons with disabilities • Prioritization of services for disabled persons • Local supportive services to supplement physical housing needs • Housing regulations/accommodation of unique housing needs • Group Homes options for persons with self -care limitations Resources to address the above needs include local General Fund revenue to fund Policy Actions described in Chapter 4, and partnership with the Orange County Regional Center, who provides and coordinates lifelong support and services to persons with disabilities. The City's existing permit procedures, regulations and policies further support physical and developmental disabilities through the granting of uses and facilities to accommodate the needs of persons disabilities. The City also has a reasonable accommodation procedure that is intended to grant accommodations for persons with disabilities with the expressed intent not to cause additional cost to the requestee. The City has included Policy Action 7C in Section 4 to address housing needs for persons with developmental disabilities. The City will review and prioritize housing and supportive services for persons with developmental disabilities, as well as explore regulatory incentives for projects that address the needs of persons with developmental disabilities. Large Households Large households are defined as those consisting of five or more members. These households comprise a special need group because many communities have a limited supply of adequately sized and affordable housing units. To save for other necessities such as food, clothing, and medical care, it is common for lower -income large households to reside in smaller units with inadequate number of bedrooms, which frequently results in overcrowding and can contribute to fast rates of deterioration. Securing housing large enough to accommodate all members of a household is more challenging for renters because multi -unit rental units are typically physically smaller than single -unit ownership homes. While apartment complexes offering two and three bedrooms are common, apartments with four or more bedrooms are rare. It is more likely that large households will experience overcrowding in comparison to smaller households. Additionally, throughout the region, single -unit homes with higher bedroom counts, whether rental or ownership units, are rarely affordable to lower -income households. Table 2-22 outlines the number of large households in the City by tenure and household size. As is shown, the vast majority of large households are owner -occupied rather than rented (71.3 percent and 28.7 percent respectively). There are very few households with 7 or more persons in owner -occupied homes and none in rentals. Amongst all rental homes, 2.5 percent are 5-person households and amongst owned homes 4.4 percent are 5-person households. Section 2: Community Profile (September 2022 Final Housing Element) 2-24 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-22: Large Households by Tenure, 2017 Owner Renter Total Household Size Percent of Total Percent of Total Percent of Count Count Count Owner HHs Renter HHs Total HHs 5-Person 933 4.4% 417 2.5% 1,350 3.6% Household 6-person 398 1.9% 93 0.6% 491 1.3% Household 7+ person 56 0.3% 48 0.3% 104 0.3% Households Total 1,387 71.3% 558 28.7% 1,945 100% Source: American Community Survey, 5-Year Estimates, 2018. Key Challenges and Resources to Address Large Person Households Large Person Households in Newport Beach have exhibited the following unique challenges to housing: • Lack of available housing with sufficient bedroom counts • Options for larger bedroom counts in rental units • Higher monthly cost burdens • Affordable options for large family households • Childcare needs for working families To address these challenges, the City must consider a variety of solutions to address the above issues: these may include: • Permitting of larger bedroom counts in ownership and rental units • Affordable housing options for large family households • Prioritization of family -sized units in affordable housing developments • Leveraging of Grant/Funding opportunities Resources to address the above needs include Policy Actions that support the leveraging of LIHTC opportunities, State, Federal and private funds focused on multiple family development. Regional resources include OCHFA, SCHFA funding, Orange County Continuum of Care and Orange County Housing Authority Funding. The City has included Policy Actions IA -IF, 4C, 4D and 6C,6D that will provide standards and provisions that will support the provision of larger sized family units. 4. Sinale-Parent Household, Single -parent households often require special consideration and assistance due to their greater need for affordable and accessible daycare, health care, and other supportive services. Many female -headed households with children are susceptible to having lower -incomes than similar two -parent households. Single, female mothers often face social marginalization pressures that often limit their occupational choices and income earning potential, housing options and access to supportive services. Section 2: Community Profile (September 2022 Final Housing Element) 2-25 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-23 shows there are few single parent households in Newport Beach (3.6 percent) as compared to 7.4 percent in Orange County. Most single -parent households in both the City and Orange County are headed by females without a spouse present— 68.9 percent in Newport Beach and 70.5 percent in Orange County. The percentage of single parents living in poverty in the City is half that of the regional percentage. Table 2-23: Single Parent Households Single Parent- Single Parent Single Parent -Male, Single Parent Female, No Spouse Households Living No Spouse Present Households Jurisdiction Present in Poverty of Single % of Single % of Single % of Total Count parent HH Count parent HH Count parent HH Count Households Newport Beach 422 31.1% 936 68.9% 183 13.5% 1,358 3.6% Orange County 22,456 29.5% 53,659 70.5% 22,999 30.2% 76,115 7.4% Source: American Community Survey, 5-Year Estimates, 2018, Key Challenges and Resources to Address Single Parent Households Single Parent Households in Newport Beach have exhibited the following unique challenges to housing: • Affordable Housing Options • Rental and For Sale Housing Options • Higher monthly cost burdens with one income families • Childcare needs for working families To address these challenges, the City must consider a variety of solutions to address the above issues: these may include: • Affordable housing options for single income families • Accessibility to childcare options • Leveraging of Grant/Funding opportunities With incidents of single parent households at half the rate compared to Orange County, the city believes the existing opportunities and policies related to affordable housing options, childcare access and leveraging of funding will provide the necessary resources to address the needs of this segment of the population. 5. Farmworkers Farmworkers are traditionally defined as persons whose primary incomes are earned through permanent or seasonal agricultural labor. Permanent farm laborers work in the fields, processing plants, or support activities on a generally year-round basis. When workload increases during harvest periods, the labor force is supplemented by seasonal workers, often supplied by a labor contractor. For some crops, farms may hire migrant workers, defined as those whose travel prevents them from returning to their primary residence every evening. Farmworkers have special housing needs because they earn lower -incomes than many other workers and move throughout the year from one harvest location to the next. Section 2: Community Profile (September 2022 Final Housing Element) 2-26 City of Newport Beach 2021-2029 HOUSING ELEMENT The United States Department of Agriculture, National Agriculture Statistics provides data on hired farm labor across the United States. The data is compiled at both a State and County level. Within Orange County, a total of 99 farms reportedly hired 1,772 workers in 2017. Permanent workers, those who work 150 days or more, represent the largest category of workers with 1,106 workers (62 percent). A total of 666 workers (38 percent) are considered seasonal and work less than 150 days. Orange County reported 340 migrant workers (19 percent) with full time hired labor in 2017. In addition, the County reported 176 unpaid workers. 2018 ACS 5-Year Estimates data reports a total of 72 Newport Beach residents employed full time, year round in the agriculture, forestry, fishing, hunting, and mining industry. Fourteen (14) residential are employed full time in farmworkers jobs. These are most likely very small local operations and not large scale farming activities .The median annual wage forthese industries is $27,472 and falls below 50 percent of the median income for Orange County (32 percent). Key Challenges and Resources to Address Farmworker Housing Needs Farmworker Households in Newport Beach have exhibited the following unique challenges to housing: • Affordable Housing Options • Higher incidents of cost burden for housing • Rental and For Sale Housing Options • Childcare needs for working families Similar to other special needs groups, Farmworkers needs are focused on affordability of housing and access to services that support lower monthly overall costs. To address these challenges, the City must consider a variety of solutions to address the above issues: these may include: • Affordable housing options for farmworkers • Accessibility to childcare options • Leveraging of Grant/Funding opportunities With incidents of Farmworker households representing less than one half of one percent, the city believes the existing opportunities and policies related to affordable housing options, childcare access and leveraging of funding will provide the necessary resources to address the needs of this segment of the population will assist in the needs for farmworkers citywide. '5. Extremely Low-income Households and Povertv Status The 2013-2017 Comprehensive Housing Affordability Strategy (CHAS) indicates that there are 3,270 low- income households living in Newport Beach. Very low-income households earn 50 percent or less of the area median family income (AMFI) for Orange County. Extremely low-income households earn less than 30 percent of the AMFI. There are approximately 3,855 extremely low-income households in the City, including both renters and homeowners. Table 2-23 below shows a breakdown of housing problems for Newport Beach households by income category. Section 2: Community Profile (September 2022 Final Housing Element) 2-27 City of Newport Beach _ Table 2-24 shows that about 10 percent more renters live with at least one housing problem. More lower - income renters report a housing problem - 9.2 percent with extremely low-income, 10.6 percent with very low-income, and 12.5 percent with low-income. About 45 percent of renters experience one or more housing problems. Homeowners typically report less of a cost burden than renters. In Newport Beach, 35.3 percent of homeowners have at least one housing problem. The majority of those are in above - moderate -income households (15.9 percent). In total, for both renters and homeowners, 39.5 percent of households have at least one housing problem. While representing only 0.8 percent of the Newport Beach population, people who identify as Black have the highest rates of poverty in the City, as illustrated in Figure 2-6. Similarly, American Indian/Alaska Natives and Native Hawaiian/other Pacific Islanders make up the smallest population percentages (0.3 percent and 0.2 percent, respectively) and together account for over 20 percent of those living below the poverty line. Values in the bar graph below contrasted to racial and ethnic composition of the City illustrate critical differences in housing needs. To calculate the projected housing needs, the City assumed 50 percent of its very low-income regional housing need are extremely low-income households. Calculating from the very low-income need of 1,456 units, the City has an estimated need of 728 housing units for extremely low-income households. Extremely low-income household needs will likely be focused to rental housing and more likely to experience overpayment, overcrowding or substandard housing conditions and more likely to include transitional and supportive housing. Table 2-24: Housing Problems for All Households by Income Categorv, 2013-2017 Owner Income Category Household has at % of Household has % of Cost Burden not % of least 1 of 4 Owner none of 4 Housing Owner available, no other Owner Housing Problems HH Problems HH Housing Problem HH Household Income is 1,335 6.2% 65 0.3% 175 0.8% less -than or = 30% Household Income >30% to less -than or = 1,020 4.7% 290 1.3% 0 0.0% 50% AMFI Household Income >50% to less -than or = 1,215 5.6% 705 3.3% 0 0.0% 80% AMFI Household Income >80% to less -than or = 615 2.8% 370 1.7% 0 0.0% 100% AMFI Household Income 3,450 15.9% 12,405 57.3% 0 0.0% >100% AMFI Total 7,635 35.3% 13,835 63.9% 175 0.8% Household Income is 1,500 9.2% 170 1.0% 610 3.7/ ° less -than or = 30% Section 2: Community Profile (September 2022 Final Housing Element) 2-28 City of Newport Beach 2021-2029 HOUSING ELEMENT Owner Income Category Household has at % of Household has % of Cost Burden not % of least 1 of 4 Owner none of 4 Housing Owner available, no other Owner Housing Problems HH Problems HH Housing Problem HH Household Income >30% to less -than or = 1,725 10.6% 235 1.4% 0 0.0% 50% AMFI Household Income >50% to less -than or = 2,040 12.5% 510 3.1% 0 0.0% 80% AMFI Household Income >80% to less -than or = 885 5.4% 425 2.6% 0 0.0% 100% AMFI Household Income 1,205 7.4% 7,025 43.0% 0 0.0% >100% AMFI Total 7,355 45.1% 8,365 51.2% 610 3.7% Total Households 14,990 39.5% 22,200 58.5% 785 2.1% (Owner and Renter) * The four housing problems are: incomplete kitchen facilities, incomplete plumbing facilities, more than 1 person per room, and cost burden greater than 30%. ** The four severe housing problems are: incomplete kitchen facilities, incomplete plumbing facilities, more than 1.5 persons per room, and cost burden greater than 50%. Note: AMFI = Area Median Family Income, this is the median family income calculated by HUD for each jurisdiction, to determine Fair Market Rents (FMRs) and income limits for HUD programs. AMFI will not necessarily be the same as other calculations of median incomes (such as a simple Census number), due to a series of adjustments that are made. Source: Source: U.S. Department of Housing and Urban Development (HUD), Comprehensive Housing Affordability Strategy (CHAS) 2013- 2017. Figure 2-6: Percent below Poverty Level, by Race and Hispanic or Latino Origin 25% 20% 15% 10% 5% 0% White Black American Asian Native Some Two or Hispanic or Indian and Hawaiian Other Race More Latino Alaska and Other Races Native Pacific Islander Source: American Community Survey, 5-Year Estimates, 2018. Note: The chart reports percentage of own population who are reported to have incomes below poverty level. Section 2: Community Profile (September 2022 Final Housing Element) 2-29 City of Newport Beach 2021-2029 HOUSING ELEMENT Housing Extremely Low Income households (those with incomes less than 30% of the County Median income) are generally challenging in Newport Beach, Extremely Low Income Housing Needs. Table 2-25 illustrates there are 3,984 persons in Newport Beach with incomes less than 30% of the Area Median Income. Persons of Hispanic origin experience the highest rates of extremely low income, represent 14.3% of the total Extremely Low Income Population. This income category is generally distributed evenly amongst racial groups. Renters tend to have a higher incidents of Extremely Low Income in Newport Beach. Table 2-25: Extremely Low Income Household Needs # Households <30% MFI % Share <30% MFI White, Non -Hispanic 3185 10.1% Black, Non -Hispanic 15 8.2% Asian and Other Non -Hispanic 449 12.6% Hispanic 335 14.3% TOTAL 3984 10.6% Renter Occupied 2385 14.4% Owner Occupied 1600 7.6% Source: HUYD CHAS, 2012-2016 Challenges and Resources to Address Farmworker Housing Needs Extremely Low Income Households in Newport Beach have exhibited the following unique challenges to housing: • Need for increased affordable housing options • Markedly Higher incidents of cost burden for housing • Need for smaller housing unit options such as SRO's • Rental Assistance • Higher incidents of homelessness • Higher likelihood for transitional and supportive housing Extremely Low income household needs are focused on affordability of housing and access to subsidies and services that support lower monthly overall costs. To address these challenges, the City must consider a variety of solutions to address the above issues: these may include: • Affordable housing options for Extremely Low Income households • Preservation of subsidized housing units • Creation of additional subsidized housing units • Inclusionary policies • Housing with a service component • Transitional, Supportive and Homeless housing options Section 2: Community Profile (September 2022 Final Housing Element) 2-30 City of Newport Beach 2021-2029 HOUSING ELEMENT Resources to address the needs of Extremely Low Income households include a variety of federal, state and regional programs, such as Section 8, HUD, LIHTC USDA, CalHFA and other public and private funding sources. The City has included Policy Action 713 in Section 4 to address transitional and supportive housing needs for extremely low income persons. The City will continue to monitor the inventory of sites appropriate to accommodate extremely low income households, transitional and supportive housing and will work with the appropriate organizations to ensure the needs of homeless and extremely low-income residents are met. The City is committed to prioritizing funding and other available incentives for projects that provide housing for homeless and extremely low-income residents whenever possible. 7, Persons Experiencing Homelessness Throughout the country and Orange County region, homelessness has become an increasingly important issue. Factors contributing to the rise in homelessness include, increased unemployment and underemployment, a lack of housing affordable to lower and moderate -income persons (especially extremely low-income households), reductions in public subsidies to the poor, and the de - institutionalization of the mentally ill. State law mandates that cities address the special needs of persons experiencing homelessness within their jurisdictional boundaries. "Homelessness" as defined by the U.S. Department of Housing and Urban Development (HUD) has recently been updated, the following lists the updated descriptions and the changes in the definition from HUD: • People who are living in a place not meant for human habitation, in emergency shelter, in transitional housing, or are exiting an institution where they temporarily resided. The only significant change from existing practice is that people will be considered homeless if they are exiting an institution where they resided for up to 90 days (it was previously 30 days) and were in shelter or a place not meant for human habitation immediately prior to entering that institution. • People who are losing their primary nighttime residence, which may include a motel or hotel or a doubled -up situation, within 14 days and lack resources or support networks to remain in housing. HUD had previously allowed people who were being displaced within 7 days to be considered homeless. The proposed regulation also describes specific documentation requirements for this category. • Families with children or unaccompanied youth who are unstably housed and likely to continue in that state. This is a new category of homelessness, and it applies to families with children or unaccompanied youth who have not had a lease or ownership interest in a housing unit in the last 60 or more days, have had 2 or more moves in the last 60 days, and who are likely to continue to be unstably housed because of disability or multiple barriers to employment. • People who are fleeing or attempting to flee domestic violence, have no other residence, and lack the resources or support networks to obtain other permanent housing. This category is similar to the current practice regarding people who are fleeing domestic violence. Section 2: Community Profile (September 2022 Final Housing Element) 2-31 City of Newport Beach This definition does not include persons living in substandard housing (unless it has been officially condemned); persons living in overcrowded housing (for example, doubled up with others); persons being discharged from mental health facilities (unless the person was homeless when entering and is considered to be homeless at discharge); or persons who may be at risk of homelessness (for example, living temporarily with family or friends.) The Point in Time Count is conducted by the County of Orange in accordance with the U.S. Department of Housing and Urban Development (HUD) guidelines to provide information on where individuals experiencing homelessness are in the County. About 1,167 volunteers across the County counted 6,860 individuals experiencing homelessness. Of those, 2,899 were sheltered and 3,961 were unsheltered. The 2020 Count is not yet available online, therefore this data is based on the Count conducted in January 2019 — the individual city results are shown in Table 2-26. Of the nearby cities, Newport Beach had the lowest count and percentage of people experiencing homelessness (64 individuals and 0.9 percent of the County). Huntington Beach recorded the greatest percentage at 5.1 percent. Of all those reported in Orange County, 5 percent were veterans, 4 percent were transitional youth ages 18 to 24, and 9 percent were seniors over the age of 65. Table 2-26: Homeless Count by Jurisdiction, 2019 Jurisdiction Unsheltered Sheltered Total % of County Costa Mesa 187 6 193 2.8% Newport Beach 64 0 64 0.9% Huntington Beach 289 60 349 5.1% Laguna Beach 71 76 147 2.1% Irvine 127 3 130 1.9% Orange County 3,961 2,899 6,860 100% Source: Orange County Point in Time Count, Everyone Counts Report 2019. Key Challenges and Resources to Address Persons Experiencing Homelessness The City has taken steps to address the very complex issue of homelessness. City staff and City Net, a contractor that assists with community outreach and case management services, work in collaboration to engage these individuals and connect them with services such as emergency housing, mental and health care, benefits counseling and a variety of other community -based programs and services. The City also has a dedicated, full-time police officer and a homeless coordinator who focus on the issue of homelessness. The Homeless Liaison Officer works closely with the County of Orange Health Care Agency's case management staff and City Net to provide homeless outreach services. The uniqueness of each homeless individual's situation requires an individual approach. Since everyone's needs are different, our staff works with our homeless individuals on a case -by -case basis. It is important to understand that often, individuals are resistant to seeing case workers or our police officers assigned to work with those experiencing homelessness. Multiple visits may be required before Section 2: Community Profile (September 2022 Final Housing Element) 2-32 City of Newport Beach 2021-2029 HOUSING ELEMENT we gain a person's trust in a way that opens a conversation about solutions. That is why, in addition to our full-time officer, the City has contracted with City Net to provide homeless outreach services. Street outreach services seeks to connect unsheltered homeless individuals with emergency shelter, housing, critical services, healthcare, or urgent, non -facility -based care. Newport Beach has entered a partnership with the adjacent City of Costa Mesa for shelter beds at the Costa Mesa Bridge Shelter, which opened in Spring 2021. In addition to temporary housing, the Bridge Shelter provides case workers who assist homeless individuals with addiction and mental health counseling, job searches, and accessing permanent housing. The City has included Policy Action 6A to address the needs of persons experiencing homelessness. The Policy Action continues the City's efforts to fund sub -recipients who provide shelter and services to persons experiencing homelessness. In addition, Policy Action 7A and 713 address supportive and transitional housing and low barrier navigation center needs for persons experiencing homelessness. 8. Students Student housing often only produces a temporary housing need based on the duration of the educational institution enrolled in. The impact upon housing demand is critical in areas that surround universities and colleges. Located in Newport Beach is Coastline College, and colleges near the City include University of California, Irvine; Concordia University; Orange Coast College; Vanguard University; Laguna College of Art and Design; SOKA University; and Irvine Valley College. Students enrolled in undergraduate and graduate programs, make up about 6 percent of the total population of Newport Beach. Key Challenges and Resources to Address Student Housing Needs Typically, students are low-income and are, therefore, affected by a lack of affordable housing, especially within easy commuting distance from campus, therefore it is important for the City to consider and accommodate the student population within the community. They often seek shared housing situations to decrease expenses and can be assisted through roommate referral services offered on and off campus. A lack of affordable housing also influences choices students make after graduating. The characteristics of the housing stock, including growth, type, availability and tenure, age and condition, housing costs, and affordability contribute to the housing needs for the community. This section details the housing characteristics of Newport Beach to identify how well the current housing stock meets the needs of its current and future residents. 1. Housina Growth According to the American Community Survey (ACS), the City's housing stock grew by 1,298 units between 2010 and 2018 (Table 2-27). This 2.9 percent increase was the second largest in this area, behind the City of Irvine which had a dramatically larger gain of 31 percent. Orange County as a whole experienced a Section 2: Community Profile (September 2022 Final Housing Element) 2-33 City of Newport Beach 2021-2029 HOUSING ELEMENT 4.6 percent housing stock increase during this same time period, which is 1.7 percent more than Newport Beach. The City of Costa Mesa had smaller percent change than Newport Beach by 2.3 percent. Table 2-27: Housing Unit Growth Trends. 2010-2018 Jurisdiction 2010 2015 2018 Percent Change 2010 to 2015 Percent Change 2015 to 2018 Costa Mesa 42,867 43,030 43,100 0.4% 0.2% Newport Beach 43,503 43,690 44,801 0.4% 2.5% Huntington Beach 79,166 78,252 81,396 -1.2% 4.0% Laguna Beach 13,243 13,433 13,487 1.4% 0.4% Irvine 76,184 91,938 101,434 20.7% 10.3% Orange County 1,042,254 1,064,642 1,091,376 2.1% 2.5% Source: American Community Survey, 5-Year Estimates, 2010, 2015, and 2018. 2. Housing Type Table 2-28 is a breakdown of housing units by type in Newport Beach in contrast to Orange County. The table reflects data from the American Community Survey which is estimates based on the U.S. Census and surveys. A large percentage of housing units in the City come from single unit detached homes (47.8 percent). Single unit attached homes typically do not take up a large portion of the housing stock, but in Newport Beach they account for 16.1 percent of all units. Another 34.5 percent is multi -unit housing, which is the same for the County as well. Mobile homes are the smallest category of housing types with 1.5 percent of all units. It is important to provide a wide variety of housing types throughout the City in order to ensure all housing needs for the population are met. Table 2-28: Total Housing Units by Tvpe Single -Unit Detached Single -Unit Attached Multi -Unit Mobile Homes Jurisdiction Count Percent Count Percent Count Percent Count Percent Newport Beach 21,399 47.8% 7,234 16.1% 15,437 34.5% 390 1.5% Orange County 553,164 50.7% 133,326 12.2% 374,176 34.3% 30,227 2.8% Source: American Community Survey, 5-Year Estimates, 2018. 3. Housing Availability and Tenure Housing tenure and vacancy rates generally influence the supply and cost of housing. Housing tenure defines if a unit is owner -occupied or renter occupied. Tenure is an important market characteristic as it relates to the availability of housing product types and length of tenure. The tenure characteristics in a community can indicate several aspects of the housing market, such as affordability, household stability, Section 2: Community Profile (September 2022 Final Housing Element) 2-34 City of Newport Beach _ and availability of unit types, among others. In many communities, tenure distribution generally correlates with household income, composition, and age of the householder. In 2018, owner -occupied units accounted for 56.5 percent of the Newport Beach housing stock and 43.5 percent were rentals (Table 2-29). Of the owner -occupied units, the large majority were single unit detached homes (71.6 percent) and the smallest percentage was of mobile homes (1.1 percent). As is often the case, multi -unit homes accounted for over half of all rentals (67.9 percent) and only 17 percent of rental units were single unit detached homes. Mobile homes are more likely to be occupied by renters, as the Table 2-27 shows. Table 2-29: Occupied Housing Units by Tvoe and Tenure Single- Unit Single -Unit Mobile Total Occupied Tenure Detached Attached Multi -Unit Homes Units' Owner 71.6% 19.5% 7.8% 1.1% 56.5% Occupied Renter 17.1% 12.7% 67.9% 2.2% 43.5% Occupied Total 47.9% 16.5% 34.1% 1.6% 100% 'Note: The data shows the percent of total occupied units. Source: American Community Survey, 5-Year Estimates, 2018. Table 2-30: Average Household Size by Tenure, 2018 Jurisdiction Owner Occupied Households (% of Total Households) Average Owner Household Size Renter Occupied Households (% of Total Households) Average Renter Household Size Costa Mesa 39.1% 2.8 60.9% 2.7 Newport Beach 56.5% 2.5 43.5% 2 Huntington Beach 57.8% 2.6 42.2% 2.6 Laguna Beach 60.7% 2.3 39.3% 2 Irvine 47.3% 2.8 52.7% 2.6 Orange County 57.4% 3 42.6% 3.1 Source: American Community Survey, 5-Year Estimates, 2018. To identify housing trends and potential population needs, Table 2-30 compares average household sizes and tenure amongst the cities surrounding Newport Beach. Renters in the City have one of the lowest average household sizes at just 2 people per home. Homeowners in Newport Beach also have the second smallest number of people per household after Laguna Beach with 2.3 people per home. The County average is 3.1 persons for rentals and 3 persons for owner -occupied homes. Figure 2-7 illustrates vacancy rates by jurisdiction and shows that Newport Beach has the second largest percentage of vacant homes at 15.5 percent. The City's vacancy rate is 3 times that of Orange County. Vacancy rates indicate the degree of choice available. High vacancy rates usually indicate low demand and/or high supply conditions in the housing market. Too high of a vacancy rate can be difficult for owners trying to sell or rent. Low vacancy rates usually indicate high demand and/or low supply conditions in the housing market. Too low of a vacancy rate can force prices up making it more difficult for lower and Section 2: Community Profile (September 2022 Final Housing Element) 2-35 City of Newport Beach 2021-2029 HOUSING ELEMENT moderate -income households to find housing. Vacancy rates of between 2 to 3 percent are usually considered healthy for single -unit or ownership housing, and rates of 5 to 6 percent are usually considered healthy for multi -unit or rental housing. Figure 2-7: Vacancy Rate by Jurisdiction, 2018 25.0% 20.0% 15.0% 10.0% 5.0% ° 0.0 /° Newport Huntington Laguna Orange Costa Mesa Beach Beach Beach Irvine County Vacancy Rate 4.8% 15.5% 5.6% 21.8% 6.0% 5.4% Source: American Community Survey, 5-Year Estimates, 2018. The most common reason for vacancies in Newport Beach is due to homes being used seasonally, or for recreation or occasional use (48.3 percent), as shown in Table 2-31 These 3,350 homes are not permanent residences and remain empty for most of the year. Homes for rent are the second most common reason for vacancies in the City at 22.4 percent. Table 2-31: Twe of Vacant Housing Units in Newport Beach Type of Housing Estimate Percent For rent 1,551 22.4% Rented, not occupied 292 4.2% For sale only 370 5.3% Sold, not occupied 499 7.2% For seasonal, recreational, or occasional use 3,350 48.3% Other vacant 869 12.5% Total 6,931 100% Source: American Community Survey, 5-Year Estimates, 2018. 4. Housing Age and Condition Housing age can be an indicator of housing condition within a community. For example, housing that is over 30 years old is typically in need of some major rehabilitation, such as a new roof, foundation, plumbing, etc. Many federal and state programs also use the age of housing as one factor in determining housing rehabilitation needs. Section 2: Community Profile (September 2022 Final Housing Element) 2-36 City of Newport Beach 2021-2029 HOUSING ELEMENT In Newport Beach, most homes were built over 30 years ago (Figure 2-8). About 22.3 percent of the housing stock was built between 1970 and 1979, while only 2.7 percent was built after 2010. Another 8 percent of homes were also built prior to 1950. This reflects an aging housing stock that may need certain updates. Figure 2-8: Age Distribution of Housing Stock 25% 20% 15% 10% 5% 1 1 o 0 /o Built Built Built Built Built Built Built Built Built Built 2014 or 2010 to 2000 to 1990 to 1980 to 1970 to 1960 to 1950 to 1940 to 1939 or later 2013 2009 1999 1989 1979 1969 1959 1949 earlier ■ Newport Beach 1.1 % 1.6% 10.8% 14.2% 11.2% 22.3% 19.0% 11.7% 3.7% 4.3% Source: American Community Survey, 5-Year Estimates, 2018 Figure 2-9 below displays the 2018 ACS data for housing units by the year they were built sorted by tenure. According to the data, Newport Beach has mostly had a majority of owner -occupied units. The majority of the City's housing stock was built before 1980 and is home to 32 percent of the City's current homeowners. The greatest number of renters reside in housing units built between 1970 and 1979. Section 2: Community Profile (September 2022 Final Housing Element) 2-37 Ciryty of Newport Beach Figure 2-9: Housing Stock by Age of Structure and Tenure 25% 20% 15% 10% 5% ■ ■ ■ ■ ■ ■ ■ ■ 0% _ M Built Built Built Built Built Built Built Built Built Built 2014 or 2010 to 2000 to 1990 to 1980 to 1970 to 1960 to 1950 to 1940 to 1939 or later 2013 2009 1999 1989 1979 1969 1959 1949 earlier ■ Renter 0.3% 0.9% 3.3% 5.1 % 5.7% 12.3% 8.5% 4.5% 1.4% 1.7% ■ Owner 0.6% 0.7% 8.1 % 9.4% 5.6% 11.1 % 10.3% 6.7% 2.2% 1.7% ■ Owner ■ Renter Source: American Community Survey, 5-Year Estimates, 2018 Figure 2-10 displays the 2018 ACS data for housing units by the year they were built for owners (left) and renters (right). That data shows that a greater concentration of renters reside in units built between 1970 and 1979 compared to other years and to homeowners. Less than 2 percent of renters and homeowners reside in units built after 2010. A greater number of homeowners live in units built between 1990 and 2009 than renters (9.1 percent more). Section 2: Community Profile (September 2022 Final Housing Element) 2-38 City of Newport Beach 2021-2029 HOUSING ELEMENT �•'�-`"�� Figure 2-10: Housing Units by Year Built Owner (Left) and Renter (Right) Owner Renter Built 1939 or earlier 1111111110 1.7% Built 1940 to 1949 M 2.2% Built 1950 to 1959 6.7% Built 1960 to 1969 10.3% Built 1970 to 1979 11.1 % Built 1939 or earlier 1111110 1.7% Built 1940 to 1949 M 1.4% Built 1950 to 1959 4.5% Built 1960 to 1969 8.5% Built 1970 to 1979 12.3% Built 1980 to 1989 5.6% Built 1980 to 1989 5.7% Built 1990 to 1999 M 9.4% Built 1990 to 1999 5.1 % Built 2000 to 2009 8.1 % Built 2000 to 2009 3.3% Built 2010 to 2013 ■ 0.7% Built 2010 to 2013 ■ 0.9% Built 2014 or later 1 0.6% Built 2014 or later 1 0.3% 0% 4% 8% 12% 0% 4% 8% 12% Source: American Community Survey, 5-Year Estimates, 2018. 5. Housing Costs and Affordability Housing costs reflect the supply and demand of housing in a community. This section summarizes the cost and affordability of the housing stock to the City's residents. Home values in Newport Beach are on median $1,787,300, as shown in Table 2-32. This total is 2.7 times the median home value of Orange County and significantly larger than the nearby cities. Laguna Beach is second behind Newport Beach in home value with a median amount of $1,700,400. Costa Mesa has the lowest median home value of $707,600. Table 2-32: Median Home Value by Jurisdiction Jurisdiction Median Home Value Costa Mesa $707,600 Newport Beach $1,787,300 Huntington Beach $728,200 Laguna Beach $1,700,400 Irvine $797,100 Orange County $652,900 Source: American Community Survey, 5-Year Estimates, 2018. Table 2-33 outlines the average monthly price of rent in Newport Beach and how it has changed between 2017 and 2020 depending on the number of bedrooms. This data is provided by the Zillow Rent Index Report for Newport Beach, and shows that all units experienced increases in rates in the last three years. One -bedroom rentals rose by 5.1 percent and the most out of 1-3-bedroom units. Two -bedroom units Section 2: Community Profile (September 2022 Final Housing Element) 2-39 City of Newport Beach 2021 ate. remained the most consistent with a slight increase of 1.4 percent. The price per square foot, however, saw a much greater increase for units with three or more bedrooms (9.8 percent). Zillow reports that one - bedroom units decreased from $3.01 per square foot in 2017 to $3 per square foot in 2020. Table 2-33: Change in Average Monthly Rental Rates. 2017-2020 Unit Type January 2017 January 2018 January 2019 January 2020 % Change 2017-2020 1 Bedroom $2,383 $2,425 $2,408 $2,504 5.1% 2 bedrooms $3,290 $3,291 $3,241 $3,337 1.4% 3 Bedrooms $4,191 $4,218 $4,095 $4,355 3.9% Price per Square Foot Unit Type January 2017 January 2018 January 2019 January 2020 % Change 2017-2020 1 Bedroom $3.01 $2.83 $2.93 $3 -0.3% 2 bedrooms $2.64 $2.65 $2.53 $2.87 8.7% 3+ Bedrooms $2.65 $2.8 $2.81 $2.91 9.8% Source: Zillow Rent Index Report, January 2017-2020, accessed August 25, 2020. Housing affordability can be inferred by comparing the cost of renting or owning a home in the City with the maximum affordable housing costs for households at different income levels. Taken together, this information can generally show who can afford what size and type of housing and indicate the type of households most likely to experience overcrowding and overpayment. The Federal Department of Housing and Urban Development (HUD) conducts annual household income surveys nationwide to determine a household's eligibility for federal housing assistance. Based on this survey, the California Department of Housing and Community Development (HCD) developed income limits, based on the Area Median Family Income (AMFI), which can be used to determine the maximum price that could be affordable to households in the upper range of their respective income category. Households in the lower end of each category can afford less by comparison than those at the upper end. The maximum affordable home and rental prices for residents in Orange County are shown in Table 2-34 and Table 2-35. The data shows the maximum amount that a household can pay for housing each month without incurring a cost burden (overpayment). This amount can be compared to current housing asking prices (Table 2-32) and market rental rates (Table 2-33) to determine what types of housing opportunities a household can afford. Extremely Low-income Households Extremely low-income households earn less than 30 percent of the County AMFI — up to $26,950 for a one -person household and up to $41,550 for a five -person household in 2020. Extremely low-income households cannot afford market -rate rental or ownership housing in Newport Beach without assuming a substantial cost burden. Section 2: Community Profile (September 2022 Final Housing Element) 2-40 City of Newport Beach 2021-2029 HOUSING ELEMENT Very Low-income Households Very low-income households earn between 31 percent and 50 percent of the County AMFI —up to $44,850 for a one -person household and up to $69,200 for a five -person household in 2020. A very low-income household cannot afford market -rate rental or ownership housing in Newport Beach without assuming a substantial cost burden. A very low-income household at the maximum income limit can afford to pay approximately $1,121 to $1,730 in monthly rent, depending on household size. Given the high cost of housing in the City, persons, or households of very low-income could not afford to rent or purchase a home in the City. Low-income Households Low-income households earn between 51 percent and 80 percent of the County's AMFI - up to $71,750 for a one -person household and up to $110,650 for a five -person household in 2020. The affordable home price for a low-income household at the maximum income limit ranges from $308,500 to $454,000. Based on the asking prices of homes for sale in 2020 (Table 2-30), ownership housing would not be affordable to low-income households. A one -person low-income household could afford to pay up to $1,794 in rent per month and a five -person low-income household could afford to pay as much as $2,766. Low-income households in Newport Beach would not be able to find adequately sized affordable apartment units (Table 2-31). Moderate -income Households Persons and households of moderate -income earn between 81 percent and 120 percent of the County's AMFI — up to $133,500, depending on household size in 2020. The maximum affordable home price for a moderate -income household is $377,000 for a one -person household and $558,600 for a five -person family. Moderate -income households in Newport Beach would not be able to purchase a home in the City. The maximum affordable rent payment for moderate -income households is between $2,163 and $3,338 per month. A one -person moderate -income household may be able to find some adequately sized affordable apartment units; larger households would not be able to afford to rent a unit in the City. Section 2: Community Profile (September 2022 Final Housing Element) 2-41 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 2-34: Affordable Housing Costs for Owners in Orange County, 2020 Annual Income Mortgage Utilities' Tax and Insurance Total Affordable Monthly Housing Cost Affordable Purchase Price Extremely Low-income (30% of AMFI) 1-Person $26,950 $455 $118 $101 $674 $99,990 2-Person $30,800 $504 $151 $116 $770 $110,500 3-Person $34,650 $539 $197 $130 $866 $118,000 4-Person $38,450 $574 $243 $144 $961 $125,800 5-Person $41,550 $594 $289 $156 $1,039 $130,200 Very Low -Income (50% of AMFI) 1-Person $44,850 $835 $118 $168 $1,121 $183,000 2-Person $51,250 $938 $151 $192 $1,281 $205,500 3-Person $57,650 $1,028 $197 $216 $1,441 $225,400 4-Person $64,050 $1,118 $243 $240 $1,601 $245,000 5-Person $69,200 $1,182 $289 $260 $1,730 $259,000 Low-income (80% AMFI) 1-Person $71,750 $1,407 $118 $269 $1,794 $308,500 2-Person $82,000 $1,592 $151 $308 $2,050 $349,100 3-Person $92,250 $1,763 $197 $346 $2,306 $386,500 4-Person $102,450 $1,934 $243 $384 $2,561 $424,000 5-Person $110,650 $2,062 $289 $415 $2,766 $452,000 Moderate -income (120% AMFI) 1-Person $86,500 $1,720 $118 $324 $2,163 $377,000 2-Person $98,900 $1,951 $151 $371 $2,473 $427,800 3-Person $111,250 $2,167 $197 $417 $2,781 $475,000 4-Person $123,600 $2,384 $243 $464 $3,090 $522,700 5-Person $133,500 $2,548 $289 $501 $3,338 $558,600 Source: Orange County Housing Authority, 2020 Utility Allowance Schedule and California Department of Housing and Community Development, 2020 Income Limits and Kimley Horn and Associates Assumptions: 2020 HCD income limits; 30% gross household income as affordable housing cost; 15% of monthly affordable cost for taxes and insurance;10% down payment; and 4.5% interest rate for a 30-year fixed-rate mortgage loan. Utilities based on Orange County Utility Allowance. 1. Utilities includes basic electric, water, sewer/trash, refrigerator, and stove. Section 2: Community Profile (September 2022 Final Housing Element) 2-42 City of Newport Beach 2021-2029 HOUSING ELEMENT r Table 2-35: Affordable Monthly Housing Cost for Renters in Orange County, 2020 Annual Income Rent Utilities' Total Affordable Monthly Housing Cost Extremely Low-income (30% of AMFI) 1-Person $26,950 $556 $ 118.00 $674 2-Person $30,800 $619 $ 151.00 $770 3-Person $34,650 $669 $ 197.00 $866 4-Person $38,450 $718 $ 243.00 $961 5-Person $41,550 $750 $ 289.00 $1,039 Very Low-income (50% of AMFI) 1-Person $44,850 $1,003 $ 118.00 $1,121 2-Person $51,250 $1,130 $ 151.00 $1,281 3-Person $57,650 $1,244 $ 197.00 $1,441 4-Person $64,050 $1,358 $ 243.00 $1,601 5-Person $69,200 $1,441 $ 289.00 $1,730 Low-income (80% AMFI) 1-Person $71,750 $1,676 $ 118.00 $1,794 2-Person $82,000 $1,899 $ 151.00 $2,050 3-Person $92,250 $2,109 $ 197.00 $2,306 4-Person $102,450 $2,318 $ 243.00 $2,561 5-Person $110,650 $2,477 $ 289.00 $2,766 Moderate -income (120% AMFI) 1-Person $86,500 $2,045 $ 118.00 $2,163 2-Person $98,900 $2,322 $ 151.00 $2,473 3-Person $111,250 $2,584 $ 197.00 $2,781 4-Person $123,600 $2,847 $ 243.00 $3,090 5-Person $133,500 $3,049 $ 289.00 $3,338 Source: Orange County Housing Authority, 2020 Utility Allowance Schedule and California Department of Housing and Community Development, 2020 Income Limits and Kimley Horn and Associates Assumptions: 2020 HCD income limits; 30% gross household income as affordable housing cost Utilities based on Orange County Utility Allowance. 1. Utilities includes basic electric, water, sewer/trash, refrigerator, and stove. Section 2: Community Profile (September 2022 Final Housing Element) 2-43 t� iewpo logeth -�=7 Mai Section 3.0 HOUSING CONSTRAINTS, RESOURCES, AND AFFIRMATIVELY FURTHERING FAIR HOUSING Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-0 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT As is common in many communities, a variety of constraints affect the provisions and opportunities for adequate housing in the City of Newport Beach. Housing constraints consist of both governmental constraints, including but not limited to land use controls, development fees and permitting fees, development standards, building codes and permitting processes; as well as, nongovernmental or market constraints, including but not limited to land costs, construction costs, and availability of finances. Combined, these factors create barriers to availability and affordability of new housing, especially for lower and moderate -income households. Nongovernmental constraints affect the cost of housing in the City of Newport Beach and can produce barriers to housing production and affordability. These constraints include the availability and cost of land for residential development, the demand for housing, financing, and lending, construction costs, and the availability of labor, which can make it expensive for developers to build any housing, and especially affordable housing. The following highlights the primary market factors that affect the production of housing in Newport Beach. 1. Land Costs and Construction Costs Construction costs vary widely according to the type of development, with multi -unit housing generally less expensive to construct than single -unit homes. However, there is variation within each construction type, depending on the size of the unit and the number and quality of amenities provided. An indicator of construction costs is Building Valuation Data compiled by the International Code Council (ICC). The International Code Council was established in 1994 with the goal of developing a single set of national model construction codes, known as the International Codes, or I -Codes. The ICC updates the estimated cost of construction at six-month intervals and provides estimates for the average cost of labor and materials for typical Type VA wood -frame housing. Estimates are based on "good -quality" construction, providing for materials and fixtures well above the minimum required by state and local building codes. In August 2020, the ICC estimated that the average per square -foot cost for good -quality housing was approximately $118.57 for multi -unit housing, $131.24 for single -unit homes, and $148.44 for residential care/assisted living facilities. Construction costs for custom homes and units with extra amenities, run even higher. Construction costs are also dependent upon materials used and building height, as well as regulations set by the City's adopted Building Code. For example, according to the ICC, an accessory dwelling unit (ADU) or converting a garage using a Type VB wood framed unit would costs about $123.68 per square foot. Although construction costs are a significant portion of the overall development cost, they are consistent throughout the region and, especially when considering land costs, are not considered a major constraint to housing production in Newport Beach. Land costs can also pose a significant constraint to the development of affordable and middle -income housing and represents a significant cost component in residential development. Land costs may vary depending on whether the site is vacant or has an existing use that must be removed. Similarly, site constraints such as environmental issues (e.g., steep slopes, soil stability, seismic hazards, flooding) can also be factored into the cost of land. There are approximately 6,000 acres of vacant and non -vacant Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-1 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT residential land (39.3 percent), out of approximately 15,238 acres of land in Newport Beach, which are not currently subject to land use constraints (airport restrictions, flood zone, fire high severity zone, NCCP conservation area, seismic hazard, and sea level rise). However, majority of the acres are developed and may require rezoning, reuse, and redevelopment due to a lack of vacant sites in the City. Additional costs may be associated with redeveloping and/or converting sites which may influence the cost of the rental units or home value. A September 2020 web search using the Orange County Market report for lots for sale in the City of Newport Beach returned less than five vacant lots listed for sale. Of the lots listed, the costs ranged from $600,000 for 0.075 acres near Santa Ana Heights (about $183 per square foot), to $4,995,000 for 0.27 acres with an ocean view (about $430 per square foot). Larger vacant lots reached as high as $9,995,000 for 0.77 acres inland (about $295 per square foot) to $10,500,000 for 0.51 acres of land (about $474 per square foot) closer to the coast. According to the same report, in September coastal lots listed for sale in the City averaged $8,000,000 for 0.6 acres. The cost of land in Newport Beach is higher than neighboring cities, such as Laguna Beach, where the median cost of land is about $115 per square foot. Therefore, land and redevelopment costs in Newport Beach create a significant constraint to the development of housing, specifically affordable housing. 2. A vaiiabi/ity Financing The availability of financing in a community depends on several factors, including the type of lending institutions active in a community, lending practices, rates and fees charged, laws and regulations governing financial institutions, and equal access to such loans. Additionally, availability of financing affects a person's ability to purchase or improve a home. Under the Home Mortgage Disclosure Act (HMDA), lending institutions are required to disclose information on the disposition of loan applications and the income, gender, and race of loan applicants. The primary concern in a review of lending activity is to determine whether home financing is available to residents of a community. The data presented in this section include the disposition of loan applications submitted to financial institutions for home purchase, home improvement, and refinancing in Newport Beach. Table 3-1 below displays the disposition of loan applications for the Anaheim -Santa Ana -Irvine Metropolitan Statistical Area/Metropolitan Division (MSA/MD), per the 2016 Home Mortgage Disclosure Act report. According to the data, applicants in the 120 percent median -income or more had the highest rates of loans approved. Of that income category, applicants who reported White had the highest percentage of approval and the number of applications. Applicants in the less than 50 percent of the MSA/MD median -income categories were showed higher percentages of denied loans than loans originated. According to the data, applicants who reported white were, on average, more likely to be approved for a loan than another race or ethnicity. Given the relatively high rates of approval for home purchase, improvement, and refinance loans, home financing is generally available and not considered a significant constraint to the provision and maintenance of housing in Newport Beach. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-2 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT41 ,# Table 3-1: Disposition of Loan Applications by Race/Ethnicity-Anaheim-Santa Ana -Irvine MSA/MD Applications by Race/Ethnicity Percent Approved Percent Denied Percent Other Total (Count) LESS THAN 50% OF MSA/MD MEDIAN American Indian and Alaska Native 26.2% 52.3% 23.1% 65 Asian 33.9% 42.5% 26.7% 1,382 Black or African American 41.6% 33.7% 25.8% 89 Native Hawaiian or other Pacific Islander 25.0% 44.2% 30.8% 52 White 45.6% 31.2% 26.1% 5,240 Hispanic or Latino 37.9% 38.2% 26.8% 1,566 50-79% OF MSA/MD MEDIAN American Indian and Alaska Native 38.1% 34.0% 29.9% 97 Asian 53.3% 25.3% 29.4% 3,153 Black or African American 43.4% 19.1% 41.4% 152 Native Hawaiian or other Pacific Islander 49.4% 39.8% 16.9% 83 White 54.5% 23.3% 27.6% 8,677 Hispanic or Latino 47.6% 27.7% 29.3% 3,245 80-99% OF MSA/MD MEDIAN American Indian and Alaska Native 51.4% 25.7% 31.4% 35 Asian 59.5% 19.2% 29.3% 1,495 Black or African American 52.9% 22.1% 30.9% 68 Native Hawaiian or other Pacific Islander 43.5% 13.0% 43.5% 23 White 61.9% 17.2% 26.1% 3,873 Hispanic or Latino 54.0% 21.4% 29.1% 1,347 100-119% OF MSA/MD MEDIAN American Indian and Alaska Native 48.9% 22.7% 29.5% 88 Asian 62.3% 15.6% 28.8% 4,820 Black or African American 55.6% 20.1% 28.6% 234 Native Hawaiian or other Pacific Islander 49.4% 27.6% 31.0% 87 White 66.2% 13.8% 25.1% 12,607 Hispanic or Latino 60.8% 1 16.4% 1 26.8% 1 3,398 120%OR MORE OF MSA/MD MEDIAN American Indian and Alaska Native 59.2% 13.0% 32.0% 169 Asian 62.8% 12.9% 29.0% 17,800 Black or African American 57.7% 17.3% 27.2% 624 Native Hawaiian or other Pacific Islander 64.2% 11.4% 26.8% 254 White 68.3% 11.3% 24.9% 49,811 Hispanic or Latino 64.6% 13.3% 26.7% 6,095 Source: Consumer Financial Protection Bureau, Disposition of loan applications, by Ethnicity/Race of applicant 2019. 3. Economic Constraints Market forces on the economy and the trickle -down effects on the construction industry can act as a barrier to housing construction and especially to affordable housing construction. It is estimated that housing price growth will continue in the City and the region for the foreseeable future. Moving into 2020, the economy was growing, California was seeing a 1.6-percent growth in jobs from 2019 and experiencing all-time lows for unemployment rates. COVID-19 had stalled much of the economy in early 2020, however, Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-3 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT as the California economy regains momentum housing stock and prices in the Newport Beach community remain stable. A 2020 California Association of Realtors (CAR) report found that homes on the market in Orange County experienced a nine percent year to year increase and cost an average of $880,000 in February 2020; almost $300,000 higher than the State median home price in the same month ($579,770). According to the CAR First Time Buyer Housing Affordability Index, from 2018 to 2019 the median value of a home in Orange County was $703,800 with monthly payments (including taxes and insurance) of $3,630, requiring an average qualifying income of $108,900. Homes and cost of living in Newport Beach was reported higher than the State median housing and living costs. According to September 2020 data from Zillow, the median home value of single -unit homes and condos in Newport Beach is $2,407,4S4. According to Zillow's methodology, this value is seasonally adjusted to remove outliers and only includes the middle price -tier of homes. Newport Beach home values have gone up 0.7 percent over the past year and Zillow predicts they will rise 3.4 percent within the next year. Newport's home value index ($2,407,454) has been on a steep and steady rise since early 2012, and according to a September 2020 forecasts, they are expected to increase slightly (estimated $2,490,000) in 2021. Orange County by comparison has a median home value index of $777,000, according to the same September 2020 report, which is significantly lower than the City of Newport. Forecasted home prices in the County, through 2021 are set to see minor increases ($810,000). The cost of land and home prices in Newport are considered a major constraint to the development of and access to housing, particularly the development of and access to affordable housing. In addition to market constraints, local policies and regulations also affect the price and availability of housing and the provision of affordable housing. For example, State and Federal regulations affect the availability of land for housing and the cost of housing production, making it difficult to meet the demand for affordable housing and limiting supply in a region. Regulations related to environmental protection, building codes, and other topics have significant, often adverse, impacts on housing cost and availability. While the City of Newport Beach has no control over State and Federal Laws that affect housing, local laws including land use controls, site improvement requirements, fees and exactions, permit processing procedures, and otherfactors can constrain the maintenance, development, and improvement of housing create barriers to housing. 1. Land Use Controls In the State of California, cities are required to prepare a comprehensive, long term General Plan to guide future development. The Land Use Element of the General Plan establishes land uses of developments within the City of Newport Beach. The Land Use Element sets for policies and regulations for guiding local development. These policies, together with existing zoning regulations, establish the amount and distribution of land to be allocated for different uses within the City. The Land Use Element of the General Plan identifies the following residential and mixed -use categories: Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-4 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • Single Unit Residential Detached (IRS-D): The RS-D category applies to a range of detached single - unit residential dwelling units on a single legal lot and does not include condominiums or cooperative housing. The RS-D category permits a density range from 0.0 to 29.9 DU/AC. • Single Unit Residential Attached (RS-A): The RS-A category applies to a range of attached single - unit residential dwelling units on a single legal lot and does not include condominiums or cooperative housing. The RS-A category permits a density range from 0.0 to 29.9 DU/AC. • Two Unit Residential (RT): The RT category applies to a range of two -unit residential dwelling units such as duplexes and townhomes. The RT permits a density range from 0.0 to 39.9 DU/AC. • Multiple Residential (RM): The RM designation is intended to provide for multi -unit residential development containing attached dwelling units. The RM permits a density range from 0.0 to 52.0 DU/AC. • Multiple Residential Detached (RM-D): The RM-D designation is intended to provide primarily for multi -unit residential development exclusively containing detached dwelling units. The RM-D allows a 1.5 FAR where a minimum FAR 0.35 and maximum FAR if .5 may be used for nonresidential. • Mixed -Use Vertical (MU-V): The MU-V designation is intended to provide for the development of properties for mixed use structures that vertically integrate housing with retail uses including retail, office, restaurant, and similar nonresidential uses. For mixed -use structures, commercial uses characterized by noise, vibration, odors, or other activities that would adversely impact on - site residential units are prohibited. The MU-V allows a 1.5 FAR where a minimum FAR 0.35 and maximum FAR of .5 may be used for nonresidential. • Mixed -Use Horizontal (MU-H): The MU-H designation is intended to provide for the development of areas for a horizontally distributed mix of uses, which may include general or neighborhood commercial, commercial office, multi -unit residential, visitor -serving and marine -related uses, and/or buildings that vertically integrate residential with commercial uses. The MU-H allows a maximum FAR of 1.0 for residential. • Mixed -Use Water Related (MU-W): The MU-W designation is intended to provide for commercial development on or near the bay in a manner that will encourage the continuation of coastal - dependent and coastal -related uses in accordance with the Recreational and Marine Commercial (CM) designation, as well as allow for the integrated development of residential. The MU-W permits a density range from 0.0 to 29.9 DU/AC. These categories accommodate development of a wide range of housing types in Newport Beach. Furthermore, maintaining the existing residential categories is important for ensuring compatibility between the new and existing housing. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-5 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Local Coastal Program and Land Use Plan The Local Coastal Program (LCP) is a coastal management plan that contains land use, development, public access, and resource protection policies and regulation to implement the California Coastal Act (Coastal Act). The LCP is comprised of a Land Use Plan (LUP) and an Implementation Plan (IP). The LUP serves in conjunction with, and is considered a legislative equivalent to, the City's General Plan Land Use Element to identify land uses in the Coastal Zone. The intent of this plan is to provide for land uses and residential density limits that protect coastal resources and public access. The LUP identifies the residential categories and densities provided in Table 3-2. Table 3-2: Coastal Land Use Plan Densities Land Use Maximum Density Range per Lot Single -Unit Residential Detached — RSD RSD-A 0 — 5.9 units per acre RSD-B 6 — 9.9 units per acre RSD-C 10 —19.9 units per acre RSD-D 20 — 29.9 units per acre Single -Unit Residential Attached — RSA RSA -A 0 — 5.9 units per acre RSA-B 6 — 9.9 units per acre RSA-C 10 —19.9 units per acre RSA-D 20 — 29.9 units per acre Two Unit Residential - RT RT-A 0 — 5.9 units per acre RT-B 6 — 9.9 units per acre RT-C 10 —19.9 units per acre RT-D 20 — 29.9 units per acre RT-E 30 — 39.9 units per acre Multiple Unit Residential — RM RM-A 0 — 5.9 units per acre RM-B 6 — 9.9 units per acre RM-C 10 —19.9 units per acre RM-D 20 — 29.9 units per acre RM-E 30 — 39.9 units per acre RM-F 40 — 52 units per acre Source: City of Newport Beach Municipal Code The Coastal Act is administered by the California Coastal Commission. Over 63 percent of the City of Newport Beach is within the Coastal Zone and subject to oversight by the Coastal. Although the City retains permit authority in most of the Coastal Zone, development projects located near sensitive coastal resources, such as the bay, ocean, wetlands, and environmentally sensitive habitat areas, require the processing of coastal development permits and are subject to appeal by the California Coastal Commission. This additional level of review and approval process may extend the review period of development projects and increase the application and discretionary review costs. In addition, any Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-6 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT request to increase residential densities or allow new residential housing opportunities requires the processing of a Local Coastal Program amendment through the California Coastal Commission. An illustrative example is the Master Development Plan for Banning Ranch, a housing development project that included 1,375 dwelling units, including an affordable housing component, that was adopted by the City in 2012, but denied by the California Coastal Commission in 2016 components but due to potential impacts to environmentally sensitive habitats and coastal resources. The Coastal Land Use Plan and Coastal Commission's additional review may inhibit development due to the added review time and costs, and uncertainty of approvals. Housing in the Coastal Zone The City of Newport Beach uses Chapters 20.34 and 21.34 (Conversion or Demolition of Affordable Housing) of the Municipal Code to implement Government Code Section 65590 et seq. Between April 3, 2000, and June 30, 2020, 3,428 new residential units were permitted for construction within the California Coastal Zone. Of these new units, 120 were developed as housing affordable to low-income individuals and/or families (Bayview Landing project). During the same time period, the City issued demolition permits for a total of 1,857 residential units within the Coastal Zone, resulting in a net increase of 1,571 units. Of the units demolished, six units were known to be occupied by low-income persons and/or families and were required to be replaced. The replacement units were provided off -site and rent restricted for a term of 30-year at rents affordable to very low and low-income households. Lastly, the City assisted with the acquisition, rehabilitation and conversion of an existing 12-unit apartment building located at 6001 Coast Boulevard for affordable housing — 6 for low-income veterans and 6 with a priority for low-income seniors and veterans (The Cove, Project). John Wayne Airport Environs Land Use Plan (AELUP) The City's Airport Area may be considered as an opportunity zone to add residential neighborhoods. However, land located within the Airport Planning Area for John Wayne Airport are subject to the development restrictions of the John Wayne Airport Environs Land Use Plan (AELUP), which limits the ability to develop residential units. Approximately 391 acres are subject to these residential restrictions. An amendment to the City's General Plan or rezoning for residential use requires review and approval by the Airport Land Use Commission (ALUC) and extends the total review period of a proposed housing development and subsequently increases the cost of development. The added review time and additional costs may dissuade housing developers, and particularly affordable housing developers, from developing housing in this area. Overlay Districts An overlay district is a regulatory tool that adds special provisions and regulations to an area in the City. An overlay district may be added to a neighborhood or corridor on a map or it may apply to the City as whole and be applied under certain circumstances. An overlay district may be initiated as a Zoning Map amendment. All proposed developments within the overlay district must comply with the district's applicable development standards in addition to the Zoning Code standards. Overlay Districts, which affect housing in Newport Beach, include the Mobile Home Park (MHP) Overlay Zoning District, Bluff Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-7 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Overlay Zoning District, and the Height Overlay District. Overlay Districts may be a constraint to the development of housing when it sets standards which are more restrictive than the Zoning Code. OvPrlav Cnactal nictrir-tc The purposes of the individual overlay coastal zoning districts and the way they are applied are detailed below. An overlay district may be initiated as a Coastal Zoning Map amendment in compliance with Chapter 21.14 of the City's Municipal Code. All development within these zones must comply with the applicable development standards (e.g., setbacks, height) of the underlying coastal zoning district in addition to the standards provided by the respective zone as outline in the Municipal Code, where applicable. Mobile Home Park Overlay Coastal Zoning District The MHP Overlay Coastal Zoning District is intended to establish a mobile home district on parcels of land developed with mobile home parks. The regulations of this district are designed to maintain and protect mobile home parks in a stable environment with a desirable residential character. However, such regulations may pose a constraint to the redevelopment of existing mobile home parks and increasing density. Uses allowed in the MHP Overlay include the following: • Mobile Home Parks • Accessory Structures incidental to the operation of Mobile Home Parks Bluff Gvertay Disrricr The Bluff (B) Overlay District is intended to establish special development standards for areas of the City where projects are proposed on identified bluff areas. The Bluff Overlay District intends to provide additional regulations and requirements in order to establish safety standards for developments in the overlay District. Specific permitted uses, development standards, and requirements are outlined in the City's Municipal Code, Chapter 21.28.040. Additional regulations and development standards may prevent increased density or intensity in areas within the Bluff Overlay District. ranvnn 17vArlav I)icfrir_f The Canyon (C) Overlay District is intended to establish development setbacks based on the predominant line of existing development for areas that contain a segment of the canyon edge of Buck Gully or Morning Canyon. In order to ensure safe development of housing within the Canyon Overlay Districts, development standards and requirements include the following: • Development Stringline Setback: Development may not extend beyond the predominant line of existing development on canyon faces by establishing a development stringline where a line is drawn between nearest adjacent corners of existing structures on either side of the subject property. • Swimming Pools require a double wall construction • Coastal Hazards and Geologic Stability Report • Erosion Control Plan Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-8 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Additional specific development standards and requirements are outlined in the City's Municipal Code, Chapter 21.28.050. The Canyon Overlay District may inhibit added density or intensity of uses to residential properties within the overlay. 14,niaht OvPrlav The Height (H) Overlay District is intended to establish standards for review of increased building height in conjunction with the provision of enhanced project design features and amenities. The Height Overlay District includes properties located in the Multiple Residential (RM) Zoning District within Statistical Area A2. The maximum height limit is 40 feet for a flat roof and 45 feet for a sloped roof with a three-story maximum. Additional standards, regulations, and eligibility requirements are outline in the City's Municipal Code, Chapter 21.28.060. The Height Overlay District is not considered a constraint to development as it provides for higher height limits. State Density Bonus Law Density bonuses are an additional way to increase the number of dwelling units otherwise allowed in a residentially zoned area. The City's Zoning Ordinance identifies the purpose of the Density Bonus Ordinance is to grant density bonuses and incentives for the development of housing that is affordable to very low-, low-, and moderate -income households and senior citizens. Under the Density Bonus Law, developers are entitled to a density bonus corresponding to specified percentages of units set aside for very low-income, low-income, or moderate -income households. Effective January 1, 2021, California State Assembly Bill 2345 amends the Density Bonus Law to expand and enhance development incentives for projects with affordable and senior housing components. AB 2345 amends the Density Bonus Law to increase the maximum density bonus from 35 percent to 50 percent. To be eligible for the maximum bonus, a project must set aside at least (i) 15 percent of total units for very low-income households, (ii) 24 percent of total units for low-income households, or (iii) 44 percent of for -sale units for moderate -income households. Levels of bonus density between 35 percent and 50 percent are granted on a sliding scale. The City's currently adopted Density Bonus Ordinance is no longer consistent with State law and must be amended to comply with new statutory requirement. Implementing Action 3.1.2 of Section 4: Housing Plan outlines the City's plan to maintain compliance with State legislation. Density Bonus Programs The currently adopted density bonuses are eligible for developments which contain five or more dwelling units and meet the requirements outlined in Chapter 20.32 of the Newport Beach Municipal Code. Units that are not eligible for density bonus include developments where affordable housing is required under the provisions of Title 19. When a development which meets the requirements, density bonuses are applicable as shown in Table 3-3 and Table 3-4 below for different income categories. Developments which meet the requirements for Senior housing will be entitled to a density bonus of twenty percent of the number of senior housing units. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-9 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-3: Density Bonus Calculations Very Low -Income Percentage of Base Units Proposed Density Bonus Percentage 5 20 6 22.5 7 25 8 27.5 9 30 10 32.5 11 35 Low -Income 10 20 11 21.5 12 23 13 24.5 14 26 15 27.5 17 30.5 18 32 19 33.5 20 35 Source: City of Newport Beach Municipal Code Chapter 20.32 Table 3-4: Density Bonus Calculations Moderate -Income Percentage of Base Units Proposed Density Bonus Percentage 10 5 11 6 12 7 13 8 14 9 15 10 16 11 17 12 18 13 19 14 20 15 21 16 22 17 23 18 24 19 25 20 26 21 27 22 28 23 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-10 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Moderate -Income Percentage of Base Units Proposed Density Bonus Percentage 29 24 30 25 31 26 32 27 33 28 34 29 35 30 36 31 37 32 38 33 39 34 40 35 Source: City of Newport Beach Municipal Code Chapter 20.32 Additionally, when an applicant for a residential development agrees to donate land to the City for very low-income households, the applicant is then entitled to a density bonus for the entire market rate development, if the conditions specified in the City's Municipal Code Section 20.32.030 are met. An applicant is entitled to an increase above the maximum allowed residential density as outline in Table 3-5. Table 3-5: Densitv Bonus Calculations Very Low -Income Percentage of Base Units Proposed Density Bonus Percentage 10 15 11 16 12 17 13 18 14 19 15 20 16 21 17 22 18 23 19 24 20 25 21 26 22 27 23 28 24 29 25 30 26 31 27 32 28 33 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-11 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Very Low -Income Percentage of Base Units Proposed Density Bonus Percentage 29 34 30 35 Source: City of Newport Beach Municipal Code Chapter 20.32 Additional regulations for density Bonuses include the following: • Fractional Units: The calculation of a density bonus, in compliance with any of the above requirements, that results in fractional units shall be rounded up to the next whole number. • Mixed Income Development: If the applicant desires to develop a density bonus project available to a mix of income levels, the Director determines the amount of density bonus to be granted up to a maximum of 35 percent. LCnnrnccinnc and Inrnnfivnc When qualified for a density bonus, an applicant may request additional parking incentives beyond those provided above. When requested, the City may grant the following (inclusive of handicap and guest parking): • Zero to one bedroom: one on -site parking space per unit; or • Two or more bedrooms: two on -site parking spaces per unit. In addition to a request for parking incentives, an applicant who meets the density bonus requirements may also submit a proposal for a reduction in the site development standards or architectural design requirements; approval of mixed -use zoning in conjunction with the housing development; other regulatory incentive proposed by the client or the City that will result in identifiable, financially sufficient, and actual cost reductions; and/or a direct financial contribution granted by the Council at its sole discretion. Additional Incentives may also apply for developments with a childcare component, requirements and applicable incentives are outlines in detailed in the City's Municipal Code Section 20.32.060. Incentives and density bonuses allow for increased opportunity and feasibility for the production of affordable housing in a community, the City of Newport Beach's Incentives and Density Bonus programs are comparable to similar Southern California communities and are a constraint to the development of housing for all income levels. Residential Development Standards Citywide, outside the specific plan areas, the City regulates the type, location, density, and scale of residential development primarily through the Zoning Code. The following summarizes the City's existing residential zoning districts: • Residential -Agricultural (R-A) — Residential -Agricultural is intended to provide for single lots appropriate for detached single -unit residential dwelling units and light farming. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-12 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • Single -Unit Residential (R-1) — Single -Unit Residential is intended to provide for a range of detached single -unit residential dwelling units on single lots. This land use designation does not include condominiums or cooperative housing. • Two -Unit Residential. Balboa Island (R-BI) — Two -Unit Residential Balboa Island is intended to provide for a maximum of two residential dwelling units, or duplexes. This is designation is reserved to single lots on Balboa Island. • Two -Unit Residential (R-2) — Two -Unit Residential is intended to provide for single lots appropriate for a maximum of two residential dwelling units, or duplexes. • Multiple Residential (RM) — Multiple Residential is intended to provide for area appropriate for multi -unit residential developments containing attached or detached dwelling units. • Medium Density Residential (RMD) — Medium Density Residential is intended to provide for areas appropriate for medium density residential developments containing attached or detached units. • Mixed -Use Vertical (MU-V) — Mixed -Use Vertical is intended to provide for area appropriate for the development of mixed -use structures that vertically include residential dwelling units. Residential dwelling units are located above the ground floor, which includes office, restaurant, retail, and similar nonresidential uses. • Mixed -Use Mariners' Mile (MU-MM) — Mixed -Use Mariners' Mile is intended to provide for areas appropriate for commercial and residential uses. Mariners' Mile is located on the inland side of Coast Highway in the Mariners' Mile Corridor. Properties that front Coast Highway may only be developed for nonresidential purposes. Properties to the rear of the commercial frontage may be developed for freestanding nonresidential uses, multi -unit residential dwelling units, or mixed - use structures that integrate residential above the ground floor with nonresidential uses on the ground floor. • Mixed -Use Cannery Village and 15th Street (MU-CV/15th St.) — Mixed -Use Cannery Village and 15th Street is intended to establish a cohesive district or neighborhood containing multi -unit residential dwelling units with clusters of mixed -use and/or commercial structures on interior lots of Cannery Village and 15th Street on Balboa Peninsula. Allowed uses include multi -unity dwelling units; nonresidential uses; and/or mixed -use structures, where the ground floor is restricted to nonresidential uses along the street frontage. Residential uses and overnight accommodations are allowed above the ground floor and to the rear of uses along the street frontage. Mixed -Use or nonresidential structures are required on lots at street intersections and are allowed, but not required, on other lots. • Mixed -Use Water (MU-W1) — Mixed -Use Water is intended to be applied to waterfront properties along the Mariners' Mile Corridor in which nonresidential uses and residential dwelling units may be intermixed. A minimum of 50 percent of the allowed square footage in a mixed -use development shall be used for nonresidential uses in which marine -related and victor -serving land uses are mixed. An approved site development review is required prior to any development to Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-13 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT ensure uses are fully integrated and that potential impacts from their differing activities are fully mitigated. Design of nonresidential space to facilitate marine -related uses is encouraged. • Mixed -Use Water (MU-W2) — This second Mixed -Use Water designation is intended to apply to waterfront properties in which marine -related uses may be intermixed with general commercial, visitor -related commercial and residential dwelling units on the upper floors. The City's Zoning Code also regulates the development on land through minimum and maximum standards on lot size, lot width and depth, setbacks, and on lot coverage and floor -area ratio (FAR). Table 3-6 below provides the development standards for each residential zoning district in Newport Beach: Table 3-6: Development Standards in Newport Beach — Dimensions Dimensions Min. Yard Setbacks Construction Standards Zone Min. Lot Min. Lot Min. Lot Front Side Rear Max. Max. Site Size (square Width Depth (feet) (feet) (feet) Height Max. FA Coverage Coverage(feet) (feet) (feet)' Residential Districts R-A 87,120 125 N/A 20 5 25 24,296 N/A 40% 2.0 (Citywide) R-1 60,501 N/A 20 3, 4z 10 24,296 1.5 N/A 5,000 1 (Corona del Mar) R-1-6,000 6,000 60 80 20 6 6 24,291 N/A 60% R-1-7,200 7,200 70 90 20 5 20 35,406 N/A 60% R-1-10,000 10,000 90 100 15 10 10 24,296 N/A 60% R-BI 2,375 60,501 N/A 20 See 10 ft. 24,296 •5fplus 200 N/A Note 3. sq• 2.0 (Citywide) R 2 6,000, 60, 501 N/A 20 See 10 ft. 24, 296 1.5 N/A 5,000 1 Note 3. (Corona del Mar) R-2-6,000 6,000 60 80 ft. 20 6 ft. 6 ft. 24,296 N/A 60% RM 60, 501 N/A 20 See 10 ft. 28,336 1.74 N/A 5,000 1 Note 3. RMD 60, 501 N/A 20 See 25 ft. 28,336 N/A N/A 5,000 1 note 4. RM-6,000 60 60 80 20 6 ft. 6 ft. 28,336 N/A 60% Mixed -Use Zoning Districts MU-V 2,500 25 0 0-55 0-51 26, 316 1.0 (Mixed - Use) MU-MM 10,000 50 0 0-55 0-55 26, 316 1.0 (Mixed - Use) Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-14 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Dimensions Min. Yard Setbacks Construction Standards Zone Min. Lot Min. Lot Min. Lot Front Side Rear Max. Max. Site Size (square Width Depth (feet) (feet) (feet) Height Max. FA Coverage Coverage(feet) (feet) (feet)' MU-DW 40,000 100 0 0-55 0-55 32, 376 1.0 (Mixed - Use) MU CV/15th St. 5,000 40 0 0-55 0-55 26, 316 1.0, 1.5 7 MU-W1 20,000 200 0 0-55 0-55 26, 316 1.0, 1.5 7 MU-W2 2,500 25 0 0-55 0-55 26, 316 0.75, 0.87 Notes: (1) Corner Lot, Interior Lot respectively (2) lots <40 wide, lots >40 wide respectively (3) 3 ft. for lots > 40ft. wide, 4 ft. for lots 40'1" — 49'11" wide, and 8% of Average Lot Width for lots > 50 ft. respectively, (4) N/A for lots > 40ft. wide, 5 ft. for lots 40'1" — 49'11" wide, and N/A for lots > 50 ft. (5) Adjoining residential district (6) Flat roof, Sloped roof respectively (7) Mixed Use, Residential respectively Yard Requirements Yards allow for open space, landscaping and greenery, emergency access, and pedestrian and vehicular circulation on a site. Requirements are set in order to ensure there is adequate available space designated to these elements on a property when considering new development or improvements. Included in these requirements are setbacks areas that are located between a setback line and the property line and must remain unobstructed. Setbacks provide the following: • Visibility and traffic safety • Access to and around structures • Access to natural light and ventilation • Separation of incompatible land uses • Space for privacy, landscaping, and recreation • Protection of natural resources • Safety from fire and geologic hazard The City's yard requirements do not prohibit residential developments from reaching the maximum density on varying lands/sites, it therefore is not a constraint to the development of housing, specifically housing affordable to low and very low-income households. Additionally, the City's Density Bonus programs provides incentives for the development of affordable housing, including a reduction in the site development standards (e.g., site coverage, setbacks, increased height up to the maximum allowed, reduced lot sizes, and/or parking requirements. 'itP r'_nvPranP and Flnnr A --a I imif Site coverage and Floor Area Limit (FAL) requirements maintain mass and intensity of a use for residential uses. The Newport Beach Zoning Code defines site coverage as the percentage of a site covered by Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-15 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT structures and accessory structures, as well as decks that exceed 30 inches in height. Maximum site coverage standards limit the footprint of a building and calculates it as a percentage between the ground floor area of a building and the net area of a lot. The FAL refers to the gross floor area allowed on a residential lot and is determined by multiplying the allowed buildable area of the lot times the applicable multiplier for the lot. FAL requirements limit the total usable floor area to limit the bulk of a building to the land, other buildings, and public facilities. Maximum Building Heighi Maximum building heights are set and defined in the City's Zoning Code to maintain symmetry and compatibility between existing and proposed developments. The height is measured as the vertical distance from the grade of the pad to the highest part of the structure, including protective guardrails and parapet walls. The height limit may be increased within specific areas through the adoption of a Planned Community Development, a specific plan, a planned development permit, a coastal development permit in the coastal zone, or a site development review. The deviation in maximum height limit requires approval of a discretionary action. • R-A, R-1, R-BI, and R-2 Zoning Districts have height limits of 24 feet for structures with flat roofs (including guard rails and parapet walls) and 29 feet for sloped roofs. A discretionary approval may permit height up to 28 feet for flat roofs and 33 feet for sloped roofs. • RM and RMD Zoning Districts have height limits of 28 feet for structures with flat roofs and 33 feet for sloped roofs. The height of the structure may be increased to 32 feet for foot roof and 37 feet for sloped roofs through discretionary approval. Properties located in the Height (H) Overlay District may increase height limits to 40 feet for flat roofs and 45 feet for sloped roofs. • Planned Community Districts may also propose and regulate their own height limits. The City's building height requirements do not prohibit residential developments from reaching the maximum density on varying lands/sites, it therefore is not a constraint to the development of housing, specifically housing affordable to low and very low-income households. Additionally, the City's Density Bonus programs provides incentives for the development of affordable housing, including a reduction in the site development standards (e.g., site coverage, setbacks, increased height up to the maximum allowed, reduced lot sizes, and/or parking requirements. Additionally, the City has identified sites in the RM and MU zones (listed in Appendix B) which can accommodate a portion of the City's RHNA allocation. The heights identified for the Multiple Residential (RM) and Mixed -Use (MU) Zones are considered base height limits and can be altered through a discretionary approval process. • However, most of the denser residential development projects are within planned communities where the developer sets the identified height limitation. Examples of this include: • Uptown Newport Planned Community Zoning District (PC-58), which allows for heights up to 150 feet Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-16 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • Residential Overlay within the Newport Place Planned Community Zoning District (PC-11), which has a base height limit of 55 feet that can be increased up to the maximum allowable under Federal Aviation Regulation (FAR) Part 77 • San Joaquin Plaza Planned Community Zoning District (PC-19) allows heights up to 69 feet The City will establish housing overlay zones that will apply to all opportunity sites in each focus area. Like the Residential Overlay within the Newport Place Planned Community Zoning District (PC-11) and other planned communities, the future housing overlay will establish increased height limits appropriate to accommodate the proposed densities. The details of the housing overlay zones are yet to be determined. Usable Open Space The City's Zoning Code defines Usable Open Space as an outdoor or enclosed area on the ground, roof, balcony, deck, porch, or terrace, used for outdoor living, active or passive recreation, pedestrian access, or landscaping. This does not include parking facilities, driveways, utility, or service areas, required setbacks, and sloped or submerged land. All residential districts in Newport Beach have a maximum site coverage to allow for open space. Mixed -Use districts require 75 square feet per dwelling unit of common open space and 5 percent of the gross floor area of private open space for each unit. The City's usable open spaces requirements do not prohibit residential developments from reaching the maximum density on varying lands/sites, it therefore is not a constraint to the development of housing, specifically housing affordable to low and very low-income households. Additionally, the City's Density Bonus programs provides incentives for the development of affordable housing, including a reduction in the site development standards (e.g., site coverage, setbacks, increased height up to the maximum allowed, reduced lot sizes, and/or parking requirements. Adequate off-street parking shall be provided to avoid street overcrowding and maintain parking opportunities for the public to visit the coast. This is maintained through the City's parking requirements for each housing unit type, as shown in Table 3-7. Parking requirements may add to the development cost of a property and project as spaces and garage parking create additional costs and remove potentially livable space. Table 3-7: Parking Reauirements for Residential Uses Unit Type Number of Spaces Required Accessory Dwelling Unit 1 parking space, with exceptions (11 Junior Accessory Dwelling Unit No additional parking required Single -Unit Dwellings —Attached 2 per unit in a garage Single -Unit Dwellings — Detached and less than 2 per unit in a garage 4,000 sq. ft. of floor area Single -Unit Dwellings — Detached and 4,000 sq. ft. 3 per unit in a garage of floor area Single -Unit Dwellings — Balboa Island 2 per unit in a garage 2 per unit covered, plus guest parking Multi -Unit Dwellings-3 units 1-2 units, no guest parking required Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-17 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Unit Type Number of Spaces Required 3 units, 1 guest parking space Multi -Unit Dwellings-4 units or more 2 per unit covered, plus 0.5 space per unit for guest parking Two -Unit Dwellings 2 per unit; 1 in a garage and 1 covered or in a garage Live/Work Units 2 per unit in a garage, plus 2 for guest/customer parking Senior Housing — Market Rate 1.2 per unit Senior Housing —Affordable 1 per unit Note: 1. Parking is waived for ADUs if the property is within % mile walking distance to transit (including ferry); within an architecturally or historically significant district; on -street parking permits are required and not provided to the occupant of the ADU; or within one block of a car -share vehicle pick-up/drop-off location Source: City of Newport Beach Municipal Code The City's parking requirements vary depending on type of unit. As shown in Table 3-7, the City's parking requirements are similar to those throughout the region and are based on generation rates by use type. Multiple family parking requirements are not overly restrictive and the City may grant exceptions to these standards through state -required density bonus provisions and other provisions in the Municipal Code. As part of the city's rezone program to accommodate future housing growth, development standards, such as parking requirements, will be evaluated to potentially provide additional incentives, concessions reductions or modifications, as appropriate The City's Density Bonus program also provides incentives for the development of affordable housing, including a reduction in the site development standards (e.g., site coverage, setbacks, increased height up to the maximum allowed, reduced lot sizes, and/or parking requirements. Additionally, the City has not denied any residential projects based upon a lack of required parking. Parking has also not been identified by prospective residential development proponents as a constraint. If, however, parking is identified as an issue, then the City's Zoning Code offers alternative means of compliance through off -site parking, demonstrative a reduced -parking demand, or a shared -parking arrangement. This is accomplished through review and approval of a use permit (see NBMC Sections 20.40.100 (Off -Site Parking) and 20.40.110 (Adjustments to Off -Street Parking Requirements) or their successor sections. Furthermore, parking standards can be modified through projects taking advantage of a density bonus, if deemed necessary. Variety of Housing Types Permitted Housing Element Law requires jurisdictions to identify sites to be made available through zoning and development standards in order to facilitate development of a variety of housing types for all socioeconomic levels of the population. Housing types include single -unit dwellings, multi -unit housing, accessory dwelling units, factory -built housing, mobile homes, employee and agricultural work housing, transitional and supportive housing, single -room occupancy units (SROs), and housing for persons with disabilities. Table 3-8 below identifies the various housing types permitted within each residential and Table 3-9 identified housing types permitted in mixed -use zoning district in Newport Beach. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-18 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-8: Various Housing Types Permitted in Residential Zones Residential Zones Nonresidential Zones Housing Type R-A R-1* R-B R-2 RM RMD Os PF PR PI IG OA OG OM OR CC CG CM CN CV CV_LV Single -Unit Dwellings —Attached - - P P P P NA NA NA NA NA Single -Unit Dwellings — Detached P P P P P P NA NA NA NA NA NA NA NA NA NA NA Multi -Unit Dwellings -- - -- -- P P NA NA NA NA NA NA NA NA NA NA Two -Unit Dwellings -- -- P P P P NA P'" NA NA N^ NA A'^ "'A NA A'^ Accessory Dwelling Unit(s) P P P P P P NA NA NA NA NA Junior Accessory Dwelling Unit(s) P P P P P P NA -- NA -- NA NA Live -Work Units -- - -- -- -- -- A -- NA -- NA NA Short -Term Lodging -- -- P P P P NA NA -- NA -- NA NA NA NA NA NA Residential Care Facilities — Limited (6 or fewer) Licensed P P P P P P 1 NA -- NA -- NA NA NA NA NA NA Residential Care Facilities — Limited (6 or fewer) Unlicensed CUP- HO CUP- HO A NA NA A NA NA NA Residential Care Facilities —General (7 or More) Licensed CUP- HO CUP- HO -- -- NA NA NA NA Residential Care Facilities —General (7 or More) Unlicensed CUP- HO CUP- HO A NA NA NA NA NA Residential Care Facilities —Integral Facilities/Integral Uses CUP- HO CUP- HO NA NA NA NA Residential Care, Accessory Use Only MUP -- MUP NA NA NA NA Caretaker Residence NA NA P NA NA NA NA I Congregate Care Home -- -- -- MUP NA Convalescent Facilities -- -- -- MUP NA Parolee -Probationer Home - -- -- -- -- -- -- a NA NA Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-19 (Revised Draft June 2022) City of Newport Beach 2021-2029 HOUSING ELEMENT Residential Zones Nonresidential Zones Housing Type CV- R-A R-1* R-BI R-2 RM RMD Os PF PR PI IG OA OG OM OR CC CG CM CN CV LV Farmworker Housing NA NA A NA NA 'A NA N, Supportive Housing NA NA NA NA NA NA NA NA NA NA NA Transitional Housing NA NA NA NA NA NA NA AIA NA AIA Emergency Shelters -- -- -- -- -- -- -- -- -- P P -- -- -- NA Low Barrier Navigation Centers IVA NA NA NA NA NA nia NA SRO Residential Hotel NA NA NA NA NA NA CUP CUP CUP CUP CUP CUP CUP CUP CUP - Notes: P — Permitted by Right A — Allowed MUP — Minor Use Permit CUP-HO — Conditional Use Permit in Residential Zoning Districts (--) - Not Allowed NA — Not Listed/Stated *Located above 15t floor Source: City of Newport Beach Municipal Code Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-20 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-9: Mixed -Use Housing Types Permitted in Mixed -Use Zones Zones Housing Type MU -CV/ MU-V MU-MM MU-DW 15th St. MU-W1 MU-W2 Single -Unit Dwellings — P. (1) -- -- P (3) P* (1) P* (2) Attached Single -Unit Dwellings — Detached Multi -Unit Dwellings P* (1) P (1)(2) P (1) P (3) -- -- Two -Unit Dwellings P* (1) -- -- P (3) -- -- Accessory Dwelling Unit(s) P P P P P P Junior Accessory Dwelling P P P P P P Unit(s) Live -Work Units P P (1)(2) P P (3) -- -- Notes: *Located above 1st floor (1) Allowed only as part of a mixed -use development. Refer to Section 20.48.130 (Mixed -Use Projects) for additional development standards. (2) Not allowed to front onto Coast Highway. Not allowed on lots at street intersections unless part of a mixed -use or live -work structure. Source: City of Newport Beach Municipal Code jingle -Unit Dwelling A Single -Unit Dwelling is defined as a structure on a single lot containing one dwelling unit and one housekeeping unit. The structure shall be constructed in compliance with the California Building Code (CBC) and placed on a permanent foundation. Single -Unit Dwellings may be attached or detached. An attached dwelling is owned in fee, located on an individual lot, and shares a wall or roof with another structure. A detached dwelling is also owned in fee and located on an individual but is not connected to another structure in any way. Multi -Unit Dwelling A Multi -Unit Dwelling contains three or more dwelling units within the same structure occupied on a single lot. Each dwelling unit is occupied by separate housekeeping units. This housing type includes triplexes (3 dwelling units in one structure), fourplexes (four dwelling units in one structure), and apartments (5 or more dwelling units in one structure), where each structure is owned by one entity and each dwelling unit is rented out. Condominiums are also multi -unit dwellings, but each individual dwelling unit is owned by separate entities. The structure must be placed on a permanent foundation and constructed in compliance with the California Building Code (CBC). r-wn-Unit 1)wAllinr A Two -Unit Dwelling contains two dwelling units, each occupied by their own housekeeping unit, and located within the same structure. This may be referred to as a duplex. The structure must be placed on a permanent foundation and constructed in compliance with the California Building Code (CBC). Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-21 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Accessory Dwelling Unit (ADU) An Accessory Dwelling Unit is a secondary dwelling unit, attached or detached, to the primary residence(s) on a single lot. This may be referred to as a "granny flat," "in-law unit," or "carriage house." An ADU must include a kitchen, a full bathroom, a living area, and a separate entrance. The Newport Beach Zoning Code includes efficiency units and manufactured homes as ADUs. Junior ADUs (JADUs) are defined by the City's Municipal Code as a dwelling unit accessory to and entirely contained within an existing or proposed single -unit dwelling. A JADU may not be greater than 500 square feet, and it must either include its own sanitation facilities or share facilities with the single -unit dwelling. A JADU must also include its own efficiency kitchen. I A1n_IA1nrk I►nit Live -Work Units refer to structures that include both a commercial and a single dwelling unit. Commercial uses are generally located on the ground floor, with the dwelling unit located one to two stories above. 4hort-Term Lodging Short -Term Lodging refers to a dwelling unit that is rented or leased as a single housekeeping unit for 30 days or less. Single -Room Occupancy (SRO) Within the Zoning Code, SROs fall under the classification of Visitor Accommodations and are defined as buildings with six or more guest rooms without kitchen facilities in individual rooms, or kitchen facilities for the exclusive use of guests, and which are also the primary residences of the hotel guests. SROs are permitted in all commercial (CC, CM, CN, CV) and office (OG, OM, OR) zoning districts with the approval of a conditional use permit. To facilitate the development of SROs within these districts, the City will not develop, nor impose, any special set of conditions or use restrictions on SROs; instead, each application would be evaluated individually and approved based upon its own merits and circumstances. Additionally, the Housing Element includes a Policy Action 30 to encourage and facilitate the development of at least one SRO development, or the preservation and rehabilitation of an SRO development, within the Planning Period. Resident;-' ►�`��� On January 22, 2008, the City Council approved Ordinance No. 2008-5 ("Ordinance") with the intent of maintaining zoning protections for residential districts, while benefiting disabled persons who wished to live in those districts. This Ordinance balances the protections granted under the federal Fair Housing Act, Fair Housing Act Amendments (42 U.S.C. Section 3601) and other state and federal laws (i.e. Americans with Disabilities Act) to persons with disabilities, while also ensuring the residential character of the neighborhood is maintained. As defined by the City, Residential Care Facilities provide housing for individuals with a disability and are commonly referred to as group homes, sober living homes, and state licensed alcoholism or drug abuse recovery or treatment facilities. Facilities that provide treatment services are required to be licensed by the State of California Department of Social Services or Department of Health Care Services ("DHCS"). Unlicensed facilities are not allowed to provide treatment services, but rather are meant to provide an Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-22 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT interim environment between rehabilitation and stabilized living. Depending on the number of persons residing within the facility and treatment provided, residential care facilities are further classified as follows: • General Licensed (Seven or More Persons) • General Unlicensed (Seven or More Persons) • Limited Licensed (Six or Fewer Persons) • Small Unlicensed (Six or Fewer Persons) The purpose of the Ordinance is to allow disabled persons to live in a residential setting while ensuring that the residential care facilities are operated in a manner consistent with the residential character of surrounding neighborhoods, do not recreate an institutional environment that would defeat the purpose of community -based care, and that residential care facilities serving the disabled are operating in compliance with City and state laws/regulations. To achieve these purposes and to provide disabled persons with an equal opportunity to use and enjoy a dwelling in the City's residential zoning districts, the City treats licensed residential care facilities for six or fewer persons as single -unit residence permitted by -right in all residential -zones (R-A, R-1, R-BI, R-2, RM, and RMD). Also, residential care facilities for seven or more persons and unlicensed residential care facilities are permitted in the following zoning districts, with a Conditional Use Permit: • Residential Districts— RM and RMD zoning districts. • Planned Community Districts —Property development regulations applicable to residential districts, related to residential care facilities, shall also apply to the corresponding portions of the PC Districts. The location and permitting requirements applicable to larger and unlicensed residential care facilities are intended to avoid overconcentration so as to maintain the residential character of a neighborhood, which if lost would have an adverse effect on the welfare of the individuals' receiving services from the residential care facility and defeat the purpose of community -based recovery. The American Planning Association's Policy Guide on Community Residences, which supports residential care facilities, states that residential care facilities should be scattered throughout residential districts rather than being concentrated on any single block or in any single neighborhood. If several residential care facilities are located next to one another, or are placed on the same block, the ability of the residential care facilities to achieve normalization and community integration would be compromised. Also, the Departments of Justice and Housing Urban Development have stated that a neighborhood composed largely of residential care facilities could adversely affect individuals with disabilities and would be inconsistent with the objective of integrating persons with disabilities into the community. The California Research Bureau similarly found that facilities should be scattered throughout residential districts, and facilities so densely clustered as to recreate an institutional environment would defeat the purpose of community -based care. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-23 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT ^+ L Newport Beach has a significant number of residential care facilities compared to other communities. According to DHCS and City records, there are currently 21 state -licensed residential treatment facilities and an additional 8 City -permitted unlicensed residential facilities in Newport Beach, a community which as of 2019 had a total resident population of 85,694. As a measure of comparison, there are currently only 8 state -licensed residential treatment facilities in Sacramento which had a total residential population of 500,930 people, as of 2019. As set forth above, the City has a significant number of residential care facilities, when compared to other cities, and, under the current regulations, there are significant portions of the City that can accommodate additional facilities. In addition, the City's has a well-defined Reasonable Accommodation procedure, which further ensures individuals with disabilities are protected. Specifically, Section 20.52.070 of the Newport Beach Municipal Code provides procedures for obtaining reasonable accommodation from the City's zoning and land use regulations, policies, and practices when necessary to provide an individual with a disability an equal opportunity to use and enjoy a dwelling. With a reasonable accommodation, a group of disabled individuals can reside in any district zoned for residential use within the City. Section 20.52.070 ensures that reasonable accommodation requests are processed efficiently without imposing costs on the applicant. The City does not assess a fee for reasonable accommodation requests. Although a public hearing is required, the matter is heard before a Hearing Officer rather than the Planning Commission, which helps establish an apolitical and more objective decision -making authority, and results in a more expedited processing. As described in more detail in the Reasonable Accommodation Section of the Housing Element, the findings are based on the objective need to provide an individual with a disability an equal opportunity to use and enjoy a dwelling. To date, the City has approved three conditional use permits and six reasonable accommodations for general and unlicensed residential care facilities, which shows that these processes are not a significant constraint. It is also important to note that these types of facilities are the only groups not living as a single housekeeping unit that may be established in a residential district. Other types of group residential uses occupied by two or more persons not living as a single housekeeping unit (e.g. dormitories, fraternities, sororities, and private residential clubs) are not permitted within residential districts. By providing an opportunity to establish residences with a conditional use permit or reasonable accommodation to disabled groups, the Municipal Code gives more favorable treatment to disabled groups not living as single housekeeping units than it gives to non -disabled groups that are not living as a single housekeeping unit. Therefore, groups of disabled individuals are distinguished only to the extent they are treated preferentially. ;„►,,..�: ,► r ,.,, �acil�+:^� .-eneL--' Lice.-.- 4 ic,,.,,,.. ,.� nn,,.,, o„��,...�► General Licensed Residential Care Facilities provide a single housekeeping unit for individuals with a disability who reside at the facility. There may be 7 or more individuals residing at the facility, but they each reside in separate dwelling units. The facility may include a place, site or building, or groups of places, sites, or buildings, licensed by the State. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-24 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Residential Care Facilities — General Unlicensed (Seven or More Persons) General Unlicensed Residential Care Facilities include a place, site or building, or groups of places, sites, or buildings, which are not licensed by the State and provide housing to 7 or more individuals with disabilities in separate dwelling units. The facility is not required by law to be licenses by the State. "acirlanfinl (nrc Farilifiac — I imifarl I irancarl 19 nr FaIA/cr Parcnnc) Limited Licensed Residential Care Facilities provide care, services, and/or treatment in a community residential setting for six or fewer individuals. Individuals may include adults, children, or adults and children. The facility shall be considered a single housekeeping unit and must therefore be in compliance with all land use and property development regulations applicable to single housekeeping units. Residential Care Facilities Small Unlicensed (6 or Fewer Persons) Small Unlicensed Residential Care Facilities include a place, site or building, or groups or places, sites, or buildings in which 6 or fewer individuals with disabilities reside in separate dwelling units. The facility is not required by law to be licensed by the State. Parolee -Probationer Home Parolee -Probationer Home refers to a structure or dwelling unit which houses 2 or more parolees - probationers who are unrelated by blood, marriage, or legal adoption. The parolees -probationers reside here in exchange for monetary or nonmonetary consideration given and/or paid by the parolee - probationer and/or any public or private entity or person on behalf of the parolee -probationer. The residential structure may be operated by an individual, a for -profit entity, or a nonprofit entity. RA-k;l- LJ,..., — nark A Mobile Home refers to a transportable trailer that is certified under the National Manufactured Housing Construction and Safety Standards Act of 1974. The mobile home is over 8 feet in width and 40 feet in length and may or may not include a permanent foundation. A mobile home on a permanent foundation is considered a single -unit dwelling. Convalescent Home Convalescent Home refers to an establishment that provides 24-hour care for persons requiring regular medical attention. A convalescent home may be referred to as a "nursing home" or "hospice." This facility does not provide emergency medical services or surgical services. Common Interest Development Common Interest Developments include community apartment projects, condominium projects, planned developments, and stock cooperative. . armworker huusing Farmworkers are considered a special needs interest group by HCD. Farmworkers are traditionally defined as people whose primary incomes are earned through permanent or seasonal agricultural labor. Farmworkers are generally considered to have special housing needs due to their limited income and the often -unstable nature of their employment. In addition, farmworker households tend to have high rates of poverty, live disproportionately in housing that is in the poorest condition, have extremely high rates Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-25 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT of overcrowding, and have low homeownership rates. There is a total of 1,772 farmworkers in the County of Orange, though few may reside in Newport Beach the City must consider the housing needs of this community. The Newport Beach Municipal Code does not explicitly define Farmworker Housing or outline it as a permitted use in residential or nonresidential zones. Policy Action 30 of the Section 4: Housing Plan outlines the City's strategy to update the Municipal Code in accordance with state legislation. 'finnnrtivA 14nu4zinri California State Assembly Bill 2162 amended Section 65583, Planning and zoning law to specify that supportive housing is a residential use of property, subject only to those restrictions that apply to other residential dwellings of the same type in the same zone. The City of Newport Beach's Municipal Code does not explicitly define Supportive Housing or identify zones where is it is a permitted use. Policy Action 7B of the Section 4: Housing Plan outlines the City's strategy to update the Municipal Code in accordance with state legislation. Transitional Housinr The City of Newport Beach defines Transitional Housing as rental housing operating under program requirements that call for the termination of assistance and recirculation of the assisted unit to another eligible program recipient program at some predetermined future point in time, which shall be no less than six months. Transitional housing that is provided in single-, two- or multi -unit dwelling units, group residential, parolee -probationer home, residential care facilities, or boarding house uses shall be permitted, conditionally permitted or prohibited in the same manner as the other single-, two-, or multi -unit dwelling units, group residential, parolee -probationer home, residential care facilities, or boarding house uses under this code. The City of Newport Beach's Municipal Code does not explicitly identify Transitional Housing as a permitted use within the appropriate zones as required by state law. Policy Action 7B of the Section 4: Housing Plan outlines the City's strategy to update the Municipal Code in accordance with state legislation. Crv��viv�r���i CHI/f�vc State Law existing law authorizes a political subdivision to allow persons unable to obtain housing to occupy designated public facilities, as defined, during the period of a shelter crisis. Existing law provides that certain state and local laws, regulations, and ordinances are suspended during a shelter crisis, to the extent that strict compliance would in any way prevent, hinder, or delay the mitigation of the effects of the shelter crisis. The City of Newport beach permits Emergency shelters in the OA — Office Airport zoning district and the PI — Private Institutions Coastal zoning district. Properties designated for PI are distributed throughout the City, but primarily located along major transportation corridors and offer easy access to public transportation. The PI zoning district is intended to provide for areas appropriate for privately owned facilities that serve the public, including places for assembly/meeting facilities (e.g., religious assembly), congregate care homes, cultural institutions, health care facilities, marinas, museums, private schools, yacht clubs, and comparable facilities. There are over 44 parcels totaling approximately 135 acres in the proposed PI zoning district. Several of the existing uses on these properties are religious assembly uses, many of which consist of large campuses. Given the high Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-26 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT land costs in the City, these religious assembly facilities could provide the best means to facilitate the development and management of emergency shelters in the City. Additionally, properties designated for OA are located within three large blocks east of John Wayne Airport, west of Birch Street, north of Bristol Street/73 Freeway, and south of MacArthur Boulevard. These properties are also located along major transportation corridors and offer easy access to public transportation. The AO zoning district is intended to provide for areas appropriate for the development of properties adjoining the John Wayne Airport for uses that support or benefit from airport operations. These may include corporate and professional offices; automobile sales, rental and service; aviation sales and service; hotels; and accessory retail, restaurant, and service uses. There are over 56 parcels totaling approximately 54 acres in the AO zoning district. Several of the existing uses on these properties are low and medium density professional office buildings, many of which are aging and offer affordable rents compared to most other parts of the City. These properties should provide realistic opportunities for reuse of these structures for the development and management of emergency shelters in the City. Combined, the PI and AO zoning districts consist of over 98 parcels and 189 acres. By allowing emergency shelters as permitted uses within these districts, adequate sites are available for the potential development of emergency shelters in the City. Low Barrier Navigation Centers AB 101 states that "The Legislature finds and declares that Low Barrier Navigation Center developments are essential tools for alleviating the homelessness crisis -." Low Barrier Navigation Centers are defined as a Housing First, low -barrier, service -enriched shelter focused on moving people into permanent housing that provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter, and housing. Low Barrier Navigation Centers are required as a use by right in areas zoned for mixed uses and nonresidential zones permitting multi -unit uses if it meets specified requirements. The City of Newport Beach's Municipal Code does not address Low Barrier Navigations Centers by definition. A program will be adopted to ensure the City's development standards allow Low Barrier Navigation Centers By -Right in all zones that permit mixed -uses and non-residential uses. Policy Action 7A of the Section 4: Housing Plan outlines the City's strategy to update the Municipal Code in accordance with state legislation. '- - -ied ^ommunitill, The Planned Community (PC) District is intended allow for a coordinated variety of uses and allows projects to benefit from large-scale community building. PC Districts allow for greater flexibility and less restrictive development regulations, while also maintaining compliance with the intent and provisions of the Zoning Code. The Newport Beach Municipal Code states that a PC District may include various types of uses given they are consistent with the General Plan through the adoption of a development plan and text materials that identify land use relationships and associated development standards. PC Districts allow for large scale housing projects on land areas no less than 25 acres of unimproved land area or 10 acres of improved land area; however, the City Council may waive the minimum acreage requirements. Improved land area refers to parcels of land with existing permanent structures occupying at least 10 percent of the total PC District. The subject property must be reclassified as a PC District and a Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-27 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Development Plan must be filed with the City to initiate the development process. The Development Plans are reviewed by the Director, scheduled for a public hearing before the Planning Commission for a recommendation, and approved by the City Council. A Planned Community District must also go through an environmental review. The Development Plan must contain: • A land use map containing the distribution, location, and extent of uses proposed • Land use tables designating permitted uses • Development standards • Protection measures for landforms and public views • Sustainable improvement standards • Location and extent of essential facilities including circulation and transportation, drainage, energy, sewage and waste disposal, and water • Development standards for conservation, development, and utilization of natural resources • A program of implementation measures, programs, regulations, and public works projects • A topographical map to illustrate the character of the terrain and condition of existing vegetation • A summary of the relationship between the proposed development plan and the goals, policies, and actions of the General Plan Growth Management Measures Growth management measures are techniques used by a government to regulate the rate, amount, and type of development. Growth management measures allow cities to grow responsibly and orderly, however, if overly restricted can produce constraints to the development of housing, including accessible and affordable housing. On November 7, 2000, the Newport Beach electorate approved Measure S. Measure S amended the Newport Beach City Charter by adding Section 423, which requires voter approval of certain amendments of the Newport Beach General Plan. Therefore, an amendment shall not take effect unless it has been submitted to the voters and approved by a majority of those voting on it. Charter Section 423 encourages the City Council to adopt implementing guidelines that are consistent with its purpose and intent. In the case of Charter Section 423, an amendment to the General Plan is defined as any proposed amendment of the General Plan that is first considered and/ or approved by the City Council subsequent to December 15, 2000 and that increases the number of peak hour trips (traffic), floor area (intensity), or dwelling units (density) when compared to the General Plan prior to approval. Procedure The City Council determines if an amendment requires voter approval pursuant to Section 423, based on the following conditions: Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-28 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • The Amendment modifies the allowed use(s) of the property or area that is the subject of the Amendment such that the proposed use(s) generate(s) more than one hundred morning or evening peak hour trips than are generated by the allowed use(s) before the Amendment; or • The Amendment authorizes an increase in floor area for the property or area that is the subject of the Amendment that exceeds forty thousand (40,000) square feet when compared to the General Plan before approval of the Amendment; or • The Amendment authorizes an increase in the number of dwelling units for the property or area that is the subject of the Amendment that exceeds one hundred (100) dwelling units when compared to the General Plan before approval of the Amendment; or • The increase in morning or evening peak hour trips, floor area or dwelling units resulting from the Amendment when added to eighty percent (80%) of the increases in morning or evening peak hour trips, floor area or dwelling units resulting from Prior Amendments (see definition in Section 2.1 exceeds one or more of the voter approval thresholds in Section 423 as specified in Subsection 1, 2 or 3. If the City Council determines a General Plan Land Use Element Amendment requires voter approval after approving the Amendment, the City Council then adopts a resolution calling an election on the Amendment. The City Council schedules the election at the next regular municipal election, as specified by the City Charter. The City Attorney then prepares an impartial analysis of the Amendment, which contains information about the Amendment, any related project or land use approval, and the environmental analysis conducted that will help the electorate make an informed decision. In the absence of an ordinance or Charter provision that establishes a procedure for submittal of arguments or rebuttals relative to City measures, the City Council will adopt a resolution that authorizes the filing of arguments and rebuttals in accordance with the general procedures specified in the Elections Code. It is important to understand that Charter Section 423 only applies to General Plan amendments. Individual housing development projects that do not require a General Plan amendment are already accommodated within the General Plan and zoning framework. They would not be subject to Charter Section 423 and would never require a vote of the electorate. If a housing development project requires a General Plan amendment, any unit and peak hour traffic increases added to the project through the Density Bonus process are not counted toward Charter Section 423 thresholds and a determination whether a vote is required. Ultimately projects that require a vote of the electorate pursuant to Charter Section 423 may require additional costs and be subject to delays due to the election process that may yield uncertain election results. The City will implement Charter Section 423 when it amends the Land Use Element of its General Plan to implement Policy Actions 1A through 1F provided in Section 4 of this Housing Element. The increases in housing units and the peak hour traffic to accommodate the City's high RHNA allocation will exceed Charter Section 423 thresholds requiring a vote of the electorate. However, Charter Section 423 includes a statement that it shall not apply if State or Federal law precludes a vote of the electorate on the Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-29 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT amendment. As of the adoption of this Housing Element, it is unclear if the State RHNA mandate to accommodate the City's RHNA allocation would preclude a vote pursuant to Charter Section 423. It is the duty of the City Council to place the increases in housing and the traffic generated before the voters of Newport Beach consistent with Charter Section 423. The vote will be scheduled in accordance with the California Elections Code and the City Charter after the City Council carefully reviews and approves the Land Use Element amendment and Zoning Strategies that support Policy Actions 1A through 1G. The City will prepare an Environmental Impact Report (EIR) in accordance with the California Environmental Quality Act (CEQA) prior to acting on the Land Use Element amendment and Zoning Strategies. In 2006, the City adopted its comprehensive General Plan Update adding 1,166 housing units within its Land Use Element. The update included the housing unit increases to accommodate the City's share of the 4th RNHA cycle. In accordance with Charter Section 423, the update was submitted to the voters and the measure passed. For the 61h cycle Housing Element, like the 2006 vote, the City will initiate an election and pay for all costs associated with the ballot measure. The discussion within Housing Goal #1 in Section 4 details the milestones involved in the Land Use Element amendment vote process. The City may choose to submit multiple ballot measures. If the ballot measure passes, Charter Section 423 would not be an impediment in any way to housing development projects supported by the Land Use amendment and Zoning implementation strategies stemming from this Housing Element. The increases in housing units and their related peak hour traffic would also not count against future General Plan amendment applications thereby reducing the impediment that Charter Section 423 represents to future housing developments needing a subsequent General Plan Amendment in the future. Making any changes to Charter Section 423 is complicated and uncertain. To attempt modifications that would exempt housing units from potentially requiring a vote is not a viable option. Placing a Charter amendment before the voters would require City Council action that would be contrary to the will of the people as expressed through Measure S in 2000 that resulted in Charter Section 423. Based upon public comments received during the preparation of this Housing Element, there is no public support to amend Charter Section 423 to accommodate the housing necessary to satisfy the State RHNA mandate. The City Council publicly debated the prospects of amending Charter Section 423 through its review of this Housing Element, and it is universally believed that placing such a Charter amendment before the voters would be a waste of resources. Additionally, any effort to potentially amend Charter Section 423 would potentially and unnecessarily delay the implementation of this Housing Element. It could create voter fatigue reducing the prospects for success of a vote for the required Land Use Element Amendment to implement this Housing Element pursuant to Charter Section 423. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-30 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Short -Term Lodging Ordinance Short-term lodging refers to the rental and leasing of a dwelling unit to a single household for less than 30 consecutive days. Short-term lodging is predominantly used by tourists to the City and the homeowner may or may not reside on the property. The City of Newport Beach adopted Ordinance 2020-15 on July 15, 2020, which set permitting regulations for short-term lodging throughout Newport Beach. The Ordinance allows short-term lodging in all residential districts in the City with the approval of a permit and related fees. Ordinance 2020-15 is not considered a constraint to housing in the City as the intent is to control short-term lodging and collect Transient Occupancy Tax. The City provides information online for interested homeowners, Frequently Asked Questions, and permit application processes. Specific Plans The purpose of a Specific Plan is to implement the goals and objectives of a city's General Plan in a more focused and detailed manner that is area and project specific. The Specific Plan promotes consistency and an enhanced aesthetic level throughout the project community. Specific Plans contain their own development standards and requirements that may be more restrictive than those defined for the city as a whole. Santa Ana Heights The Santa Ana Heights Community is located to the north of Newport Beach between East Side Costa Mesa and the Upper Newport Bay. The area was previously within County of Orange's permitting jurisdiction and the redevelopment project area was designated to eliminate blight. The land has since been annexed into Newport Beach. The principal objectives of the Santa Ana Heights Specific Plan include: • Encourage the upgrading of existing residential neighborhoods and business development areas • Ensure well -planned business park and commercial developments which are adequately buffered from adjacent residential neighborhoods • Encourage the consolidation of smaller contiguous lots in the business park area • Ensure that business park and residential traffic are separated to the maximum extent possible, while minimizing impact upon existing parcels • Ensure adequate provision of public works facilities as development occurs • Enhance equestrian opportunities with the residential equestrian neighborhood • Enhance the overall aesthetic character of the community The Santa Ana Heights Specific Plan identifies design and landscaping guidelines in Section 20.90.030 of the Newport Beach Zoning Code; the development standards are provided in Table 3-6. Table 3-8 also identifies the housing types permitted in each zoning district. Zoning district designations within the project area include the following: Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-31 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Y-� • Open Space and Recreational District: SP-7 (OS/R) — Open Space and Recreational District is intended to establish the long-term use and viability of the Newport Beach Golf Course. • Residential Equestrian District: SP-7 (REQ) Residential Equestrian District is intended to provide for the development and maintenance of a single -unit residential neighborhood in conjunction with limited equestrian uses. The zoning district is intended to maintain a rural character with an equestrian theme. • Residential Kennel District: SP-7 (RK) — Residential Kennel District is intended to provide for the development of a single -unit residential neighborhood in conjunction with commercial kennel businesses. • Residential Single -Family District: SP-7 (RSF) — Residential Single -Family District is intended to provide for the development of medium density single -unit detached residential neighborhoods. Permitted uses should complement and be compatible with residential neighborhoods. • Residential Multiple -Family District: SP-7 (RMF) — Residential Multiple -Family District is intended to provide for the development of high -density multi -unit residential neighborhoods with a moderate amount of open space. Permitted uses should complement and be compatible with residential neighborhoods. • Horticultural Nursery District: SP-7 (HN) — Horticultural Nursery District is intended to ensure the long-term use and viability of the horticultural nursery uses located along Orchard Drive in the western section of Santa Ana Heights. • General Commercial District: SP-7 (GC) — General Commercial District is intended to provide regulations for the commercial areas along South Bristol Street and ensure the continuation of commercial uses which offer a wide range of goods and services to both the surrounding residential and business communities. This district is intended to promote the upgraded aesthetic image of the community and reduce conflicts between commercial and residential uses. • Business Park District: SP-7 (BP) — Business Park District is intended to provide for the development and maintenance of professional and administrative offices, commercial uses, specific uses related to product development, and limited light industrial uses. The district shall protect the adjacent residential uses through regulation of building mass and height, landscape buffers, and architectural design features. • Professional and Administrative Office District: SP-7 (PA) — Professional and Administrative Office District is intended to provide for the development of moderate intensity professional and administrative office uses and related uses on sites with large landscaped open spaces and off- street parking facilities. This district is intended to be located along heavily trafficked streets or adjacent to commercial or industrial districts. This district may also be used to buffer residential areas. • Professional, Administrative, and Commercial Consolidation District: SP-7 (PACC) — Professional, Administrative, and Commercial Consolidation District is intended to provide for the development of professional and administrative office uses and commercial uses on lots located between South Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-32 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT ^�t a' ,Sit Bristol Street and Zenith Avenue in a manner which ensures lot consolidation and vehicular access to and from South Bristol Street. • Planned Development Combining District (PD) — Planned Development Combining District is intended to provide a method for land to be developed using design features which take advantage of modern site planning techniques to produce an integrated development project amongst existing and potential development of the surrounding neighborhoods. Housing for Persons with Disabilities Both the Federal Fair Housing Act and the California Fair Employment and Housing Act direct local governments to make reasonable accommodations (that is, modifications or exceptions) to their zoning laws and other land use regulations when such accommodations may be necessary to afford disabled persons an equal opportunity to use and enjoy a dwelling. The Housing Element Update must also include programs that remove constraints or provide reasonable accommodations for housing designed for persons with disabilities. The analysis of constraints must touch upon each of three general categories: 1) zoning/land use; 2) permit and processing procedures; and 3) building codes and other factors, including design, location and discrimination, which could limit the availability of housing for disabled persons. ►-asnnable Accnmmndatin� Reasonable accommodation in the land use and zoning context means providing individuals with disabilities or developers of housing for persons with disabilities, flexibility in the application of land use and zoning and building regulations, policies, practices and procedures, or even waiving certain requirements, when it is necessary to eliminate barriers to housing opportunities. For example, it may be reasonable to accommodate requests from persons with disabilities to waive a setback requirement or other standard of the Newport Beach Municipal Code to ensure that homes are accessible for the mobility impaired. Whether a particular modification is reasonable depends on the circumstances. Section 20.25.070 (Reasonable Accommodation) of the Newport Beach Municipal Code provides a procedure and sets standards for disabled persons seeking a reasonable accommodation in the provision of housing and is intended to comply with federal and state fair housing laws. A request for reasonable accommodation may be made by any person with a disability, their representative, or a developer or provider of housing for individuals with a disability, and a reasonable accommodation may be approved only for the benefit of one or more individuals with a disability. Section 20.52.070 ensures that reasonable accommodation requests are processed efficiently without imposing costs on the applicant. The City does not assess a fee for reasonable accommodation requests. Although a public hearing is required, the matter is heard before a Hearing Officer rather than the Planning Commission, which helps establish an apolitical and more objective decision -making authority, and results in a more expedited processing. Once an applicant requests reasonable accommodation via all appropriate forms and submittals (as outline in Section 20.25.070 of the Newport Beach Municipal Code), the following actions may be taken by the Hearing Office: Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-33 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • The Hearing Officer shall issue a written determination to approve, conditionally approve, or deny a request for reasonable accommodation, and the associated modification or revocation. • The reasonable accommodation request shall be heard with, and subject to, the notice, review, approval, call for review, and appeal procedures identified for any other discretionary permit. • On review the Council may sustain, reverse, or modify the decision of the Hearing Officer or remand the matter for further consideration, which remand shall include specific issues to be considered or a direction for a de novo hearing. The written decision to approve or deny a request for reasonable accommodation must be consistent with all the applicable Federal and State laws and is be based on consideration of the following findings, all of which are required for approval: • The reasonable accommodation request is made by or on the behalf of one or more individuals with a disability protected under the Fair Housing Laws. • The reasonable accommodation request is necessary to provide one or more individuals with a disability an equal opportunity to use and enjoy a dwelling. • The reasonable accommodation request will not impose an undue financial or administrative burden on the City as "undue financial or administrative burden" is defined in Fair Housing Laws and interpretive case law. • The reasonable accommodation request will not result in a fundamental alteration in the nature of a City program, as "fundamental alteration" is defined in Fair Housing Laws and interpretive case law; and • The reasonable accommodation request will not, under the specific facts of the case, result in a direct threat to the health or safety of other individuals or substantial physical damage to the property of others. In considering a request for reasonable accommodation, the hearing officer may consider a variety of factors; factors for consideration by the hearing officer are listed (but limited to) in Section 20.52.070 of the Newport Beach Municipal Code. Reasonable accommodation generates practical opportunity and increased feasibility for the creation of accessible housing and the Newport Beach's City process is not considered a constraint to the development of housing for all persons. Definition c -v Famii A restrictive definition of "family" that limits the number of unrelated persons and differentiates between related and unrelated individuals living together is inconsistent with the right of privacy established by the California Constitution. The City's Municipal Code defines "family" as one or more persons living together as a single housekeeping unit in a dwelling unit. The Code also defines a single housekeeping unit as the functional equivalent of a traditional family, whose members are an interactive group of persons jointly occupying a single dwelling unit, including the joint use of and responsibility for common areas, and sharing household activities and responsibilities (e.g., meals, chores, household maintenance, expenses, etc.) and where, if the unit is rented, all adult residents have chosen to jointly occupy the entire Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-34 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT premises of the dwelling unit, under a single written lease with joint use and responsibility for the premises, and the makeup of the household occupying the unit is determined by the residents of the unit rather than the landlord or property manager. The City's definition of family does not limit the number of unrelated persons living together, however the definition for single housekeeping unit, as it relates to family, may require an update by the City as it considers a unit the equivalent to a traditional family. Development Fees Residential developers are subject to a variety of permitting, development, and impact fees in order to access services and facilities as allowed by State law. The additional cost to develop, maintain, and improve housing due to development fees result in increased housing unit cost, and therefore is generally considered a constraint to housing development. However, fees are necessary to provide planning and public services in Newport Beach. The location of projects and housing type result in varying degrees of development fees. The presumed total cost of development is also contingent on the project meeting city policies and regulations and the circumstances involved in a particular development project application. Table 3-10 provides the planning and land use fees assessed by City of Newport Beach and Table 3-11 provides the engineering and development services fees required for development projects. All fees are available on the City's website in compliance with (GC 65940.1(a)(1)(A)). Estimated total development and impact fees for a typical single -unit residential project, assuming it is not part of a subdivision and is consistent with existing city policies and regulations can range from $63,304 to $68,304. Estimated total development and Impact fees for a typical multi -unit residential project with ten units, assuming it is consistent with existing City policies and regulations range from $429,600 to $434,600. These estimates are illustrative in nature and that actual costs are contingent upon unique circumstance inherent in individual development project applications. Considering the high cost of land in Newport, and the International Code Council (ICC) estimates for cost of labor and materials, the combined costs of permits and fees range from approximately 12.5 percent to 13.5 percent of the direct cost of development for a single -unit residential project and 9.6 percent to 9.3 percent for a multi -unit residential project. Direct costs do not include, landscaping, connection fees, on/off-site improvements, shell construction or amenities, therefore the percentage of development and impact fees charged by the City may be smaller if all direct and indirect costs are included. Table 3-10: Planning and Land Use Fees Type Fee Deposit Hourly Rate Amateur Radio and Satellite Dish Antenna Permit $1,379 Amendment —General Plan -- $7,500 $266 Amendment — Local Coast Program -- $3,300 $266 Amendment — Planned Community -- $7,500 $266 Amendment —Zoning Code -- $7,500 $266 Appeals to City Council $1,715 -- -- Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-35 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Type Fee Deposit Hourly Rate Appeals to Planning Commission $1,715 -- Approval in Concept Permit $916 -- -- Certificate of compliance $358 + $12 County $370 -- - Coastal Development Permit / Parcel Map Bundle $3,380 -- - Coastal Development Permit Waiver / Initial Review $1,195 -- - Compliance Letters / Minor Records Research $390 -- -- Comprehensive / Heritage / Innovative Sign Program $1,906 -- -- Condominium Conversion Permit $1,354 -- -- Development Agreement -- $10,000 $266 Development Agreement Annual Review $1,397 -- -- Director / Staff Approval $982 -- -- Extensions of Time (except Abatement Period) $172 -- -- Environmental Documents 110% of Consultant Cost -- Heritage Sign Review -- -- $166 In -Lieu Parking -- -- $150 Limited Term Permit — Less than 90 Days $650 -- -- Limited Term Permit — More than 90 Days $2,235 -- -- Limited Term Permit —Seasonal $309 -- -- Lot Line Adjustment $2,316 -- - Lot Merger $2,316 -- -- Modification Permit $3,219 -- - Nonconforming Abatement Period Extension $698 -- -- Operator's License —Application $974 - -- Operator's License —Appeal $946 - Planned Community Development Plan -- $10,000 $266 Planned Development Permit $6,386 - Preliminary Application for Residential Development $776 - Public Noticing Costs $508 Site Development Review — Major $5,776 -- Site Development Review — Minor $3,293 -- -- Subdivision Parcel Map $2,301 -- -- Subdivision Tentative/Vesting Tract Map $5,685 -- -- Temporary Banner Permit ($50 + $1 Recorded Management Fee) $S9 -- -- Transfer of Development Rights $4,490 -- Use Permit — Conditional $5,838 -- Use Permit — Minor $3,292 -- - Variance $5,380 -- - Zoning Plan Check -- -- $208 Sources: City of Newport Beach Planning Division Fee Schedule (Effective 0710112020 per Council Resolution 2021-21). Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-36 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-11: Engineering and Development Services Fees Type Fee Plan Check Hourly Rate $261 Plan Review 87% of Building Permit Fee Repetitive Plan Review 25%of Building Permit Fee Energy Compliance Review 0.07% of Construction Cost Disabled Access Compliance Review 0.1% of Construction Cost Grading Plan Review by City Staff 87% of Grading Permit Fee Grading Plan Review of Complex Projects by Consultant 133% of Consultant Fee Determination of Unreasonable Hardship $357 Electrical Plan Review 87% of Total Permit Fee Mechanical Plan Review 87% of Total Permit Fee Plumbing Plan Review 87% of Total Permit Fee Drainage Plan Review for Alteration to Drainage $199 Water Quality Management Plan Review (Commercial Projects) $275 Water Quality Management Inspections (Commercial Projects) $350 Water Quality Management Plan Review Fee (Residential Projects) $191 Water Quality Management Inspection Check Fee (Residential Projects) $284 Expedite Plan Review 1.75 X regular plan check fees ($453 minimum) Plan Check Extension $68 Harbor Construction Plan Review $329 Waste Management Administration Fee $27 Sources: City of Newport Beach Schedule of Rents, Fines, and Fees (Effective 0710112021 per City Resolution 2021-21). Impact r-GGro Impact fees are assessed on a case -by -case basis depending on the proposed use, location, and density. Impact fees ensure adequate maintenance and provision of public facilities and services to the project and include transportation, school, park and open space, waste management, sewage, and water. Table 3-12 provides the fees calculated based on land use in Newport Beach. Table 3-12: Development Impact fees Use Fee Transportation (Fair Share) Single -Unit Development $2,579/unit Residential -Medium Density $2,016 /unit Apartment $1,524/unit Elderly Residential $938/unit Mobile Home $1,407/unit Nursing/ Convalescent Home $633/unit School Impact Fee N-MUSD Residential Developer Fee $1.84/sq.ft.(1) Park Dedication Park Dedication $30,217/unit Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-37 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT San Joaquin Transportation Corridor Agency (TCA) — Zone A (Z) Single Unit $6,050/unit Multi -Unit $3,524/unit San Joaquin Transportation Corridor Agency (TCA) — Zone B M Single Unit $4,689/unit Multi -Unit $2,735/unit Sources: City of Newport Beach Schedule of Rents, Fines, and Fees (Effective 0710112021 per Council Resolution 2021-21). Newport -Mesa Unified School District Developer Fees Notes: (1) Addition under 500 sq.ft. may be exempt (2) Effective July 1, 2020 — June 30, 2021. The fee rate schedule increases by 2.667% each year on July 15t. On -/Off -Site Improvements Site improvements in the City consist of those typically associated with development for on -site improvements (street frontage improvements, curbs, gutters, sewer/water, and sidewalks), and off -site improvements caused by project impacts (drainage, parks, traffic, schools, and sewer/water). Thus, these are costs that may influence the sale or rental price of housing. Because residential development cannot take place without the addition of adequate infrastructure, site improvement requirements are considered a regular component of development of housing within the City. Majority of cost associated with on and off -site improvements is undertaken by the City and recovered in the City's development and impact fees. The City's construction codes are based upon the California Code of Regulations, Title 24 that includes the California Administrative Code, Building Code, Residential Code, Electrical Code, Mechanical Code, Plumbing Code, Energy Code, Historical Building Code, Fire Code, Existing Building Code, Green Building Standards Code, and California Referenced Standards Code. They are the minimum necessary to protect the public health, safety and welfare of the City's residents. In compliance with State law, the California Building Standards Code is revised and updated every three (3) years. The newest edition of the California Building Standards Code is the 2019 edition with an effective date of January 1, 2020. The City strives to provide reasonable accommodation for persons with disabilities in the enforcement of building codes and the issuance of building permits. The City has not made any building code or code enforcement amendments in the past 8 years which directly affect or potentially hider the development of housing in Newport Beach. Code enforcement is conducted by the City and is based on systematic enforcement in areas of concern and on a complaint basis throughout the city. The Code Enforcement Division works with property owners and renters to assist in meeting state health and safety codes. The Code Compliance Department investigates complaints regarding violations of the Newport Beach Municipal Codes. The following are frequent enforcement items: • Hazardous property conditions • Overgrown vegetation • Housing Code violations (broken windows, peeling paint) Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-38 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • Inoperable and abandoned vehicles on private property • Signs, including signs in public right-of-way and signs without permits • Solid Waste (early set -out of containers, inadequate containers, illegal dumping) • Water quality and conservation • Zoning requirements, (i.e., illegal dwelling units and use requirements) Local Processing and Permit Procedures The processing time needed to obtain development permits and required approvals is commonly cited by the development community as a prime contributor to the high cost of housing. Depending on the magnitude and complexity of the development proposal, the time that elapses from application submittal to project approval may vary considerably. Factors that can affect the length of development review on a proposed project include the completeness of the development application and the responsiveness of developers to staff comments and requests for information. Approval times are substantially lengthened for projects that are not exempt from the California Environmental Quality Act (CEQA), require rezoning or general plan amendments, encounter community opposition, or are appealed to or require approval from the Coastal Commission. The City strives for a streamlined building permit plan check process, especially for single- and multi -family residential development. Internal targets for plan check review times for building permits are 10 business days for the first submittal, 5 business days for the second and subsequent submittals, if needed. It is worth noting that the timing of the overall process depends more heavily on the responsiveness of the design team after the first round of review. For projects requiring a discretionary action, such as a coastal development permit, site development review, or parcel map, approximately three additional months should be added to processing timelines. Although rare, if an EIR, Zone Change, General Plan Amendment, or Local Coastal Program Amendment is required, then approximately eight months should be added to processing timelines. Applicants for all permits or reviews are recommended to request a pre -application conference with the respective department to achieve the following: • Inform the applicant of City requirements as they apply to the proposed project. • Review the City's review process, possible project alternatives or revisions; and • Identify information and materials the City will require with the application, and any necessary technical studies and information relating to the environmental review of the project All applicable fees related to permits and reviews are established by the City Council and can be found in the City's Master fee schedule (Tables 3-10 and 3-11). All applications are first reviewed for completeness, discretionary applications require the respective department to provides a written report and recommendation, applications are then subject to review by the appropriate authority. Table 3-13 below identifies the review authority responsible for reviewing and making decisions on each type of application Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-39 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT required by the Newport Beach Zoning Code. Permit review procedures for residential developments in the City of Newport Beach are outlined below. Table 3-13: Review Authority for Permit Application Role of Review Authority' Applicable Code Director Zoning Hearing Commission Z Council Type of Action yp Chapter/Section Administrator Officer Administrative and Legislative Interpretations Section 20.12.020 Determination' -- -- Appeal Appeal Planned Chapter 20.56 -- -- -- Recommend Decision Communities Specific Plans Chapter 20.58 -- -- -- Recommend Decision Zoning Code Chapter 20.66 -- -- -- Recommend Decision Amendments Zoning Map Chapter 20.66 -- -- -- Recommend Decision Amendments Permits and Approvals Conditional Use Section 20.52.020 -- -- Decision Appeal Permits Conditional Use Permits— Section 20.52.030 -- -- Decision -- Appeal Residential Zones HO Minor Use Permits Section 20.52.020 -- Decision 3 -- Appeal Appeal Modification Section 20.52.050 -- Decision -- Appeal Appeal Permits Planned Development Section 20.52.060 -- -- -- Decision Appeal Permits Reasonable Section 20.52.070 -- -- Decision -- Appeal Accommodations Site Development Section 20.52.080 -- Decision -- Decision Appeal Reviews Variances Section 20.52.090 -- -- -- Decision Appeal Zoning Clearances Section 20.52.100 Determination -- -- Appeal Appeal Notes: (1) "Recommend" means that the Commission makes a recommendation to the Council; "Determination" and "Decision" mean that the review authority makes the final determination or decision on the matter; "Appeal" means that the review authority may consider and decide upon appeals to the decision of a previous decision -making body, in compliance with Chapter 20.64 (Appeals). (2) The Council is the final review authority for all applications in the City. (3) The Director or Zoning Administrator may defer action and refer the request to the Commission for consideration and final action. Source: City of Newport Beach Municipal Code, Chapter 20.50 Permit Application Filing and Processing Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-40 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Time Between Receiving Approval and Submitting Building Permit Application The amount of time between when a project receives approval and submittal of an application for building permits varies, depending upon a variety of factors and is controlled by a project applicant. While the City makes every effort to streamline permitting processes, this element of time is outside the control of the City. Factors for variability of time may include the size of a project, type of construction, funding and financing considerations, lease or contract considerations, litigation, seasonal factors, engineering, design and architectural considerations. The timeline can be a matter of a few days to a few weeks, if the project is small and uncomplicated (e.g. ADU/JADU) to months for large-scale, modern construction. The City of Newport Beach views the longer time period is common and necessary for larger, more complicated projects and does not see this in any way as hindering the construction of housing or introducing unnecessary delays. In most all cases, the timeline from receiving approval to submitting for building permits is solely dictated by the project applicant and not constrained by any requirements placed upon the applicant by the City. '�nnn/ifinn�l //cn Dnrrs�i*c in Dncir/nnfi�l 7nniniv The purpose and intent of conditional use permits in residential zoning districts, as identified by the Newport Beach Municipal Code Section 20.52.030, is to promote the public health, safety, and welfare and to implement the goals and policies of the General Plan by ensuring that conditional uses in residential neighborhoods do not change the character of the neighborhoods as primarily residential communities. As well as, to protect and implement the recovery and residential integration of the disabled, including those receiving treatment and counseling in connection with dependency recovery. In doing so, the City seeks to avoid the over -concentration of residential care facilities so that these facilities are reasonably dispersed throughout the community and are not congregated or over -concentrated in any particular area to institutionalize that area. A conditional use permit is required to authorize uses not previously permitted as allowable in the applicable residential zoning district or in an area where residential uses are provided for in Planned Community Districts or specific plan districts. An application for a conditional use permit, meeting all the requirements outline in Section 20.52.030(D), is then reviewed by the Director to ensure that the proposal complies with all applicable requirements. Additionally, all conditional use permit applications require a public hearing and a public notice of the hearing. The review authority identified in Table 3-13 above is designated to approve, conditionally approve, or deny applications for conditional use permits in residential zoning districts. Newport Beach Municipal Code Section 20.52.030 (H)(4) establishes the provisions for granting a conditional use permit in residential zones, including for residential care facilities, and states the following: 4. The use will be compatible with the character of the surrounding neighborhood, and the addition or continued maintenance of the use will not contribute to changing the residential character of the neighborhood (e.g., creating an over -concentration of residential care or bed and breakfast uses in the Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-41 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT vicinity of the proposed use). In making this finding or sustaining the finding, the Hearing Officer and/or Council shall consider, as appropriate, all of the following factors: a. The proximity of the use location to parks, schools, other conditionally permitted uses of the some or similar type, outlets for alcoholic beverages, and any other uses that could be affected by or affect the operation of the subject use; b. The existence of substandard physical characteristics of the area in which the use is located (e.g., limited available parking, lot widths, narrow streets, setbacks, short blocks), and other substandard characteristics that are pervasive in certain areas of the City of Newport Beach, including portions of Balboa Island, Balboa Peninsula, Corona Del Mar, Lido Isle, Newport Heights, and West Newport, which portions were depicted on a map referred to as the Nonstandard Subdivision Area presented to the Commission on September 20, 2007, and on file with the Director; and c. In the case of residential care uses, whether, in light of the factors applied in subsections (H)(4)(o) and (b) of this section, it would be appropriate to apply the American Planning Association standard of allowing only one or two residential care uses in each block. i. Median block lengths in different areas of Newport Beach widely range from three hundred (300) feet in the nonstandard subdivision areas to as much as one thousand four hundred twenty-two (1,422) feet in standard subdivision areas. ii. The average calculable block length in much of the standard subdivision areas is seven hundred eleven (711) feet and the calculable median block length is six hundred seventeen (617) feet. iii. The review authority shall apply the American Planning Association standard in all areas of Newport Beach in a manner that eliminates the differences in block lengths. iv. In making this determination, the review authority shall be guided by average or median block lengths in standard subdivisions of the City. v. The review authority shall retain the discretion to apply any degree of separation of uses that the Hearing Officer deems appropriate in any given case. vi. A copy of the American Planning Association standard is on file with the Director. The above provisions pertain to the physical aspects of the site, or the utilization of the sites and not the user or the resident type. Additionally, the provisions generally define "character" as the physical feature of a site and its environs. Provisions (a) through (c) above, are objective standards that apply to the site conditions and are generally not considered subjective in nature. Because these standards do not directly Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-42 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT or tacitly deny a residential use based on subjective criteria and "community character" is used to define the provisions in 20.52.030 (H)(4)(a) through (c), the City contends that these provisions are reasonable criteria to include in a conditional use permit approval and, therefore, does not consider these provisions a constraint. To promote certainty in meeting the scope of the conditional use permit review, provide upfront feedback, and to expedite processing, the City offers, free -of -charge, Development Review Committee (DRC) meetings with prospective applicants. DRC meetings are informal meetings with representatives of the various City departments or divisions (i.e., Planning, Building, Public Works, Fire, etc.) that are held weekly and are scheduled with only one week lead time. A prospective applicant receives detailed feedback on their proposal so they can address issues early to provide a more complete submission thereby avoiding unnecessary delays. As described in more detail in the Reasonable Accommodation Section of the Housing Element, in the event that conditional use permit process proves to be a barrier or constraint to the development of housing for disabled, Section 20.52.070 of the Zoning Code provides procedures for obtaining reasonable accommodation from the permitting requirements. With a reasonable accommodation, a group of disabled individuals can reside in any district zoned for residential use without the need for a conditional use permit, but rather an alternative, no -cost, and objective reasonable accommodation process. While not explicitly required by State law, the conditional use permit requirement for residential care facilities for 7 or more persons could be considered a fair housing issue and a potential constraint due to the discretionary nature of the process. The Development Review Committee process helps mitigate approval uncertainty and the reasonable accommodation process provides an alternative and more objective review process for disabled individuals, Policy Action 3P has been included in the Section 4 Policy Program requiring that development standards for larger residential care facilities in the Municipal Code will be evaluated to ensure State fair housing laws are met for residential care facilities of 7 or more persons, and amended to promote objectivity and ensure greater approval certainty. 'ifn noun►nmmonf /?1Q1/i1Q1AM The City of Newport Beach identifies the purpose of site development reviews as providing a process for the review of specific development projects in order to: • Ensure consistency with General Plan policies related to the preservation of established community character, and expectations for high quality development. • Respect the physical and environmental characteristics of the site. • Ensure safe and convenient access and circulation for pedestrians and vehicles. • Allow for and encourage individual identity for specific uses and structures. • Encourage the maintenance of a distinct neighborhood and/or community identity. • Minimize or eliminate negative or undesirable visual impacts. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-43 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • Ensure protection of significant views from public right(s)-of-way in compliance with Section 20.30.100 (Public View Protection); and • Allow for different levels of review depending on the significance of the development project. Site development review is required before the issuance of a building or grading permit for any new structure. Structures that do not require a site development review (but instead require a zoning clearance) include, accessory structures, fences and/or walls, reconstruction or exterior remodeling of existing structures, one to four dwelling units, without a tentative or parcel map, and non-residential up to a maximum of 9,999 square feet of gross floor area. Site development review and approval is determined by either the Zoning Administrator or the Planning Commission. The City provides the DRC review process for site development reviews as described in the previous section. Table 3-14 below identifies the applicable review authority for different development types. Table 3-14: Review Authority and Action for Residential Construction Role of Review Authority (1) (2) Type of Construction Activity Zoning Administrator Planning Commission (Minor Review) (Major Review) Residential construction: 5 to 20 dwelling units, without a Decision Appeal tentative or parcel map. Residential construction: 5 or more dwelling units with a tentative or parcel map and 21 or more dwelling units, without a tentative or -- Decision parcel map. Residential construction: On a bluff, an increase in the boundaries of a development area in compliance with the findings in -- Decision Section 128.0 (Bluff (B) Overlay District). Mixed -use projects: 1 to 4 dwelling units and nonresidential construction of up to a maximum of 9,999 square feet of gross Decision Appeal floor area. Mixed -use projects: 5 or more dwelling units and/or nonresidential construction of 10,000 square feet or more of gross floor area. -- Decision Source: City of Newport Beach Municipal Code A site development review is initiated when the Department receives a complete application package including the required information and materials specified by the Director and any additional information required by the applicable review authority in order to conduct a thorough review of the project. Upon receipt of a complete application the applicable review authority shall conduct a review of the location, design, site plan configuration, and effect of the proposed project on adjacent properties by comparing the project plans to established development standards and adopted criteria and policies applicable to the use or structure. All site development reviews require a public hearing and a notice of the hearing. The review authority may approve or conditionally approve a site development review application. The following criteria shall be considered during the review of a site development review application: • Compliance with this section, the General Plan, this Zoning Code, any applicable specific plan, and other applicable criteria and policies related to the use or structure. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-44 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • The efficient arrangement of structures on the site and the harmonious relationship of the structures to one another and to other adjacent developments; and whether the relationship is based on standards of good design. • The compatibility in terms of bulk, scale, and aesthetic treatment of structures on the site and adjacent developments and public areas. • The adequacy, efficiency, and safety of pedestrian and vehicular access, including drive aisles, driveways, and parking and loading spaces. • The adequacy and efficiency of landscaping and open space areas and the use of water efficient plant and irrigation materials; and • The protection of significant views from public right(s)-of-way and compliance with Section 20.30.100 (Public View Protection). Section 4: Housing Plan establishes Policy Action 3A to establish objective design standards for the City. Specifically, Policy Action 3A states —The City of Newport Beach will review existing entitlement processes for housing development and will eliminate discretionary review for all housing development proposals that include a minimum affordable housing component. The City will also review the appropriateness of its current development standards to ensure that it reasonably accommodates the type and density of housing it is intended to support. The City will also amend existing development standards to replace or remove all subjective standards for projects with a minimum affordable housing component with objective standards that do not impede the type and density of housing it is intended to allow. The objective development standards are to be adopted within 24 months of the Housing Element adoption. Zoning Clearances A Zoning clearance is the procedure used by the City to verify that a proposed use or structure complies with the activities allowed in the applicable zoning district and the development standards and other provisions of the City's Zoning Code. A zoning clearance is required as a prerequisite to establishing a structure or use for the following: • Before the initiation or commencement of any use of land not requiring the construction of a structure. • Whenever a use is proposed to be changed, whether or not the new use involves a new lessee, operator, or owner, a zoning clearance shall be obtained. • Before the City issues a new or modified building permit, grading permit, or other construction - related permit required for the alteration, construction, modification, moving, or reconstruction of any structure. The Department may issue the zoning clearance after first determining that the request complies with all Zoning Code provisions and other adopted criteria and policies applicable to the proposed use or structure. An approval may be in the form of a stamp, signature, or other official notation on approved plans, a letter to the applicant, or other certification, at the discretion of the Director. Review authority for Zoning Clearances is stated in Table 3-13 above. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-45 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT At ` 'enate Bill 3F California Senate Bill 35 (SB 35), codified as Government Code Section 65913.41, was signed on September 29, 2017 and became effective January 1, 2018. SB 35 will automatically sunset on January 1, 2026 (Section 65913.4(m)). The intent of SB 35 is to expedite and facilitate construction of affordable housing. SB 35 applies to cities and counties that have not made sufficient progress toward meeting their affordable housing goals for above moderate- and lower -income levels as mandated by the State. In an effort to meet the affordable housing goals, SB 35 requires cities and counties to streamline the review and approval of certain qualifying affordable housing projects through a ministerial process. When a jurisdiction has made insufficient progress toward their Above Moderate -income RHNA and/or has not submitted the latest Housing Element Annual Progress Report (2018) it is subject to the streamlined ministerial approval process (SB 35 (Chapter 366, Statutes of 2017) streamlining) for proposed developments with at least 50 percent affordability. All projects, which propose at least 50 percent affordable units within Newport Beach are eligible for ministerial approval under SB 35 as determined by the SB 35 Statewide Determination Summary. To be eligible for SB 35 approval, sites must meet a long list of criteria, including: • A multifamily housing development (at least two residential units) in an urbanized area; • Located where 75% of the perimeter of the site is developed; • Zoned or designated by the general plan for residential or mixed use residential; • In a location where the locality's share of regional housing needs has not been satisfied by building permits previously issued; • One that includes affordable housing in accordance with SB 35 requirements; • Consistent with the local government's objective zoning and design review standards; and • Willing to pay construction workers the state -determined "prevailing wage." A project does not qualify for SB 35 streamline processing if in: • A coastal zone, conservation lands, or habitat for protected species; • Prime farmland or farmland of statewide importance; • Wetlands or lands under conservation easement; • A very high fire hazard severity zone; • Hazardous waste site; • Earthquake fault zone; • Flood plain or floodway; • A site with existing multi -family housing that has been occupied by tenants in the last ten years or is subject to rent control; or Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-46 (September 2022 Final Housing Element) City of Newport Beach T 2021-2029 HOUSING ELEMENT At • A site with existing affordable housing.' 9 Infrastructure Constraints Another factor that could constrain new residential construction is the requirement and cost to provide adequate infrastructure (major and local streets; water and sewer lines; and street lighting) needed to serve new residential development. In most cases, where new infrastructure is required, it is funded by the developer and then dedicated to the City, which is then responsible for its maintenance. The cost of these facilities is generally borne by developers, which increases the cost of new construction, with much of that increased cost often "passed on" in as part of home rental or sales rates. The Utilities Department oversees, manages, and maintains the City's: • Water • Street sweeping • Wastewater (sewer) • Streetlights • Storm drain and tidal valve system • Oil and gas operations The City has water, sewer and dry utilities that exist or are planned to accommodate residential development in the community. As the City is essentially built out, the infrastructure in place is designed and located to accommodate potential for additional housing identified for the 6th Cycle Housing Element. Dry Utilities Dry utilities are the installation of the electric, telephone, TV, internet, and gas in a community. Of the utilities, the City must plan to provide the necessary resources, such as electric and gas, to increased households from 2021-2029, as projected by the RHNA allocation. Electricity Southern California Edison (SCE) is the electrical service provider for the City of Newport Beach. SCE is regulated by the California Public Utilities Commission (CPUC) and the Federal Energy Regulatory Commission (FERC) and includes 50,000 square miles of SCE service area across Central, Coastal, and Southern California. The SCE reliability report identifies the reliability of electricity services to the City and identifies any dependability issues that exist in the City. There are 52 circuits that serve the City of Newport Beach, in total the 52 circuits serve 77,199 customers. SCE measure reliability by three categories: • System Average Interruption Duration Index (SAIDI) — total minutes every SCE customer was without power due to sustained power outage (outage > 5 minutes) divided by total number of customers • System Average Interruption Frequency Duration Index (SAIFI) — Number of sustained customer outages experienced by all SCE customers divided by total number of customers 1 JD Supra Knowledge Center, "How California's SB 35 Can Be Used to Streamline Real Estate Development Projects", Accessed March 26, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-47 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • Customer Average Interruption Duration Index (MAIFI) — System average interruption duration index divided by system average interruption frequency index Overall, the City of Newport Beach experience relatively low interruptions compared to the overall service provided to all SCE customers, displayed in Figure 3-1. Figure 3-1: Reliability History of Circuits Serving Newport Beach (No Exclusions) 2016 2017 2018 2019 200.0 150.0 134.5 139.7 SAIDI 118.4 1152 (average 100.0 minutes of sustained interruptions) 50.0 SAIR (average frequency of sustained interruptions) MAIFI {average frequency of momentary interruptions) 0.0 1.4 1.2 1.0 0A 0.6 0.4 o.2 0.0 2.0 1.5 1.0 0.5 0.0 Source: Southern California Edison, Reliability Reports, Newport Beach 2020 ■ Newport Reach ■SCE SYSTEMWIDE —Exclusions' are days which utilities are allowed to remove from their metrics because the outages on those days were caused by acts of nature. "Data is as of 0211412020, data can be slightly different due to outage data validation process SCE will continue to provide adequate services to the City of Newport Beach including increased household growth as projected by the City's RHNA allocation. Southern California Gas Company provides natural gas services to the City of Newport Beach. SoCal Gas is a gas -only utility and, in addition to serving the residential, commercial, and industrial markets, provides gas for enhanced oil recovery (EOR) and EG customers in Southern California. The SoCal Gas 2020 utility report projects total gas demand to decline at an annual rate of 1 percent from 2020-2035. From 2020-2035, residential demand is expected to decline from 230 Bcf to 198 Bcf. The decline is approximately 1 percent per year, on average. The decline is due to declining use per meter —primarily driven by very aggressive energy efficiency goals and associated programs— offsetting new meter growth.' z SoCal Gas 2020 California Gas report, Prepared in Compliance with California Public Utilities Commission Decision D .95-01-039 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-48 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT SoCalGas engages in several energy efficiency and conservation programs designed to help customers identify and implement ways to benefit environmentally and financially from energy efficiency investments. Programs administered by SoCalGas include services that help customers evaluate their energy efficiency options and adopt recommended solutions, as well as simple equipment -retrofit improvements, such as rebates for new hot water heaters. Additionally, the City of Newport Beach employs programs for energy and utility conservation, outline below in Section 3: Housing Resources, Opportunities for Energy Conservation. Water Supply The City of Newport Beach Utilities Department currently serves a population of over 86,000 within a service area of approximately fifty square miles. The Department is responsible for providing a safe and reliable source of water to approximately 26,200 active connections and delivering approximately 13,500-acre feet (AF) of water per year on average.3 The City's distribution system consists of approximately 300 miles of distribution pipelines and is divided into five main pressure zones: Zone 1 through Zone 5 with 16 minor zones. Zones 1 and 2 are the largest and cover most of the system demands. Zones 3, 4 and 5 are smaller pumped zones. The system infrastructure consists of four wells, three storage reservoirs, five pump stations and 43 pressure reducing stations (PRS) that manage pressure across the system.' The City of Newport Beach water division is separated into four sections: water maintenance and repair, water production, water quality, and water system services, each department's duties are outlined below. Together the division is responsible for providing a safe and reliable source of water. Newport Beach Water Source The City receives its water from several sources, local groundwater from the Lower Santa Ana River Groundwater Basin, imported water purchased from the Municipal Water District of Orange County (MWDOC), and recycled water purchased from Orange County Water District (OCWD). Most of the City's water supply is groundwater, pumped from four wells within the City of Fountain Valley. Imported water is treated at the Diemer Filtration Plant operated by the Metropolitan Water District of Southern California (Metropolitan). The City is not capable of treating water to produce reclaimed water but purchases water from OCWD through the Green Acres Project. 5 Water Maintenance ana Kepair Water Maintenance & Repair is responsible for the maintenance and operation of the City's water mains and valves that are located underground. Wat— ornductinn Water Production operates, maintains, and disinfects the City of Newport Beach's water supply. The division operates two well sites which produce groundwater from the Orange County Basin as well as three water reservoirs to receive, store and distribute the City's water. Other water facilities that assist in the distribution and treatment process include: five water pump stations, five Metropolitan Water District s City of Newport Beach, Water rate Study, 2019 ° City of Newport Beach, Water Master Plan, 2019 s City of Newport Beach, Urban Water Management Plan (2015) Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-49 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT ^�t a' , Sit interconnections, and 42 water pressure regulating stations. Water Production also manages SCADA (Supervisory Control and Data Acquisition) which monitors and controls the pumps in the City's water wastewater and gas systems. Big Canyon Reservoirs Located at 3300 Pacific View Drive in Corona Del Mar. The Big Canyon Reservoir is the largest City owned reservoir with a capacity of 600-acre foot or 195 million gallons. Built in 1958 this reservoir was the primary water supply for Newport for many years. Although the reservoir does have the ability to supply water to the entire service area the reservoir is primarily used as a storage reservoir and supply to the City's higher -pressure zones. Spyglass Hill Reservoir Located under the Spyglass Reservoir park at the end of Muir Beach Circle in Spyglass is the 1.5-million- gallon concrete reservoir. Built in the 1970s to supply the surrounding community this 101-foot diameter and 27-foot-deep reservoir is under the playground park. Large concrete support columns and thick concrete roof and walls support this reservoir. 16th Street Reservoir Located at the Utilities Yard at 949 West 16th Street in Newport Beach the newest of our reservoirs is a 3-million-gallon underground concrete reservoir. Built in 1996 as part of the City's ground water project, this reservoir receives well waterfrom our four City owned wells in Fountain Valley. This reservoir supplies water to the 16th Street pump station that can pump up to 12,000 gallons per minute into our distribution system. Excess water not used in the system is stored in the Big Canyon Reservoir in Corona Del Mar. Water Qualit- The City of Newport Beach Utilities Department is responsible for providing residents with a reliable, safe, clean, potable, and domestic water supply. Newport Beach's drinking water is safe for drinking. It meets or exceeds all Federal and California water quality standards, which are the most stringent standards of any state in the nation. The City's staff continuously monitors the City's water supply and conducts more than 1,500 tests each year on potable water drawn from different sampling points along our distribution system. Water System Services Water System Services assists City of Newport Beach customers with any questions regarding water quality, water pressure, consumption usage, any concern with water meters, leak detection, utilities inspections and underground utility locating. The City's Water Systems Services webpage provides tips and information for proper water systems care for property owners as well as additional resources. Wastewater Wastewater is responsible for the collection of residential and commercial wastewater. This Division has three sub -sections: Pump Station Operation, Cleaning Operation and Construction Operation. These three sub -sections provide service relating to pump station repair and maintenance, sewer main, lateral and manhole cleaning, sewer blockage and odor, and sewer main and lateral breaks and repairs. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-50 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT The City's Wastewater department is responsible for 203 miles of sewer pipe, 120 miles of sewer laterals, approximately 5,000 manholes, 21 pump stations, and five miles of force mains. The City's 2019 Sewer System Management Plan states the department's main goals to include the following: • Maintain uninterrupted sewage flow without health hazard, effluent leakage, or water infiltration and inflow. • Operate a sanitary sewer system that meets all regulatory requirements. • Avoid sanitary sewer overflows and respond to sanitary sewer overflows quickly and mitigate any impact of the overflow. • Maintain standards and specifications for the installation of new wastewater systems. • Verify the wastewater collection system has adequate capacity to convey sewage during peak flows. • Provide training for Wastewater Collection staff. • Maintain the Fats, Oil, and Grease program (FOG program) to limit fats, oils, grease, and other debris that may cause blockages in the wastewater collection system. • Identify and prioritize structural deficiencies and implement short-term and long-term maintenance and rehabilitation actions to address each deficiency. • Meet all applicable regulatory notification and reporting requirements. • Provide excellent customer service through efficient system operation and effective communication strategies. Sewer The Orange County Sanitation District (OCSD)provides sanitation services to the City of Newport Beach. In 2013, the sanitation district began a construction program to rehabilitate the OCSD's regional sewers in the City. The program ran through 2018 and consisted of five construction projects, including: • Dover Drive Trunk Sewer Relief (5-63): The Dover Drive Trunk sewer runs between Irvine Blvd. and Coast Highway and is in poor condition. The existing sewer pipeline also does not have efficient hydraulic capacity to handle the wastewater flow and must therefore be replaced with a larger pipeline. OCSD will also relocate a city waterline to reduce the level of impact for the community by eliminating the need for a secondary project in the area. • Balboa Trunk Sewer Rehabilitation (5-47): This project will rehabilitate the existing Balboa Trunk sewer along Newport Blvd. and Balboa Blvd. between A Street and Finley Ave. (See map: between A Street Pump Station and Lido Pump Station.) The project includes installation of a new protective lining in approximately 12,600 feet of sewer pipeline. • Newport Force Main Rehabilitation (5-60): The Newport Force Main is a critical component of our sewer system and needs to be rehabilitated. It carries the wastewater flow from various pump stations to our treatment plant in Huntington Beach. The pipelines are located on Coast Highway stretching past Dover Dr. to the Bitter Point Pump Station, approximately 1/4 mile north of Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-51 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Superior Ave., which is a heavily traveled thoroughfare. There are two sewer lines, one on the north side of Coast Highway and one on the south side which make the rehabilitation more complex. • District 6 Trunk Sewer Relief (6-17): The District 6 Trunk sewer runs from Pomona Ave. in the City of Costa Mesa to Newport Blvd. near Coast Highway in the City of Newport Beach. This project will increase the capacity of the existing sewer pipeline to reduce the potential for sewer spills and to properly handle flows. • Southwest Costa Mesa Trunk (6-19): In an effort to improve efficiency in our service area, this project is looking into the design and construction of a new gravity trunk sewer. This project may lead to the abandonment of eight Costa Mesa and Newport Beach pump stations to provide more reliable service to the community The infrastructure improvements initiated by OCSD from 2013 to 2018 increased overall capacity and efficiency in the Newport Beach sewer system. The City can accommodate the increase in households as projected by the City's RHNA allocation. Water uemana In fiscal year 2014-15, the City's total water demand was approximately 16,033 acre-feet. The City's potable demand was met through 11,200 acre-feet of groundwater and 4,338 acre-feet of imported water; the remaining non -potable demand was met through recycled water. The City is projecting over five percent increase in total potable and non -potable demand in the next 25 years accompanied by a projected 13 percent population growth.6 The 2015 UWMP found that Metropolitan is able to meet full service demands of its member agencies with existing supplies out to 2040 during a normal, single -dry, and multiple -dry year scenario. Additionally, the 2019 Water Master Plan found that though population continues to increase over the past ten years, total water demand has decreased. The 10-year average annual demand for 2007-2016 (15,991 AF) is 14 percent less than the 1986-1996 average annual demand (18,626 AF). The City's water infrastructure and service provider is capable of meeting the water demands of its customers under the same hydrological conditions out to 2040, this includes all household growth estimated by the City's RHNA allocation. Fire and Emergency Services The City of Newport Beach's Fire Department aims to Protect life, property, and the environment with innovative professionalism and organizational effectiveness using highly trained professionals committed to unparalleled service excellence. The department has 144 full-time employees and over 200 part-time/seasonal employees provide 24-hour protection and response to the community's residents, businesses, and visitors. 5 City of Newport Beach, Urban Water Management Plan (2015) Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-52 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT The department's primary goals are identified as follows: `+ •.st !�� • Identify and reduce fire and environmental hazards that may threaten life and property. • Provide a safe, effective, and expeditious response to requests for assistance. • Develop an adequately trained workforce to effectively perform their duties. • Participate in the community development planning process to improve fire and life safety. • Encourage department personnel to assume leadership roles in the organization. • Plan for response to natural and man-made disasters that affect the community. • Educate and train employees and the community to assist them in maintaining a safe environment. The department's different divisions and respective duties are outlined below. Fire Operations Division The Fire Operations Division is the largest of four divisions within the Newport Beach Fire Department. The primary responsibilities of its personnel are life safety, incident stabilization, and the preservation of property and the environment. The Newport Beach Fire Department operates as an "all risk" emergency responsible organization responding to the following: • Fires • Pre -hospital Medical Emergencies • Technical Rescues • Traffic Accidents • Vehicle Extrications • Major Flooding • Beach Rescues • High Rise Incidents • Wildland Fires • Disaster Operations • Hazardous Materials Incidents The Fire Department staffs eight fire stations 24/7. The stations are strategically located throughout the city to provide the quickest and most effective response to the area served, with an average response time of five minutes. Considering the department's expansive and well-connected nature, as well as the compactness of the City of Newport, additional housing or new developments would not pose a burden on the existing Fire Department's fire operations. Therefore, fire operations are not considered a constraint to the development of housing for all income levels. The City requires Development Agreements for certain development types within the Airport area to ensure adequate safety services and ambulance units. Development Agreements include additional fees for safety service operations in the airport area due to current lack of ambulance units. The imposition of additional fees may pose a constraint to the development of housing, and particularly affordable housing. This may result in greater development fees which may subsequently influence the final rental cost of units or home value. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-53 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Emergency Medical Services The goal of the Emergency Medical Services (EMS) Division is to deliver the highest quality of medical care to members of the community, regardless of their ability to pay. In total, the City has eight fire stations that are strategically located to provide the best services the community. Each day there are eight fire engines, two fire trucks and the three paramedic ambulances in service. The average response time is four minutes and 22 seconds. The system's design accounts for fewer paramedic ambulances and expects a nearby fire engine or truck company to arrive on scene first to initiate basic medical care, which at times can include lifesaving cardio-pulmonary resuscitation or delivering rapid electrical shocks using automated external defibrillators (AEDs), prior to the arrival of the paramedic team. Lifnfvtsn rl t1nnrnfinnc mlicinr The City of Newport Beach's Lifeguard Division protects up to 10 million beach visitors on Newport Beach's 6.2 miles of ocean and 2.5 miles of bay beaches, with preventative actions and medical assistance. Every day of the year, lifeguards ensure safety and provide customer service to the visitors on the beach, boardwalk, piers, and in the ocean. Police Services The City of Newport Beach's Police Department intends to: • Respond positively to the Community's needs, desires, and values and in so doing be recognized as an extension and reflection of those we serve. • Strive to provide a safe and healthy environment for all, free from violence and property loss resulting from criminal acts, and injuries caused by traffic violators. • Manage inevitable change and welcome the challenge of future problems with creative solutions, which are financially prudent and consistent with Community values. The Department's is headed by Chief of Police Jon T. Lewis, who is the 101" Chief of Police in the department's history, assuming office on March 22, 2016. The City of Newport Beach's Police Department handles a wide array of services and permitting, all services are outlined in detail on the City's Police Department webpage. 3. Environmental Constraints Newport Beach is bound by the Pacific Ocean to the West and contains many different natural landscapes within the City's boundaries. Newport Beach has a variety of coastal features ranging from replenished beach sands in West Newport, to steep bluffs comprised of sandstone and siltstone to the south of Corona del Mar. The community, as most of California is, sits along some major fault traces. The City is susceptible to several potential environmental constraints to the development of housing, including geologic hazards, flood hazards, and fire hazards, all are detailed below. Coastal Hazards A goal of the California Coastal Act and the City's adopted Local Coastal Program is to assure the priority for coastal -dependent and coastal -related development over other development in the Coastal Zone. The Coastal Act is an umbrella legislation designed to encourage local governments to create Local Coastal Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-54 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Programs (LCPs) to govern decisions that determine the short- and long-term conservation and use of coastal resources. The City of Newport Beach's LCP is considered the legislative equivalent of the City's General Plan for areas within the Coastal Zone. Local Coastal Programs are obligated by statute to be consistent with the policies of the Coastal Act and protect public access and coastal resources. Over 63 percent of Newport Beach is within the Coastal Zone and subject to the oversight by the California Coastal Commission. 'Pa I AvAI RicA and Zfnrm In►►nrlatinn Newport Beach is exposed to a variety of coastal hazards including beach erosion, bluff erosion, and coastal flooding due to sea level rise (SLR) and storm inundation. The City has a significant amount of land directly adjacent to surface water that is directly affected by sea level rise and storm inundation. The effects of SLR on coastal processes, such as shoreline erosion, storm -related flooding and bluff erosion, have been evaluated using a Coastal Storm Modeling System (CoSMoS), a software tool and multi -agency effort led by the United States Geological Survey (USGS), to make detailed predictions of coastal flooding and erosion based on existing and future climate scenarios for Southern California. The mapping results from CoSMoS provide predictions of shoreline erosion (storm and non -storm), coastal flooding during extreme events, and bluff erosion for the City in community -level coastal planning and decision -making. A large portion of the City's coastal adjacent land appropriate for development is at risk of tidal flooding. Land along the coast is vulnerable to shoreline retreat, which is predicted to accelerate with Sea Level Rise. Long-term shoreline retreat coupled with storm -induced beach erosion has the potential to cause permanent damage to buildings and infrastructure in these hazard zones. As a result, the City did not utilize land within the coastal The Coastal Commission provides direct guidance on how the City of Newport Beach addresses future land use in consideration of sea level rise. According to the California Coastal Commission Sea Level Rise Policy Guidance' , local jurisdictions can "Minimize Coastal Hazards through Planning and Development Standards" through the following measures applicable to Newport Beach: • Design adaptation strategies according to local conditions and existing development patterns, in accordance with the Coastal Act. • Avoid significant coastal hazard risks to new development where feasible. • Minimize hazard risk to new development over the life of the authorized development. • Minimize coastal hazard risks and resource impacts when making redevelopment decisions. • Account for the social and economic needs of the people of the state include environmental justice, assure priority for coastal -dependent and coastal -related develop over other development The Coastal Commission has also prepared a Draft Coastal Adaptation Planning Guidance: Residential Development (dated March 2018), which will serve as the Coastal Commission's policy guidance on sea ' California Coastal Commission Sea Level Rise Policy Guidance, 2018 Science Update Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-55 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT ^�w level rise adaptation for residential development to help facilitate planning for resilient shorelines while protecting coastal resources in LCPs Geologic Hazards According to the Newport Beach Safety Element, the geologic diversity of Newport Beach is strongly related to tectonic movement along the San Andreas Fault and its broad zone of subsidiary faults. This, along with sea level fluctuations related to changes in climate, has resulted in a landscape that is also diverse in geologic hazards. Geologic hazards are generally defined as surficial earth processes that have the potential to cause loss or harm to the community or the environment. Specific geologic hazards that may affect the development of housing in the City are detailed below. Slope Failures Slope failures often occur as elements of interrelated natural hazards in which one event triggers a secondary event such as a storm -induced mudflow. Slope failure can occur on natural and man-made slopes. The City's remaining natural hillsides and coastal bluff areas are generally vulnerable to slope failures that include: San Joaquin Hills; and bluffs along Upper Newport Bay, Newport Harbor, and the Pacific Ocean. Despite the abundance of landslides and new development in the San Joaquin Hills, damage from slope failures in Newport Beach has been small which may be attributed to the development of strict hillside grading ordinances, sound project design that avoid severely hazardous areas, soil engineering practices, and effective agency review of hillside grading projects. Seismic Hazards The City of Newport Beach is located in the northern part of the Peninsular Ranges Province, an area that is exposed to risk from multiple earthquake fault zones. The City of Newport Beach Safety Element determines that the highest risks originate from the Newport -Inglewood fault zone, the Whittier fault zone, the San Joaquin Hills fault zone, and the Elysian Park fault zone. Each of the aforementioned zones have the potential to cause moderate to large earthquakes that would cause ground shaking in Newport Beach and nearby communities. Earthquake -triggered geologic effects also include surface fault rupture, landslides, liquefaction, subsidence, and seiches. Specific hazards associated with seismic hazards, which can potentially be determined as a constraint to development are detailed below. Liquefaction Strong ground shaking can result in liquefaction. Liquefaction, a geologic process that causes ground failure, typically occurs in loose, saturated sediments primarily of sandy composition. According to the Newport Beach Safety Element, the areas of Newport Beach susceptible to liquefaction and related ground failure (i.e., seismically induced settlement) include the following areas along the coastline: • Balboa Peninsula, • In and around the Newport Bay and Upper Newport Bay, • in the lower reaches of major streams in Newport Beach, and • In the floodplain of the Santa Ana River. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-56 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT It is likely that residential or commercial development will never occur in many of the other liquefiable areas, such as Upper Newport Bay, the Newport Coast beaches, and the bottoms of stream channels. 'Qi,zmir_ally Inritir_Prl S/nn Failure Strong ground motions can also worsen existing unstable slope conditions, particularly if coupled with saturated ground conditions. Seismically induced landslides can overrun structures, people or property, sever utility lines, and block roads, thereby hindering rescue operations after an earthquake. Much of the area in eastern Newport Beach has been identified as vulnerable to seismically induced slope failure. Approximately 90 percent of the land from Los Trancos Canyon to State Park boundary is mapped as susceptible to land sliding by the California Geologic Survey. Additionally, the sedimentary bedrock that crops out in the San Joaquin Hills is locally highly weathered. In steep areas, strong ground shaking can cause slides or rockfalls in this material. Rupture along the Newport Inglewood Fault Zone and other faults in Southern California could reactivate existing landslides and cause new slope failures throughout the San Joaquin Hills. Slope failures can also be expected to occur along stream banks and coastal bluffs, such as Big Canyon, around San Joaquin Reservoir, Newport and Upper Newport Bays, and Corona del Mar. Flood Hazards The City of Newport Beach and surrounding areas are, like most of Southern California, subject to unpredictable seasonal rainfall, and every few years the region is subjected to periods of intense and sustained precipitation that result in flooding. Flooding can be a destructive natural hazard and is a recurring event. A flood is any relatively high streamflow overtopping the natural or artificial banks in any reach of a stream. Flood hazards in Newport Beach can be classified into two general categories: flash flooding from small, natural channels; and more moderate and sustained flooding from the Santa Ana River and San Diego Creek. The City of Newport Beach's Safety Element Identifies 100-year and 500-year flood zones in the City. Federal Emergency Management Agency (FEMA) flood zones are geographic areas that the FEMA has defined according to varying levels of flood risk. Each zone reflects the severity or type of flooding in the area.' The 100-year flood zone are areas with a one percent annual chance of flooding, the 500-year flood zones are areas with a 0.2 percent annual chance of flooding. The 100- and 500-year flood zones include the low-lying areas in West Newport at the base of the bluffs, the coastal areas which surround Newport Bay and all low-lying areas adjacent to Upper Newport Bay. 100- and 500- year flooding is also anticipated to occur along the lower reaches of Coyote Canyon, in the lower reaches of San Diego Creek and the Santa Ana Delhi Channel, and in a portion of Buck Gully. The City also recently worked with FEMA to revise proposed flood hazards maps, in which FEMA removed over 2,700 properties from flood zones. Most flooding along these second- and third -order streams is not expected to impact significant development. However, flooding in the coastal areas of the City will impact residential and commercial zones along West Newport, the Balboa Peninsula and Balboa Island and the seaward side of Pacific Coast Highway.' With increased development, there is also an increase in impervious surfaces, such as asphalt. Water that used to be absorbed into the ground becomes runoff to downstream areas. However, various flood $ FEMA Flood Zone Designations, Natural resources Conservation Service — Field Office Technical Guides 9 City of Newport Beach Safety Element Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-57 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT control measures help mitigate flood damage in the City, including reservoirs in the San Joaquin Hills and Santa Ana Mountain foothills, and channel alterations for the Santa Ana River. These structures help regulate flow in the Santa Ana River, San Diego Creek, and smaller streams and hold back some of the flow during intense rainfall period that could otherwise overwhelm the storm drain system in Newport Beach. Fire Hazards The Newport Beach Safety Element defines a wildland fire hazard area as any geographic area that contains the type and condition of vegetation, topography, weather, and structure density that potentially increases the possibility of wildland fires. The eastern portion of the City and portions of the Newport Beach region and surrounding areas to the north, east, and southeast include grass- and brush -covered hillsides with significant topographic relief that facilitate the rapid spread of fire, especially if fanned by coastal breezes or Santa Ana winds. In those areas identified as susceptible to wildland fire, the Fire Department enforces locally developed regulations which reduce the amount and continuity of fuel (vegetation) available, firewood storage, debris clearing, proximity of vegetation to structures and other measures aimed at "Hazard Reduction." New construction and development are further protected by local amendments to the Uniform Building Code. These amendments, which are designed to increase the fire resistance of a building, include: protection of exposed eaves, noncombustible construction of exterior walls, protection of openings, and the requirement for Class "A" fireproof roofing throughout the City. Additionally, a "Fuel Modification" plan aimed at reducing fire encroachment into structures from adjacent vegetation must be developed and maintained. 1. Affirmatively Furthering Fair Housing All Housing Elements due on or after January 1, 2021 must contain an Assessment of Fair Housing (AFH) consistent with the core elements of the analysis required by the federal Affirmatively Further Fair Housing Final Rule of July 16, 2015. Under State law, affirmatively further fair housing means "taking meaningful actions, in addition to combatting discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics. These characteristics can include, but are not limited to race, religion, sex, marital status, ancestry, national origin, color, familiar status, or disability. The Orange County Analysis of Impediments (AI) to Fair Housing Choice for FY 2015-19 was approved by the City of Newport Beach City Council in October 2016 as one of the fifteen urban county program participants in partnership with the Fair Housing Council of Orange County. The Draft Regional Analysis of Impediments (AI) to Fair Housing Choice for FY 2020-25 was made available for public review in 2020. The Fair Housing Council of Orange County works under the direction of a volunteer board of directors and staff to fulfill a mission of protecting the quality of life in Orange County by ensuring equal access to Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-58 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT housing opportunities, fostering diversity and preserving dignity and human rights. The agency is a HUD Approved Housing Counseling Agency and provides one-on-one education, mediation, and counseling for individuals and families throughout the Orange County region. The Al identifies impediments that may prevent equal housing access and develops solutions to mitigate or remove such impediments. Newport Beach's 6th Cycle Housing Element references analysis from the FY 2020-2025 Al in order to identify potential impediments to housing that are specific to Newport Beach. The City also completed its FY 2020-24 Consolidated Plan, adopted by City Council on May 12, 2020, as an entitlement city for Community Development Block Grant (CDBG) funding, which identifies housing problems within the community, specifically among low and very -low-income households. Fair housing is identified as a priority within the Consolidated Plan. 2. Summary of Local Data The Al contains a Countywide analysis of demographic, housing, and specifically fair housing issues for all the cities in Orange County, including Newport Beach. The City's demographic and income profile, household and housing characteristics, housing cost and availability, and special needs populations were discussed in the previous Section 2: Community Profile. In an ongoing effort to promote and encourage fair housing, the City contracts with the Fair Housing Foundation (FHF). FHF provides public outreach, educational workshops, and distributes educational materials related to fair housing. Inquiries regarding fair housing matters are generally referred to the FHF. As of July 30, 2021, a total of 116 Newport Beach low-income residents relied on Section 8 rental assistance vouchers. In 2020, the Fair Housing Foundation held virtual fair housing workshops (February 3, 2020, and November 17, 2020), held virtual walk-in clinics (May 13, 2020, May 20, 2020, July 15, 2020, September 2, 2020, and November 18, 2020), produced a public service announcement for Newport Beach Television (NBTV), and distributed 2,250 pieces of literature. Fair Housing issues Within the legal framework of federal and state laws and based on the guidance provided by the HUD Fair Housing Planning Guide, impediments to fair housing choice can be defined as: • Any actions, omissions, or decisions taken because of age, race, color, ancestry, national origin, age, religion, sex, disability, marital status, familial status, source of income, sexual orientation, or any other arbitrary factor which restrict housing choices or the availability of housing choices; or • Any actions, omissions, or decisions which have the effect of restricting housing choices or the availability of housing choices on the basis of age, race, color, ancestry, national origin, age, religion, sex, disability, marital status, familial status, source of income, sexual orientation or any other arbitrary factor. Regional Fair Housing Issues • Availability, Type, Frequency, and Reliability of Public Transportation - The availability, type, frequency, and reliability of public transportation may be significant local contributing factors to fair housing issues in Newport Beach. Public transportation in Orange County primarily consists Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-59 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT of bus service operated by the Orange County Transportation Authority (OCTA) and Metrolink light rail service. However, Metrolink does not provide service to Newport. The lack of public transportation may deter members of protected classes who do not have cars and are reliant on public transportation from choosing to live there, thus reinforcing patterns of segregation. • Impediments to Mobility - Impediments to mobility may be a significant local contributing factor to fair housing issues in Newport Beach. Specifically, Housing Choice Voucher payment standards that make it difficult to secure housing in many, disproportionately White areas contribute to segregation and disparities in access to opportunity. The Orange County Housing Authority, which provides Section 8 resources to Newport Beach, has three tiers based on city rather than zip code, but the highest tier - $2,280 for two -bedroom units in selected cities — falls far short of Small Area Fair Market Rents and leaves some cities targeted for that payment standard out of reach. For example, in zip code 92660, located in Newport Beach, the Small Area Fair Market Rent for two -bedroom units would be $3,120. A Zillow search for that zip code revealed advertised two -bedroom units in only two complexes available for under $2,280 but many more available between $2,280 and $3,120. • Location of Accessible Housing - The location of accessible housing may be a significant local contributing factor to fair housing issues in Newport Beach. With a few exceptions the location of accessible housing tends to track areas where there are concentrations of publicly supported housing. In Orange County, publicly supported housing tends to be concentrated in areas that are disproportionately Hispanic and/or Vietnamese and that have relatively limited access to educational opportunity and environmental health. While this Is not a predominate issue in Newport Beach, comments by advocacy groups during the outreach process indicated that the location and availability of affordable housing throughout the community contributes to challenges to fair housing opportunity. Multi -unit housing tends to be concentrated in communities of color, but there are some predominantly White communities that have significant amounts of market -rate multi -unit housing that may be accessible and affordable to middle - income and high -income persons with disabilities, including Newport Beach. Overall, permitting more multi -unit housing and assisting more publicly supported housing in predominantly White communities with proficient schools would help ensure that persons with disabilities who need accessibility features in their homes have a full range of neighborhood choices available to them. Occupancy Codes and Restrictions - Occupancy codes and restrictions may be a significant local contributing factor to fair housing issues in Newport Beach. Specifically, there is a substantial recent history of municipal ordinances targeting group homes, in general, and community residences for people in recovery from alcohol or substance abuse disorders, in particular. In 2015, the City of Newport Beach entered into a $5.25 million settlement of a challenge to its ordinance, but that settlement did not include injunctive relief calling for a repeal of that ordinance.10 Although municipalities have an interest in protecting the health and safety of group home residents, these types of restrictions may be burdensome for ethical, high -quality group 10 41 Hannah Fry, Newport Will Pay Group Homes $5.25 Million Settlement, L.A. TIMES (July 16, 2015), https://www.latimes.com/socal/daily- pilot/news/tn-dpt-me-0716-newport-group-home-settlement-20150716- story.html. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-60 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT home operators. Occupancy codes and restrictions are not as high priority of a barrier as the factors that hinder the development of permanent supportive housing, as group homes are generally less integrated than independent living settings. Fair Housing Enforcement and Outreach Capacity Currently, the Fair Housing Foundation provides fair housing services to the City of Newport Beach. This includes providing fair housing enforcement and landlord/tenant mediation services which are available for tenants, realtors, apartment owners and managers, lending institutions and other interested parties. For FY 2020-21, the City of Newport Beach has allocated $12,000 in Community Development Block Grant (CDBG) funds for the Fair Housing Foundation to perform the following, at no cost: • Fair housing services such as, responding to discrimination inquiries and complaints, documenting, and investigating discrimination complaints, and resolving or mediating discrimination complaints • A comprehensive, extensive, and viable education and outreach program, including: o Fair Housing Workshop o Certificate Management Training o Walk -In Clinics o Rental Housing Counseling Workshop o Community presentations, staff training, and workshops o Community events, booths, networking, etc. • Landlord and tenant counseling on responsibilities and rights • Rental counseling • Since the City contracts with an outside firm for these services, lack of monitoring and lack of direct access through City resources may be identified as contributing factors. The Fair Housing Foundations offers regular walk-in counseling sessions, in addition to resources fairs, informational workshops (accessible in multiple languages), landlord and tenant workshops, and other outreach efforts. Additionally, the FHF provided virtual workshops available online to Newport Beach residents. From 2015 to 2020, the City provided 408 residents with fair housing services using CDBG funding. As part of the FY 2020-25 Consolidated Plan for the Newport Beach, the City has set a goal of assisting 625 people with fair housing issues within the five-year period using $60,000 of CDBG funding. Newport Beach has also set a goal of retaining a Fair Housing provider to promote fair housing education and outreach within the community. The U.S. Department of Housing and Urban Development (HUD) maintains a record of all housing discrimination complaints filed in local jurisdictions. These grievances can be filed on the basis of race, color, national origin, sex, disability, religion, familial status, and retaliation. As reported by the 2020- 2025 Al, one fair housing case is unresolved (as one 2020) in Newport Beach. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-61 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Housing Element 2021-2029 Outreach Outreach and materials used in the 6t" Cycle Housing Element are provided in Appendix C: Summary of Community Outreach. I Analysis of Federal, State, and Local Data and Local Know/edge Newport Beach officially became an incorporated City in Orange County in September of 1906 and the current City Charter was adopted in 1954. The City began establishing itself in the 1920s around the development of the harbor; however it wasn't until the 1950s that the City became a vacation destination and permanent residents began to settle in the area.11 Between 1960 and 1980 the City experienced a boom in construction, which resulted in the population increasing from 26,564 residents to 62,549 residents over the 20-year period. Today, about 85,694 persons live in the City of Newport Beach (ACS 2019). Of the residents in the City, 85.8 percent identify as White, 1.0 percent identify as Black, 8.0 percent identify as Asian, and 8.8 percent of all persons identify as Hispanic or Latino. The City's demographics display a large contrast between the population that is White and Non -White. Similarly, about 61.0 percent of the County of Orange population is White compared to 1.8 percent who identify as Black, 20.5 percent who identify as Asian and 34.1 percent who Identify as Hispanic or Latino of any race.lz The City of Newport Beach's population requires a diverse array of housing options. Specifically, Newport Beach has an aging population. About 23.1 percent of the population is over the age of 65 compared to 14.4 percent in the County. About 8.0 percent of all persons in Newport Beach reported at least one disability in 2019, majority of which were seniors (over the age of 65). Senior housing and housing accessibility were key priorities identified by the community during the Housing Element Outreach. Additionally, the median income for non -family households is significantly lower than that of married couple households and family households. The ACS 2019 5-year data reports that nonfamily households earned a median income of $86,656 annually, compared to family households that earned $171,699 annually and married couple households that earned $192,542 annually. The City does not do fair housing testing, however additional information regarding fair housing concerns and issues was identified through the County of Orange Al. Additional housing needs, concerns, and disparities are analyzed below in the Fair Housing Analysis. Findings from the analysis are reported below under "Local Data and Knowledge." I nral nata and KnnwlPrfrrP Locally -derived knowledge and contributing factors were developed through community participation in outreach events, analysis conducted in Affirmatively Furthering Fair Housing development, feedback and comments received on the draft Housing Element's data, sites inventory, and policy programs. Additionally, local knowledge has been gathered and retained by City staff during the course of routine business over many decades of service. The various City Departments interact with the residents and businesses, property owners, developers, the various elected and appointed representatives, and the 11 The Chamber Newport Beach, About Newport Beach, https://www.newportbeach.com/about-newport- beach/#:-:text=The%20City%20of%2ONewport%2OBeach,brokering%20followed%20in%2Olater%20decades., accessed January 24, 2022. 12American Community Survey, DP05 5-year estimates, 2019. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-62 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT public on a daily basis. One aspect of providing service is to listen to the needs of the community and then to work with all stakeholders to address those needs deemed priorities after public debate. The following local contributing factors have been identified and several citywide and placed -based strategies to counter those factors are described later in Section 4 Additional local knowledge is provided regarding affirmatively furthering fair housing in the Airport Area and West Newport Focus Areas under the "Analysis of Exacerbating Current Conditions" header later in this Section.: • Aging Housing Stock — The community and the City's Planning and Code Enforcement Divisions have indicated that there is an older housing stock that will continue to require rehabilitation as the housing continues to age. With the relative cost of property, these conditions are a challenge for maintenance and upkeep due to relatively high cost of improvements. • Housing Conditions and Senior Housing —The community has noted its higher proportion of aging population. This is also supported by the demographic information provided in Tables 2-18 and 2- 19 in Section 2 (Profile) of this Housing Element. This tends to create challenges with deferred maintenance , as those older homeowners may not have the financial resources or physical ability to perform maintenance functions. Seniors are predominately on fixed incomes and represent the largest group of residents in need of support to address high housing costs and unique housing needs. The City's Senior Home Assistance Repair Program (SHARP) works to assist senior citizens with home repairs. Data for the program is provided in Appendix A. Eligible applicants must be 60 or older and must have an income at or below the 50t"-percentile of median income of Orange County with net assets not to exceed gross household income for 18 months. The City's Senior Center (OASIS) plays a vital role in the dissemination of information and services to the senior community and should be engaged to help facilitate the needs of the senior population. • Variety of Housing Choices — The City's existing mobile home and upward -trending accessory dwelling unit (ADU) inventory play a role in keeping an inventory of affordable housing in the community. The community has expressed its desire to have a good balance of residential development types and densities to accommodate various income levels and a variety of household types As discussed in Appendix D, the City has been promoting ADU development and provides local data to substantiate increased production. • Redevelop and Infill Opportunities — Residents and property owners indicated a desire to focus future development in areas seeing a decline in commercial development activity. As such, the Airport Area and Newport Center Area were included as major opportunity areas due to recent residential development activities and entitlement requests. The negative effects that the COVID- 19 pandemic and on-line shopping trends has had on the ability to maintain economically performing commercial properties was also cited as a concern. As such, reuse and repurposing of commercial and industrial uses is a major opportunity area according to residents. • Address the High Cost of Housing - The cost of housing in Newport Beach is very high and rents continue to increase; however, the City has aimed to encourage and preserve a number of affordable housing units through existing agreements. As part of this Housing Element update, Policy Action 1K is included to adopt an inclusionary housing program that would require affordable units to be developed as part of housing development projects meeting the certain Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-63 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Y applicability criteria. This Inclusionary Housing Program, in conjunction with the implementation of the Housing Element, will help to boost affordable housing production, which will in turn boost affordable housing stock to help offset higher housing costs. • Lower Income Access to Opportunity— High local employment in service industry at resort, hotel, restaurants, and other tourist -serving businesses contributes to the need for housing affordable to lower income households. To address this, Policy 4E grants exceptions for affordable housing projects, and supportive Policies for Housing Goal #5 provides for the preservation of lower income housing opportunities. • Transportation and Housing — Through community workshops, residents and stakeholders have indicated there is a need for improved transit use and better access throughout the community. In areas where higher density is preferred, such as the Airport Area, access to various transportation options will increase local economic development potential, physical mobility, employment and housing mobility. • Displacement of Residents — As the cost of housing rises, there are continued limitations on housing options for the younger and older populations. During community workshops, residents indicated the desire to improve access to housing options throughout various life stages. This includes rental and ownership opportunities, as well as options for persons with various incomes and household needs. The ability to age -in -place, not necessarily within an owned single-family home, but within a senior living community in Newport Beach, was identified as a major priority given the City's aging population. • Preserving Economic Integrity — As the RHNA obligations in the City have increased significantly, increasing development capacity has also increased the project cost for services and land has become scarce. The members of City's Housing Element Update Advisory Committee, its elected officials and a number of residents have expressed the need to balance housing with the need for economic development in the community to foster access to services and jobs. • Alternative Means to Accommodate Affordable Housing — Throughout the outreach and consultation process, the public stakeholders decision -makers and housing advocates have expressed at many meetings and workshops a desire to seek alternatives to accommodating affordable housing in a high -cost market. This includes ADU development, inclusionary housing options, and funding and financing mechanisms that further these opportunities. The community has expressed that ADUs represent the single greatest opportunity to accommodate affordable housing within existing established high -resource neighborhoods and recommended the inclusion of policies and programs to encourage them. Considering the locally derived knowledge and data, the City recognizes that fair housing issues exist within the community. The City is committed to reducing barriers to providing housing that is affordable to all. The City has outlined programs to address fair housing issues in Newport Beach in the Section 4: Housing Plan. As a prime example, Policy Action 4A (Affirmatively Furthering Fair Housing) has Table 4-1 (Fair Housing Actions) and lists nine identified fair housing issues such as access to opportunity, displacement, and housing mobility. The Table includes both place -based and citywide strategies. Each Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-64 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT issue includes geographic targets, meaningful City actions, priority level, timelines for action, and evaluative metrics that are aspirational goals to measure performance and to inform changes to future actions. Integration and Segregation Patterns and Trends The dissimilarity index is the most used measure of segregation between two groups, reflecting their relative distributions across neighborhoods (as defined by census tracts). The index represents the percentage of the minority group that would have to move to new neighborhoods to achieve perfect integration of that group. An index score can range in value from 0 percent, indicating complete integration, to 100 percent, indicating complete segregation. An index number above 60 is considered to show high similarity and a segregated community. It is important to note that segregation is a complex topic, difficult to generalize, and is influenced by many factors. Individual choices can be a cause of segregation, with some residents choosing to live among people of their own race or ethnic group. For instance, recent immigrants often depend on nearby relatives, friends, and ethnic institutions to help them adjust to a new country.13 Alternatively, when white residents leave neighborhoods that become more diverse, those neighborhoods can become segregated. Other factors, including housing market dynamics, availability of lending to different ethnic groups, availability of affordable housing, and discrimination can also cause residential segregation. The Longitudinal Tract Data Base (LTDB) from the Diversity and Disparities project shows that from 1980 to 2010 the City of Newport became increasingly diverse. In 1980, the Non -Hispanic White population totaled 91.6 percent of the overall population and decreased to about 73.6 percent in 2010. During the same timeframe, the Hispanic population increased from 5.0 percent to 10.9 percent. Additionally, the total populations for those who identified as Asian increased from 1980 to 2010, 2.0 percent to 13.6 percent, and the total population of those who are Non -Hispanic Black increased from 0.5 percent to 1.2 percent. However, in 2018, the Black or African American population totaled about 0.8 percent of the population. The decrease in the Black population and increase in the Hispanic population is consistent with demographics trends for the greater metropolitan area. In 1980, the Non -Hispanic Black population equaled 10.1 percent of the overall population for the Los Angeles -Long Beach -Santa Ana metropolitan area, and the Hispanic population totaled 25.0 percent. By 2010, the Black population totaled 6.7 percent whereas the Hispanic population increased to 44.4 percent. According to 2018 ACS data, the total Non - Hispanic Black population in Orange County was 1.7 percent and the total Hispanic population was 34.1 percent. Figure 3-2 shows the dissimilarity between each of the identified race and ethnic groups and the jurisdictions White population, in both the County of Orange and Newport Beach. The higher scores indicate higher levels of segregation among those racial and ethnic group. The White (non -Hispanic or Latino) population makes up most of the City's population at approximately 79.5 percent according to the 2018 ACS estimates, as well as most of the County's population at 61.7 percent of the total population. The race and ethnic groups with the highest scores were the Native Hawaiian population (44.5) and people 3 Allen, James P. and Turner, Eugene. "Changing Faces, Changing Places: Mapping Southern California". California State University, Northridge, (2002). Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-65 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT who reported as Other (51.3). Additionally, those who reported Black and the American Indian population had dissimilarity indices of 37.8 and 37.4 respectively. The scores above directly correlate with the percentage of people within that racial or ethnic group that would need to move into a predominately White census tract in order to achieve a more integrated community. For instance, in Newport Beach, 44.5 percent of the Native Hawaiian population would need to move into predominately white census tract areas to achieve "perfect" integration. Whereas in Orange County, 55.9 percent of the percent of the Native Hawaiian population would need to move into predominately white census tract areas to achieve "perfect" integration. Overall, there are higher rates of segregation across the County of Orange compared to the City of Newport Beach. The Department of Housing and Community Development (HCD) considers dissimilarity index scores above 30, but below 60 as moderate segregation. Scores above 60 are considered to be high segregation. According to Figure 3-2 below, while the City of Newport Beach has no racial or ethnic populations with a dissimilarity index above 60, all populations (with the exception of the Hispanic/Latino population) have a score above 30, meaning all groups experience moderate segregation from the White population. Similarly, all populations in the County have a score above 30. While segregation may be a result of ethnic enclaves or persons of similar cultures living in community, there is often increased likelihood segregated populations will have fewer access to essential resources. As a part of Newport Beach's efforts to further fair housing, the City will consider increased targeted outreach to the City's minority residents. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-66 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-2: Dissimilarity Index with Whites — Newport Beach and Orange County Hispanic Two or More Races* Other* Native Hawaiian* Asian* American Indian* Black* 0 Black* Orange County 43.8 Newport Beach 37.8 10 20 30 40 50 60 70 American Native Two or More * Asian* * Other* * Hispanic Indian Hawaiian Races 40.3 44.1 55.9 44.7 58.9 58.9 37.4 31.2 44.5 51.3 16.6 22.4 Source: Census Scope, Social Science Data Analysis Network, *Not Hispanic or Latino Racially or Ethnically Concentrated Areas of Poverty (R/ECAP) To assist communities in identifying racially/ethnically concentrated areas of poverty (R/ECAPs), HUD has developed a census tract -based definition of R/ECAPs. The definition involves a racial/ethnic concentration threshold and a poverty test. The racial/ethnic concentration threshold is straightforward: R/ECAPs must have a non -white population of 50 percent or more. Regarding the poverty threshold, Wilson (1980) defines neighborhoods of extreme poverty as census tracts with 40 percent or more of individuals living at or below the poverty line. Because overall poverty levels are substantially lower in many parts of the country, HUD supplements this with an alternate criterion. Thus, a neighborhood can be a R/ECAP if it has a poverty rate that exceeds 40% or is three or more times the average tract poverty rate for the metropolitan/micropolitan area, whichever threshold is lower. Location of residence can have a substantial effect on mental and physical health, education opportunities, and economic opportunities. Urban areas that are more residentially segregated by race and income tend to have lower levels of upward economic mobility than other areas. Research has found that racial inequality is thus amplified by residential segregation.14 However, these areas may also provide different opportunities, such as ethnic enclaves providing proximity to centers of cultural significance, or business, social networks and communities to help immigrants preserve cultural identify and establish 11 Orange County, Analysis of Impediments to Fair Housing Choice, April 2020 DRAFT. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-67 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT themselves in new places. Overall, it is important to study and identify these areas in order to understand patterns of segregation and poverty in a City. The 2020 Al performed an analysis of R/ECAPs within Orange County and found four R/ECAPs, none of which were found in Newport Beach. However, two of the four were found in the neighboring City of Irvine, adjacent to one another and near the University of California; these both bordered the City of Newport Beach. According to the Al, it is likely that they qualify as R/ECAPs due to the high proportions of students. These R/ECAPs have a much more diverse group of residents, with some White, Asian or Pacific Islander, Hispanic and Black residents. These R/ECAPs primarily contain Asian or Pacific Islander or Hispanic residents. 23.49% of residents are White, 1.63% are Black, 48.50% are Hispanic, 23.70% are Asian or Pacific Islander, and 0.14% are Native American. Figure 3-3 below identifies low poverty index with race/ethnicity and R/ECAPs in Newport Beach, and the overall Orange County region. The low poverty index captures the depth and intensity of poverty in a given neighborhood. The index uses both family poverty rates and public assistance receipt, in the form of cash -welfare, such as Temporary Assistance for Needy Families (TANF). The poverty rate and public assistance for neighborhoods are determined at the census tract level, and the higher the score, the less exposure to poverty in a neighborhood. The map identifies the R/ECAP and a few surrounding neighborhoods, to the south and southeast, The figure identifies R/ECAP areas (outlined in red) bordering the City of Newport Beach, near the University of California, Irvine. The map also shows that there are few R/ECAPs in the County as a whole, with a few pockets in the City of Santa Ana. Overall, the City of Newport Beach is a high income areas, with majority of the population identifying as white. The City should consider the impact of high cost of housing and higher annual incomes on lower income households. The current financial circumtance combined with the recent housing boom can create displacement through economic pressures, where lower income households need to look for affordable housing outside of the City. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-68 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-3: Low Poverty Index with Race/Ethnicity and R/ECAPs, Newport Beach f- I - �: �Jrl P-�drj [i.i �_Islils rJsl:lfl =9Irxx� « I. V « IL ' C12812021, 4-56:59 PM 1:288,$95 0 City.Town Boundaries 4 2 4 6mi (R) Racially or Ethnically Concentrated Areas of Poverty 'R1ECAP'S" (HUD, 200E-20131-Tract 0 3.2;5 6.3 13kn- 0 - i\ot a WECAP Gry of kWnC Cmrrty of Las AMmim. 8- ai _si Mnzage nc Y. Csr Source: HUD Affirmitaevly Furthering Fair Housing Data and Mapping Tool, Data Versions: AFFHT0006, July 10, 2020 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-69 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT - Racially Concentrated Areas of Affluence (RCAA) Racially or Ethnically Concentrated Areas of Poverty have long been analyzed and reviewed as a contributing factor to segregation. However, patterns of segregation in the United States show that of all racial groups, people who identify as White are the most severely segregated.15 Research also identifies segregation of affluence to be greater than the segregation of poverty. Racial and economic segregation can have significant effects on respective communities, including but not limited to, socioeconomic disparities, educational experiences and benefits, exposure to environmental conditions and crime, and access to public goods and services. Data used in the analysis of RCAA is from the 2012-2016 American Community Survey and are measured at the census track level. The definition for an RCAA is a census tract in which 80 percent or more of the population is White and has a median income of at least $125,000. The nationwide RCAA analysis identifies the following: • RCAA tracts have more than twice the median household income of the average tract in their metro area. • Poverty rates in RCAAs are significantly lower and are, on average about 20 percent of a typical tract. • RCAAs tracts are more income homogenous than RECAPS. • The average RCAA is about 57 percent affluent, whereas the average RECAP had a poverty rate of 48 percent. • The typical RCAA tract has a rate of affluence 3.2 times that of a typical tract, whereas RECAPS on average had a poverty rate 3.2 times that of a typical tract Overall, RCCAs may represent a public policy issue to the extent that they have been created and maintained through exclusionary and discriminatory land use and development practices. Postwar patterns of suburbanization in many metropolitan areas were characterized by White communities erecting barriers to affordable housing and engaging in racially exclusionary practices." Currently (October 2020), there is no consolidated database to identify RCAAs, therefore, to identify these areas in Newport Beach, this analysis examines census tracts with a population gap that is greater than 50% between the nonwhite and white population and a median income over $100,000. Table 3-15 below displays the RCAA data for the County of Orange and Newport Beach. Additionally, Table 3-16 below shows local (Newport Beach) and regional (Orange County) context for the median household incomes of white residents. 15 Racially Concentrated Areas of Affluence: A Preliminary Investigation. University of Minnesota. Edwards Goets, Damiano, Williams. 2019. 16 Ibid. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-70 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-15: Median Household Income by Race, Newport Beach Census Tract Percent Population White Median Income Census Tract 630.09 82.7% $130,089 Census Tract 634 88.84% $107,321 Census Tract 635 84.6% $112,000 Census Tract 629 92.1% $140,833 Census Tract 630.05 86.5% $171,406 Census Tract 627.01 89.3% $145,313 Census Tract 627.02 88.4% $107,829 Census Tract 626.43 71.6% $199,219 Census Tract 626.42 89.4% $134,444 Census Tract 626.44 82.4% $113,779 Census Tract 626.45 76.1% $167,530 Census Tract 630.07 79.6% $125,918 Source: HCD, AFFH Data Viewer, Predominant White Population and Median Income (SCA 2010-2014), Accessed October 2021. Table 3-16: Median Household Income by Race Race Newport Beach County of Orange Median Income Population Median Income Population White (Not Hispanic or Latino) $ 129,797 85% $94,082 61% All Households $127,223 -- $90,234 -- Source: American Community Survey, 5-Year estimates, 2019. Table S1903 Median Income In The Past 12 Months (In 2019 Inflation -Adjusted Dollars) 5-Year Estimate 2015-2019 (for all households and for White Alone) The majority of the City is predominately White. Additionally, the City reports a large percentage of households who earn a median annual income of at least $125,000. Almost the entire City has an overlap of high racial concentrations (those who identify as White) and high incomes resulting in RCAAs. Many lower income housing sites have been identified throughout the City and within areas considered RCAAs. Figure 3-4 and 3-5 below display the White majority tracts and median incomes throughout Newport Beach. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-71 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT - Figure 3-4: Racially Concentrated Areas of Affluence (RCAA) — White Majority Tracts 112512422, 8:14-:15 AM 1:72,224 0 CityeTown Boundaries 0 0.5 1 2}ri (R) Predominant Population - White Majority Tracts 0 2 4 krn Slim (gap < 10%) Sizeable (gap 10% - 50%) Predominant (gap } 50%) Source: California Department of Housing and Community Development —AFFH Data Viewer Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-72 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELFMFNT * Figure 3-5: Racially Concentrated Areas of Affluence (RCAA) — Median Income 1:2� 12. 7:5fi:32 AM 1:72 224 0 Cicyrrawn Boundaries C DF 1 2n•i� . .� � (R) Median Incame (AGS, 2015-2419) -BLack Group c 1 2 g krn 0 4 ssa,0a0 $e!5,000 - < S87,100 {HC6 202D Slate Median Income) - $12r'.000 - Greater than 51255,0a0 Source: California Department of Housing and Community Development —AFFH Data Viewer Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-73 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Disparities in Access to Opportunity Access to Opportunities The UC Davis Center for Regional Change and Rabobank partnered to develop the Regional Opportunity Index (ROI) intended to help communities understand local social and economic opportunities. The goal of the ROI is to help target resources and policies toward people and places with the greatest need to foster thriving communities. The ROI incorporates both "people" and "place components, integrating economic, infrastructure, environmental, and social indicators into a comprehensive assessment of the factors driving opportunity." As shown in Figures 3-6 and Figure 3-7 below, the majority of the City of Newport Beach is classified as a high opportunity zone. This indicates a high level of relative opportunities that people can achieve as well as a high level of relative opportunities that Newport Beach provides. While most of the census tracts within the City are areas of high opportunity, there are two census tracts within the ROI People Index shown as yellow, identifying a low opportunity area. Together these areas contain 86 sites which accommodate 1,941 potential units designated to meet the City's RHNA for lower -income units (shown in Section 3: Housing Resources and outlined in Appendix B). The Data for both regions with lower opportunity show high civic life, health, transportation, economic and education access, however, both show very low housing access. Therefore, the consideration and identification of these areas for housing, affordable to low and very low-income households, will provide increased housing opportunity in high opportunity and high resources areas. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-74 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Description The Regional Opportunity Index (ROQ: People is a relative measure of people's assets in education, the economy, housing, mobility/rransportab'on, health/environment, and civic life. Legend Regional Opportunity Index: People ❑ Soma data not available Lowest opportunity 0 ■ Highest Opportunity Oate:11/19/2020 hops:/Finteract.regionalchange.ucdavi s.edu/r0i/ Figure 3-6: Regional Opportunity Index: People, 2014 Regional Opportunity Index: People, 2014 mf 0 1.5 3 6 Source: UC Davis Center for Regional Change and Rabobank, 2014. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-75 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-7: Regional Opportunity Index: Place, 2014 Regional Opportunity Index: Place, 2014 Description She Regional Opportunity Index (ROIL: Place is a relative measure of an areas assets in education, the economy, housing, mobility/transportation, health/environment, and civic life. , i Lap*nd Regional Opportunity Index: PEace ,J Some data not available Lowest Opportunity Highest Opportunity City Boundary Date; 11/19l2C}20 mi 0 1.5 3 6 https-./linteract.regionalchange.ucdavis.edu/rot/ Source: UC Davis Center for Regional Change and Rabobank, 2014. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-76 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Additionally, Table 3-17 and Figure 3-8 below display the data for Regional Opportunity index in Newport Beach overall compared to the State of California. The data shows the following key findings: • The City has higher rates of college educated adults, high school graduation rates and higher levels of UC and CSU eligibility. Additionally, the City has higher levels of Math and English proficiency. However, the City has higher levels of truancy and discipline rates. • Newport Beach residents experience significantly higher basic income levels and higher employment rates. While the City has a higher job availability rate and job quality, overall, both City and State job growth are similar. Newport Beach residents have higher rates of bank accessibility (nearly double the state's accessibility rates). • Newport Beach and the State have the same rate of home ownership, but residents of Newport Beach experience higher rates of cost burden. Housing adequacy and affordability are similar in both the City and State, where California has a slightly higher rate of affordability. • Mobility and transportation access are moderate in both Newport Beach and the State. Newport Beach residents have a significantly higher commute times than the State's median, this could be due in part to a lack of public transit or the development patterns of coastal communities. • Overall health and environmental opportunities are comparable to the State, the City's air quality is slightly lower than the States. Newport Beach has a slightly lower average of supermarket availability, however a much higher rate of healthcare availability. • Newport Beach has higher rates of US citizenship and English speakers, as well as a higher percentage of voters compared to the State. However, Newport Beach has a slightly lower rate of neighborhood stability In summary, Newport Beach is a high opportunity area with quality education opportunities, high rates of resident achievement, access to local and regional economic and employment opportunities, and high rates of home ownership. However, the data shows that there are high rates of cost burden in the City and slightly lower access to supermarkets and healthy foods. The City should focus on increasing access to affordable housing options to reduce cost burden and aim to increase affordable healthy food access. Table 3-17: Opportunity Indicators, Newport Beach and California ROI Indicator Newport Beach California People College Educated Adults 70% 38% Math Proficiency 87% 70% c English Proficiency 87% 65% 41 Elementary Truancy 34% 24% V Place "' High School Graduation Rate 93% 83% UC/CSU Eligibility 52% 41% Teacher Experience 60% 36% High School Discipline Rate 8% 6% U People E Employment Rate 93% 89% c Minimum Basic Income 85% 64% 0 Place Job Availability 1302.07 701.75 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-77 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT ROI Indicator Newport Beach California Job Quality 52% 40% Job Growth 4% 3% Bank Accessibility 0.44 0.24 People Home Ownership 55% 55% Housing Cost Burden 54% 52% bb Place CA c Housing Adequacy 99% 91% = Housing Affordability 0.13 0.19 People Vehicle Availability 96% 86% 0 Commute Time 74% 60% Internet Access 4.96 4 Place Infant Health 96% 95% E Birth to Teens 1% 7% c Years of Life Lost 18.27 29.84 L Place Air Quality 8.82 10.01 c� Prenatal Care 94% 83% = Access to Supermarket 47% 53% Health Care Availability 4.61 1.76 People Voting Rates 41% 31% U English Speakers 92% 88% > Place u US Citizenship 92% 83% Neighborhood Stability 82% 85% Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-78 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-8: Regional Opportunity Index Newport Beach and California 120 100 sowoo 60 40 20 0 , Q101 ,Q1011, ,Qeo� OP QeOP a�\off o�J 0 1 \0 �o�J. o�y\��. �0 Statewide Average Newport Beach Opportunity Areas Additionally, the Department of Housing and Community Development (HCD) together with the California Tax Credit Allocation Committee (TCAC) established the California Fair Housing Task Force to provide research, evidence -based policy recommendations, and other strategic recommendations to HCD and other related state agencies/departments to further the fair housing goals (as defined by HCD). The Task Force developed the TCAC/HCD opportunity Area Maps to understand how public and private resources are spatially distributed. The Task force defines opportunities as pathways to better lives, including health, education, and employment. Overall, opportunity maps are intended to display which areas, according to research, offer low-income children and adults the best chance at economic advancement, high educational attainment, and good physical and mental health. According to the Task Force's methodology, the tool allocates the 20 percent of the tracts in each region with the highest relative index scores to the "Highest Resource" designation and the next 20 percent to the "High Resource" designation. Each region then ends up with 40 percent of its total tracts as "Highest" or "High" resource. These two categories are intended to help State decision -makers identify tracts within each region that the research suggests low-income families are most likely to thrive, and where they typically do not have the option to live —but might, if given the choice. As shown in Figure 3-9 below, nearly all of Newport Beach is classified as moderate, high, and highest resource. There is one census tract in the Northwest Portion of Newport Beach classifies as low resource, the tracts scores identify high economic resources and low educational resources. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-79 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT 5,_ Figure 3-9: TCAC/HCD Opportunity Area Maps, Newport Beach (2020) Sv ��INGS IRVINE nor l i R'A�C-1'I ALTAIR �RECTRU'✓� -_ 6ilIF•II HI.I .os o�rvos Lake.ForeSt RancY 'IsnNVRuc �a�ach \ Mar j TV��Ti Ne vpart Beach EWPrpT cE .ER Lag2na Woods l Legend City Boundary Highest Resource A i o Viejo High Resource Moderate Resource (Rapidly Changing) Moderate Resource Low Resource High Segregation & Poverty Missing/Insufficient Data LAGUNA BEACH National & state Park/Forest/Rpc Area Source: California Tax Credit Allocation Committee and Department of Housing and Community Development, 2020. Access to neighborhoods with higher levels of opportunity can be more difficult due to discrimination and when there may not be a sufficient range and supply of housing in such neighborhoods. In addition, the continuing legacy of discrimination and segregation can impact the availability of quality infrastructure, educational resources, environmental protections, and economic drivers, all of which can create disparities in access to opportunity. The Department of Housing and Urban Development (HUD) developed the opportunity indicators to help inform communities about disparities in access to opportunity, the scores are based on nationally available data sources and assess resident's access to key opportunity assets in the City. Table 3-18 provides the index scores (ranging from zero to 100) for the following opportunity indicator indices: • Low Poverty Index: The low poverty index captures poverty in a given neighborhood. The poverty rate is determined at the census tract level. The higher the score, the less exposure to poverty in a neighborhood. • School Proficiency Index: The school proficiency index uses school -level data on the performance of 4th grade students on state exams to describe which neighborhoods have high -performing elementary schools nearby and which are near lower performing elementary schools. The higher the score, the higher the school system quality is in a neighborhood. • Labor Market Engagement Index: The labor market engagement index provides a summary description of the relative intensity of labor market engagement and human capital in a neighborhood. This is based upon the level of employment, labor force participation, and Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-80 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT educational attainment in a census tract. The higher the score, the higher the labor force participation and human capital in a neighborhood. • Transit Trips Index: This index is based on estimates of transit trips taken by a family that meets the following description: a three -person single -parent family with income at 50% of the median - income for renters for the region (i.e. the Core -Based Statistical Area (CBSA)). The higher the transit trips index, the more likely residents in that neighborhood utilize public transit. • Low Transportation Cost Index: This index is based on estimates of transportation costs for a family that meets the following description: a three -person single -parent family with income at 50 percent of the median -income for renters for the region/CBSA. The higher the index, the lower the cost of transportation in that neighborhood. • Jobs Proximity Index: The jobs proximity index quantifies the accessibility of a given residential neighborhood as a function of its distance to all job locations within a region/CBSA, with larger employment centers weighted more heavily. The higher the index value, the better the access to employment opportunities for residents in a neighborhood. • Environmental Health Index: The environmental health index summarizes potential exposure to harmful toxins at a neighborhood level. The higher the index value, the less exposure to toxins harmful to human health. Therefore, the higher the value, the better the environmental quality of a neighborhood, where a neighborhood is a census block -group. Table 3-18 below displays the opportunity indices by race and ethnicity for persons in Newport Beach. The table displays the following results: • According to the data, there is low poverty among the population of Newport, across all racial/ethnic groups. • Additionally, the access to quality education system is high among all racial/ethnic groups (each group has an opportunity index score above 80). • The data shows the City offers high labor and economic opportunity as well as sufficient access to transportation. • While the data shows a high access to transportation, it also shows that the transportation is less affordable, specifically to non -Hispanic Asian or Pacific Islander and Native American populations. • The data also shows low environmental health index scores across all racial/ethnic groups, below 50. • Households who earn below the poverty rate in Newport Beach have lower levels of opportunity access across all indicators as well as race and ethnicities. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-81 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-18: Opportunitv Indices by Race/Ethnicity, Newport Beach Low School Labor Low Jobs (Newport Beach, CA Transit Environmental Poverty Proficiency Market Transportation Proximity CDBG) Jurisdiction Index Health Index Index Index Index Cost Index Index Total Population White, Non -Hispanic 81.31 90.17 82.88 86.59 75.16 90.40 41.36 Black, Non -Hispanic 78.86 89.72 81.85 86.92 76.61 90.54 40.65 Hispanic 79.04 88.93 81.76 86.93 76.81 89.82 40.55 Asian or Pacific Islander, Non- 84.48 91.60 85.94 83.05 68.64 89.19 38.80 Hispanic Native American, 79.22 88.29 81.86 88.35 78.06 91.17 40.73 Non -Hispanic Population below federal poverty line White, Non -Hispanic 78.99 89.20 83.30 87.76 78.81 90.38 43.27 Black, Non -Hispanic 78.71 86.38 78.21 89.58 85.43 87.99 48.46 Hispanic 82.46 87.75 81.41 88.28 77.88 89.87 41.76 Asian or Pacific Islander, Non- 84.34 88.97 82.79 88.43 76.05 92.09 39.15 Hispanic Native American, 77.00 89.17 88.00 J 93.00 85.00 95.55 40.00 Non -Hispanic Source: Department of Housing and Urban Development, Affirmatively Furthering Fair Housing Online Mapping tool, Decennial Census; ACS,• Great Schools, Common Core of Data; SABINS,• LAI; LEHD, NATA Access to Education, Economic and Transit Opportunities School Proficiency, Labor Market and Job Proximity Table 3-19 below displays opportunity indicators based on school proficiency, labor market, and job proximity. The City of Newport Beach has no Title I schools. Title I schools help low -achieving children meet state standards in core academic subjects. These schools coordinate and integrate resources and services from federal, state, and local sources. To be considered for Title 1 school funds, at least 40 percent of the students must be considered low-income. Additionally, the data shows that the City has an annual unemployment rate of 3.1%. Additionally, over 69.4 percent of residents has commute that is 30-minutes or less. The City of Newport Beach provides a variety of economic opportunities for current and future residents; however, the data shows there is little educational opportunities for lower achieving students. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-82 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-19: Opportunity Indicator — School Proficiency, Labor Market, Job Proximity Opportunity Indicator Newport Beach School Proficiency Total Title I Schools 0 Total Schools 12 % of Schools 0% Unemployment Rate Total Unemployed 1,408 Annual Rate 3.1% Job Proximity <29 mins. 69.4% 30-59 mins. 22.6% 60 mins. or more 8.1% Source: National Center for Education Statistics, public Schools Directory. Accessed October 29, 2021. American Community Survey 2013-2017, S1701. American Community Survey 2013-2017, S0801 Opportunity Indicators The TCAC/HCD Opportunity Area Maps include education data, as illustrated in Figure 3-10. This data represents opportunity levels based on the following four factors: • Math proficiency — Percentage of 4th graders who meet or exceed math proficiency standards. • Reading proficiency — Percentage of 4th graders who meet or exceed literacy standards. • High school graduation rates — Percentage of high school cohort that graduated on time. • Student poverty rate — Percentage of students not receiving free or reduced -price lunch. Additionally, The TCAC/HCD Opportunity Area Maps include economic data, as illustrated in Figure 3-11. This data represents opportunity levels based on the following five factors: • Poverty — Percent of population with income above 200% of federal poverty line. • Adult Education — Percent of adults with a bachelor's degree or above. • Employment — Percent of adults aged 20-64 who are employed in the civilian labor force or in the armed forces. • Job Proximity — Number of jobs filled by workers with less than a BA that fall within a given radius (determined by the typical commute distance of low -wage workers in each region) of each census tract population -weighted centroid. • Median Home Value - Value of owner -occupied units. Figures 3-10 and 3-11 below display the geographic data for education and economic opportunity in Newport Beach using the TCAC data detailed above. The data shows that nearly all of Newport Beach census tracts show high positive education outcomes. High positive outcomes mean there are high testing scores amongst elementary schoolers, high graduation rates and low poverty rates. Compared to the Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-83 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT region, coastal cities with higher median incomes show higher positive outcomes for education. Additionally, the data shows that all census tracts in Newport Beach are high positive outcome. Similar to the education data, positive outcomes are consistent in costal and high -income cities in Orange County. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-84 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-10: TCAC — Education Score 10{2912021. 10:2136 AM 0 Ci1ylT0wv1 Boundaries (R) 1-CAC Opporlundy AreBs f2721 �- Education Score -Tract � 0.25 (Less Pruitive Education Outcomes) 0.25 - 4.50 0.50 - 0.75 > 0.75 (More P.itNe Education Outcomesl No Data 12BS.895 1) 2 4 6 M1 �I 4 1T4 5 5� 0 3.25 6.5 13 km Gry dct'm Mass. Ckg cc 14-0 1BaaO. C. ntYVW, A40164. EU MU d L M Mm.9 fl. €-. HQAs:. Ganrvn USGS. EPA, HPS €an H€Q Game. 0Ope && Waa mnribaias, and drc Gig —aommu 1y Source: HCD AFFH Data Viewer, Accessed September 10, 2021 vironmental Justice Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-85 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT q Sys Figure 3-11: TCAC — Economic Score NNW 0 I= t FIN Emir. ry y_ tmucstE'� ,ari Jra E_l f 1012W2021, 10:31:01 AM Q CItylTown Boundaries (R) TCAC 09pcwtue1ity Areas (ZD21 )- Ecanomic Scare -Tract a 0.26 (Less Flos'ttive Ecanomic Dutcome� 0 0.2.5 - 0.50 0.So - 0. 75 - > 0.75 (More PositYve Economic Ou=me) Na Data 1:288,895 D 2 4 a mi �I 1 IT4 5 i� 0 3.25 6.5 13 km G!y d Cce Hess. Cry d -N-"q 15 B h. Cw ,ty W Lug Aogel— &-- H L. N M—g—1 Efr. .+I RE G,rnsn. UWS EPA, NPS Esn HGR; Game. A0,-SI.—IM.P—kibw—and Te GI3—ca -Hy Source: HCD AFFH Data Viewer, Accessed September 10, 2021vironmental Justice Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-86 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Access to Transit Access to transportation, specifically public transit provides households with affordable and environmentally friendly commuting options. It can also increase accessibility to essential retail such as grocers and markets as well as recreational activities and safe transit options for young adults and children. AIITransit explores metrics that reveal the social and economic impact of transit, specifically looking at connectivity, access to jobs, and frequency of service. According to the data shown in Table 3-20, Newport Beach scored a 3.9 AIITransit performance score, illustrating a low combination of trips per week and number of jobs accessible that enable a moderate number of people to take transit to work. In total, 138,164 jobs are accessible within a 30-minute trip from Newport Beach, however just 0.55 percent of commuters use transit. Additionally, AIITransit identified the following transit related statistics for Newport Beach: • 95.4 percent of all jobs in Newport Beach are located within % mile of transit • There are 53,761 customer households within a 30-minute transit commute of local businesses • 1.86 percent of workers in Newport Beach walk to work • 1.02 percent of workers in Newport Beach bike to work • 0 percent of low-income households live near transit By comparison, Newport Beach scored lower than neighboring jurisdictions of Costa Mesa (5.4), Huntington Beach (4.4), and Irvine (3.6), however slightly higher than Laguna Beach (3.8). Overall, the City of Newport Beach has a lower AIITransit score than the County of Orange (3.9 in Newport Beach and 4.2 in the County). Table 3-20: Opportunity Indicator —Transit All Transit Transit Trips Jobs Accessible Commuters Who Transit Routes Jurisdiction Performance Per Week in 30-min trip Use Transit within 1/2 Mile Score within 1/2 Mile Newport 3.9 410 138,164 0.55% 4 Beach County of 4.2 528 172,595 2.28 4 Orange Source: AIITransit, Transit Scores. Accessed October 29, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-87 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-12: AIITransit Score, Newport Beach bmtFH COd5t Ir?JMy LEbAr:V METRO AIITrans it TM' Performance Score on 14 . 309 Low combination of trips per week and number of jobs accessible enablingfewpeopletotake# transit to work Salit i�- m 4u me TEE ROCK x x x Ne Bea c � . an ,to8quin Hells Pit NEWPORT COAST Ck AIITransitT`'' Performance Scorel■ < 1 ■ 1-2 ■ 2-4 ■ 4-5 ■ 5-b 6-7 7 9 9+ Lnq;inr, Environmental Justice The California Office of Environmental Health Hazard Assessment (OEHHA) developed a screening methodology to help identify California communities disproportionately burdened by multiple sources of pollution called the California Communities Environmental Health Screening Tool (CalEnviroScreen). In addition to environmental factors (pollutant exposure, groundwater threats, toxic sites, and hazardous materials exposure) and sensitive receptors (seniors, children, persons with asthma, and low birth weight infants), CalEnviroScreen also takes into consideration socioeconomic factors. These factors include educational attainment, linguistic isolation, poverty, and unemployment. Research has shown a heightened vulnerability of people of certain ethnicities and lower socioeconomic status to environmental pollutants. The CalEnviro Model Is made up of a suite of 20 statewide indicators of pollution burden and population characteristics associated with increased vulnerability to pollution's health effects. The model uses the follow analysis and calculation to identify areas which may create health risk: Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-88 (September 2022 Final Housing Element) City of Newport Beach' 2021-2029 HOUSING ELEMENT�� • Uses a weighted scoring system to derive average pollution burden and population characteristics scores for each census tract. • Calculates a final CalEnviroScreen score for a given census tract relative to the other tracts in the state by multiplying the pollution burden and population characteristics components together. • The score measures the relative pollution burdens and vulnerabilities in one census tract compared to others and is not a measure of health risk. Figure 3-13 below displays the results for the CalEnviroScreen in Newport Beach. The data shows that all of Newport Beach is low to lowest scoring (light to dark green), meaning that throughout the City there is low proximity or exposure to harmful pollutants. Compared to the region, majority of the coastal cities are identified as low pollutant burdens. Cities to the east of Newport beach, such as Santa, Ana, Anaheim, Orange, and Garden Grove experience higher rates of pollution burdens and exposure to harmful pollutants. The discrepancy in pollution exposure could be related to cost of land. Land in Newport Beach is significantly more expensive than land in Anaheim, Santa Ana and Garden Grove, therefore, warehouse and industrial developers can buy larger lots of land for less money to accommodate manufacturing, trucking, industrial parks and other uses which produces higher traffic and pollution. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-89 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT 4 -r Figure 3-13: CalEnviroScreen 4.0, Newport Beach Source: HCD AFFH Database, Accessed October 29,2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-90 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Discussion of Disproportionate Housing Needs The analysis of disproportionate housing needs within Newport Beach evaluated existing housing need, need of the future housing population, and units within the community at -risk of converting to market - rate. 'uturA rrninith Alccr� The City's future growth need is based on the RHNA production of 1,456 very low and 930 low-income units within the 2021-2029 planning period. Appendix B of this Housing Element shows the City's ability to meet its 2021-2029 RHNA need at all income levels. This demonstrates the City's ability to accommodate the anticipated future affordable housing needs of the community. =xisting Need As described in Section 3.F.1 of this Housing Element, the Orange County Housing Authority administers Section 8 Housing Choice vouchers within the City of Newport Beach. As of October 30, 2020, the City has allocated 112 Section 8 vouchers to residents within the community: 30 for families, 20 for persons with disabilities, and 62 for seniors. Additionally, a variety of affordable housing opportunities currently exist in the City. In Orange County, each category of publicly supported housing (public housing, Project Based Section 8, Other Multi -unit Housing, Housing Choice Vouchers, and Low -Income Housing Tax Credit [LIHTC] units) is represented, although that representation varies greatly depending on the individual municipality. Table 3-21 below identifies the variety of publicly supported housing, by percent, in the City of Newport Beach. Table 3-21 below displays the demographics of all publicly supported housing in Newport Beach. The data shows that majority of persons who utilize and receive public housing support identify as White, with a small percentage Hispanic or Asian/Pacific Islander. Table 3-21: Publicly Supported Housing Demographics, Newport Beach Asian or Pacific White Black Hispanic Housing Type Islander Project -Based 85 o 87.63/0 0 0 0.00/ 3 0 3.09/0 9 0 9.28/ Section 8 HCV Program 99 70.21% 14 9.93% 15 10.654% 13 9.22% LIHTC 238 85.9% 8 1.99% 147 35.57% 12 2.99% Total Households 32,490 84.94% 135 0.35% 2,485 6.6% 2,477 6.45% Source: County of Orange, Analysis of Impediments Notes: HVC = Housing Choice Voucher LIHTC = Low -Income Housing Tax Credit Housin_p Needs in Newport Beacr A variety of factors affect housing needs for different households. Most commonly, disability, household income and households' characteristics shape the type and size of housing units needed, as well as accessibility based on existing units in a City. Tables 3-22 through 3-27 displayed data for demographic characteristics of Newport Beach, as compared to the County of Orange and the State of California. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-91 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Additional detailed analysis of the Newport Beach community demographics is outlined in Chapter 2: Community Profile of this Housing Element. Homelessness People experiencing homelessness are those who do not have a fixed, regular, and adequate overnight residence, or whose overnight residence is a shelter, street, vehicle, or enclosure or structure unfit for habitation. Factors contributing to increases of homelessness may include the following: • Lack available resources to support stable housing access • Spikes in rent increase and lack of tenant protections • Housing discrimination • Evictions • Lack of housing affordable to low- and moderate -income persons • Increases in the number of persons whose incomes fall below the poverty level • Reductions in public subsidies to the poor • The deinstitutionalization of the mentally ill According to the Orange County Point in Time report, in 2019 there were an estimate 64 unhoused persons in Newport Beach. Overall, the 64 unhouse persons in Newport Beach in 2019 account for about 1.6 percent of the overall Orange County count of 3,961 persons. When contextualized with the total number of people residing in Newport Beach, the 64 homeless individuals represent approximately .07 percent of the population. In neighboring jurisdictions, the point in time count of homeless persons in 2021 was: • Huntington Beach: 349 persons • Laguna Beach: 147 persons • Irvine: 130 persons • Costa Mesa: 193 persons Data for 2020 and 2021 is not broken down by individual jurisdiction. However, in 2020 there were a total of 3,017 persons experiencing homelessness in Orange County and 2,441 persons in 2021. The racial and ethnic demographic data for unhoused persons in 2021 is not broken down by jurisdictions, however for the 2,441 unhoused persons in the County, 10 percent experienced chronic homelessness. Additionally, 77 percent identified as White, 12 percent identified as Black, three (3) percent identified as American Indian, less than one (1) persons identified as Native Hawaiian and 45 percent identified as Hispanic or Latino. About 295 persons were seniors (60 years+) and about 102 persons were youth, 288 persons were experiencing domestic violence and 162 persons were veterans. Of the persons living in shelters, 334 experience mental health conditions, 308 persons experience a physical disability, and 297 persons recorded substance abuse.17 Disability Table 3-22 displays the data for persons with disabilities in the City, County, and State. Overall, about 10 percent of the California population reported having at least one disability. In the City, about 8 percent of 17 Orange County Homeless Point -in -Time Count, Orange County Homeless Management Information Systems. 2019, 2020 and 2021. Accessed online: January 24, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-92 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT persons reported at least one disability. The County reported a higher percentage than the City at 8.5 percent. Of the 8 percent of Newport Beach residents who reported a disability, the majority were independent living and ambulatory difficulties, which could be tied to the City's senior population. Ease of reasonable accommodation procedures and opportunity for accessible housing can provide increased housing security for the population with disabilities. Table 3-22: Population by Disability Type, Compared by Geography, 2019 Disability City of Newport Beach County of Orange California Total with a Disability 8% 8.5% 10.6% Hearing Difficulty 2.7% 2.5% 2 9% Vision Difficulty 1.5% 1.5°% 2°% Cognitive Difficulty 3.0% 3.4% 4.3% Ambulatory Difficulty 3.7% 4.5% 5.8% Self -care Difficulty 1.7°% 2 2°% 2 6°% Independent Living 3.6% 4.3% 5.5% Source: American Community Survey, 5-Year Estimates, 2019. The data in Figure 3-14 below displays data for disability status in Newport Beach by census tract. The data shows that in Newport Beach most of the census tracts report under ten percent of the population to have at least one disability. Some census tracts to the northwest show that between 10 and 20 percent of the population report at least one disability. Overall, majority of the surrounding areas shows less than 10 percent of the population has reported at least one disability with some pockets of the region which have a population between 10 and 20 that reports a disability. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-93 (September 2022 Final Housing Element) City of Newport Beach 4 2021-2029 HOUSING ELEMENT�i ` Figure 3-14: Persons with Disabilities f f JyI /f1 + A�ppM t @Mow, 4�7�5arzc�c 111412 021. 1:33:02 PM 1:14-4A48 0 1 2 4 mi 0 City/Town Boundaries T 0 1.5 3 5 km (R) Population with a Disability (ACS, 2015 - 2019) -Tract 10% aiv or Newpor, Beech. c:w ny or Loa Angeles, aveau ar Lmd +11 Hrr� H�O Manapn .. Ew ti@ir, Ci n. uSG5. EPA. NPS. Gai. HERE. C—n. y 0�ry /. .y- �0 0CT—SircelMapm neumm. ad the GIS user w—niry Source: HCD AFFH Database, American Community Survey. Accessed November 3, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-94 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Income and Familial Status Table 3-23 displays household type and income data for the State, County and City. Overall, the City has a smaller percentage of family households than the County and State; this includes family households, married -couple family households, and those with children. Of the three jurisdictions, the City has the largest percentage of non -family households (42.2 percent, compared to 28.3 at approximately 2 percent more than Orange County and about 6 percent more than the City. The City has a higher percentage of households with at least one senior over the age of 60 as compared to the state (29.2 percent) but a lower percentage than the County (39.9 percent). Table 3-23: Population by Familial Status, Compared by Geography, 2019 Familial Status City of Newport Beach County of Orange California Total Households 37,605 1,037,492 13,044,266 Family Households 57.7% 71.7% 68.7% Married -Couple Family Households 49.6% 54.9% 49.8% With Children 21.1% 30.9% 34% Non -Family Households 42.2% 28.3% 31.3% Households with one or more people 60 years+ 35.5% 39.9% 29.2% Female Headed Households, No Spouse Present with Children Source: American Community Survey, 5-Year Estimates. 2019 The data in Figure 3-15 and Figure 3-16 below shows living arrangements of children by census tract in Newport. Figure 3-15 shows the percent of children in married couple households by census tract in Newport Beach. The data shows that most census tracts have children living in married couple households (above 80 percent per tract). There are few pockets adjacent to Costa Mesa and along the coast that show children living in married couple households where the census tract is between 60 and 80 percent. Figure 3-16 shows the percent of children in female headed households with no spouse/partner by census tract in Newport. The data shows that most children are not in female headed households with no spouse and children present where the census tract shows less than 20 percent. There is one census tract where there is between 60 and 80 percent of children living in female headed households with no spouse/partner. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-95 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-15: Married Couple Households with Children 1 V412021, 1:36:09 PM IM CityFrown Boundaries (R) Percent of Children in Married - Couple Households (AC5. 2015-2019) - Tract 0 20%-40% - 40% - 00 % 60%-eo]° xam 1:144,448 0 1 2 4 ml 1) 1.5 3 5km CiY U Came llese. Coy U Wmbeech. CwnlY of Loa Angeles. Ekneeu al Land M-Rg—.l F-. NE7G G—, Ur.G$. EPA. NP$, Eon. NUF Garmi. 0ID".are W p—trib d—and tie GIG —oo 115, Source: HCD AFFH Database, American Community Survey. Accessed November 3, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-96 (September 2022 Final Housing Element) City of Newport Beach - 2021-2029 HOUSING ELEMENT Figure 3-16: Female Headed Households, No Spouse/Partner Present with Children I t t-- �e No .. J Ile 11 1412021, 1:43:04 PM 1:14-4,449 0 1 2 4mi CV;To m Boundaries i .1 ,T, ' ,T Percent of Chl ldren in Female Householder, No 0 1.5 3 6km Sp—o;P—ner Presem Households lb 180% lb 60%-80% 40%-60% GY U CJ6in M65tl. Cfr A YrirocA 86tl4?i. Coui4rA Lai R--r�lea. &ua9u 20%-40% a2 4.in;i M.nagcrnwn E-. M Ginrvn, u$iG5 EPA, w?S. E—. NE s zo% fiE Gann. m Oyen-S r—e M mnribuln .and fie Gig user oorr. ninny Source: HCD AFFH Database, American Community Survey. Accessed November 3, 2021 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-97 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Regarding household income, the City had a significantly higher median household income than the County and State in 2019 ($127,223 in the City compared to $90,234 in the County and $75,235 in the State). As Table 3-24 shows, majority of the City's households are higher earning; in total 70.4 percent of households in Newport Beach earn more than the State median -income. Additionally, over 30 percent of households in Newport Beach earn $200,000 or more annually. In the state, nearly 38 percent of households earn $100,000 or more and 45.2 percent in the County of Orange. Just under 20 percent of City residents earn less than $50,000 annually, compared to 27 percent and 34 percent for the County and State, respectively. Table 3-24: Households by Income, Compared by Geographv, 2019 Households Income City of Newport Beach County of Orange California Less than $10,000 3.8% 4.2% 4.8% $10,000-$14,999 2.5% 2.7% 4.1% $15,000-$24,999 4.3% 5.6% 7.5% $25,000-$34,999 3.6% 6.0% 7.5% $35,000-$49,999 5.7% 8.8% 10.5% $50,000-$74,999 9.8% 14.6% 15.5% $75,000-$99,999 10.1% 12.8% 12.4% $100,000-$149,999 16.7% 18.6% 16.6% $150,000-$199,999 10.8% 11.1% 8.9% $200,000 or More 32.8% 15.5% 12.2% Median -Income $127,223 $90,234 $75,235 Source: American Community Survey, 5-Year Estimates, 2019 Figure 3-17 shows median household income by block group in Newport Beach. The data shows that Newport Beach range at different median income levels. There is a large number of block groups in the southern portion and along the coast of Newport Beach whose median income for households is greater than $125,000. There are block groups in the northern areas of Newport Beach ranging from less than $55,000 and less than $125,000. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-98 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-17: Median Income for Households in Newport Beach 11W2021, 1:47:38 PM 1714-4.448 4 1 2 4 mi CityfTown 8ountlartes I � �` I' � I , ' � � IJ (R) Medpan Income (ACS, 2015-Xl9) - BbckGroup 0 $30,040 $55,000 { $87,100 (HCD 2Q20 State Me::ier I'1C_ilt• i Greater than 1.5 s krrr CiV M CWW fih M. Cilr d! t4,* 'I fieaO. M4 LV 0I Loa fMW leb. &!lead M L nd 4Aa gu.=, r-. HERE. C.— 5JWS. EPA, HAS Es H6p£. Ga i.. 00".Sl—W.p oo tWl—and F¢GISuscc —ily Source: HCD AFFH Database, American Community Survey. Accessed November 3, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-99 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Overpayment Table 3-25 displays data for households experiencing overpayment or cost burden in the State, County and City. Housing Cost burden has a number of consequences for a household, mainly displacement from their existing living situation creating limited access essential goods and often employment by potentially increasing commute times. Overall, the percentage of households that experience a cost burden greater than 30 percent is similar amongst the City, County, and State with all three reporting about 75 to 80 percent. The City has a slightly higher percentage of households that have a high -cost burden over 50 percent (21.4 percent in the City, compared to about 19 percent in the County and State). Increased opportunity for affordable housing and housing assistance funds help to prevent cost burden on households. Table 3-25: Households by Overnavment. Compared by Geoeraphv Overpayment/Cost Burden City of Newport Beach County of Orange California Cost Burden > 30% 76.3% 79.3% 79.2% Cost Burden > 50% 21.4% 19.3% 19.4% Cost Burden Not Available 2.1% 1.4% 1.4% Source: Consolidated Planning/CHAS Data, 2013- 2017. Figure 3-18 and displays Figure 3-19 the housing costs as a percentage of household income, specifically overpayment by homeowners and overpayment by renters, by census tract in Newport Beach. The data shows that most homeowners and renters in Newport Beach overpay for housing. Figure 3-18 shows most areas are between 20 percent and 60 percent of homeowners with mortgages whose monthly costs are 30 percent or more of their household income. There is a census tract where the overpayment of homeowners is shown at above 80 percent. Figure 3-19 shows most areas are between 20 and 60 percent of renter households whom gross rent is 30 percent or more of their household income. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-100 (September 2022 Final Housing Element) City of Newport Beach _ i} 2021-2029 HOUSING ELEMENT b Figure 3-18: Overpayment by Homeowners 1114/2021. 2:05:26 PM CitpToaw Boundaries (R) Overpayment by Home Owne!s (ACS, 2015 - 2019) - Tract c 20 -20%-40% -40%-60% 60°1 -80°I } 80% a;l,1. 1:144„448 ❑ 1 2 4 mi 0 1.5 3 6 km firy sf. Cosia �1esa CaY a Nw�pcA 8eacn. Goirilr� Las Anynlee, &Hasa c+. Lantl iU7„n�garnm�l Esn iiiRr, G nrvn u$GS EPA, VPS Ear., RERF Gamdn. Ci 01—& .3Aap _Tibuiaa.and au GIS usQ «nrrn�nnp Source: HCD AFFH Database, American Community Survey. Accessed November 3, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-101 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT 5, Figure 3-19: Overpayment by Renters 11 W2021, 2:08:1$ PM CityfTown Boundaries (R) 4verpaymerit by Renters (ACS, 2015 - 2019) - Tract E::]e20% - 20%-4Ck% -40%-60% 60%-80n% - x 64°b lrJB.) ate U&Z 'TF1„9 1: 144,448 fl 1 2 4 mi 0 1.5 3 5km CGY & Cv tiara. Cry 0 4,"q Sea.:n G—ky ui Lug AnLcl— B—u urxi M—g.—d Rs. +IRE C-- JSGS EPA, NPS E— HGRr, 3x", - :_••: 'ec?daR 9an4i6VlOn.and fie GlSusQc -hy Source: HCD AFFH Database, American Community Survey. Accessed November 3, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-102 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Overcrowding and Tenure Table 3-26 displays data for household tenure (owner vs. renter) for the State, County and City. Homeownership is a crucial foundation for helping families with low-income to build strength, stability and independence. The opportunity for transition into the homebuyer's market is important for persons and households in different communities, homeownership allows for increased stability and opportunity to age in place. Table 3-26 shows that the City has a comparable rate of homeownership to the County and a slightly lower ownership rate that the State. Table 3-26: Households by Tenure, Compared by Geographv, 2019 Household Tenure City of Newport Beach County of Orange California Owner Households 56.7% 57.4% 66.0% Renter Households 43.3% 42.6% 34.0% Total Occupied Housing Units 37,605 1,037,492 13,044,266 Source: American Community Survey, 5-Year Estimates, 2019, Additionally, Table 3-27 displays data for overcrowding in the State, County and City. Overcrowding is defined as between 1.01 and 1.5 persons per room in a household, and severe overcrowding is defined as more than 1.51 persons per room. Overcrowding often occurs when nonfamily members combine incomes to live in one household, such as college students and roommates, it also occurs when there are not enough size appropriate housing options for large or multigenerational families. The City experiences very low rates of overcrowding in comparison to the County and the State. According to the data, overcrowding occurs more frequently in renter households rather than owner households. In Newport Beach, owner households that are severely overcrowded represent 0 percent of all households, while severely overcrowded renter households represent 0.3 percent. In the County and state a trend similar in the County and State. Table 3-27: Households by Overcrowding, Compared by Geography Overcrowding and Tenure FCity of Newport Beach County of Orange California Owner Households Overcrowded 0.5% 2.6% 1.6% Severely Overcrowded 0% 1.0% 0.6% Renter Households Overcrowded 3.1% 9.8% 3.6% Severely Overcrowded 0.3% 6.0% 2.4% Source: American Community Survey, 5-Year Estimates, 2019. Figure 3-20 and Figure 3-21show overcrowded households and severely overcrowded households, respectively. The data from these figures shows that overcrowded households is not a precedent issue for Newport Beach. Figure 3-20 shows that all the census tracts in Newport Beach is less than the statewide average for overcrowded households. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-103 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-20: Households Experiencing Overcrowding 111412021, 3-20'16 PM 0 CitylTown Boundaries - 12.01 % - 15% (R) Overcrowded Households (CHHS) - Tract - 15 01 % _ 20% 0 s 8.2% (Statewide Avefage.1 � y 20% 0 8.3% - 12% ,mow 1-14-4,448 D 1 2 4 ml 1 IT, , I . IT 0 1.5 3 BKM QV e! Cvs%. Me s-s. C4 d Me+.-ri beach. M nky ai Los Rn06B. 6ui su a� L irl k "r..—1 Vs HS{2f C n USGS, FPA, HUS risn riGRF J.-5?.ae -Mj o 'fibulwi and ie GIS— culr- mily Source: HCD AFFH Database, American Community Survey. Accessed November 3, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-104 (September 2022 Final Housing Element) City of Newport Beach 4 2021-2029 HOUSING ELEMENT�-i ` Figure 3-21: Households Experiencing Severe Overcrowding r � I :[ f �• �� ��� y�fr rf 111412D21. 3.21:35 P M CityiTown Boundaries (R) Severely Overcrowded Households (CHHS) - Tract No data I4NM ( twoname 1:14-4,448 0 1 2 4 mi 0 1.5 3 6 km C4 u? cvae ars& cr,y d N&�Wrl 86e: Ti couiry W L08 AAW1ee. eu 66u ai Lard 6.4—g—m Esn. NEA6 n sJSGS EPA, NP5. Een NEQt G—Q OFa &—lbUap—Vibul and arc GIG usm ounvnuniiy Source: HCD AFFH Database, American Community Survey. Accessed November 3, 2021. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-105 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Housing Stock in Newport Beach Table 3-28 displays comparative housing stock data for the State, County and City. Table 3-28 below shows data for occupied housing units by type. A variety of housing stock provides increased opportunity in communities for different size and households types. The majority of housing stock in Newport Beach is classified as one -unit -detached housing, or single-family housing. Just under 18 percent of Newport Beach homes include 20 or more units, referred to as multi -family housing. In comparison to the County Orange has a greater amount of single-family homes, and an overall smaller number multi -family housing (2 or more units). Table 3-28: Occupied Housing Units by TvDe. Compared by Geographv Housing Unit Type City of Newport Beach County of Orange California 1, detached 48.4% 50.6% 57.7% 1, attached 15.1% 12.3 % ° 7.0% 2 units 4.8% 1.6% ° 2.4% 3 or 4 units 4.5% 6.9% ° 5.5 ° 5 to 9 units 4.4% 6.7% ° 6.0% 10 to 19 units 3.5% 5.4% ° 5.2 ° 20 or more units 17.9% 13 7% 12.3% Mobile home or other type of housing 1.3% 2 7% 3.7% Source: American Community Survey, 5-Year-Estimates, 2019. Table 3-29 below displays housing stock by year built or the City, County, and State. A factor used to determine housing condition is the age and state of the home. Older housing generally requires more upkeep, regular maintenance and can cause a cost burden on both renters and homeowners. Majority of Newport Beach's housing stock was built between 1960 and 1999. Development shows to have slowed significantly in the City after 2010, which could be indicative of the Great Recession. Majority of the County's and State's housing units were built between 1980 and 2009 whereas the distribution of development was more dispersed from 1950 to 1990 in the State. Majority of Newport Beach's homes are over between 40 and 70 years old, built between 1950 and 1979 (53.4 percent). Homes over 50 years old have an increased likelihood of needing more major repairs to key systems and building components. Therefore, these homes are at a higher risk of needing repair or replacement. Overall, increased numbers of older housing which is not maintained can lead to cost burden and substandard living conditions. Table 3-29: Housing Unit by Tvpe. Compared by Geogravhv Year Built City of Newport Beach County of Orange California Built 2014 or later 1.6% 2.7% 1.7% Built 2010 to 2013 1.7% 2.0% 1.7% Built 2000 to 2009 10.4% 8.3% 11.2% Built 1990 to 1999 14.3% 11.7% 10.9% Built 1980 to 1989 10.9% 14.9% 15.0% Built 1970 to 1979 22.7% 23.3% 17.6% Built 1960 to 1969 19.8% 19.5% 13.4% Built 1950 to 1959 10.9% 13.0% 13.4% Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-106 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Year Built City of Newport Beach County of Orange California Built 1940 to 1949 3.6% 2.1% 5.9% Built 1939 or earlier 4.1% 2.5% 9.1% Source: American Community Survey, 5-Year Estimates, 2019. Substandard units are those in need of repair or replacement. Based on 2019 ACS data, one (1) percent of housing units in Newport Beach display substandard conditions. Approximately .03 percent of housing units lack complete plumbing facilities and .08 percent lack complete kitchen facilities. Based on this data, at a minimum 377 units (1 percent) within Newport Beach are substandard and in need of rehabilitation. In the Orange County Area, 1.5 percent of homes are considered substandard, lacking complete kitchen or plumbing facilities. The current distribution of the age of homes in Newport Beach also indicates that a majority of homes in the City were built prior to the 1990 Americans with Disabilities Act (ADA), which may result in a lack of accessible homes for those residents experiencing a disability. The City's older housing stock also reflects a rapidly gaining need to rehabilitate housing to meet minimum livability and quality requirements, which is a barrier to many homeowners and residents in Newport who have a lower income or a fixed income. However, the City of Newport Beach is moderate and above moderate income, therefore, substandard housing and units in need of rehabilitation may be passed on to renters with moderate to lower incomes. Displacement Risk The potential for economic displacement risk can result from a variety of factors, including large-scale development activity, neighborhood reinvestment, infrastructure investments, and changes in local and regional employment opportunity. Economic displacement can be an inadvertent result of public and private investment, where individuals and families may not be able to keep pace with increased property values and market rental rates. Urban Displacement The Urban Displacement Project developed a neighborhood change database to map neighborhood transformations and identify areas vulnerable to gentrification and displacement. This data was developed to assist local decision makers and stakeholders better plan for existing communities and provide additional resources to areas in need or at -risk of displacement and gentrification. Table 3-30 provides the criteria used to identify each displacement typology and the total number of Newport Beach Census Tracts that currently fall within each category. Table 3-30: Displacement Typology Criteria and Newport Beach Census Tracts Newport Beach Census Modified Types and Criteria Tracts Low-Income/Susceptible to Displacement None • Low or mixed low-income tract in 2018. Ongoing Displacement of Low -Income Households • Low or mixed low-income tract in 2018. None • Absolute loss of low-income households, 2000-2018. At Risk of Gentrification None Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-107 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Newport Beach Census Modified Types and Criteria Tracts • Low or mixed low-income tract in 2018. • Housing affordable to low or mixed low-income households in 2018. • Didn't gentrify 1990-2000 OR 2000-2018. • Marginal change in housing costs OR Zillow home or rental value increases in the 90th percentile between 2012-2018. • Local and nearby increases in rent were greater than the regional median between 2012-2018 OR the 2018 rent gap is greater than the regional median rent gap. Early/Ongoing Gentrification Low or mixed low-income tract in 2018. • Housing affordable to moderate or mixed moderate -income households in 2018. None • Increase or rapid increase in housing costs OR above regional median change in Zillow home or rental values between 2-12-2018. - Gentrified in 1990-2000 or 2000-2018. Advanced Gentrification • Moderate, mixed moderate, mixed high, or high -income tract in 2018. • Housing affordable to middle, high, mixed moderate, and mixed None high -income households in 2018. • Marginal change, increase, or rapid increase in housing costs. • Gentrified in 1990-2000 or 2000-2018. Stable Moderate/Mixed Income • Moderate, mixed moderate, mixed high, or high -income traact in None 2018. At Risk of Becoming Exclusive • Moderate, mixed moderate, mixed high, or high -income traact in 2018. None • Housing affordable to middle, high, mixed moderate, and mixed high - income households in 2018. • Marginal change or increase in housing costs. Becoming Exclusive • Moderate, mixed moderate, mixed high, or high -income traact in 2018. • Housing affordable to middle, high, mixed moderate, and mixed high - income households in 2018. None • Rapid increase in housing costs. • Absolute loss of low-income households, 2000-2018. • Declining low-income in -migration rate, 2012-2018. • Median income higher in 2018 than in 2000. Stable/Advanced Exclusive 6059062604 6059063500 • High -income tract in 2000 and 2018 6059062643 6059062900 • Affordable to high or mixed high -income households in 2018. 6059062702 6059063400 • Marginal change, increase, or rapid increase in housing costs. 6059062800 6059063302 6059062645 6059063009 6059062642 6059062612 6059062644 6059062630 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-108 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT b Newport Beach Census Modified Types and Criteria Tracts 6059063008 6059062631 6059063007 6059062629 6059063004 6059063103 6059063006 High Student Population None Source: Urban Displacement Project, University of California Berkeley (2021). Table 3-30 and Figure 3-22 show that all of Newport Beach is considered stable/advanced exclusive. Stable advanced exlusive means the households in the census tracts have high and above moderate incomes and that there is either little change in the cost of housing or rapid increases. Stable exclusive areas also means that it is very difficult for lower and moderate income hosueholds to partake in the housing market through ownership, and there is little mobility and fewer options in terms of rentership. The City of Newport Beach is one of the highest income cities in the County, consistent with income data for many coastal cities in Southern California, particularly Orange County. Paired with high costs of land and increasing costs of contruction materials and labor, the housing market and cost of housing in Newport Beah will likely contiue to increase. Affordable housing through density bonus and partnerhsip with affordable developers is the key way to increase housing equity in Newport Beach. Additionally, the creation of accessory dwelling units can provide less costly housing opportunities within the City that would be available to a broader demographic. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-109 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT q Sys Figure 3-22: Urban Displacement Typologies, Newport Beach r Westrninster SANTA AN T�Skiri' No Fou-ntairs Valley .r UNTINCION i Displacement lypoIogy Lour-IncomelSusceptible to Displacement Ongoing Displacement At Risk of Gentrification EarlylOngoing Gentrification Advanced Gentrification Stable Moderate/Mixed Income At Risk of Becoming Exclusive Becoming Exclusive StablelAdvanced Exclusive High Student Population Unavailable or Unreliable Data I RVJ N E ,. _.M LAG U Source: Urban Displacement Project University of California Berkeley (2021). � fi El Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-110 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-31 below identifies the assisted and affordable housing units within the City of Newport Beach and identifies the end date of each covenant. According to the table, 4 locations (with a total of 112 units) were up for renewal in the previous planning period (2014-2021). Additionally, 3 locations, with a total of 45 units are set to expire and be addressed for renewal over the next planning period (2021-2029). The City of Newport Beach is committed to working with property owners and utilizing appropriate funds, as available, to review covenants set to expire for renewal. Table 3-31: Citv of Newport Beach Assisted (and Affordable) Housing Summary Project Name/ Location Type of Assistance Received Earliest Possible Number of Date of Change Units/Type Section 8 (rental assistance vouchers) Newport Harbor Apartments Density Bonus 1538 Placentia Avenue Community Development Block 2020 26 Low -Income Grant (CDBG) Newport Harbor II Apartments Section 8 Density Bonus CDBG 10 Low -Income 1530 Placentia Avenue In -Lieu Fee Funds 2023 4 Very Low -Income Newport Seacrest Apartments Section 8 CDBG 20 Very Low -Income 843 15th Street Fee Waivers Tax Credit Financing 2016 45 Low -Income Pacific Heights Apartments 881- 887 W. 15th Street Section 8 Density Bonus 2019 7Loty-Income Newport Seashore Apartments 849 West 15th Street Section 8 Fee Waivers 2018 15 Low -Income Newport Seaside Apartment Section 8 CDBG 1544 Placentia Fee Waivers 2017 25 Very Low -Income 100 Extremely Low Seaview Lutheran Plaza (Seniors) Section 202 (federal grant) 2039 and Very Low — 2800 Pacific View Drive Section 8 Income Senior Villa del Este 2 Moderate -Income 401 Seaward Road — 2026 (ownership) 3 Moderate -Income Villa Siena 2101 15th Street Density Bonus 2021 (ownership) Bayview Landing (Seniors) 1121 In -lieu Fee Funds Fee Waivers 24 Very Low Back Bay Drive Tax Credit Financing 2056 95 Low -Income Cost of Replacement Analysis In general, the cost for new land in the City cost about $115/square foot, per market research (noted in Section 3.A.1). The actual construction cost for residential development ranges from $118/square foot up to $131/square foot. The total replacement cost for the at -risk units identified in Table 3-31 are summarized below • The cost for replacing the 65-unit Newport Seacrest Apartments would total more than $12,499,600. This cost assumes that 1.5 acres of land will be required, and each unit will have a total floor area of 650 square feet (1-bedroom units). The land cost will be approximately $7,514,100 (assuming $115/square foot) while the construction cost will be approximately $4,985,500 (assuming $118/square foot for a 650-square foot unit= $76,700/unit). Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-111 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • The cost of replacing the 7-units in the Pacific Heights Apartments would total more than $1,789,550. This cost assumes that 0.25 acres of land will be required, and each unit will have a total floor area of 650 square feet (1- bedroom). The land cost will be approximately $1,252,350 (assuming $115/square foot) while the construction cost will be approximately $536,900 (assuming $118/square foot for a 650-square foot unit=$76,700/unit). • The cost of replacing the 15 units in Newport Seashore Apartments would total more than $3,655,200. This cost assumes that 0.5 acres of land (average 650 square feet per dwelling unit) will be required and each unit will have a total floor area of 650 square feet (1-bedroom units). The land cost will be approximately $2,504,700 (assuming $115/square foot) while the construction cost will be approximately $1,150,500 (assuming $118/square foot for a 650-square foot unit= $76,700/unit). • The cost of replacing the 25 units in Newport Seaside Apartments would total more than $4,422,200. This cost assumes that .5 acres of land (average 650 square feet per dwelling unit) will be required and each unit will have a total floor area of 650 square feet (1-bedroom units). The land cost will be approximately $2,504,700 (assuming $115/square foot) while the construction cost will be approximately $1,917,500 (assuming $118/square foot for a 650-square foot unit= $76,700/unit). • The cost of replacing the 5 units for ownership in Villa del Este and Villa Siena developments would total more than $1,809,100. This cost assumes that 0.25 acres of land (average 850 square feet per dwelling unit) will be required and each unit will have a total floor area of 850 square feet (2-bedroom units). The land cost will be approximately $1,252,350 (assuming $115/square foot) while the construction cost will be approximately $556,750 (assuming $131/square foot for an 850-square foot unit= $111,350/unit). To address the risk of affordable units converting to market rate housing, the City has identified Programs 5A and 5C to monitor these units. The City will actively work to create programs and seek additional funding in which the focus is to preserve these units beyond the expiration of the covenant so that the owners are able to have affordable housing options. Resources to Preserve At -Risk Units A variety of programs exist to help cities acquire, replace, or subsidize at -risk affordable housing units. The following summarizes financial resources available: • Community Development Block Grant (CDBG) — CDBG funds are awarded to cities on a formula basis for housing activities. The primary objective of the CDBG program is the development of viable communities through the provision of decent housing, a suitable living environment and economic opportunity for principally low- and moderate -income persons. Eligible activities include administration, fair housing, energy conservation and renewable energy sources, assistance for economic development, public facilities and improvements and public services. • HOME Investment Partnership — Local jurisdiction can receive funds by formula from the Department of Housing and Urban Development (HUD) to increase the supply of decent, safe, Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-112 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT sanitary, and affordable housing to lower income households. Eligible activities include housing acquisition, rehabilitation, and development, homebuyer assistance, and rental assistance. • Section 8 Rental Assistance Program — The Section 8 Rental Assistance Program provides rental assistance payments to owners of private, market rate units on behalf of very low-income tenants, senior citizens, disabled and/or handicapped persons, and other individuals for securing affordable housing. • Section 202/811 Program — Non-profit and consumer cooperatives can receive no -interest capital advances from HUD under the Section 202 program for the construction of very low-income rental housing with the availability of supportive services for seniors and persons with disabilities. These funds can be used in conjunction with Section 811, which can be used to develop group homes, independent living facilities and immediate care facilities. The capital advance funding can also provide project rental assistance for the properties developed using the funds. Eligible activities include acquisition, rehabilitation, new construction, and rental assistance. • California Housing Finance Agency (CaIHFA) Multifamily Programs — CaIHFA's Multifamily Programs provide permanent financing for the acquisition, rehabilitation, and preservation or new construction of rental housing that includes affordable rents for low- and moderate -income families and individuals. One of the programs is the Preservation Loan program which provides acquisition/rehabilitation and permanent loan financing designed to preserve or increase the affordability status of existing multifamily housing projects. • Low -Income Housing Tax Credit (LIHTC) — This program provides tax credits to individuals and corporations that invest in low-income rental housing. Tax credits are sold to those with high tax liability and proceeds are used to create housing. Eligible activities include new construction, rehabilitation, and acquisition of properties. • California Community Reinvestment Corporation (CCRC) — The California Community Reinvestment Corporation is a multifamily affordable housing lender whose mission is to increase the availability of affordable housing for low-income families, seniors, and residents with special needs by facilitating private capital flow from its investors for debt and equity to developers of affordable housing. Eligible activities include new construction, rehabilitation, and acquisition of properties. Qualified Entities to Preserve At -Risk Units The following organizations may potentially assist in preserving future at -risk units: • Jamboree Housing Corporation • Irvine Housing Opportunities, Inc. • Bridge Housing Corporation • The Irvine Company • Orange County Housing Authority • Housing Corporation of America • Southern California Housing Development Corporation • Century Housing Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-113 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Quantified Objectives Housing Element law requires that cities establish the maximum number of units that can be preserved over the planning period. The City's objective it to preserve the 52 affordable housing units "at -risk" of converting to market rate through policy programs provided in Section 4. Urban Disnlacement Analvsis The UC Berkeley Urban Displacement projects provides a database for Los Angeles, Orange and San Diego Counties displaying gentrifications and socioeconomic indicators based on 2015 ACS data. The final (2018) version of the database shows whether each Census tract comprising these three Southern California counties gentrified between 1990 and 2000; gentrified between 2000 and 2015; gentrified during both of these periods; or exhibited characteristics of a "disadvantaged" tract that did not gentrify between 1990 and 2015. The outcome of the data is a map which displays displacement typology by census tract (outlined below). Low Income/Susceptible to • Low or mixed low-income tract in 2018 Displacement: Ongoing Displacement of • Low or mixed low-income tract in 2018 Low -Income Households: • Absolute loss of low-income households, 2000-2018 • Low-income or mixed low-income tract in 2018 • Housing affordable to low or mixed low-income households in 2018 • Didn't gentrify 1990-2000 OR 2000-2018 At Risk of Gentrification: • Marginal change in housing costs OR Zillow home or rental value increases in the 90th percentile between 2012-2018 • Local and nearby increases in rent were greater than the regional median between 2012-2018 OR the 2018 rent gap is greater than the regional median rent gap • Low-income or mixed low-income tract in 2018 • Housing affordable to moderate or mixed moderate -income households in 2018 Early/Ongoing Gentrification: • Increase or rapid increase in housing costs OR above regional median change in Zillow home or rental values between 2012- 2018 • Gentrified in 1990-2000 or 2000-2018 • Moderate, mixed moderate, mixed high, or high -income tract in 2018 • Housing affordable to middle, high, mixed moderate, and mixed Advanced Gentrification highs income households in 2018 • Marginal change, increase, or rapid increase in housing costs • Gentrified in 1990-2000 or 2000-2018 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-114 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Stable Moderate/Mixed • Moderate, mixed moderate, mixed high, or high -income tract in Income: 2018 • Moderate, mixed moderate, mixed high, or high -income tract in 2018 Risk of Becoming Exclusive: • Housing affordable to middle, high, mixed moderate, and mixed highs income households in 2018 • Marginal change or increase in housing costs • Moderate, mixed moderate, mixed high, or high -income tract in 2018 • Housing affordable to middle, high, mixed moderate, and mixed highs income households in 2018 Becoming Exclusive: . Rapid increase in housing costs • Absolute loss of low-income households, 2000-2018 • Declining low-income in -migration rate, 2012-2018 • Median income higher in 2018 than in 2000 • High -income tract in 2000 and 2018 Stable/Advanced Exclusive: • Affordable to high or mixed high -income households in 2018 • Marginal change, increase, or rapid increase in housing costs Figure 3-23 below displays the mapped displacement typology for Newport Beach. The data shows that nearly all of Newport Beach is considered Stable/Advanced Exclusive, furthering previous conclusions that the City is an overall high income and high -cost City to live in. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-115 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-23: Displacement Risk, Newport Beach Hawtharno ri NgPVdALif C�mpt r' Yot,3 Lind- Lt CORONA FULLERTON TORRANCE RSON ANAHIEIM LONE;'BEACH Temescal Valley Westminster �SANTA iiNl� �i Fountalrs�Vall��y _ HUNTINGTO., �IRVINE H EAC H _31,e I cl"Est - NIISS1 N VIL.JO alis vle n AGUNA BEACH Lagin3 NiQuej - Displacement Typology _ove-Income!Susceptible to Gisplacelrent Ongoing Displacement At Risk of Gentrification EarlylOngoing Gentrification Advanced Gentnfication Stable ModeratelMixed Income At Risk of Becoming Exclusive 9ecoming Exclusive Stable/Advanced Exclusive -iigh Student Population Jnavailable or Unre€fable Data Source: UC Berkeley, Urban Displacement Project, "Mapping Neighborhood Change in Southern California. "Accessed November 4, 2021 Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-116 (September 2022 Final Housing Element) City of Newport Beach - �— 2021-2029 HOUSING ELEMENT ,B 330 Effective January 1, 2020, Senate Bill 330 (SB 330) aims to increase residential unit development, protect existing housing inventory, and expedite permit processing. Under this legislation, municipal and county agencies are restricted in ordinances and policies that can be applied to residential development. The revised definition of "Housing Development" now contains residential projects of two or more units, mixed -use projects (with two-thirds of the floor area designated for residential use), transitional, supportive, and emergency housing projects. SB330 sets a temporary 5-year prohibition of residential density reduction associated with a "housing development project," from January 1, 2020, to January 1, 2025. For example, during this temporary prohibition, a residential triplex cannot be demolished and replaced with a duplex as this would be a net loss of one unit. None of the housing strategy sites contain significant existing housing with low-income tenants who will be displaced if the sites redevelop. To the extent that there is existing housing, all housing must be replaced (Government Code Section 66300). The City of Newport Beach has developed an informative webpage on SB 330 available for the public. The State has also adopted just cause eviction provisions and statewide rent control to protect tenants from displacement. The City is committed to making diligent efforts to engage underrepresented and disadvantaged communities in studying displacement. Assessment of Contributing Factors to Fair Housing Issues in Newport Beach The Al identifies the following regional goals for mitigating impediments to fair housing within jurisdictions in Orange County: • Goal 1: Increase the supply of affordable housing in high opportunity areas.1 • Goal 2: Prevent displacement of low- and moderate -income residents with protected characteristics, including Hispanic residents, Vietnamese residents, other seniors, and people with disabilities • Goal 3: Increase community integration for persons with disabilities. • Goal 4: Ensure equal access to housing for persons with protected characteristics, who are disproportionately likely to be lower -income and to experience homelessness. • Goal 5: Expand access to opportunity for protected classes. Summary of Fair Housing Analysis The Housing Element programs incorporate these recommended goals as they relate to Newport Beach. The analysis above regarding other fair housing issues within Newport Beach yields the following results: • The City does not have any racial or ethnic groups that score higher than 60 on the dissimilarity index. However, those who identify as Native Hawaiian, Asian, American Indian, Black and Some Other Race experience moderate levels of segregation (a dissimilarity index of greater than 30). Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-117 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT While there are no groups experience high segregation, the City should focus on the needs and targeted outreach to the populations experiencing moderate segregation. • The City does not have any racially or ethnically concentrated census tracts (R/ECAPs) as identified by HUD. This indicates that there are no census tracts within Newport Beach with a non -white population of 50 percent or more or any census tracts that have a poverty rate that exceeds 40% or is three or more times the average tract poverty rate for the metropolitan/micropolitan area. However, one R/ECAP was identified in the neighboring city of Irvine, near the University of California Irvine. This will be considered in the housing plan as students within the R/ECAP may look for housing in Newport Beach. • The UC Davis Regional Opportunity Index shows that the majority of residents within Newport Beach have a high level of access to opportunity throughout the majority of the City, with only two census tracts showing a moderate level of access to opportunity. No census tracts were shown as having the lowest level of access to opportunity. The City should focus on increasing resources, housing opportunity and encourage economic development in these areas. • The analysis of the TCAC/HCD opportunity Area Maps show that most census tracts in Newport Beach are classified with the "Moderate Resource" "High Resource" or "Highest Resource" designation. This indicates that these census tracts are within the top forty percent in the region in terms of areas that lower -income residents may thrive if given the opportunity to live there. All but two census tracts within Newport Beach register within the top 20 percent in the index. One census tract registered as a "Low Resource" area, citing high economic opportunity and low educational opportunity. The Opportunity Indices identify overall high access to quality resources including economic and job proximity, educational access, and transportation access. However, there is a low health index, indicating increased pollution and low environmental quality across all racial/ethnic groups in the City. Additionally, the opportunity indices identify low affordable transportation options to both the Asian or Pacific Islander (Non -Hispanic) and Native American (Non -Hispanic). Key Findings from Fair Housing Analysis As a part of the Housing Element, the City considers protected class (such as race, ethnicity, income, etc.) and opportunity indicators as key factors in fair housing. Federal, state, and local data provide regional context, background information and supportive data which helps the City to understand fair housing issues and to identify key fair housing factors for Newport Beach. The section below uses available data to identify key trends and local contributing factors for fair housing, key themes identified through this analysis are stated below: • Persons who identify as Native Hawaiian or Other experience the moderate levels of segregation with persons who identify as White in the City of Newport Beach. • The City has twelve census tracts characterized as Racially Concentrated Areas of Affluence (RCCA) and no R/ECAPs. • Residents of Newport Beach are more likely to experience high housing cost burden as homeowners. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-118 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • Persons who earn incomes below the poverty rate are more likely to have lower access to opportunities as indicated by the Opportunity Indices analysis. Local Contributing Factors to Fair Housing There are a number of factors and elements that contribute to and cause fair housing issues. The following lists a number of contributing factors within the City of Newport Beach: • Opportunities for Persons with Disabilities —The analysis shows disability and access as possible fair housing issues in Newport Beach. In comparison to Figure D-14, the City shows a moderate portion of residents report at least one disability (10 percent) as well as some census tracts reporting 10-20 percent having a disability. While the City is considered a high opportunity area, residents with disabilities may have lower access to resources and information. Housing Goals #3: Increase community integration for persons with disabilities, Housing Goal #4: Ensure equal access to housing for persons with protected characteristics, who are disproportionately likely to be lower -income and to experience homelessness, and Housing Goal #5: Expand access to opportunity for protected classes. • Expansion of Opportunities in Lower Resource Areas — While the City of Newport Beach is considered a moderate to high resource region, some parts of the City are characterized as lower opportunity zones as depicted in Figure 3-6. When compared to the CalEnviroScreen map in Figure 3-13, the low resource areas align with regions identified at the highest degree of pollution burdens. Various Housing Programs have been adopted to ensure opportunities for residents in low opportunity areas. Housing Goal #5: Expand access to opportunity for protected classes. 4. Analysis of Sites Pursuant to AB 686 AB 686 requires that jurisdictions identify sites throughout the community in a manner that is consistent with its duty to affirmatively further fair housing. The site identification requirement involves not only an analysis of site capacity to accommodate the RHNA (provided in Appendix B), but also whether the identified sites serve the purpose of replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity. Figures 3-24 through 3-26 below identify the sites to accommodate future housing, as identified in the adequate sites analysis, overlaid on demographic data using the 2018 American Community Survey 5-year Estimates. • Figure 3-24 — Newport Beach Proposed RHNA Sites, Hispanic/Latino, 2019 • Figure 3-25 — Newport Beach Proposed RHNA Sites, Non -White Population 2019 • Figure 3-26— Newport Beach Proposed RHNA Sites, Low and Moderate -Income, 2019 Figure 3-24 shows the proposed candidate sites to meet the RHNA for Newport Beach in relation to the location of residents of Hispanic origin. These sites take into consideration access to vital goods, services, and public transportation and are therefore ideal areas for the City to focus much of its future housing growth. It is anticipated that accessory dwelling unit (ADU) growth, including growth for affordable ADUs, will occur in the less dense areas of the community. Figure 3-24 shows the following findings: Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-119 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • 291 proposed sites to accommodate the RHNA allocation (totaling 20,999 potential units, or 94% of the total potential units) are located within block groups that have a percentage of the population that identifies as Hispanic below 20 percent. • 3 proposed sites to accommodate the RHNA allocation (totaling 153 potential units, or 1% of the total potential units) are located within block groups that have a percentage of the population that identifies as Hispanic between 20 and 40 percent. • 17 proposed sites to accommodate the RHNA allocation (totaling 920 potential units, or 4% of the total potential units) are located within block groups that have a percentage of the population that identifies as Hispanic between 40 and 60 percent. • 2 proposed sites to accommodate the RHNA allocation (totaling 188 potential units, or 1% of the total potential units) are located within block groups that have a percentage of the population that identifies as Hispanic between 60 and 80 percent. The data shows that the proposed candidate sites to meet the very low and low-income RHNA allocation are evenly dispersed throughout the community with an emphasis on locating units where there is a high level of access to important public services and transit. The distribution of potential units does not disproportionately impact areas with larger concentrations of the Hispanic population. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-120 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-24: Newport Beach Proposed RHNA Sites, Hispanic/Latino, 2018 .4° tr COASiHWYW A& Miles NORTH o 2 Sources: American Community Survey, HUD Exchange: City of Newport Beach Newport AFFH * Site Candidates (Low/Very Low) * Site Candidates (Moderate/Above Moderate) 0 City Boundary Percent Hispanic Population 2018 ACS (5-Year) Py 0% - 20% v 201-40% 40% - 60% �0 60%-80% � WW n80% 1 �/ * FOAO flD ;VY '0 `f l 6�N I s °gY.r�oA � SPN, AnWufy J �J -\ SAN IpAQUIN HMS FD-'-- _ -- X ",.. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-121 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-25 shows the proposed candidate sites to meet the RHNA for Newport Beach in relation with census data showing the percentage of the population within each block group that is Non -white. Figure 3-25 shows the following findings: • 156 proposed sites to accommodate the RHNA allocation (totaling 9,867 potential units, or 44% of the total potential units) are located within block groups that have a percentage of the population that identifies as Non -White less than 20 percent. • 46 proposed sites to accommodate the RHNA allocation (totaling 3,166 potential units, or 14% of the total potential units) are located within block groups that have a percentage of the population that identifies as Non -White between 20 and 40 percent. • 109 proposed sites to accommodate the RHNA allocation (totaling 9,039 potential units, or 41% of the total potential units) are located within block groups that have a percentage of the population that identifies as Non -White between 40 and 60 percent. • 2 proposed sites to accommodate the RHNA allocation (totaling 188 potential units, or 1% of the total potential units) are located within block groups that have a percentage of the population that identifies as Non -White between 60 and 80 percent. The data shows that the proposed candidate sites to meet the very low and low-income RHNA allocation are evenly dispersed throughout the community with an emphasis on locating units where there is a high level of access to important public services and transit. The distribution of potential units does not disproportionately impact areas with larger concentrations of Non -white populations. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-122 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT' r Figure 3-25: Candidate Sites — Non -White Analysis 73 Ej Newport AFFH * Site Candidates (Low/Very Low) * 51te Candidates (Moderate/Above Moderate) Q City Boundary Percent Non -White Population 2018 ACS (5-Year) < 20 A 20%-40% ❑� j -- - 40%-60% Q --1 60%-80% > 80% �/� � oisaN avr * 9 E A 9ry sa+u�cwQurmHrusao _ __ a E Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-26 shows location of proposed candidate sites to meet the RHNA for Newport Beach in comparison with census data showing the percentage of the population within each block group who is categorized as low-income or moderate by the American Community Survey. Figure 3-26 shows the following findings: • 1 proposed site to accommodate the RHNA allocation (totaling 1,046 potential units, or 5% of the total potential units) are located within block groups that have a percentage of the population that identifies as low -and -moderate -income less than 10. • 54 proposed sites to accommodate the RHNA allocation (totaling 922 potential units, or 4% of the total potential units) are located within block groups that have a percentage of the population that identifies as low -and moderate -income between 10 and 25 percent. • 212 proposed sites to accommodate the RHNA allocation (totaling 16,784 potential units, or 76% of the total potential units) are located within block groups that have a percentage of the population that identifies as low -and moderate -income between 25 and 50 percent. • 44 proposed sites to accommodate the RHNA allocation (totaling 3,320 potential units, or 15% of the total potential units) are located within block groups that have a percentage of the population that identifies as low -and moderate -income between 50 and 75 percent. • 2 proposed sites to accommodate the RHNA allocation (totaling 188 potential units, or 1% of the total potential units) are located within block groups that have a percentage of the population that identifies as low -and moderate -income greater than 75 percent. The data shows that the proposed candidate sites to meet the very low and low-income RHNA allocation are evenly dispersed throughout the community with an emphasis on locating units where there is a high level of access to important public services and transit. The distribution of potential units provides increased opportunities for low-income housing in areas with higher rates of low-income persons. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-124 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-26: Candidate Sites — Low/Moderate-Income Block Group Analysis �o rg P 9 �O l� I 0 s aisnNnvF Z a ,p a �UN9 001 �d a Newport AFFH t4 Site Candidates (Low/Very Low) Site Candidates (Moderate/Above Moderate) Q City Boundary Percent Low- and Moderate Income Population 2015 ACS (5-Year) < 10% 101/-251/ 25% - 50% 50% - 75% >75% 00 Ilk* , mAs Nwr PF,Fe � iqS/OFF R 5•\N�GJ�- W� SAN,'OAOlIfN HfCLS RIJ 9 N T� fF Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-125 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT The concentration of low- and very low-income sites located in the northern, western, and central areas of the City as depicted in Figures 3-24 through 3-26 above, are designated to include units at mixed income levels that would provide housing opportunity for both lower income households and moderate to above moderate -income households. Thus, the concentrations of low- and very low-income sites located in the northern, western, and central areas of the City would not exacerbate the current conditions in these areas. Analysis of Exacerbating Current Conditions Through the City's sites analysis, which was conducted in compliance with the requirements of AB 1398, sites were selected to consider the following: • Minimize over concentrations of affordable housing in one geographical area; • Encouraging and expanding opportunities for mixed -income development; and • Expanding mixed use, infill opportunities in areas adjacent to services and amenities The Airport Area and West Newport Area have been identified with a larger concentration of lower - income opportunities. These sites will help encourage mixed -income development and will expand opportunity in some of the City's highest resource areas proximate to jobs. The Airport Area has a higher amount of existing affordable units that were constructed in conjunction with market -rate development projects and through the implementation of density bonus incentives and past inclusionary housing. Due to high land costs citywide, there are no opportunities to feasibly construct lower -income development unless they are in conjunction with larger scale market rate projects and would not have otherwise existed in this area. While the Airport Area scores in the 43rd percentile related to pollution burden according to OEHHA's California Communities Environmental Health Screening Tool, this is primarily due to transportation and air quality impacts given the proximity to John Wayne Airport. It is not related to majority polluting industries or other point sources. The area is experiencing a transition from low -scale, office/industrial uses to higher density, urban mixed -use development, as evidenced by the multiple project examples presented in Appendix B. The Airport Area is also identified in the General Plan Recreation Element as deficient in park acreage. The Land Use Element currently provides policies for the dedication and improvement of neighborhood parks within future residential or mixed -use development. Three recently entitled projects have been required to dedicate and improve parks for future residents and the broader community (i.e., Uptown Newport, Newport Crossings, and the Residences at 4400 Von Karman). Continued implementation of these policies will further assist in the provision of necessary park spaces thereby improving access recreation and open space areas to enhance the livability of the area. For the Airport Area, Policy Actions 1A and 4.1 require new development standards that will further enhance the City's ability to establish quality mixed -income communities Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-126 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT while helping to mitigate and/or avoid possible environmental considerations in the area. Examples include feasible and appropriate noise mitigation and possibly enhanced airfiltration systems for buildings to reduce exposure of future resident to these environmental factors. The West Newport Area contains most the City's mobile home parks and, thus, has long provided opportunities for affordable housing. It also has the largest industrial use area with several manufacturing uses concentrated in a smaller area. Industrial uses can be associated with increased noise and or pollution. Based on consultation with the City's Code Enforcement Division, there have been no recent complaints from residential uses regarding noise in this area. Air and ground pollutants are largely monitored and regulated by the South Coast Air Quality Management District (SCAQMD), as well as the Department of Toxic Substances Control (DTSC). The SCAQMD and DTSC began closely monitoring the emissions of a single operator in the West Newport Area between 2008 and 2015. The operator has implemented measures to reduce emissions to appropriate standards by installing a vapor extraction system as well as exhaust treatment equipment. The City has served as a coordinating partner in this effort and continues to assist in any inquiries related to pollutants in the area. Policy Action 4K is included in Section 4 to ensure the City continues to monitor industrial users while striving to improve the environmental score for the area. Although there is a concentration of industrial type uses in this area, it has long been viewed as an opportunity area for redevelopment. While there is currently a temporary City -run community center in the area, the City continues to pursue the siting and development of a permanent community center. In 2015, the City approved the Ebb Tide Residential Project, an 81-unit condominium community. In 2016, the City Council adopted the West Newport Mesa Streetscape Master Plan, which includes streetscape improvements that are required as part of private development projects and improvements that could be implemented as part of the City's Capital Improvements Program (CIP). The Ebb Tide Residential Project was the first private project to implement components of the West Newport Mesa Streetscape Master Plan. Future redevelopment projects will also be required to implement streetscape improvements that will foster an enhanced and safer environment for workers and residents. As the area transitions to a more urban, dense environment, it is important to include affordable housing opportunity sites to help preserve current affordable housing opportunities while serving to expand economic growth potential. In addition, there is an opportunity for workforce housing with the proximity of Hoag Hospital, one of Newport Beach's biggest employers. The West Newport area has experienced recent trends toward infill, mixed -income development that will continue in a high resource area. Policy Action 4K has a consideration to include residential -serving commercial as part of the rezoning program (Policy 1B) to allow flexibility beyond the underlying industrial zoning limits, which will allow new commercial uses that are more supportive of current and future residents as well as workers in the area. Also notable, the West Newport Area is home to several education institutions such as Pacifica Christian High School, Coastline Community College, and Carden Hall. The City has seen recent reinvestment from the schools, which further demonstrates an improving neighborhood condition that shifts away from industrial to more mixed -use and mixed -income development. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-127 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Relevant to the West Newport Mesa Area, Policy Action 5D provides for the protection of mobile home opportunities. Policy Action 113 states provisions to include development standards, overlay text and entitlement procedures to encourage the development of housing for persons of very low and low incomes. In developing the overlay, or similar rezone strategy, the City will evaluate the potential to include a variety of incentive tools as appropriate, including but not limited to floor area bonus, density bonus, entitlement streamlining, fee waivers or reductions and other considerations. The intent in these incentive tools is to further opportunity for mixed -income developments in these areas. Lastly, to ensure that these conditions are not exacerbated during the planning period, the City is introducing an inclusionary requirement (Policy 1K) that would further support mixed -use and mixed - income developments and provide additional incentives to increase lower-, moderate- and above moderate -income development in these areas. Racially and Ethnically Concentrated Areas of Poverty and Affluence The HUD R/ECAP maps do not identify any racially or ethnically concentrated areas of poverty in Newport Beach. The analysis conducted for this housing element concluded that there are approximately 12 census tracts that are considered racially concentrated areas of affluence (RCAA) in the City. The RCAA areas are clustered throughout the City predominately in the east and along the southern and western boundaries of the City. The concentrations of lower income households located in the northern, western, and central areas of the City are in high income areas surrounded by RCAAs. The location of these area provides affordable housing opportunities within areas with high access to resources. I ccess to Onnortunity The majority of the City is considered highest resource according to the TCAC Opportunity Map composite score. The majority of the sites identified in the sites inventory are located in the highest resource areas which will give households access to more opportunities and resources. Transit According to AIITransit the City of Newport Beach has a low transit performance score overall. The City has identified a significant number of low- and very low-income housing opportunity sites in the Airport Area Environs in the north, the West Newport Mesa Area in the west, and the Newport Center Area in the central area of the City. These three areas of the City have high connectivity scores compared to other areas throughout the City. Households within these areas have better access to jobs and key destinations through transit than those located elsewhere in the City. The majority of the low- and very low-income sites were strategically located within the Airport Area Environs, West Newport Mesa Area, and the Newport Center Area to take advantage of the increased transportation assets within these areas. Environmental OEHHA's California Communities Environmental Health Screening Tool considers the City of Newport Beach as having a primarily low pollution burden through the entire City. There are concentrations of low - and very low-income sites located in the northern, western, and central areas of the City which have low to moderate pollution burdens. The Northern area, identified as Airport Area Environs, has the highest Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-128 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT pollution burden scoring in the 43rd percentile due to high exposure scores from traffic related pollutants. The northern area was selected to accommodate a number of housing opportunity sites due to its higher access to transit amenities and reduced, but high land values. Disproportionate Housing Needs Disability The City of Newport Beach has a fairly low disabled population. With a higher representation of persons with disabilities located throughout the greater central area of the City. The sites inventory has identified a concentration of low- and very low-income sites located in the Newport Center Area. The placement of these sites was strategically located to increase affordable housing opportunities where persons with disabilities are already present as well as where there are nearby service amenities which can provide increased housing security for the City's disabled population. Income The majority of the City has low rates of populations categorized as low- to moderate -income. The northern, western, and central areas of the City have higher rates of residents considered to be low- to moderate -income. The sites inventory predominately concentrates low- and very low-income sites within the Airport Area Environs, West Newport Mesa Area, and Newport Center Area as they have the highest opportunities ratings, moderate or highest resource ratings, and higher transit connectivity. The low- and very low-income site within these areas will provide increased affordable housing options where there are higher rates of lower -income residents. Additionally, the majority of the selected sites throughout the City are planned to accommodate mixed -income housing units which will prevent exacerbating the concentrations of lower income households. Overpayment The City of Newport Beach experiences low to moderate rates of overpayment generally with only one census tract in the central area of the City experiencing high rates of overpayment. Site selection emphasized the development of multifamily and mixed -use housing within six focus areas that will be rezoned to allow for high -density housing. Housing located throughout the City's six focus areas will facilitate additional affordable units through multifamily development. The low- and very low-income sites associated with the residential development in the central area of the City will provide access to supportive services such asjob opportunity and transit amenities and will ensure that there are affordable housing options in geographical areas that are experiencing moderate to high rates of overpayment. Overcrowding The entirety of the City experiences low rates of overcrowding. The placement of lower and moderate- to above moderate -income sites throughout the six focus areas within the City will not exacerbate any instances of overcrowding as additional housing development at all income levels would alleviate impacts of overcrowding. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-129 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT 5. Analysis of Fair Housing Priorities and Goals To enhance mobility and promote inclusion for protected classes, the chief strategy included in this housing element is to provide sites suitable for affordable housing in high -resource, high opportunity areas, as demonstrated by the analysis of the housing resource sites contained in this section. Other programs that affirmatively further fair housing include: • Policy Action 4A: Affirmatively Furthering Fair Housing • Policy Action 7A: Supportive Housing / Low Barrier Navigation Centers • Policy Action 713: Transitional and Supportive Housing • Policy Action 7C: Housing for Persons with Developmental Disabilities • Policy Action 7D: Fair Housing Services 1. Regional Housing Needs Allocation This section of the Housing Element provides an overview of the resources available to the City to meet their Regional Housing Needs Allocation (RHNA). Residential Sites Inventory Appendix B of the Housing Element includes the required site analysis tables and site information for the vacant and non -vacant properties to meet the City's RHNA need through the 2021-2029 planning period. The following discussions summarize the City's site inventory and rezone plan. Above Moderate- and Moderate -Income Sites For the 2021-2029 planning period, the City's RHNA allocation is 1,050 for moderate -income site and 1,409 for above moderate -income sites. The City anticipates current planned growth, projects already in the approval process, to entirely meet the above moderate -income need within the planning period. The City will meet the moderate -income need through a combination of existing capacity on residentially zoned land, through the redevelopment of parcels rezoned within the focus areas, and through the development of accessory dwelling units (ADUs). A total of 287 moderate -income and 40 above moderate -income units can be accommodated through existing zoning capacity on parcels. By subtracting existing units from maximum potential unit yield per parcel, the City projected additional capacity on several parcels. Each parcel included in the inventory was then vetted for likelihood of redevelopment and to ensure all HCD criteria were met. The required descriptive information for these sites can be found within Appendix B. An additional 72 moderate and 5 above moderate -income units can be accommodated through the development of ADUs throughout the community. This is based on the methodology described within Appendix D: Accessory Dwelling Units and incorporates guidance from HCD's Housing Element Site Inventory Guidebook. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-130 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT A supplemental 5,798 moderate and above moderate -income units can be accommodated through the rezone strategies proposed for six focus areas throughout the City. Originally identified by the Housing Element Update Advisory Committee (HEAUC), the focus areas guided the development of area -specific rezone policies and City actions to ensure that Newport Beach has sufficient capacity to meet the RHNA Allocation for the 6th Cycle. .analysis of The City's Existing Capacity and Zoning Table 3-32: Residential Caaacity for Moderate and Above Moderate -Income Sites Significant Zone Max Density Reasonable Density* Number of Parcels Acreage Potential Units Moderate -Income Sites MU-MM 26 du/ac 26 du/ac 24 9 acres 180 units MU-W2 26 du/ac 23 du/ac 13 4 acres 51 units MU-V 25 du/ac 20 du/ac 6 1 acre 13 units MU-CV/15th Street 18 du/ac 15 du/ac 24 3 acres 43 units Subtotal 67 17 acres 287 units Above Moderate -Income Sites MU-W1 5 du/ac 5 du/ac 7 9 acres 40 units Subtotal 7 9 acres 40 units TOTAL CAPACITY 74 26 acres 327 units *Note — Specific densities vary within these zoning designations and potential unit projections are based on the parcel - specific requirements and existing conditions on parcels. Reasonable Capacity Assumptions This section describes the methodology developed to determine the site capacity for the moderate and above moderate -income sites. The City assumes that above moderate -income units will develop at a maximum up eight dwelling units per acre, and that moderate -income units will develop at a maximum of 26 dwelling units per acre. Reasonable capacity for sites identified to meet the City's moderate and above moderate need was calculated based on a number of factors, including site size, existing zoning requirements, vacancy and total number of units entitled, and the maximum density achievable for projects within the following zones: • MU-MM — Mixed -Use Mariners' Mile: The MU-MM Zoning District is intended to provide areas for the development of mixed -use structures that vertically integrate residential dwelling units above the ground floor with retail uses including office, restaurant, and retail. The zone permits a density range of 20.1— 26.7 dwelling units per acre. • MU-W1 — Mixed -Use Water: This zoning district applies to waterfront properties along the Mariners' Mile Corridor in which nonresidential uses and residential dwelling units may be intermixed. A minimum of fifty (50) percent of the allowed square footage in a mixed -use development shall be used for nonresidential uses in which marine -related and visitor -serving land uses are mixed. This zone permits a density range of up to 15 dwelling units per acre. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-131 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • MU-W2— Mixed -Use Water: This zoning district applies to waterfront properties in which marine - related uses may be intermixed with general commercial, visitor -serving commercial and residential dwelling units on the upper floors. This zone permits a density range of up to 15 dwelling units per acre. • MU-V — Mixed -Use Vertical: This zoning district is intended to provide for areas appropriate for the development of mixed -use structures that vertically integrate residential dwelling units above the ground floor with retail uses including office, restaurant, retail, and similar nonresidential uses located on the ground floor or above. • MU-CV/15th Street — Mixed -Use Cannery Village and 15t' Street: This zoning district applies to areas where it is the intent to establish a cohesively developed district or neighborhood containing multi -unit residential dwelling units with clusters of mixed -use and/or commercial structures on interior lots of Cannery Village and 15th Street on Balboa Peninsula. Allowed uses may include multi -unit dwelling units; nonresidential uses; and/or mixed -use structures, where the ground floor is restricted to nonresidential uses along the street frontage. Residential uses and overnight accommodations are allowed above the ground floor and to the rear of uses along the street frontage. Mixed -use or nonresidential structures are required on lots at street intersections and are allowed, but not required, on other lots. This zone permits a density range of 20.1— 26.7 dwelling units per acre. Potential constraints, to the extent they are known, such as environmentally sensitive areas and steep slopes were considered, and deductions made where those factors decreased the net buildable area of a parcel. Additionally, existing units' non -vacant parcels were analyzed to determine the number of existing units currently on the parcel. Replacement of existing units was included as a factor to prevent no net loss of existing housing stock. Rezones to Accommodate the Moderate and Above Moderate RHNA In additional to residential use on specific plans and ADUs, the City of Newport Beach has identified 212 sites to be rezoned from commercial use to residential use or to be rezoned to a higher residential density. The sites for rezone are further detailed in Appendix B and a rezone program is identified in Section 4: Housing Plan. Figure 3-27 displays the focus areas for rezone, accompanied by a corresponding table of strategy information shown below as Table 3-33. The specific development assumptions (both on affordability and overall development potential) that produce the Potential Units are described, area -by - area, in the Sites Inventory of Appendix B. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-132 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-33: Moderate/Above Moderate -Income Rezone Strateizv by Focus Area Focus Area Feasible Acreage Rezone Density Potential Moderate -Income Units Potential Above Moderate -Income Units Airport Area Environs 172 acres 50 du/ac 258 1,546 West Newport Mesa Area 47 acres 50 du/ac 111 664 Dover-Westcliff Area 20 acres 50 du/ac 52 312 Newport Center Area 163 acres 50 du/ac 244 1,463 Coyote Canyon Area 34 acres 60 du/ac 153 995 Total 436 acres - 818 units 4,981 units Banning Ranch Area 30 acres 50 du/ac 148 884 Total 466 acres -- 966 units 4,865 units Development of Non -Vacant Sites and Converting to Residential Uses To analyze the potential for redevelopment of non -vacant sites, the City sent out more than 500 letters to property owners. Responses to the letters were recorded and are included within the inventory of sites within Appendix B. Although a positive response to the redevelopment interest letters does not guaranty the redevelopment of a parcel to residential as a primary use within the planning period, it is a strong indicator of likelihood of redevelopment and is used as sufficient evidence for inclusion within the Adequate Sites Inventory. Accessory Dwelling Unit Production The City of Newport Beach believes that ADUs present a viable option as part of the overall strategy to develop housing at all income levels during the 2021-2029 61" Cycle Housing Element planning period. Appendix D describes: • Recent ADU legislation and regional actions, • Local factors that may increase ADU development over the next eight years, and • Actions Newport Beach will take through housing programs to incentivizing ADU development The City assumes a total development 240 ADUs from 2021-2029. Utilizing the Southern California Association of Governments (SCAG) approved ADU affordability assumptions, 163 ADUs will be allocated to the low and very low-income RHNA, 72 will be allocated to the City's moderate -income RHNA and 5 will be allocated to the above moderate. This is based on the methodology described within Appendix D: Accessory Dwelling Units and incorporates guidance from HCD's Housing Element Site Inventory Guidebook. Sites Suitable for Lower -Income Housing This section contains a description and listing of the candidate sites identified to meet the Newport Beach's very low and low-income RHNA need. A full list of these sites is presented in Appendix B. Projects in the Pipeline and Accessory Dwellingq Unit, The City has identified a number of projects currently in the entitlements process which are likely to be developed during the planning period and count as credit towards the 2021-2029 RHNA allocation. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-133 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Ike Projects with planned affordable components include: • Newport Airport Village • Residences at 4400 Von Karman • Newport Village Mixed -Use • West Coast Highway Mixed -Use • Newport Crossings The total anticipated development of Projects in the Pipeline and Accessory Dwelling Units is summarized in Table 3-34 below to calculate the Remaining Need. Table 3-34: Low and Very Low -Income Remaining Need Very Low -Income Low -Income RHNA Allocation 1,456 930 Pipeline Projects 97 78 5` Cycle Sites 0 0 Accessory Dwelling Units 60 103 Remaining Low/Very Low -Income Need 1,299 749 Sites Identified for Rezone to Accommodate Low and Very low After the identification of projects in the pipeline and ADUs to accommodate the City's low and very low RHNA, a remaining 2,048 units must be accommodated to meet the City's RHNA. To account for this remaining need, the City conducted a community -driven process to identify several parcels for inclusion in the Adequate Sites Inventory. This process was led by the Housing Element Update Advisory Committee (HEUAC). To guide the identification of adequate sites, the committee created focus areas Sites identified by the committee and the public to meet the City's very low and low-income RHNA were selected based on the AB 1397 size requirements of at least 0.5 acres but not greater than 10 acres. The 221 parcels are currently zoned as the following: • 157 parcels are zoned non-residential • 64 parcels are zoned residentially at a lower density. All parcels are non -vacant and will be rezoned to higher densities (densities are specific to each focus area) able to accommodate the development of lower -income housing. Figure 3-28 below displays the sites identified to accommodate the City's low and very low-income RHNA allocation. The Housing Plan section outlines actions the City will take to promote the development of affordable units within the following focus areas: • Airport Vicinity Area • Newport Center Area • West Newport Mesa Area • Coyote Canyon Area • Dover-Westcliff Area • Banning Ranch Area Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-134 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT The key assumptions and unit projections related to each focus area are shown below in Table 3-35 and the focus areas are shown geographically below in Figure 3-27. The specific development assumptions (both on affordability and overall development potential) that produce the Potential Units are described, area -by -area, in the Sites Inventory of Appendix B. Table 3-35: Low/Very Low -Income Rezone Strategy by Focus Area Focus Area Feasible Acreage (AC) Rezone Density Potential Low/Very Low - Income Units Airport Area Environs 172 acres 50 du/ac 773 West Newport Mesa Area 47 acres 50 du/ac 332 Dover-Westcliff Area 20 acres 50 du/ac 156 Newport Center Area 163 acres 50 du/ac 732 Coyote Canyon Area 34 acres 60 du/ac 383 Total 436 acres - 2,376 units Banning Ranch Area 30 acres 50 du/ac 443 Total 466 acres -- 2,819 units Figure 3-27: Focus Areas for Rezones Banning Ranch I West Newport Mesa Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-135 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Development of Nonvacant Sites to Accommodate Low and Very Low -Income 74 non -vacant sites were also identified in the 51h cycle. In accordance with AB 1397 the City will establish a program that permits By -Right development for projects that propose 20 percent of all units to be affordable to low and very low-income units. The program is outlined in detail in Section 4: Housing Plan. Zegional Housing Needs Allocation Future Housing Needs Future housing need refers to the share of the regional housing need that has been allocated to the City. The State Department of Housing and Community Development (HCD) supplies a regional housing goal numberto the Southern California Association of Governments (SCAG). SCAG is then mandated to allocate the housing goal to city and county jurisdictions in the region through a RHNA Plan. In allocating the region's future housing needs to jurisdictions, SCAG is required to take the following factors into consideration pursuant to Section 65584 of the State Government Code: • Market demand for housing. • Employment opportunities. • Availability of suitable sites and public facilities. • Commuting patterns. • Type and tenure of housing. • Loss of units in assisted housing developments. • Over -concentration of lower -income households. • Geological and topographical constraints. HCD, through a determination process, allocates units to each region across California. It is then up to each region to determine a methodology and process for allocating units to each jurisdiction within that region. SCAG adopted its final Regional Housing Needs Allocation (RHNA Plan) in February 2021. This RHNA covers an 8-year planning period (starting in 2021) and addresses housing issues that are related to future growth in the region. The RHNA allocates to each city and county a "fair share" of the region's projected housing needs by household income group. The major goal of the RHNA is to assure a fair distribution of housing among cities and counties within the Southern California region, so that every community provides an opportunity for a mix of housing for all economic segments. Newport Beach's share of the SCAG regional growth allocation is 4,845 new units for the current planning period (2021-2029). Table 3-36, Housing Needs for 2021-2029, indicates the City's RHNA need for the stated planning period. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-136 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-36: Housing Needs for 2021-2029 Income Category (% of County AMI) Number of Units Percent Extremely Low (30% or less) 728 units 15% Very Low (31 to 50%)1 728 units 15% Low (51 to 80%) 930 units 19% Moderate (81%to 120%) 1,050 units 22% Above Moderate (Over 120%) 1,409 units 29% Total 4,845 units 100% Note 1: Pursuant to AB 2634, local jurisdictions are also required to project the housing needs of extremely low- income households (0-30%AMI). In estimating the number of extremely low-income households, a jurisdiction can use 50% of the very low-income allocation or apportion the very low-income figure based on Census data. Adequacy of Sites For RHNA The City of Newport Beach has a total 2021-2029 RHNA allocation of 4,845 units. The City is able to take credit for 1,662 units currently within the planning process (Projects in the Pipeline), 327 units of 51" Cycle Sites being projected at existing buildout capacity, and 240 units of ADU's (addressed in Appendix B and in Appendix D). These three categories of existing capacity lower the total RHNA planning need to a "Remaining Need" of 2,707 units as shown in Table 3-37. The Housing Element update lists sites that would be able to accommodate an additional 7,909 total units, well in excess of the remaining 2,707-unit RHNA need. Newport Beach has identified sites with a capacity to accommodate 2,296 lower -income dwelling units, which is in excess of its 2,386-unit lower -income housing need. The identified sites for lower -income dwelling units are on parcels that will permit residential development as a primary use at a base density of between 30 and 60 dwelling units per acre and at an assumed density of between 50 and 60 dwelling units per acre. The Banning Ranch Focus area is included in the sites inventory, but not assumed to accommodate the City's 2021-2029 RHNA growth need. Banning Ranch is considered as additional dwelling unit opportunity in addition to those that accommodates the RHNA. When including Banning Ranch, the Housing Element would enable the City to increase its site surplus. This would result in a surplus of 691 low and very low income units compared to a 248 unit surplus without Banning Ranch. As described in Appendix B, the City believes that due to recent State legislation and local efforts to promote accessory dwelling unit (ADU) production, the City can realistically anticipate the development of 240 ADUs within the 8-year planning period. As outlined in the Sites Inventory within Appendix B, the City has compiled an inventory of sites for rezone that, combined, have development potential to wholly exceed and maintain the capacity to accommodate the RHNA Allocation throughout the 8-year planning period. Overall, the City has adequate capacity to accommodate its 2021-2029 RHNA. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-137 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 3-37: Summary of RHNA Status and Sites Inventory Extremely Low/ Very Low Income Low Income Moderate Income Above Moderate Income Total 2021-2029 RHNA 1,456 930 1,050 1,409 4,845 RHNA Credit (Units Built) TBD TBD TBD TBD TBD Total RHNA Obligations 1,456 930 1,050 1,409 4,845 Sites Available Projects in the Pipeline 175 32 1,455 1,662 Accessory Dwelling Units 163 72 5 240 5th Cycle Sites 0 287 40 327 Remaining RHNA 2,048 659 -- 2,707 Airport Area Environs Rezone 773 258 1,546 2,557 West Newport Mesa Rezone 332 111 664 1,107 Dover-Westcliff Rezone 156 52 313 521 Newport Center Rezone 732 244 1,463 2,439 Coyote Canyon Rezone 383 153 995 1,530 Total Rezone 2,376 818 4,981 8,174 TOTAL POTENTIAL DEVELOPMENT CAPACITY 2,714 1,209 6,481 10,403 Sites Surplus/Shortfall (+/-) +328 +159 +5,072 +5,558 Percentage Buffer 14% 15% 360% 115% Banning Ranch Rezone 443 148 884 1,475 Total Rezone with Banning Ranch 2,819 966 5,775 9,649 TOTAL POTENTIAL DEVELOPMENT CAPACITY 3,156 1,357 1,366 11,878 Sites Surplus/Shortfall (+/-) +770 +307 +5,957 +7,033 Percentage Buffer 32% 29% 423% 145% Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-138 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 3-28: Sites Inventory and RHNA Obligations Summary of Sites Inventory and RHNA Obligations The data and map detailed in Figure 3-28 above shows the City of Newport Beach's ability to meet the 4,845 RHNA allocation in full capacity with a 5,293-unit buffer. Along with the identifying appropriate sites to meet the current and future housing needs, the City has established a Housing Plan to support its efforts in providing housing opportunities for all income levels in Newport Beach. 2. Financial Resources Providing an adequate supply of decent and affordable housing requires funding from various sources, the City has access to the following finding sources. Section 8 Housing Choice Voucher The Section 8 Housing Choice Voucher program is a Federal government program to assist very low- income families, the elderly, and the disabled with rent subsidy payments in privately owned rental housing units. Section 8 participants can choose any housing that meets the requirements of the program and are not limited to units located within subsidized housing projects. They typically pay 30 to 40 percent of their income for rent and utilities. The Orange County Housing Authority administers Section 8 Housing Choice vouchers within the City of Newport Beach. As of October 30, 2020, the City has allocated 112 Section 8 vouchers to residents within the community: 30 for families, 20 for persons with disabilities, and 62 for seniors. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-139 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Community Development Block Grants (CDBG) The Community Development Block Grant (CDBG) program provides annual grants on a formula basis to cities to develop viable urban communities by providing a suitable living environment and by expanding economic opportunities, principally for low- and moderate -income persons (up to 80 percent AMI). CDBG funds can be used for a wide array of activities, including: • Housing rehabilitation. • Lead -based paint screening and abatement. • Acquisition of buildings and land. • Construction or rehabilitation of public facilities and infrastructure, and: • Public services for low-income households and those with special needs. According to the Federal regulations, the City of Newport Beach is allowed to spend no more than of 20% of CDBG funding on program administration, and 15% on community services such as senior meal delivery or homeless prevention programs. The remaining amount must be used other eligible projects that meet national objectives that principally benefit low- and moderate -income households or the disabled. HUD requires Newport Beach to complete a Five -Year Consolidated Plan (Con Plan) to receive HUD's formula grant programs. The Con Plan identifies the City's 5-year strategies related to priority needs in housing, homelessness, community development, and economic development. It also identifies short - and long-term goals and objectives, strategies, and timetables for achieving its goals. Developed with the input of citizens and community groups, the Con Plan serves four basic functions: • It is a planning document for the community built upon public participation and input. • It is the application for funds under the CDBG Program. • It articulates local priorities. • It is a five-year strategy the City will follow in implementing HUD programs. Additionally, HUD requires the City to prepare a One -Year Action Plan for each of the five years covered by the Con Plan. The City of Newport Beach reports a total of $372,831 CDBG funds from HUD in the 2020-2021 Action Plan. In same report, the City reports an anticipated $2.07 million of CDBG resources during the five-year period from July 1, 2020, through June 30, 2025. HOME Investment Partnership Program (HOME) The HOME program provides federal funds for the development and rehabilitation of affordable rental and ownership housing for households with incomes not exceeding 80 percent of area median -income. The program gives local governments the flexibility to fund a wide range of affordable housing activities through housing partnerships with private industry and non-profit organizations. HOME funds can be used for activities that promote affordable rental housing and homeownership by low-income households. The City of Newport Beach does not currently receive HOME funds. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-140 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT 3. Opportunities for Energy Conservation Enerav Use and Pr-viders The primary uses of energy in urban areas are for transportation lighting, water heating, and space heating and cooling. The high cost of energy demands that efforts be taken to reduce or minimize the overall level of urban energy consumption. Energy conservation is important in preserving non-renewable fuels to ensure that these resources are available for use by future generations. There are also a number of benefits associated with energy conservation including improved air quality and lower energy costs. Southern California Gas Company (SCG) provides natural gas service for the City. Natural gas is a "fossil fuel" and is a non-renewable resource. Most of the major natural gas transmission pipelines within the City are owned and operated by SCG. SCG has the capacity and resources to deliver gas except in certain situations that are noted in state law. As development occurs, SCG will continue to extend its service to accommodate development and supply the necessary gas lines. Electricity is provided on an as -needed basis to customers within existing structures in the City. Southern California Edison Company (SCE) is the distribution provider for electricity in Newport Beach. Currently, SCE has no immediate plans for expansion of infrastructure, as most of the City is built out. However, every year SCE expands and improves existing facilities according to demand tnergy uonservatioi. The City's energy goals, stated in the Natural Resources Element of the General Plan, make every effort to conserve energy in the City thus reducing dependence on fossil fuels. The City's policies relating to energy include increasing energy efficiency in City facilities and operations and in private developments and reducing the City's reliance on fossil fuels. In order to reach the City's goals, objectives include the following: • Develop incentives that encourage the use of energy conservation strategies by private and public developments, • Promote energy -efficient design features, • Promote or provide incentives for "Green Building" programs that go beyond the requirements of Title 24 of the California Administrative Code and encourage energy efficient design elements as appropriate to achieve "green building" status; and, • Provide incentives for implementing Leadership in Environmental and Energy Design (LEED) certified building such as fee waivers, bonus densities, and/or awards recognition programs.18 The City of Newport Beach's Energy Action Plan (EAP) is identified as a roadmap for the City of Newport Beach to reduce GHG through reductions in energy used in facility buildings and operations. According to the City's EAP, the City's long-term vision for energy efficiency focuses on the following objectives: • Reduce the City's carbon footprint and its adverse effect on the environment • Conserve energy at the local government facilities 11 City of Newport Beach Natural Resource Element, 2006. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-141 (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT • Raise energy conservation awareness in local community and improve the quality of life Currently, the City of Newport Beach has developed the "Building Green" construction manual, created by the City's Task Force on Green Development. The City has also enacted a City-wide streetlight LED replacement program, replacing 400 units to date, and is continuing marketing. Education, and outreach to the community regarding every efficiency and conservation. Section 3: Housing Constraints, Resources and Affirmatively Furthering Fair Housing 3-142 (September 2022 Final Housing Element) ta'ills Ie �r:a 4' -71 :. '�r ,��... � �_- i.: I wY ram•_ - �Ist ��- '� ■rly a '.`4 '■ Irv, Mop— LZ . 7"z Oak got v _ ZT- 64 1TiTi L' City of Newport Beach 2021-2029 HOUSING ELEMENT The Housing Plan describes the City of Newport Beach 2021-2029 policy program. The Housing Plan describes the specific goals, policies, and programs to assist City decision makers to achieve the long-term housing objectives set forth in the Newport Beach Housing Element. This Plan identifies goals, policies, and programs aimed at providing additional housing opportunities, removing governmental constraints to affordable housing, improving the condition of existing housing, and providing equal housing opportunities for all residents. These goals, policies, and programs further the City's overall housing policy goal to encourage a more diverse, sustainable, and balanced community through implementation of strategies and programs that will result in economically and socially diversified housing choices that preserve and enhance the special character of Newport Beach. The City will make every effort to budget, plan for and comply with the timelines for implementation set forth in this Section, but may be contingent upon funding and staffing resources. The Southern California Association of Governments (SCAG) has conducted a Regional Housing Needs Assessment (RHNA) to determine the City's share of the affordable housing needs for the Orange County region. The RHNA quantifies Newport Beach's local share housing needs for the region by income category. Income categories are based on the most current Median Family Income (MFI) for Orange County. The current 2021 MFI (for an assumed family of 4 persons) for Orange County is $106,700. The MFI may change periodically, as it is updated on an annual basis. The City's 2021-2029 RHNA growth need of 4,845 housing units is allocated into the following income categories: • 1,456 units - Very low-income (0-50% County MFI) • 930 units - Low-income (51-80% of County MFI) • 1,050 units - Moderate -income (81-120% of County MFI) • 1,409 units - Above moderate -income (120% or more of County MFI) Housing Goals The City of Newport Beach has identified the following housing goals as part of this Housing Element Update: Housing Goal #1: Provision of adequate sites to accommodate projected housing unit growth needs identified by the 2021-2029 RHNA. Housing Goal #2: Quality residential development and the preservation, conservation, and appropriate redevelopment of housing stock. Housing Goal #3: A variety of housing types, designs, and opportunities for all social and economic segments. Housing Goal #4: Housing opportunities for as many renter- and owner -occupied households as possible in response to the market demand and RHNA obligations for housing in the City. Section 4: Housing Plan (September 2022 Final Housing Element) 4-1 City of Newport Beach 2021-2029 HOUSING ELEMENT View ��-�- Housing Goal #5: Preservation of the City's housing stock for extremely low-, very low-, low-, and moderate -income households. Housing Goal #6: Housing opportunities for special needs populations. Housing Goal #7: Equal housing opportunities in the City for all people. Housing Goal #8: Effective and responsive housing programs and policies. The goals listed above are described below and on the following pages with accompanying policies and programs to achieve them. B. Housing Policies and Program Actions This Housing Element expresses the Newport Beach community's overall housing goals and supporting policies and program actions to achieve them. The stated Housing Program Actions are based on a review of past performance of the 5th Cycle Housing Element, analysis of current constraints and resources, and input from Newport Beach residents and stakeholders. Housing Goal #1 Provision of adequate sites to accommodate projected housing unit growth needs. Housing Policy 1.1: identify a variety of sites to accommodate housing growth need by income categories to serve the needs of the entire community. Implementation Actions Adequate Sites to Accommodate 2021-2029 RHNA The City of Newport Beach has a total Regional Housing Needs Assessment (RHNA) allocation of 4,845 units. State law requires the City of Newport Beach to identify adequate sites to accommodate its fair share allocation for the 6th Cycle Housing Element. This City has identified a variety of candidate sites through extensive analysis in collaboration with the community and stakeholder through Newport Together's "Listen and Learn" process, multiple meetings of the City's Housing Element Update Advisory Committee (Committee), participation by interested residents at a variety of public meetings, workshops, and consultation with property owners. The City of Newport Beach has identified an adequate amount of land that was determined by the Committee as "Feasible" or "Potentially Feasible" for future development. Only a portion of these candidate sites will be necessary to accommodate the City's RHNA planning obligation. These sites have undergone a rigorous process to evaluate site features, development potential, developer/owner interest and other factors to deem them appropriate for housing during the 2021-2029 Planning Period. As part of the analysis of adequate sites, the City has comprehensively reviewed opportunity sites citywide and have identify eight primary areas of opportunity: • Airport Area Environs • Dover/Westcliff • West Newport Mesa • Newport Center Section 4: Housing Plan (September 2022 Final Housing Element) 4-2 City of Newport Beach - - �-- s- 2021-2029 HOUSING ELEMENT • Banning Ranch • 51" Cycle Housing Element Sites • Coyote Canyon • Accessory Dwelling Units Since the City has identified several opportunity sites in the 5t" Cycle that will be utilized in the 6t" Cycle Housing Element, additional policy considerations are stated in this Policy Program. These opportunities sites are described in map and tabular format in Appendix B of this Housing Element. Each of the opportunity areas described in this Housing Element have been assigned a targeted acreage, and a targeted number of new housing units (see following implementing Policy Action statements). Collectively, these targets must meet the unmet RHNA need as required by State law. It is expected there may be deviations from the targets with future implementing zoning actions. New opportunity sites may be identified, and other sites may be deemed unsuitable or densities may be modified, all based on new information received over time. The City may adopt future zoning strategies that are more or less than the identified targets in this Housing Element provided the total unmet RHNA need by income category is accommodated within state -defined deadlines. If future zoning strategies deviate from the targets expressed in this Housing Element but still meet the requirement to identify adequate sites to accommodate unmet RHNA need, no amendment to the Housing Element would be required and deviations of any magnitude may be considered subject to the City Council's review and approval in consultation with the Community. All sites proposed for rezoning through implementation of Policy Actions 1A through 1F provided in Section 4 of this Housing Element will require a companion Land Use Element amendment that will be subject to a vote of the electorate pursuant to Charter Section 423. The City will initiate an election and conduct community outreach to educate the public on the benefits of higher density housing and pay for all costs associated with the ballot measure(s). The table below presents a timeline for the process including the vote. If the vote fails, the City will propose alternative Policy Actions and call for a second election. If the second vote fails to pass, the City Council will seek a legal opinion from the State Attorney General's Office as to how to proceed. Milestones for Housing Element Adoption. Implementation and Charter Section 423 Election Anticipated Date Action Requirements February 2022 Housing Element Adoption Public Hearing February 2022- Preparation of Land Use Element amendment(s), Community meetings September 2023 Zoning to implement Policy Actions 1A — 1F, and completion and Public Hearings of Environmental Impact Report September 2023 Initiate ballot measure for Charter Section 423 vote 133 days prior to election date March 2024 Charter Section 423 election date for voter approval on proposed Land Use Element Amendment If Charter 423 vote fails: Amend Housing Element for HCD review and amend Land Community meetings Use Element and adopt corresponding zoning strategies after and Public Hearings conducting environmental review Section 4: Housing Plan (September 2022 Final Housing Element) 4-3 City of Newport Beach 2021-2029 HOUSING ELEMENT Conduct second Charter Section 423 election on revised amendments If second Charter 423 fails: Request opinion from State Attorney General's Office as to City's options For all Rezone Policy Actions 1A to 1F, Pursuant to Government Code 65583.2, subdivisions (h) & (i), which rezone sites to accommodate the City's shortfall in satisfying the RHNA, the City commits to the following: • permit owner -occupied and rental multifamily uses by -right for developments in which 20 percent or more of the units are affordable to lower -income households. By -right means local government review must not require a CUP, planned unit development permit, or other discretionary review or approval. • accommodate a minimum of 16 units per site; • require a minimum density of 20 units per acre; and • at least 50 percent of the lower -income need must be accommodated on sites designated for residential use only or on sites zoned for mixed uses that accommodate all of the very low and low-income housing need, if those sites: o allow 100 percent residential use, and o require residential use occupy 50 percent of the total floor area of a mixed-useproject. Policy Action 1A: Airport Environs Sub Area The City will establish a housing opportunity overlay district, or similar rezoning strategy, in the Airport Environs area for 172 acres of land to provide for the accommodation of at least 2,577 housing units in the Very Low, Low, Moderate and Above Moderate -income categories. A Map and Table Summary of these sites are provided in Appendix B of this Housing Element. The overlay, or similar rezone strategy, will allow development of a variety of residential product types at a permitted average density of 50 dwelling units per acre. Implementation of this program will also include but not limited to development standards, overlay text and entitlement procedures to, among other things, encourage the development of housing for persons of Very Low and Low incomes. In developing the overlay, or similar rezone strategy, the City will evaluate the potential to include a variety of incentive tools as appropriate, including but not limited to floor area bonus, density bonus, entitlement streamlining, fee waivers or reductions and other considerations. For Policy 1A, pursuant to Government Code 65583.2, subdivisions (h) & (i), which rezone sites to accommodate the City's shortfall in satisfying the RHNA, the City commits to the following: • permit owner -occupied and rental multifamily uses by -right for developments in which 20 percent or more of the units are affordable to lower -income households. By -right means local government review must not require a CUP, planned unit development permit, or other discretionary review or approval. • accommodate a minimum of 16 units per site; • require a minimum density of 20 units per acre; and • at least 50 percent of the lower -income need must be accommodated on sites designated for residential use only or on sites zoned for mixed uses that Section 4: Housing Plan (September 2022 Final Housing Element) 4-4 City of Newport Beach 2021-2029 HOUSING ELEMENT accommodate all of the very low and low-income housing need, if those sites: o allow 100 percent residential use, and o require residential use occupy 50 percent of the total floor area of a mixed-useproject. Timeframe: Complete Code Amendments within 36 months of Housing Element Adoption Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 1 B: West Newport Mesa The City will establish a housing opportunity overlay, or similar rezoning strategy, in the West Newport Mesa area for 47 acres of land to provide for the accommodation of at least 1,107 housing units in the Very Low, Low, Moderate and Above Moderate -income categories. A Map and Table Summary of these sites are provided in Appendix B of this Housing Element. The overlay, or similar rezone strategy, will allow development of a variety of residential product types at a permitted average density of 50 dwelling units per acre. Implementation of this program will also include but not limited to development standards, overlay text and entitlement procedures to, among other things, encourage the development of housing for persons of Very Low and Low incomes. In developing the overlay, or similar rezone strategy, the City will evaluate the potential to include a variety of incentive tools as appropriate, including but not limited to floor area bonus, density bonus, entitlement streamlining, fee waivers or reductions and other considerations. For Policy 113, pursuant to Government Code 65583.2, subdivisions (h) & (i), which rezone sites to accommodate the City's shortfall in satisfying the RHNA, the City commits to the following: • permit owner -occupied and rental multifamily uses by -right for developments in which 20 percent or more of the units are affordable to lower -income households. By -right means local government review must not require a CUP, planned unit development permit, or other discretionary review or approval. • accommodate a minimum of 16 units per site; • require a minimum density of 20 units per acre; and • at least 50 percent of the lower -income need must be accommodated on sites designated for residential use only or on sites zoned for mixed uses that accommodate all of the very low and low-income housing need, if those sites: o allow 100 percent residential use, and o require residential use occupy 50 percent of the total floor area of a mixed-useproject. Timeframe: Complete Code Amendments within 36 months of Housing Element Adoption Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Section 4: Housing Plan (September 2022 Final Housing Element) 4-5 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action 1 C: Newport Center The City will establish a housing opportunity overlay, or similar rezoning strategy, in the Newport Center area for 163 acres of land to provide for the accommodation of at least 2,439 housing units in the Very Low, Low, Moderate and Above Moderate -income categories. A Map and Table Summary of these sites are provided in Appendix B of this Housing Element. The overlay, or similar rezone strategy, will allow development of a variety of residential product types at a permitted average density of 50 dwelling units per acre. Implementation of this program will also include but not be limited to development standards, overlay text and entitlement procedures to, among other things, encourage the development of housing for persons of Very Low and Low incomes. In developing the Overlay, or similar rezone strategy, the City will evaluate the potential to include a variety of incentive tools as appropriate, including but not limited to floor area bonus, density bonus, entitlement streamlining, fee waivers or reductions and other considerations. For Policy 1C, pursuant to Government Code 65583.2, subdivisions (h) & (i), which rezone sites to accommodate the City's shortfall in satisfying the RHNA, the City commits to the following: • permit owner -occupied and rental multifamily uses by -right for developments in which 20 percent or more of the units are affordable to lower -income households. By -right means local government review must not require a CUP, planned unit development permit, or other discretionary review or approval. • accommodate a minimum of 16 units per site; • require a minimum density of 20 units per acre; and • at least 50 percent of the lower -income need must be accommodated on sites designated for residential use only or on sites zoned for mixed uses that accommodate all of the very low and low-income housing need, if those sites: o allow 100 percent residential use, and o require residential use occupy 50 percent of the total floor area of a mixed-useproject. Timeframe: Complete Code Amendments within 36 months of Housing Element Adoption Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 1 D: Dover/ Westcliff The City will establish an overlay, or similar rezoning strategy, in the Dover / Westcliff area for 20 acres of land to provide for the accommodation of at least 521 housing units in the Very Low, Low, Moderate and Above Moderate -income categories. A Map and Table Summary of these sites are provided in Appendix B of this Housing Element. The overlay, or similar rezone strategy, will permit development of a variety of residential product types at a permitted average density of 50 dwelling units per acre. Implementation of this program will also include but not limited to development standards, overlay text and entitlement procedures to, among other things, encourage the development of housing for persons of Very Low and Low incomes. In developing the overlay, or similar rezone strategy, the City will evaluate Section 4: Housing Plan (September 2022 Final Housing Element) 4-6 City of Newport Beach 2021-2029 HOUSING ELEMENT the potential to include a variety of incentive tools as appropriate, including but not limited to floor area bonus, density bonus, entitlement streamlining, fee waivers or reductions and other considerations. For Policy 1D, pursuant to Government Code 65583.2, subdivisions (h) & (i), which rezone sites to accommodate the City's shortfall in satisfying the RHNA, the City commits to the following: • permit owner -occupied and rental multifamily uses by -right for developments in which 20 percent or more of the units are affordable to lower -income households. By -right means local government review must not require a CUP, planned unit development permit, or other discretionary review or approval. accommodate a minimum of 16 units per site; require a minimum density of 20 units per acre; and • at least 50 percent of the lower -income need must be accommodated on sites designated for residential use only or on sites zoned for mixed uses that accommodate all of the very low and low-income housing need, if those sites: o allow 100 percent residential use, and o require residential use occupy 50 percent of the total floor area of a mixed-useproject. Timeframe: Complete Code Amendments within 36 months of Housing Element Adoption Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 1E: Banning Ranch The City has identified the Banning Ranch area as a potential site to accommodate future housing needs. The City has previously approved housing development on this site, but the approved project was subsequently denied by the California Coastal Commission. Additionally, there is a potential the site will be purchased by an entity to preserve the area as open space. The State Department of Housing and Community Development and California Coastal Commission have expressed they do not support the City utilizing the site to the accommodate future RHNA needs based on this potential. Despite these statements, the City believes this site is still a viable opportunity to provide housing for a variety of income levels on a small portion of the 400+ acre site while protecting environmental resources. The City will continue to support development potential in the Banning Ranch Area, but will not assume the potential buildout of the area to demonstrate adequate sites for the 2021-2029 RHNA planning period. The site is currently within the City's Sphere of Influence. The City will continue to work collaboratively with the County of Orange for annexation and with other agencies/entities regarding future use of the property. The City will continue to pursue residential opportunities on a portion of the Banning Ranch site, consistent with existing General Plan policies to provide opportunities for up to 1,475 residential units at an average density of 50 dwelling units per acre. Implementation of this program will also include development standards and entitlement procedures to encourage the development housing for persons of Very Low and Low incomes. Section 4: Housing Plan (September 2022 Final Housing Element) 4-7 City of Newport Beach 2021-2029 HOUSING ELEMENT For Policy 1E, pursuant to Government Code 65583.2, subdivisions (h) & (i), which rezone sites to accommodate the City's shortfall in satisfying the RHNA, the City commits to the following: • permit owner -occupied and rental multifamily uses by -right for developments in which 20 percent or more of the units are affordable to lower -income households. By -right means local government review must not require a CUP, planned unit development permit, or other discretionary review or approval. • accommodate a minimum of 16 units per site; • require a minimum density of 20 units per acre; and • at least 50 percent of the lower -income need must be accommodated on sites designated for residential use only or on sites zoned for mixed uses that accommodate all of the very low and low-income housing need, if those sites: o allow 100 percent residential use, and o require residential use occupy 50 percent of the total floor area of a mixed-useproject. Timeframe: Complete necessary Code, General Plan and LCP Amendments within 36 months of Housing Element Adoption Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 1 F. Coyote Canyon The Coyote Canyon property is a closed landfill that is owned and managed by the County or Orange but leased to a private developer. The area is of substantial acreage but has limited development potential due to various environmental considerations. The developer has evaluated the entire landfill area and has concluded that 34 acres of the property is not subject to environmental constraints. Additionally, the City has been advised that the County has expressed interest in participating in a transfer of a portion of the property to accommodate residential opportunity. The City will rezone at least 34 acres of land on the Coyote Canyon site, as shown in Appendix B, to accommodate up to 1,530 housing units at an average density of 60 dwelling units per acre. Implementation of this program will also include development standards and entitlement procedures to encourage the development of housing for persons of Very Low and Low incomes. Timeframe: Complete Code Amendments within 36 months of Housing Element Adoption Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 1G: 51 Cycle Housing Element Sites The City has identified a number of sites in the sites inventory contained in Appendix B contain infill sites that were identified in the 5th Cycle Housing Element to accommodate the Very Low and Low-income categories. To comply with State law, the City will amend Title 20 of the Newport Beach Municipal Code (NBMC) to permit residential uses by -right for housing development projects in which at least 20-percent Section 4: Housing Plan (September 2022 Final Housing Element) 4-8 City of Newport Beach 2021-2029 HOUSING ELEMENT of the units are affordable to lower -income households. For the purpose of implementation of this program, by -right shall mean the City will not require a discretionary permit application, such as a Conditional Use Permit or Planned Unit Development Permit, that would constitute a "project" as described in Section 21100 of the Public Resources Code. For sites in the coastal zone, the City will continue to require coastal development permits to determine compliance with the City's certified Local Coastal Program. The City commits to zoning these 5t" Cycle sites to allow Newport Beach's default density of 30 du/ac, pursuant to Government Code 65583.2, subdivision(c) or at densities demonstrated to be appropriate for the development of housing for lower -income households. Additionally, if any vacant sites in the inventory are being used to accommodate the lower RHNA and have been identified in two prior planning periods, the program must ensure that those sites meet the same requirements. Timeframe: Complete Code Amendments within 36 months of Housing Element Adoption Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 1 H: Accessory Dwelling Unit Construction Accessory Dwelling Units (ADUs) are an accepted method of providing affordable housing in the City. Due to recent legislation, the ability to entitle and construct ADUs has increased significantly. The City recognizes the significance of this legislation as evidenced by a marked increase in ADU permit applications. Due to this legislation, the City believes aggressive support for ADU construction will result in increased opportunities for housing including affordable units. The City will aggressively support and accommodate the construction of at least 240 ADUs by a variety of methods, including but not limited to: • Developing and implementing a public awareness campaign for construction of ADUs with a systematic approach utilizing all forms of media and outreach distribution • Preparing and maintaining a user-friendly website committed to information related to codes, processes, and incentives pertaining to the development of ADUs and JADUs in the City. • Evaluating and assessing the appropriateness of additional incentives to encourage ADU development. • Approve permit -ready standard plans to permit new ADU construction to minimize design costs, expedite permit processing, and provide development certainty for property owners. Timeframe: Analyze methods within 12 months of Housing Element adoption; Establish programs within 24 months of Housing Element adoption. Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Section 4: Housing Plan (September 2022 Final Housing Element) 4-9 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action 11: Accessory Dwelling Units Monitoring Program The City will annually monitor its progress in permitting an average of 30 ADUs annually, for a total of 240 ADUs during the planning period, in conjunction with Annual Housing Element Progress Report. The analysis will track applications for ADUs, location, affordability, and other important features. If ADU permitting falls below 20 ADUs for more than two consecutive years, the City re-evaluate the City's ADU standards and procedures and modify accordingly within 6 months. If actual production of ADUs is far from anticipated trends, then the City will commit to increasing the capacity or inventory of sites within six months. This increase in capacity would apply to the proposed rezoning focus areas to demonstrate the City has remaining capacity to accommodate RHNA need previously assumed through ADU construction. If actual production is near anticipated trends, then the City will consider additional outreach and marketing Timeframe: Ongoing, Annual, Developing Monitoring Program within 6 months of adoptions of Housing Element, Increase capacity in rezone areas withing 6 months if monitoring program is far from anticipated trends. Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 1J: Accessory Dwelling Units Amnesty Program The City will establish a program to allow owners with existing unpermitted ADUs to obtain permits to legalize the ADUs during the 2021-2029 planning period. The Amnesty Program should consist of two parts: 1) education; and 2) incentives. The intent of Part 1 (education) of the program is to create an information guide to help educate and inform the importance and benefits of legalizing and bringing their unpermitted units into compliance. The information guide will include an overview of the necessary life safety code requirements and improvements that will need to be provided for permit issuance and advice on how to discuss and ask questions of permitting staff without the risk of Code Enforcement action. The information guide will also explain how the City's ADU regulations have created an easier path towards compliance whereas previously not feasible. Part 2 (Incentives) of the program will provide property owners incentives, such as fee waivers, courtesy inspections, or grants, to encourage property owners to seek permits to legalize units and make them safe for habitation. Timeframe: Develop Amnesty Program within 24 months of Housing Element adoption, Target 10 Households annually to participate in the program. Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 1 K: Inclusionary Housing Policy The City has a substantial RHNA obligation of affordable housing that will be a challenge to accommodate due to prevailing project development costs include high land values. Therefore, the City must evaluate a variety of policy prescriptions that will encourage and facilitate the construction of below market -rate housing. The City will investigate inclusionary housing policy options as an additional means to provide a variety of housing types and opportunities for very low, low- and moderate -income households in Newport Beach. The City will assess and analyze a variety of inclusionary housing policy options, standards, requirements and regulations to determine the best course of action. Based upon this initial assessment, the City will determine the appropriateness and application of inclusionary policies, and Section 4: Housing Plan (September 2022 Final Housing Element) 4-10 City of Newport Beach 2021-2029 HOUSING ELEMENT adopt policies, programs or regulations that will produce housing opportunities affordable to very low, low and moderate -income households. The City has determined that a base inclusionary requirement of 15 percent for new residential development to be affordable to very low-, low-, and moderate -income households is appropriate as an interim measure prior to the adoption of a final inclusionary ordinance or policy. The final inclusionary policy shall address development of rental and for -sale housing affordable to very low, low- and moderate -income households, as well as the applicability of this requirement and its alternatives. Timeframe: Adopt interim inclusionary policy within 6 months of Housing Element adoption. Evaluate Inclusionary options and adopt an Ordinance within 36 months of Housing Element adoption. Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Housing Goal #2 Quality residential development and preservation, conservation, and appropriate redevelopment of housing stock. Housing Policy 2.1: Support all reasonable efforts to preserve, maintain, and improve availability and quality of existing housing and residential neighborhoods, and ensure full utilization of existing City housing resources for as long into the future as physically and economically feasible. Implementation Action: Policy Action 2A: Neighborhood Preservation The City will continue to improve housing quality and prevent deterioration of existing neighborhoods by strictly enforcing applicable Building Code, Fire Code, and Zoning Code regulations and abating Code violations and nuisances. The City of Newport Beach will continue to prepare a quarterly report on code enforcement activities in the 61" Cycle. Timeframe: Ongoing, Semi -Annual Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 2B: Residential Building Record Program The City will maintain and continue to implement the Residential Building Records (RBR) program to reduce and prevent violations of building and zoning ordinances by providing a report to all parties involved in a transaction of sale of residential properties, and providing an opportunity to inspect properties to identify potentially hazardous conditions, resources permitting. The report provides information as to permitted and illegal uses/construction, and verification that buildings meet applicable zoning and building requirements. The City will continue to implement this program as RBR applications are submitted to the City. The City will continue to promote the availability of program to the public and local real estate professionals by maintaining information on its website and developing brochures and other promotional materials. Section 4: Housing Plan (September 2022 Final Housing Element) 4-11 City of Newport Beach 2021-2029 HOUSING ELEMENT .-1 Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 2C: Preservation of At -Risk Units There are a number of assisted housing developments or individual housing units within development that may be at -risk of converting to market rate during the 10-year period from the beginning of the 2021- 2029 Housing Element planning period. "Assisted housing developments" shall mean multifamily rental housing that receives governmental assistance under federal programs listed in subdivision (a) of Government Code Section 65863.10, state and local multifamily revenue bond programs, local redevelopment programs, the federal Community Development Block Grant Program, or local in -lieu fees. "Assisted housing developments" shall also include multifamily rental units that were developed pursuant to a local housing program or used to qualify for a density bonus pursuant to Government Code Section 65916. During the planning period, preservation of the assisted housing developments shall utilize, to the extent necessary, all available federal, state, and local financing and subsidy programs including those listed above, except where a City demonstrates it has other urgent needs for which alternative funding sources are not available. The city will include strategies that involve local regulation and technical assistance, including maintaining registration as a Qualified Preservation Entity with HCD to ensure that the City will receive notices from all owners intending to opt out of their Section 8 contracts and/or prepay their HUD -insured mortgages. The City will proactively consult with the property owners identified in Table 3-31 of the Housing Element and potential preservation organizations regarding use of all federal, state and local resources to be used for maintaining affordable housing opportunities in those developments listed in Table 3-31 of Chapter 3 of this Housing Element. The City will provide technical assistance to non-profit entities for acquisition of the units to ensure long-term affordability, upon receiving notice that a property owner of an existing affordable housing development intends to convert the units to a market -rate development. The City will provide specific assistance to owners of these units by making initial contact within 9 months of Housing Element adoption to identify and coordinate assistance. The City will provide in -kind assistance, through information dissemination, to assist in partnering local assisted unit owners with agencies or entities that can provide financial or other assistance to preserve the affordability of these units. The Citywill maintain registration as a Qualified Preservation entitywith HCD and continuously implement the above policy as notices are received from property owners in the 61" Cycle. Timeframe: Ongoing, as necessary to preserve affordability. Initial contact with owners within 9 months of Housing Element adoption. Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund, State, Federal funding Section 4: Housing Plan (September 2022 Final Housing Element) 4-12 City of Newport Beach 2021-2029 HOUSING ELEMENT Housing Goal #3 A variety of housing types, designs, and opportunities for all social and economic segments. Housing Policy 3.1: Encourage preservation of existing and provision of new housing affordable to extremely low-, very low-, low-, and moderate -income households. Housing Policy 3.2: Encourage housing developments to offer a wide spectrum of housing choices, designs, and configurations. Implementation Actions Policy Action 3A: Objective Design Standards State Housing law includes various exemptions for projects with an affordable housing component, which limits the City's ability to apply discretionary design review requirements to certain residential projects. State Housing law specifies having objective design standards available to apply to housing projects where the City's discretion over design review is otherwise preempted per State law. The City of Newport Beach will review existing entitlement processes for housing development and will eliminate discretionary review for all housing development proposals that include a minimum affordable housing component. The City will also review the appropriateness of its current development standards to ensure that it reasonably accommodates the type and density of housing it is intended to support. The City will also amend existing development standards to replace or remove all subjective standards for projects with a minimum affordable housing component with objective standards that do not impede the type and density of housing it is intended to allow. Timeframe: Adopt standards within 24 months of Housing Element adoption Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 3B: SB 35 Streamlining The City will establish written procedures to comply with California Government Code Section 65913.4 and publish those procedures for the public, as appropriate, to comply with the requirements of SB 35, Chapter 366 Statues 2017. These requirements apply at any point in time when the City does not meet the State mandated requirements, based upon the SB 35 Statewide Determination Summary Report for Housing Element progress and reporting on Regional Housing Needs Assessment (RHNA)., the City will process development projects with at least 50 percent affordable units through a streamlined permit process (i.e., 90 days for projects with up to 150 units). All projects covered by SB 35 are still subject to the objective development standards of the Newport Beach Municipal Code that includes the Building and Fire Codes. However, qualifying projects cannot be subject to discretionary review or public hearings; and in many cases the City cannot require parking. Reduced parking requirements would be established consistent with the requirements of SB 35 for qualified streamlining projects. Section 4: Housing Plan (September 2022 Final Housing Element) 4-13 City of Newport Beach 2021-2029 HOUSING ELEMENT The City currently has consistently exceeded RHNA performance goals during the 5t" Cycle. The City's status regarding SB 35 could change during the 6t" Cycle dependent upon RHNA progress throughout the 2021-2029 Planning Period. Timeframe: Adopt procedures within first year of the planning period Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 3C: Preservation of Rental Opportunities The City will continue to maintain rental housing opportunities by restricting conversions of rental units to condominiums in a development containing 15 or more units unless the rental housing vacancy rate in Newport Beach is 5 percent or higher, and unless the property owner complies with condominium conversion regulations contained in Newport Beach Municipal Code Chapter 19.64. The City's intent is to ensure no net loss in rental opportunities in existing sites that contain 15 or more units and that the conversion of rentals do not create an imbalance of opportunity in the community. The City will conduct an annual vacancy rate survey to support the implementation of this policy. To protect lower and moderate -income rental housing, the City shall amend the Municipal Code to restrict the demolition of lower and moderate -income rental housing on sites that provide more than 15 units unless the units maintain the same income categories after demolition. Timeframe: Ongoing. Update Municipal Code within 24 months of Housing Element adoption. Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 3D: Priority of Affordable Housing The City will continue to take all feasible actions, through use of development agreements, expedited development review, and expedited processing of grading, building and other development permits, to ensure expedient construction and occupancy for projects approved with lower- and moderate -income housing requirements. The City will continue to implement this program as affordable housing projects are submitted to the City. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 3E: Mortgage Revenue Bonds The City will continue to participate with the County of Orange in the issuance of tax-exempt mortgage revenue bonds to facilitate and assist in financing, development, and construction of housing affordable to low and moderate -income households. The City will continue to implement program per project submittal as the developer applies for these bonds. The City will adjust this policy to include the promotion of available bonds to the public and developers in the 6t" Cycle. Timeframe: Ongoing, Annual Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Section 4: Housing Plan (September 2022 Final Housing Element) 4-14 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action 3F. Annual Reporting Program The City will conduct an annual compliance -monitoring program for units required to be occupied by very low-, low-, and moderate -income households. The City of Newport will complete review by the last quarter of each year and report within the annual General Plan Status Report including the Housing Element Report provided to OPR and HCD by April 1st each year. Timeframe: Ongoing. Annual Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 3G: Entitlement Assistance The City will provide entitlement assistance, expedited entitlement processing, and waive application processing fees for developments in which 5 percent of units are affordable to extremely low-income households. To be eligible for a fee waiver, the units shall be subject to an affordability covenant for a minimum duration of 55 years. The affordable units provided shall be granted a waiver of park in -lieu fees (if applicable) and City traffic fair share fees. The City will continue to implement this program as affordable housing projects are submitted to the City in the 6th Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 3H: Prioritization of Affordable Housing Funds The City will give highest priority for use of Affordable Housing Fund monies to affordable housing developments providing units affordable to extremely -low-income households and senior households. The City will continue to implement this program as affordable housing projects are submitted to the City. The City shall establish objective priorities to allow for the ranking/scoring of future affordable housing projects so that expenditures that most meet the City's objectives are prioritized for funding. Timeframe: Ongoing. Establish objective priorities with project ranking/scoring within 16 months of Housing Element adoption. Responsible Agency: City of Newport Beach Community Development Funding Sources: Affordable Housing Fund, based upon available funds Policy Action 31: Public Information About Affordable Housing The City will continue to maintain a brochure of incentives offered by the City for the development of affordable housing including fee waivers, expedited processing, density bonuses, and other incentives. A copy of this brochure shall be located at the Planning Counter, on the City's website and shall also be provided to potential developers. The City will update the brochure as needed to provide updated information regarding incentives including updated fees and a reference to the most up to date Site Analysis and Inventory. Section 4: Housing Plan (September 2022 Final Housing Element) 4-15 City of Newport Beach 2021-2029 HOUSING ELEMENT d Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action V: Priority in Kind Assistance for Affordability The City shall provide more assistance for projects that provide a higher number of affordable units or a greater level of affordability. At least 15 percent of units shall be affordable when assistance is provided from Community Development Block Grant (CDBG) funds or the City's Affordable Housing Fund. The City will continue to implement the program as housing projects are submitted to the City in the 61h Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 3K: Coastal Zone Development Affordability The City shall follow Government Code Section 65590 and implement Municipal Code Titles 20.34 and 2134 "Conversion or Demolition of Affordable Housing" for new developments proposed in the Coastal Zone areas of the City. All required affordable units shall have restrictions to maintain their affordability for a minimum of 55 years. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 3L: Proactive Education and Outreach to Prospective Developers The City will continue to advise and educate existing landowners and prospective developers of affordable housing development opportunities available within Banning Ranch, the Airport Area, West Newport Mesa, Dove r-Westcl iff, Newport Center, Mariners' Mile, and Balboa Peninsula areas. The City of Newport Beach will continue to implement its program as prospective developers contact the City seeking development information. The City will maintain designated staff persons that can be contacted to provide housing opportunity information and incentives for development of affordable housing during the 6th Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 3M: Regional Coordination of Housing Issues The City will continue to participate in other programs that assist production of housing. The City will attend quarterly OCHA (Cities Advisory Committee) meetings to keep up to date on rehabilitation programs offered by the County in order to continuously inform homeowners and rental property owners within the City of opportunities and to encourage preservation of existing housing stock in the 6th Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Section 4: Housing Plan (September 2022 Final Housing Element) 4-16 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action 3N: Housing Impact Studies The City will continue to study housing impacts of proposed larger -scale, significant commercial/industrial projects during the development review process. Prior to project approval, a housing impact assessment shall be developed by the City with the active involvement of the developer. Such assessment shall indicate the magnitude of jobs to be created by the project, where housing opportunities are expected to be available, and what measures (public and private) are requisite, if any, to ensure an adequate supply of housing for the projected labor force of the project and any restrictions on development due to the City "Charter Section 423". The City will continue to implement such program as major commercial/industrial projects are submitted to the City in the 61" Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 30: Single Resident Occupancies (SROs) The City will continue to study housing impacts of proposed larger -scale, significant commercial/industrial Use State and federal funding to continue to provide assistance and make provisions for development of single -room occupancy (SRO) housing and other forms of housing for people experiencing homelessness in the City. The City will ensure that such housing options include reasonable accommodations and supportive services for people with disabilities. The City will seek to encourage the development of at least one SRO development within the Planning Period. Timeframe: Ongoing, with targeted outreach on an annual basis. Responsible Agency: City of Newport Beach Community Development Funding Sources:: To be determined as State and federal funding sources become available. Policy Action 3P: Residential Care Facilities The City will review and amend the permitting procedures, application requirements, and development standards applicable to residential care facilities for persons of 7 or more to ensure consistency with state and federal laws to promote objectivity and greater approval certainty. Timeframe: By October 2022 and amend the Zoning Code by April 2023 if needed. Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund. Section 4: Housing Plan (September 2022 Final Housing Element) 4-17 City of Newport Beach 2021-2029 HOUSING ELEMENT Housing Goal #4 Housing opportunities for as many renter- and owner -occupied households as possible in response to the market demand and RHNA obligations for housing in the City. Housing Policy 4.1: Mitigate potential governmental constraints to housing production and affordability by increasing the City's role in facilitating construction of market -rate housing and affordable housing for all income groups. Housing Policy 4.2: Enable construction of new housing units sufficient to meet City quantified goals by identifying adequate sites for their construction. mplementation Actions Policy Action 4A: Affirmatively Furthering Fair Housing Pursuant to AB 686, Chapter 958, Statutes 2018, the City will affirmatively further fair housing by taking meaningful actions in addition to resisting discrimination, that overcomes patterns of segregation and fosters inclusive communities free from barriers that restrict access to opportunity based on protected classes, as defined by State law. To accomplish this, the City or designated contracted organization will collaborate with local and regional organizations to review any housing discrimination complaints, assist in dispute resolution, and, where necessary, refer complainants to appropriate state or federal agencies for further investigation, action, and resolution. Section 3 of this Housing Element contains an analysis of fair housing activities in Newport Beach and the Orange County region. The analysis found that: • The City does not have any racial or ethnic groups that score higher than 60 on the dissimilarity index, indicating that while the City of Newport Beach has no racial or ethnic populations with a dissimilarity index above 60, all populations (with the exception of the Hispanic/Latino population) have a score above 30, meaning all groups experience moderate segregation from the White population. • The City does not have any racially or ethnically concentrated census tracts (R/ECAPs) as identified by HUD. This indicates that there are no census tracts within Newport Beach with a non -white population of 50 percent or more or any census tracts that have a poverty rate that exceeds 40 percent or is three or more times the average tract poverty rate for the metropolitan/ micropolitan area. However, one R/ECAP was identified in the neighboring City of Irvine, near the University of California Irvine. This will be considered in the housing plan as students within the R/ECAP may look for housing in Newport Beach. Section 4: Housing Plan (September 2022 Final Housing Element) 4-18 City of Newport Beach 2021-2029 HOUSING ELEMENT • The UC Davis Regional Opportunity Index shows that most residents within Newport Beach have a high level of access to opportunity throughout the majority of the City, with only two census tracts showing low access to opportunity. • The analysis of the TCAC/HCD opportunity Area Maps shows that most census tracts in Newport Beach are classified with the "Moderate Resource" "High Resource" or "Highest Resource" designation. This indicates that these census tracts are within the top 40 percent in the region in terms of areas that lower -income residents may thrive if given the opportunity to live there. All but two census tracts within Newport Beach register within the top 20 percent in the index. One census tract registered as a "Low Resource" area, citing high economic opportunity and low educational opportunity. • The Opportunity Indices identify overall high access to quality resources including economic and job proximity, educational access, and transportation access. However, there is a low health index, indicating increased pollution and low environmental quality across all racial/ethnic groups in the City. The opportunity indices identify low affordable transportation options to both the Asian or Pacific Islander (Non -Hispanic) and Native American (Non -Hispanic). Additionally, the index identified that households who earn below the poverty rate in Newport Beach have lower levels of opportunity access across all indicators as well as race and ethnicities. • Racially Concentrated Areas of Affluence (RCAA) are characterized by census tract areas in which 80 percent or more of the population is White and that have a median income of at least $125,000. There are 12 census tracts within the City that are identified as RCAAs. • Newport Beach and the State have the same rate of home ownership, but residents of Newport Beach experience higher rates of cost burden. Housing adequacy and affordability are similar in both the City and State, where California has a slightly higher rate of affordability. • Newport Beach scored a 3.9 AIITransit performance score, illustrating a low combination of trips per week and number of jobs accessible that enable a moderate number of people to take transit to work. In total, 138,164 jobs are accessible within a 30-minute trip from Newport Beach, howeverjust 0.55 percent of commuters use transit. By comparison, Newport Beach scored lower than neighboring jurisdictions of Costa Mesa (5.4), Huntington Beach (4.4), and Irvine (3.6), however slightly higher than Laguna Beach (3.8). Overall, the City of Newport Beach has a lower AIITransit score than the County of Orange (3.9) in Newport Beach and 4.2 in the County). During the planning period, the City will take the following explicit actions to address and implement Fair Housing issues and to affirmatively further fair housing in the community: Section 4: Housing Plan (September 2022 Final Housing Element) 4-19 City of Newport Beach 2021-2029 HOUSING ELEMENT r Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue Anti- The City does not have any Target Airport Area, To help address this issue, the City will Low Timeline(s): Displacement racially or ethnically adjacent to UC take the following actions: / Housing concentrated census tracts Irvine By December 2024, the City will aim to Mobility (R/ECAPs) as identified by 1. Address potential R/ECAP adopt amendments to the General Plan HUD. This indicates that there and Environmental Justice to include environmental justice policies issues by adopting an that promote a reduction in poverty rate, are no census tracts within promote diversity, and require Newport Beach with a non amendment to include consideration of environmental justice white population of 50 policies addressing principles in City decision -making. percent or more or any environmental justice in the census tracts that have a General Plan; and Evaluative Metric(s): poverty rate that exceeds 2. Facilitate an annual meeting 1. The City will strive to meet 40 percent or is three or more annually with representatives times the average tract with representatives from from the City of Irvine and UC poverty rate for the the City of Irvine and UC Irvine to review whether the metropolitan/ micropolitan Irvine or other major R/ECAP is contributing to any area. However, one R/ECAP employers to address any fair housing issues. If was identified in the local affects these R/ECAP determined to be a contributor, neighboring City of Irvine, areas may have on the City will coordinate near the University of opportunity for housing in additional actions that will seek to reduce or eliminate the California Irvine. This will be Newport Beach. R/ECAP identified adjacent to UC considered in the housing Irvine. plan as students within the R/ECAP may look for housing in Newport Beach. Section 4: Housing Plan (September 2022 Final Housing Element) 4-20 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue Access to The UC Davis Regional Target Two census To help address this issue, the City will High Timeline(s): Opportunity / Opportunity Index shows that tracts with low take the following actions: Place Based most residents within access to By June 2023, the City will aim to adopt Strategies Newport Beach have a high opportunity. 1. Adopt and codify accessory revised ADU regulations. By December level of access to opportunity In the dwelling unit (ADU) 2023, the City will conduct two regulations that facilitate community workshops that are focused throughout the majority of g J y following g within the geographic target. the City, with portions of only areas: and incentivize ADU two census tracts showing development beyond State Evaluative Metric(s): low access to opportunity. 1. In the law minimum requirements, West create new housing 1. The City will seek to produce 20 Newport development incentives and to 30 ADUs per calendar year Focus fee waivers, and that provide within higher resource areas; Area for access into areas of high and adjacent opportunity that contribute 2. The City will seek to make to Hoag to the following community contact with at least 50% of the Hospital development actions: households in the affected 2. In the o Increase residential census tracts. Airport development Focus opportunities; Area, o Maximize infill adjacent development in to John "built -out" Wayne neighborhoods, and Airport o Increase affordable housing options. 2. Target outreach to the two census tracts with low access to opportunity; and Section 4: Housing Plan (September 2022 Final Housing Element) 4-21 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue Target 3. Conduct two community workshops that will accomplish the following: o Identify local issues that are influencing low access to opportunity; o Identify potential solutions to address those local issues; o Identify opportunities to increase the housing supply for all income levels; and o Establish economic development priorities to help stimulate the creation of jobs and access to services. Access to The analysis of the TCAC/HCD Two census To help address this issue, the City will Timeline(s): Opportunity / opportunity Area Maps shows tracts with low take the following actions: Place Based that most census tracts in access to Starting 2023, the City will annually Strategies Newport Beach are classified opportunity • Adopt an Inclusionary review and update its housing -related "Moderate Housing Ordinance (See webpages. Within 6 months of Housing with the are in the Policy Action 1K) to ensure Element adoption, the City will adopt an Resource" "High Resource" or following lower income units are interim inclusionary housing policy. "Highest Resource" areas: developed in conjunction Within 36 months of Housing Element Section 4: Housing Plan (September 2022 Final Housing Element) 4-22 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue designation. This indicates Target with new market -rate adoption, the City will adopt an that these census tracts are 1. In the development equitably inclusionary housing ordinance. within the top 40 percent in West throughout the City and the region in terms of areas Newport higher resource census Evaluative Metric(s): tracts; that lower -income residents Focus 1. By December 2026, the City will may thrive if given the Area • Target outreach to two low- aspire to have approved opportunity to live there. All adjacent access census tracts via between 750 and 1,000 but two census tracts within to Hoag mailers or by other means affordable housing units or to Newport Beach register Hospital including social media to have collected a commensurate within the top 20 percent in 2. In the provide website information in -lieu affordable housing fee for the index. One census tract Airport about local entrepreneurship use to subsidize future and educational affordable housing projects; registered as a "Low Focus opportunities; Resource" area, citing high Area, 2. The City will improve upon its economic opportunity and adjacent • Maintain and promote the existing Business Ambassador low educational opportunity. to John City's Business Ambassador Program and will seek to assist at Wayne Program to local residents as least 35-45 persons annually Airport a way to support local with establishing their own businesses and business opportunities; and entrepreneurship; and 3. The Business Ambassador • Continually update the City's Program will be advertised housing related webpages to within the lower -opportunity ensure current available census tracts with a goal of data. reaching at least 50% of the households. Section 4: Housing Plan (September 2022 Final Housing Element) 4-23 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue Housing Availability of financing Target Citywide To help address this issue, the City will Medium Timeline(s): Mobility affects a person's ability to take the following actions: purchase or improve a home. By June 2023, the City will provide Under the Home Mortgage 1. Disseminate online information to the community about information to the home loans and the loan process. By Disclosure Act (HMDA), community about home December 2023 , the City will conduct its lending institutions are loans and the loan first biannual affordable housing required to disclose application and approval workshop with affordable housing information on the process; lenders and local affordable housing disposition of loan advocates. applications and the income, 2. Conduct biannually gender, and race of loan affordable housing Evaluative Metric(s): workshops with invited applicants. The primary guests from the local lending 1. The City will seek to reach concern in a review of lending industry and local affordable between 10,000 and 15,000 activity is to determine housing advocates; and households with loan whether home financing is information and will further seek available to residents of a 3. Conduct annual report of to reduce any occurrence of loan community. loan dispositions in the City disposition discrimination, if and identify any trends or found to be prevalent. According to available data, issues. Provide findings to applicants in the 120 percent local lenders and financial institutions. median -income or more had the highest rates of loans approved. Of that income category, applicants who reported White had the highest percentage of approval and the number of applications. Applicants in the less than 50 percent of the MSA/MD median -income Section 4: Housing Plan (September 2022 Final Housing Element) 4-24 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue categories were showed Target higher percentages of denied loans than loans originated. According to the data, applicants who reported white were, on average, more likely to be approved for a loan than another race or ethnicity. Access to The majority of the City of Citywide w/ To help address this issue, the City will Timeline(s): Opportunity Newport Beach is classified as focus on two take the following actions: a high opportunity zone. This census tracts Within the first half of the planning indicates a high level of in the • Conduct two public workshops period, the City will conduct two public for residents of the two census workshops on entrepreneurship and job relative opportunities that following tracts identifying as lower training. g• people can achieve as well as locations: opportunity; a high level of relative Evaluative Metric(s): opportunities that Newport 1. In the . Collaborate with the Chamber of Beach provides. West Commerce to disseminate 1. The City will improve upon its Newport economic opportunity through existing Business Ambassador While most of the census Focus entrepreneurship, job training on Program and will seek to assist at the City's website; least 35-45 persons annually with tracts within the City are Area establishing their own business areas of high opportunity, adjacent • Maintain and promote the City's opportunities; and there are two census tracts to Hoag Business Ambassador Program to identifying as low Hospital local residents as a way to 2. The Business Ambassador Program opportunity. Together these 2. In the support local businesses and will advertised within the lower - areas contain 86 sites which Airport entrepreneurship; and unity census tracts with a goal opportunity Section 4: Housing Plan (September 2022 Final Housing Element) 4-25 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue accommodate 1,941 potential Target Focus of reaching at least 50% of affected units intended to meet the Area, • Provide direct contact to households. City's RHNA for lower -income adjacent residents within the lower units (shown in Section 3: to John opportunity census tracts via mailers or other means including Housing Resources and Wayne social media to invite them to outlined in Appendix B). Airport workshop. The data for both regions with lower opportunity show very low housing access, but conversely show high civic life, health, transportation, economic and educational access.. Therefore, the consideration and identification of these areas for housing, affordable to low and very low-income households will address the deficiency to housing access in these otherwise high opportunity and high resources areas. Section 4: Housing Plan (September 2022 Final Housing Element) 4-26 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue Access to Access to education is Target Citywide To further improve access to High Timeline(s): Opportunity generally above average in education, the City will take the Newport Beach. Additionally, following action: Beginning 2023, the City will conduct access to quality education meetings annually with local educational system is high among all 1. Conduct an annual meeting institutions. racial/ethnic groups (each with local educational institutions to discuss Evaluative Metric(s): group has an opportunity housing needs related to index score above 80). education 1. The City will leverage the input from the annual meetings to identify up to two additional City policies or actions that will help enhance access to education. Place Based The City of Newport Beach Citywide, with To help improve access to transit, the Medium Timeline(s): Strategies / has a low transit performance focus on the City will take the following actions: Access to score overall. The City has Airport Area Starting with the adoption of the FY23-24 Opportunity identified low- and very low- environs. 1. In adopting the annual Capital Improvement Program , the City Capital Improvements will annually consider projects that income housing opportunity Program (CIP), the City will enhance access to transit in the targeted sites in the Airport Area seek and consider projects areas of need. By December 2024, the Environs in the north, the that will help improve access City will consider updating the Land Use West Newport Mesa Area in to transit near housing Element to include policies encouraging the west, and the Newport opportunity sites; denser residential near transit stops. Center Area in the central area of the City. While these 2. Maintain a proactive working Evaluative Metric(s): partnership with the Orange three areas of the City have County Transportation 1. The City will seek improve or trend low transit performance Authority (OCTA) to continue the City's AIITransit Score from 3.9 to scores, they have high to plan and coordinate public 5.0 or greater by the end of the connectivity scores compared transit routes to serve Housing Elementplanning period. to other areas throughout the existing community facilities City. Households within these and future development. Section 4: Housing Plan (September 2022 Final Housing Element) 4-27 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue areas have better access to Target Continue to provide local jobs and key destinations input on the Long -Range through transit than those Transportation Plan (LRTP); located elsewhere in the City. and The majority of the low- and 3. With the Land Use Element very low-income sites were Update, the City will consider strategically located within policies that would the Airport Area Environs, encourage denser housing West Newport Mesa Area, projects closer to transit and the Newport Center Area stops consistent with the to take advantage of the housing opportunity sites identified in Appendix B. increased transportation assets within these areas. Place Based The City of Newport Beach Citywide To help address this issue, the City will Medium Timeline(s): Strategies / has very high comparative take the following actions: Displacement rental and sales prices. By December 2023, the City will revamp The cost of housing limits 1. Continue to provide quarterly and provide updated information on the upward mobility and the costs and virtual training to website related to fair housing. of upkeep, repairs or landlords and tenants on fair rehabilitation, housing requirements Within 6 months of Housing Element especially for older housing including allowable rent adoption, the City will adopt an interim units, may be prohibitive for increases, source of income inclusionary housing policy. some segments of the discrimination, and benefits population. of marketing housing units Within 36 months of Housing Element for vouchers to expand the adoption, the City will adopt an locations of registered units inclusionary housing ordinance. in the City. Provide update information on the City's Evaluative Metric(s): website; Section 4: Housing Plan (September 2022 Final Housing Element) 4-28 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue Target 2. Encourage development of 1. Ensure the provision of quarterly fair ADUs in high opportunity housing educational workshops areas through targeted public conducted by a qualified fair housing outreach, user-friendly service provider; websites, pre -approved standard plans, fee waivers, and priority processing; and 2. The City will seek to assist at least 5 households annually through rehab 3. Incentivize development of assistance. The City will seek to affordable housing units abate 75% of major deferred through inclusionary housing maintenance incidents during the policies (Policy 1K). planning period; and 3. The City will seek to produce 20 to 30 ADUs per calendar year within higher resource areas. Access to There are approximately 12 Citywide, To help address this issue, the City will Medium Timeline(s): Opportunity census tracts that are predominately take the following actions: considered racially in the east and By June 2024, the City will conduct a concentrated areas of along the 1. Conduct summary review of summary review of RCAA census tracts. RCAA census tracts to identify By June 2025, the City will use findings affluence (RCAA) in the City. southern and potential redlining; and from the study to develop potential western policies. The RCAA areas are clustered boundaries of 2. Use findings from redlining throughout the City the City study to develop potential Evaluative Metric(s): predominately in the east and ggreenlining policies that can along the southern and be employed to benefit RCAA 1. The City will seek to reduce the western boundaries of the areas. incidents of unlawful redlining (if found) in these RCAA by between 35- City. The concentrations of 50% during the planning period. lower income households located in the northern, Section 4: Housing Plan (September 2022 Final Housing Element) 4-29 City of Newport Beach 2021-2029 HOUSING ELEMENT Identified Fair Local Contributing Factors Table Geographic 4-1: Fair Housing Actions Housing Issue western, and central areas of Target the City are in high income areas surrounded by RCAAs. The location of these area provides affordable housing opportunities within areas with high access to resources. Section 4: Housing Plan (September 2022 Final Housing Element) 4-30 City of Newport Beach 2021-2029 HOUSING ELEMENT k1- The City will maintain compliance with Fair Housing Laws and Regulations. The City will annually review and, if necessary, amend its Municipal Code to comply with State Housing Laws and Fair Housing Laws and Regulations. Timeframe: Review annually, amend actions and modify Municipal Code as necessary to continue to affirmatively further fair housing and comply with State Housing Laws and Fair Housing Laws and Regulations. Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 4B: Streamlined Project Review The City will provide a streamlined "fast -track" development review process for proposed affordable housing developments. The City of Newport will continue to implement this program as affordable housing projects are submitted to the City in the 61h Cycle. Timeframe: Evaluate program features within 24 months, Adopt updated procedures within 36 months of Housing Element adoption Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 4C: Density Bonus and Incentives for Affordable Housing The City will update its Density Bonus Ordinance (Newport Beach Municipal Code Chapter 20.32) to be consistent with State Law, as amended. Additionally, the City shall either grant a density bonus as required by state law if requested, or provide other incentives of equivalent financial value when a residential developer agrees to construct housing for persons and families of very low, low, and moderate -income above mandated requirements. The City will continue to implement provisions of Chapter 20.32, as amended (Density Bonus) of the Zoning Code as housing projects are submitted to the City during the 6th Cycle. The City will further encourage affordable housing and the potential use of density bonus statutes to accommodate additional affordable units. Timeframe: Update to Newport Beach Municipal Code Chapter 20.32 within 12 months of the adoption of this Housing Element and implement future updates to maintain consistency with applicable State law on an ongoing basis. Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 4D: List of Pre -Approved Development Incentives The City will develop a pre -approved list of incentives and qualifications for such incentives to promote the development of affordable housing. Such incentives could include the waiver of application and development fees or modification to development standards (e.g., setbacks, lot coverage, etc.). The City will continue to work with the Affordable Housing Task Force to develop the list within the 6th Cycle. Timeframe: Evaluate program features within 24 months, Adopt procedures within 36 months of Housing Element adoption Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Section 4: Housing Plan (September 2022 Final Housing Element) 4-31 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action 4E: Airport Area Policy Exceptions for Affordable Housing The City recognizes that General Plan Policy LU6.15.6 may result in a potential constraint to the development of affordable housing in the Airport Area, and as a result, the City shall maintain an exception to the minimum 10-acre village requirement for projects that include a minimum of 30 percent of the units affordable to lower -income households. It is recognized that allowing a smaller scale development within an established commercial and industrial area may result in land use compatibility problems and result in a residential development that does not provide sufficient amenities (i.e., parks) and/or necessary improvements (i.e., pedestrian walkways). Therefore, it is imperative that the exception includes provisions for adequate amenities, design considerations for the future integration into a larger residential village, and a requirement to ensure collaboration with future developers in the area. The City of Newport Beach will maintain the exception and continue to implement this program as projects are submitted to the City in the 6t" Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 4F. Encourage Development of Opportunity Sites The City will continue to encourage and facilitate residential and/or mixed -use development on sites listed in Appendix B by providing technical assistance to interested developers with site identification and entitlement processing. The City will continue to support developers funding applications from other agencies and programs. The City shall post the Sites Inventory, as showing in Appendix B on the City's webpage and produce marketing materials for residential and mixed -use opportunity sites, and it will equally encourage and market the sites for both for -sale development and rental development. The City shall educate developers of the benefits of density bonuses and related incentives, identify potential funding opportunities, offer expedited entitlement processing, and offer fee waivers and/or deferrals to encourage the development of affordable housing within residential and mixed -use developments. The City will continuously implement this program as housing projects are submitted to the City. Review and update as necessary the Site Inventory and provide information to interested developers. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 4G: Annual RHNA Sites Inventory Monitoring The City will monitor and evaluate the development of vacant and underdeveloped parcels on an annual basis and report the success of strategies to encourage residential development in its Annual Progress Reports required pursuant to Government Code 65400. The City of Newport will respond to market conditions and will revise or add additional sites where appropriate or add additional incentives, if identified strategies are not successful in generating development interest. The City will include the report in its annual General Plan Status Report including Housing Element Report to OPR and HCD by April 1st each year. Section 4: Housing Plan (September 2022 Final Housing Element) 4-32 City of Newport Beach 2021-2029 HOUSING ELEMENT ,;- �'— Timeframe: Ongoing, Annual Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 4H: Review Mixed -Use Zones As part of the 2006 Comprehensive General Plan Update and 2010 Zoning Code Update, new mixed -use housing opportunity zones were created throughout the City as a strategy to enhance and revitalize underperforming and underutilized properties. These areas included the Airport Area, Dove r/Westcliff, Newport Center, Mariners Mile, and portions of the Balboa Peninsula. The Airport Area and Newport Center have proven the most successful with several approved and constructed mixed -use developments, such as Uptown Newport and Villas Fashion Island. The Balboa Peninsula has had some limited success while Dover/Westcliff and Mariners' Mile have not proven successful to -date. Despite the housing opportunity that was created in these areas, a majority of these sites remain underutilized with a single, non-residential use, such as retail or office. It is evident the City's existing development standards (e.g., setbacks, height, density, parking, dedications, etc.) related to mixed -use development may create constraints to the redevelopment of these properties. Therefore, to ensure that mixed -use opportunities are maximized, the City will review established mixed - use land use categories and corresponding zoning regulations in the City and recommend policy or code changes to the City Council that reduce regulatory barriers and incentivize mixed -use residential development. Timeframe: Complete the review and provide recommendations to the City Council within 12 months of Housing Element Adoption, and then complete a review annually thereafter. Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 41: Establish Mixed -Use Resort Opportunities Mixed -use resorts are an established trend in the hospitality industry that incorporate hotel -branded residential units as an accessory use located within a resort hotel complex where residents enjoy access to the full range of services, facilities, and amenities provided by the hotel operator or brand. The residential use cannot exist without the hotel's services, facilities, and amenities. The hotel industry has been one of the hardest hit industries due to the COVID-19 pandemic and a full recovery of the industry is not anticipated for many years. Mixed -use resorts provide an opportunity to revitalize older or underperforming hotels and maintain their competitive standing by creating multiple revenue streams. Economies of scale created by shared facilities, amenities, and services add additional benefit to mixed - use resort developments. This cross pollination of business benefits both the hotel and the resident. It may also increase occupancy rates at the resort by creating increased synergy between uses and social gathering opportunities, boosting transient occupancy taxes while providing in -fill housing opportunities to partially assist the City in meeting its RHNA obligation in highly desirable and built -out areas. Section 4: Housing Plan (September 2022 Final Housing Element) 4-33 City of Newport Beach 2021-2029 HOUSING ELEMENT Incorporating residences also helps to off -set cyclical variations in hotel occupancy rates that can, for instance, result in seasonal decreases in revenue for the hotel's food and beverage offerings. Therefore, to further encourage and incentivize the development of mixed -use hotels, the City will consider policies, regulations and/or interpretations to: 1) clarify ambiguities in General Plan, Zoning Code, and/or Local Coastal Plan Program provisions to allow hotels and motels, located outside of the Coastal Commission Appeal Areas, to convert up to thirty percent (30%) of their permitted hotel and motel rooms into residential units on a one -for -one basis; 2) establish parking programs (e.g., shared parking) and/or reduced residential parking requirements that mitigate the need for any additional parking due to the conversion to residential use; 3) require a fiscal impact analysis to disclose and mitigate any reduction in transient occupancy tax due to a potential conversion; 4) increase the flexibility in use of transfer of development rights to allow for transfer of unbuilt residential units to hotel sites; 5) require property owners converting permitted hotel and motel rooms into residential units to mitigate impacts to on affordable housing production by either constructing affordable housing units within the development or through a contribution of in -lieu fees; 6) require mitigation of impacts to public access for potential conversions located within the Coastal Zone; and 7) require property owners converting permitted hotel and motel rooms into residential units to enter into a development agreement to ensure implementation of this policy at the project level. Timeframe: Establish policies, regulations and/or interpretations within 24 months of Housing Element Adoption. Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 4J: Airport Environs Sub Area Environmental Constraints As discussed in Section 3 (Analysis of Exacerbating Current Conditions), the Airport Area is potentially exposed to heightened noise and a lower environmental score primarily due to the proximity of John Wayne Airport. The City will take the following actions to address potential environmental constraints in the Airport Environs Sub Area and ensure continued feasibility of sites, particularly for lower -income RHNA: • Require new residential development projects in the Airport Environs Sub Area provide noise studies and acoustical analyses to ensure designs include proper sound attenuation; • Require new residential development projects in the Airport Environs Sub Area to explore advanced air filtration systems for buildings to promote cleaner air; • Encourage on -site indoor amenities, such as fitness facilities or recreation and entertainment facilities; and • Continue to implement park dedication requirements consistent with the City's Park Dedication ordinance and Land Use Element Policy LU 6.15.13 (Neighborhood Parks — Standards) and Policy LU 6.15.16 (On -Site Recreation and Open Space) to ensure adequate recreational space to ensure at least 8-percent of a project's gross land area (exclusive of existing rights -of -way) of the first phase for any development in each neighborhood or % acre, whichever is greater, is developed as a neighborhood park, unless waived through Density Bonus Law. Section 4: Housing Plan (September 2022 Final Housing Element) 4-34 City of Newport Beach 2021-2029 HOUSING ELEMENT Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 4K. West Newport Mesa Environmental Constraints As discussed in Section 3 (Analysis of Exacerbating Current Conditions), the West Newport Area is possibly exposed to heightened noise and pollutants largely due to a historic concentration of industrial type uses in the area. The City will take the following actions to address environmental constraints and ensure feasibility of sites, particularly for lower -income RHNA, in the West Newport Mesa Area: • Continue to coordinate with the South Coast Air Quality Management District (SCAQMD) and other responsible regulatory agencies to monitor compliance of industrial operators on an as - needed basis if any issues are identified; • Closely examine new light industrial uses that may locate in the area to avoid and mitigate potential environmental impacts to ensure the use/activity is compatible with nearby residential uses; • Provide a Code Enforcement Division response when complaints are made and track the nature of the complaints; review for trends or patterns that may require stronger enforcement actions to abate identified nuisances; • Require implementation of the West Newport Mesa Streetscape Master Plan for new private development projects and consider including improvement projects in the City's Capital Improvements Program (CIP); • Consider including residential -serving commercial as part of a zoning overlay (or similar rezoning mechanism) to support the future residents and to allow zoning flexibility beyond the underlying industrial zoning limits as part of the overall rezoning program within 36 months of Housing Element adoption; and • Pursue the siting and development of a community center to serve the West Newport area. If a potential site is identified, the Community Development Department will research the feasibility from a land use and entitlement perspective and will present findings during at least one study session with the City Council. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Policy Action 4L: Coyote Canyon Environmental Constraints As noted, the Coyote Canyon property is locates on a closed landfill or is proximate to the landfill. The bulk of conceptual residential development is sited away from former landfill areas; however, the City understands the importance of ensuring the health and safety of future residents and the surrounding neighborhood. The City will take the following actions to address environmental constraints on the Coyote Canyon landfill site: Section 4: Housing Plan (September 2022 Final Housing Element) 4-35 City of Newport Beach 2021-2029 HOUSING ELEMENT • During the Coyote Canyon project design and entitlement phase, work closely with developer(s) and property owner(s) to ensure all residential units and construction comply with the proper building and safety code requirements (e.g., ensure seismic standards are met, provide appropriately designed landfill gas mitigation); and • Implement the requirements of California Environmental Quality Act and other applicable environmental regulations. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Housing Goal #5 Preservation of the City's housing stock for extremely low-, very low-, low-, and moderate -income households. Housing Policy 5.1: Continue or undertake the following programs to mitigate potential loss of "at risk" units due to conversion to market -rate units. These efforts utilize existing City and local resources. They include efforts to secure additional resources from public and private sectors should they become available. Housing Policy 5.2: Improve energy efficiency of all housing unit types (including mobile homes). Implementation Actions Policy Action 5A: Preservation of Affordability Covenants The City will contact owners of 19 affordable units approaching the expiration of affordability covenants to obtain information regarding their plans for continuing affordability on their properties, inform them of financial resources available, and to encourage the extension of the affordability agreements for the developments listed beyond the years noted. The City will conduct an annual compliance monitoring program and a contact list shall be maintained on City website and updated annually during the 61h Cycle. Timeframe: Ongoing, as necessary Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 5B: Section 8 Participation The City shall maintain information on the City's website and prepare written communication for tenants and other interested parties about Orange County Housing Authority Section 8 opportunities and to assist tenants and prospective tenants acquire additional understanding of housing law and related policy issues. The City will attend quarterly OCHA (Cities Advisory Committee) that provide updates on OCHA Section 8 waiting list and housing opportunities to ensure information provided on City website is up to date. If Section 4: Housing Plan (September 2022 Final Housing Element) 4-36 City of Newport Beach 2021-2029 HOUSING ELEMENT Section 8 waiting list is opened, promote the availability of the program through marketing materials made available to the public. Timeframe: Ongoing, Annual Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 5C: Incentivize for Preserving of Affordability Covenants The City will investigate the potential for providing additional incentives or modify its current policy to incentivize property owners to maintain the affordability of units on their property during the 6th Cycle. Timeframe: Investigate and adopt incentives, as appropriate, within 24 months of Housing Element Adoption Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 5D: Mobile Home Park Conversions The City will continue to employ the provisions of NBMC Title 20 provision of the Mobile Home Park Overlay to maintain and protect mobile home parks in a stable environment with a desirable residential character. The City will review the existing provisions of the Mobile Home Park Overlay for consistency with State law in accordance with Government Code Section 65863.7. The City will continue to implement program as projects are submitted to the City. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 5E: Orange County Housing Authority Advisory Committee The City of Newport Beach will continue to participate as a member of the Orange County Housing Authority (OCHA) Advisory Committee and work in cooperation with the OCHA to provide Section 8 Rental Housing Assistance to residents of the community. The City will continue to attend quarterly OCHA (Cities Advisory Committee). Continue to maintain information on City's website informing landlords of the program benefits of accepting Section 8 Certificate holders. The City will, in cooperation with the Housing Authority, recommend and request use of modified fair - market rent limits to increase the number of housing units within the City that will be eligible to participate in the Section 8 program. The Newport Beach Planning Division will prepare and implement a publicity program to educate and encourage landlords within the City to rent their units to Section 8 Certificate holders, and to make very low-income households aware of availability of the Section 8 Rental Housing Assistance Program. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Section 4: Housing Plan (September 2022 Final Housing Element) 4-37 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action 5F: Water Efficiency for Residential Projects The City will continue to implement and enforce the Water Efficient Landscape Ordinance and Landscape and Irrigation Design Standards in compliance with AB 1881 (Chapter 559 Statutes 2006). The ordinance establishes standards for planning, designing, installing, and maintaining and managing water -efficient landscapes in new construction and rehabilitated projects. The City will continue to implement such program as housing projects are submitted to the City. The City will also encourage the retrofit of existing residential developments to install water efficient appliances and fixtures. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 5G: Energy Efficiency in Residential Projects The City of Newport Beach will continue to require that any affordable housing developments that receive City assistance from Community Development Block Grant (CDBG) funds or from the City's Affordable Housing Fund shall be required, to the extent feasible, to include installation of energy efficient appliances and devices that will contribute to reduced housing costs for future occupants of the units. The City will continue to implement program as housing projects are awarded funds from the City in the 6th Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund & Community Development Block Grant (CDBG) funds Housing Goal #6 Housing opportunities for special needs populations. Housing Policy 6.1: Encourage approval of housing opportunities for senior citizens and other special needs populations. Implementation Actionz. Policy Action 6A: Homeless Program Assistance In the 5th Cycle, the City was successful in providing funding to local organizations for providing shelter and services to the individuals experiencing homelessness. The City will continue to apply annually for United States Department of Urban Development Community Development Block Grant (CDBG) funds and allocate a portion of such funds to sub -recipients who provide shelter and other services for the homeless as well as submit Annual Action Plan to HUD in May of each year. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Section 4: Housing Plan (September 2022 Final Housing Element) 4-38 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action 6B: Repair Loans and Grant Programs for Seniors, Persons with Physical and Developmental Disabilities and Lower -Income Households The City, in partnership with OASIS Senior Center and Habitat for Humanity Orange County, has developed a Senior Home Repair Assistance Program (SHARP) that is aimed at assisting low-income seniors in need of critical home repair or modifications due to accessibility needs, safety concerns, health and well-being. The program is available to homeowners aged 60 and older who fall within the 50t" percentile of the Orange County median -income. Additionally, the City will continue to cooperate with the Orange County Housing Authority to pursue establishment of a Senior/Disabled or Limited Income Repair Loan and Grant Program to underwrite all or part of the cost of necessary housing modifications and repairs. Cooperation with the Orange County Housing Authority will include continuing City of Newport Beach participation in the Orange County Continuum of Care and continuing to provide CDBG funding. The City will continue to attend quarterly OCHA (Cities Advisory Committee) meetings to keep up to date on rehabilitation programs offered by the County in order to continuously inform homeowners and rental property owners within the City of opportunities and to encourage preservation of existing housing stock. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 6C: Leverage CDGB and other Federal Formula Grant Funding The City receives annual allocation of CDBG and other Federal formula grant funds for use in a variety of housing -related activities. The City shall make every effort to leverage these annual funds from various agencies to further the City's housing goals. These may include, but are not limited to, the following State, Regional and private resources: State Resources • State Low -Income Housing Tax Credit Program • Building Equity and Growth in Neighborhoods Program (BEGIN) • CalHome Program • Multifamily Housing Program (MHP) • Housing Related Parks Grant • CalHFA Single and Multi -Family Program • Mental Health Service Act (MHSA) Funding Regional Resources • Orange County Housing & Finance Agency (OCHFA) Funding • Southern California Home Financing Authority (SCHFA) Funding • Orange County Continuum of Care Program • Orange County Housing Authority (OCHA) Programs Private Resources • Federal Home Loan Bank Affordable Housing Program (AHP) Section 4: Housing Plan (September 2022 Final Housing Element) 4-39 City of Newport Beach 2021-2029 HOUSING ELEMENT • Community Reinvestment Act Programs • United Way Funding • Private Contributions • Public -Private Partnerships In addition, the City of Newport Beach will continue to maintain a list of "Public and Private Resources Available for Housing and Community Development Activities" and maintain a list of resources on City website and update as necessary in the 61h Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 6D: Child Daycare Facilities The City will continue to encourage the development of daycare centers as a component of new affordable housing developments and grant additional incentives in conjunction with the review and approval of density bonus projects pursuant to NBMC Chapter 20.32 (Density Bonus). Timeframe: Modify Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 6E: Housing Assistance for Seniors The City of Newport Beach was successful in assisting the funding of senior housing services through the 5th Cycle. The City shall continue to encourage senior citizen independence through the promotion of housing and services related to in -home care, meal programs, and counseling, and maintain a senior center that affords seniors opportunities to live healthy, active, and productive lives in the City. The City will encourage and approve senior housing developments if there is a market demand provided the projects include appropriate support services including transportation. Projects that provide housing and services for low- and moderate -income seniors shall take precedence over market -rate senior housing. The City will continue to provide social services, support groups, health screenings, fitness classes, and educational services at the City's OASIS Senior Center or other facilities and offer affordable ride -share transportation and meal services to seniors who are unable to drive and/or prepare their own meals or dine out and have little assistance in obtaining adequate meals during the 6th Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 6F. Emergency Shelters, Transitional and Supportive Housing To comply with State law, the City of Newport Beach will amend certain sections of its Municipal Code to address the following requirements: Section 4: Housing Plan (September 2022 Final Housing Element) 4-40 City of Newport Beach 2021-2029 HOUSING ELEMENT • Supportive Housing Streamlined Approvals (AB 2162) - To comply with AB 2162 (Chapter 753, Statues 2018), the City of Newport Beach will amend its Municipal Code to permit supportive housing as a use permitted by right in all zones where multiple family and mixed -use development is permitted. • Emergency and Transitional Housing Act of 2019 (AB 139) — The City will update its Municipal Code to comply with the requirements of Gov Code 65583 to address permit requirements, objective standards, analysis of annual and season needs, and parking and other applicable standards and provisions. • Amend the City of Newport Beach Municipal Code to comply with the definitions for "Supportive Housing," Supportive Services," "Target Population" consistent with applicable sections of the California Government Code. • Amend the Newport Beach Municipal Code to ensure Emergency Shelters, Transitional and Supportive Housing are permitted in appropriate zones, consistent with State law. Timeframe: Adopt Code Amendments within the first year of the planning period. Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 6G: Senior Housing Priority Program The City has an aging population that will require affordable housing options for its existing and future retirement age population. The City seeks to develop explore the feasibility and appropriateness of proactive policies and programs to address and prioritize the needs of its senior population. The City will strategically collaborate with the local senior community and organizations providing senior services to evaluate existing programs, policies, procedures and funding priorities. Upon completion of this initial assessment and determination if there are feasible and practical approaches, the City will develop a comprehensive prioritization program for Senior Housing. The prioritization program will establish the specific methodologies for priority ranking, criteria, scoring and related new policies, programs, regulations and incentives as appropriate. Timeframe: Study and evaluate existing policies within 24 months of Housing Element adoption. Establish formal policies, programs and regulations within 36 months of Housing Element adoption If deemed practical and feasible during initial study. Responsible Agency: City of Newport Beach Community Development Funding Source: General Fund Housing Goal #7 Equal housing opportunities in the City for all people. Housing Policy 7.1: Support fair and equal housing opportunities, and environmental justice considerations for all housing opportunities in the City. Section 4: Housing Plan (September 2022 Final Housing Element) 4-41 City of Newport Beach 2021-2029 HOUSING ELEMENT Implementation Actions Policy Action 7A: Supportive Housing / Low Barrier Navigation Centers State law has been updated to require approval 'by right' of supportive housing with up to 50 units and low barrier navigation centers that meet the requirements of State law. Low barrier navigation centers are generally defined as service -enriched shelters focused on the transition of persons into permanent housing. Low barrier navigation centers provide temporary living facilities will persons experiencing homelessness to income, public benefits, health services, shelter, and housing. To comply with State law, the City of Newport Beach will adopt policies, procedures, and regulations for processing this type of use to establish a non -discretionary local permit approval process that must be provided to accommodate supportive housing and lower barrier navigation centers per State law. In the interim, any submitted application for this use type will be processed in accordance with State law. The City will provide for annual monitoring of the effectiveness and appropriateness of existing adopted policies. Should any amendments be warranted to existing policies pursuant to State law, the City will modify its existing policies, as appropriate. Timeframe: Adopt Code Amendments within first year of the planning period. Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 7B: Transitional and Supportive Housing In compliance with Senate Bill 2 (Chapter 364, Statutes 2017) and SB 745 Chapter 185, Statutes 2013 ) the City will ensure the Zoning Code is amended to encourage and facilitates emergency shelters and limits the denial of emergency shelters and transitional and supportive housing under the Housing Accountability Act. This Program would permit transitional and supportive housing by -right in all zones allowing residential uses, subject onlyto those regulations that apply to other residential uses of the same type in the same zone. In addition, the Zoning Code will be amended to define "supportive housing," "target population" and "transitional housing" pursuant to state law. The City will continue to monitor the inventory of sites appropriate to accommodate transitional and supportive housing and will work with the appropriate organizations to ensure the needs of homeless and extremely low-income residents are met. The City is committed to prioritizing funding and other available incentives for projects that provide housing for homeless and extremely low-income residents whenever possible. Timeframe: Adopt Code Amendments within 12 months of Housing Element adoption within the first year of the planning period. Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 7C: Housing for Persons with Developmental Disabilities The housing needs of persons with developmental disabilities are typically not fully addressed by local zoning regulations. Persons with disabilities may require, in addition to basic affordability, slight modifications to existing units, and in some instances, a varying range of supportive housing facilities. To Section 4: Housing Plan (September 2022 Final Housing Element) 4-42 City of Newport Beach 2021-2029 HOUSING ELEMENT accommodate residents with developmental disabilities, the City will review and prioritize housing construction and rehabilitation including supportive services targeted for persons with developmental disabilities. Newport Beach will also explore the granting of regulatory incentives, such as expedited permit processing, and fee waivers and deferrals, to projects targeted for persons with developmental disabilities. To further facilitate the development of units to accommodate persons with developmental disabilities, the City will encourage development of projects targeted for special needs groups. As housing is developed or identified, Newport Beach will collaborate with the Regional Center of Orange County (RCOC) to implement an outreach program informing families within the City of housing and services available for persons with developmental disabilities. The City will provide information at City Hall and on the City's website. Timeframe: Adopt Code Amendments within 24 months of Housing Element adoption Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 7D: Fair Housing Services The City was successful in reaching out to the community about fair housing services during the 51h Cycle. The City of Newport Beach will continue to contract with an appropriate fair housing service agency for the provision of fair housing services for Newport Beach residents. The City will also work with the fair housing service agency to assist with the periodic update of the Analysis of Impediments to Fair Housing document required by HUD. The City will continue to provide a minimum of two public outreach and educational workshops a year, and distribute pamphlets containing information related to fair housing in the 6th Cycle. Timeframe: Ongoing Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Housing Goal #8 Effective and responsive housing programs and policies. Housing Policy 8.1: Review the Housing Element on a regular basis to determine appropriateness of goals, policies, programs, and progress of Housing Element implementation. Implementation Actions Policy Action 8A: Annual Reporting Program The City of Newport Beach shall report on the status of all housing programs as part of its annual General Plan Review and Annual Progress Report (APR). The Annual Progress Report discusses Housing Programs and is submitted to the California Department of Housing and Community Development in accordance with California state law. The City will continue to annually report its efforts within the annual General Plan Status Report including Housing Element Report provided to OPR and HCD by April 1st each year. Section 4: Housing Plan (September 2022 Final Housing Element) 4-43 City of Newport Beach 2021-2029 HOUSING ELEMENT .-1 Timeframe: Ongoing, Annual Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund Policy Action 8B: Water and Sewer Service Providers Pursuant to SB 1087, Chapter 727, Statues of 2005, the City of Newport Beach is required to deliver its adopted housing element and any amendments thereto to local water and sewer service providers. This legislation allows for coordination between the City and water and sewer providers when considering approval of new residential projects, to ensure that the providers have an opportunity to provide input on the Element. Additionally, review of the Housing Element ensures that priority for water and sewer services is granted to projects that include units affordable to lower -income households. The City will submit the adopted 61h Cycle Housing Element to local water and sewer providers for their review and input. Timeframe: Transmit document immediately upon adoption of future amendment Responsible Agency: City of Newport Beach Community Development Funding Sources: General Fund +ummary of Quantified Objectives The 2021-2029 Regional Housing Needs Assessment (RHNA) determined the City of Newport Beach had a construction need for 4,845 residential units between October 15, 2021 and October 15, 2029. The forecasted need by income group includes: • Very Low -Income (0-50% County MR); • Low -Income (51-80% County MFI); • Moderate -Income (81-120% County MFI); and, • Above Moderate -Income (>120% County MR) Additionally, the City has goals to rehabilitate and preserve its existing inventory of housing units. As required by State housing law, quantified objectives by income group for the 2021-2029 planning period are summarized in this section. The quantified objectives represent the target number of housing units that the City anticipates will be constructed, rehabilitated, or preserved over the 2021-2029 planning period. Section 4: Housing Plan (September 2022 Final Housing Element) 4-44 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 4-1: Quantified Objective Summary Quantified Objective Extremely Low Very Low Low Moderate Above Moderate Housing Production Accessory Dwelling Units 163 72 5 RHNA Sites 1,456 930 1,050 1,409 Rehabilitation 5 5 10 284 00 Preservation 95 77 86 10 00 Source: City of Newport Beach Section 4: Housing Plan (September 2022 Final Housing Element) 4-45 City of Newport Beach 2021-2029 HOUSING ELEMENT The following chart is a review of the City's housing project and program performance in the 2014-2021 Planning cycle. It is an evaluation of the 51h cycle's Policy Program and considers all current and existing programs and projects as well as the most current accomplishments and effectiveness and appropriateness. Policy Action Objective Program Accomplishments Status for Sixth Cycle Policy 1.1 Support all reasonable efforts to preserve, maintain, and improve availability and quality of existing housing and residential neighborhoods, and ensure full utilization of existing City housing resources for as long into the future as physically and economically feasible. 1.1.1 Prepare quarterly report The building inspectors and code enforcement Ongoing Improve housing quality and on code enforcement officers continually enforce code regulations, In accordance with State Law, the prevent deterioration of existing activities abatement violations, and nuisances. City will continue to enforce neighborhoods by strictly enforcing The City conducts quarterly reports on code Building Code regulations and Building Code regulations and enforcement activities and keeps them on file at City address violations and nuisances. abating Code violations and Hall. nuisances. • In 2020, the City Council awarded funding for the Senior Home Assistance Repair Program. 1.1.2 Through Code On April 29, 2015, the City published Request for Ongoing Investigate the use of federal funds Enforcement notifications Proposal (RFP) No. 15-55 for use of the City's During the 51h Cycle Planning and local funds, including and correction activities, Affordable Housing Fund toward affordable housing Period, the City was successful in Community Development Block attempt to identify development or programming. Three projects providing additional funding to 3 Grants (CDBG) and the Affordable property owners in need of received approval of the funding from City Council on projects that resulted in new Housing Fund, to provide technical financial assistance and November 24, 2015: affordable housing units for low - and/or financial assistance, if overall resource allocation income seniors and veterans and in necessary, to existing lower- and for a rehabilitation 1. Senior Home Assistance Repair Program the rehabilitation of residences moderate -income, owner program. Attend quarterly SHARP - An agreement with Habitat for belonging to lower income seniors. Humanity Orange County (Habitat OC) granted occupants of residential properties OCHA (Cities Advisory up to $600,000 for critical home repair for low - The City will continue to seek through low -interest loans or Committee) meetings to funding opportunities from federal income seniors. The total the City has used the emergency grants to rehabilitate keep up to date on program to date is $243,466 for a total of 11 and local funds for lower- and and encourage the preservation of rehabilitation programs moderate -income households. This existing housing stock. offered by the County and projects. will continue assisting seniors and o In 2020, the program worked on 2 projects investigate the availability and expended a total of $9,222.11. Projects lower income households in Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-1 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle of federal funds in February included home weatherization, roof repair maintaining their homes and of each year, when new and accessibility modifications. The total incentivizes developers to create funding opportunities are we have used in the program to date is affordable housing for the typically announced. $228,023 for a total of 11 projects. community. 0 In 2019, the City worked on 2 projects and expended a total of $30,682. Projects included home weatherization, roof repair and accessibility modifications. 0 In 2018, there was $194,000 spent with 8 projects completed and 1 in the process at the end of the year. These projects include repairing and weatherizing roofing, bringing landscaping up to code, repairing stairs and railings, and replacing furnaces and windows. 0 In 2017, the first project was completed in West Newport in March 2017. The second project was completed in Corona del Mar in October 2017. The third and fourth projects were close to completion in Bayview and Santa Ana Heights in December 2017. Additionally, there were 3 projects in the application process in 2017 in West Newport Mesa, Bayside Village, and Peninsula Point. 0 In 2016, the first project was funded and underway in West Newport in December 2016 to repair the following: siding, roof, paint, chimney, faucets, outlets, smoke and carbon monoxide detectors. Anticipated completion is early 2017. The second project was in the initial inspection phases at a Santa Ana Heights residence for exterior clean-up items to address code Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-2 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle enforcement issues such as landscape, garage door, paint and a broken window 2. An agreement with Community Development Partners granting $1,975,000 to assist with the acquisition, rehabilitation and conversion of an existing 12-unit apartment building located at 6001 Coast Boulevard for affordable housing — 6 for low-income veterans and 6 with a priority for low-income seniors and veterans (The Cove, formally known as the Newport Veterans Project). In June 2017, the project closed on construction financing. Building permits were issued and construction began in July 2017. The lease -up of the units were completed in 2018. 3. Seaview Lutheran Plaza Protect — Seaview Lutheran Plaza was awarded $1.6 million to assist with the rehabilitation of an existing 100- unit apartment building that is affordable to low- income seniors located at 2800 Pacific View Drive. On July 26, 2016, the City and Seaview Lutheran entered into an affordable housing grant agreement for $800,000 of the award for upgrades to existing bathrooms. The design and permits were approved late 2016 and construction was underway throughout 2017. By spring 2018 all 100 units were complete. The grant agreement extended the affordability requirement through 2069. Subsequent to the grant, Seaview Lutheran decided to not pursue the remaining $800,000 for a loan 3 PROGRAM STATUS agreement. Therefore, this money remains in the City's affordable housing account. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-3 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle 1.1.3 Use Chapter 20.34 On October 29, 2019, the Community Development Removed Require replacement of housing "Conversion or Demolition Director determined that Newport Beach Municipal This policy action is no longer being demolished within the Coastal Zone of Affordable Housing" to Code (NBMC) Chapters 20.34 and 21.34 (Conversion considered at this time. The City is when housing is or has been implement Program of Demolition of Affordable Housing) are no longer continuing to look for ways to occupied by very low—, low-, and continuously as projects required. These chapters of the NBMC implement the protect and create affordable moderate -income households are submitted. Mello Act (Government Code Sections 65590 - housing through the 61h Cycle Policy within the preceding 12 months. 65590.1 Low- and Moderate -Income Housing Within Actions and Sites Inventory. The City shall prohibit demolition the Coastal Zone). The regulations require the unless a determination of replacement of housing units lost within the coastal consistency with Government Code zone that are occupied by low- and moderate -income Section 65590 has been made. The households under certain circumstances when specific provisions implementing feasible. Both the NBMC and the Mello Act provide replacement unit requirements are when there is less than 50 acres in aggregate, of contained in Chapter 20.34 of the privately owned, vacant land available for residential Municipal Code. use within the City's coastal zone, and 3 miles therefrom, the replacement requirement is not required. The Planning Division completed a land use inventory in October 2019 to determine if 50 aggregate acres of privately owned, vacant land is available for residential use within the City's coastal zone and within 3 miles inland of the coastal zone. The inventory conducted found less than 50 qualifying acres. 1.1.4 Continuously implement This City report allows the City to verify that its Ongoing The City will continue to implement program as RBR residential buildings meet zoning and building code The City will continue the Residential Building Records applications are submitted requirements, life safety requirements as set forth by implementing the RBR program (RBR) program to reduce and to the City. Promote the the City's Municipal Code and fulfill the State's through the 6`h Planning Cycle. This prevent violations of building and availability of program to requirement that all homes have both smoke allows the City to track the sale of zoning ordinances by providing a the public and local real detectors and seismic strapping of water heaters properties, ensure the home meets report to all parties involved in a estate professionals by (California Health and Safety Code, Section 19211). Code regulations for life and safety transaction of sale of residential maintaining information on • In 2020, there were 1,629 RBRs processed. purposes, and provide new properties and providing an website and developing homeowners with detailed opportunity to inspect properties to brochure and other • In 2019, there were 1,405 RBRs processed. information on the permitting identify potentially hazardous promotional materials. • In 2018, there were 1,059 RBRs processed. history of their property. conditions, resources permitting. • In 2017, there were 1,547 RBRs processed. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-4 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle The report provides information as • In 2016, there were 1,447 RBRs processed. to permitted and illegal • In 2015, there were 1,432 RBRs processed. uses/construction, and verification • In 2014, there were 1,392 RBRs processed. that buildings meet zoning and building requirements, including life safety requirements. Policy 2.1 Encourage preservation of existing and provision of new housing affordable to extremely low-, very low-, low-, and moderate -income households. 2.1.1 Complete a vacancy rate A vacancy rate survey is completed upon receiving an Modified. This program was Maintain rental opportunities by survey upon submittal of application for the conversion of 15 or more rental ongoing during the 5tn cycle; restricting conversions of rental condominium conversion units to condominiums. Between 2014 and 2020 no however, no projects of this nature units to condominiums in a application of 15 or more project of 15 or more units were submitted. were submitted. The program is development containing 15 or more units. important in retaining the City's units unless the vacancy rate in existing rental housing and will be Newport Beach for rental housing is continued in the 6t" cycle with an average of 5 percent or higher for appropriate modifications. 4 consecutive quarters, and unless the property owner complies with condominium conversion regulations contained in Chapter 19.64 of the Newport Beach Municipal Code. 2.1.2 Continuously implement Pending applications that include affordable housing Ongoing Take all feasible actions, through program as affordable will be expedited. The City will continue to promote use of development agreements, housing projects are the development of affordable expedited development review, and submitted to the City. 2020: Newport Airport Village housing by expediting the expedited processing of grading, • 2020: Residences at 4040 Von Karmen 2019: 4 development process. The building and other development very low-income applications submitted (1 ADU Regional Housing Needs Allocation permits, to ensure expedient and 3 multi -unit). (RHNA) requires the City to add construction and occupancy for • 2018: 3 very low-income applications submitted 2,381 lower income homes and projects approved with lower- and (3 ADUs). 1,048 moderate income homes; moderate -income housing this policy action incentivizes the requirements. development of such housing. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-5 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle 2.1.3 Continuously implement The issuance of tax-exempt mortgage revenue bonds Modify Participate with the County of program per project is project driven, and the developer typically applies The City will continue to incentivize Orange in the issuance of tax- submittal as the developer for the bonds. the development of affordable exempt mortgage revenue bonds to applies for these bonds. No applications were received, 2020-2014. housing units; however, the policy facilitate and assist in financing, will be adjusted to include the development and construction of promotion of available bonds to housing affordable to low and the public and developers. moderate -income households. 2.1.4 Complete review by the Annual compliance monitoring has been conducted Ongoing Conduct an annual compliance- last quarter of each year for 2014-2020 and the report for the City's income- The City will continue to maintain monitoring program for units and report within the and rent -restricted units by Priscila Davila & the availability of affordable required to be occupied by very low- annual General Plan Status Associates, Inc. (consultant) found all units in housing units for lower income and low-, and moderate -income Report including Housing compliance. moderate -income households. households. Element Report provided to OPR and HCD by April 1st each year. 2.1.5 Continuously implement In 2018 the building permit fees were waived for the Ongoing Provide entitlement assistance, program as affordable Seaview Lutheran Plaza Project. Planning staff The City, in accordance with recent expedited entitlement processing, housing projects are assisted as a liaison between the applicant and the updates to State Law, will continue and waive application processing submitted to the City. Building Division to assist in resolving Building Code to promote the development of fees for developments in which issues during the plan check process for the Seaview affordable housing by committing 5 percent of units are affordable to Lutheran Plaza Project and assisted with coordinating to taking actions within the 2021- extremely low-income households. plan check and expediting permitting for the 2029 Housing Element to expedite To be eligible for a fee waiver, the Newport Beach Veterans project. the entitlement process. units shall be subject to an affordability covenant for a minimum duration of 30 years. The affordable units provided shall be granted a waiver of park in -lieu fees (if applicable) and traffic fairshare fees. 2.1.6 Continuously implement In 2020, the City released an RFQ for Permeant Ongoing Affordable housing developments program as affordable Supportive Housing consultant to assist the City in The City will continue to prioritize providing units affordable to housing projects are developing a PSH. the creation or conversion of extremely low-income households submitted to the City. See status of Program 1.1.2. housing units for extremely low - shall be given the highest priority for income households. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-6 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle use of Affordable Housing Fund monies. Policy 2.2 Encourage the housing development industry to respond to existing and future housing needs of the community and to the demand for housing as perceived by the industry. 2.2.1 Update brochure as A brochure is maintained and provided on the City Ongoing Maintain a brochure of incentives needed to provide updated website and in the public lobby. The City will continue to promote offered by the City for the information regarding affordable housing to the development of affordable housing incentives including community. The City will continue including fee waivers, expedited updated fees and a in the 6th Cycle planning period to processing, density bonuses, and reference to the most up to pursue methods of outreaching to other incentives. Provide a copy of date Site Analysis and the local development community, this brochure at the Planning Inventory. including non-profit developers, to Counter, the website and also explore partnerships. provide a copy to potential developers. 2.2.2 Continuously implement The City provides financial assistance based on a Ongoing The City shall provide more program as housing project by project analysis, depending on need and The City will continue to provide assistance for projects that provide projects are submitted to overall project merits. assistance, through CDBG funds or a higher number of affordable units the City. the City's Affordable Housing Fund, or a greater level of affordability. At This program was considered in evaluating the for projects that provide a higher least 15 percent of units shall be proposals for the RFP and choosing the projects number of affordable housing affordable when assistance is described in Program 1.1.2. units. provided from Community Development Block Grant (CDBG) funds or the City's Affordable Housing Fund. 2.2.3 Use Zoning Code Chapter See status of Program 1.1.3. Ongoing For new developments proposed in 20.34 "Conversion or The City uses NBMC Chapter 20.34 Conversion or The City will continue to ensure the the Coastal Zone areas of the City, Demolition of Affordable Demolition of Affordable Housing by monitoring number of affordable housing the City shall follow Government Housing" to implement this demolition requests and permits. One applicable options within the City is not Code Section 65590 and Title 20. program continuously as project (PA2018-051) was submitted in 2018 th decreased. The 6 Cycle RHNA All required affordable units shall projects are submitted. requesting the demolition of 4 units; none of the 4 calculations add to the number of have restrictions to maintain their units were found to be occupied by low- or needed affordable housing units, moderate -income households. therefore maintaining the affordability of units does not add Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-7 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle affordability for a minimum of 30 Resulting from Mello Act Compliance for the Echo to the amount the City must years. Beach project approved in 2014, 6 existing studio develop between 2021 and 2029. units at 305 E. Bay Avenue were remodeled and converted to very low and low-income rental units in 2016. The units were available to rent in 2017. 2.2.4 Continuously implement Staff continues to include this affordability restriction Ongoing All required affordable units shall program as housing as a standard condition on all affordable housing The City will continue to maintain a have restrictions to maintain their projects are submitted to projects, unless an otherwise longer affordability 30-year minimum restriction for affordability for a minimum of 30 the City. covenant is agreed upon. affordable housing units to protect years. On February 21, 2019, the 350-unit Newport residents currently residing in such Crossings Mixed -Use Project was approved, which units and, in conjunction with other includes 78 units affordable to low-income policy actions, incentivize the households. 52 units were restricted for a term of 55 development of affordable housing years in compliance with density bonus law and the in the City. remaining 26 non -density bonus units were restricted for a term of 30 years. The Newport Veterans project has an affordability requirement of 50 years and the Seaview Lutheran project will add 30 additional years to their existing requirement, resulting in a new expiration date of 2069. 2.2.5 Continuously implement A brochure has been created and distributed that Ongoing Advise and educate existing program as prospective outlines development incentives and entitlement The City will continue to promote landowners and prospective developers contact City assistance available in the City. The brochure is affordable housing sites to developers of affordable housing seeking development maintained at the public counter in Bay C at the Civic prospective developers. The 61h development opportunities information. Maintain a Center and on the City website. Cycle Housing Element will identify available within the Banning Ranch, designated staff person opportunity sites for housing that Airport Area, Newport Mesa, that can be contacted to should be actively presented to Newport Center, Mariners' Mile, provide housing developers through this policy West Newport Highway, and Balboa opportunity information action. Peninsula areas. and incentives for development of affordable housing. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-8 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle 2.2.6 Attend quarterly OCHA City staff attends Orange County Housing Authority Ongoing Participate in other programs that (Cities Advisory (OCHA) Cities Advisory Committee meetings to keep The City will continue to participate assist production of housing. Committee) meetings to up-to-date with programs that assist in the in OCHA meetings and programs keep up to date on production of housing. that assist in the production of rehabilitation programs housing. This policy action is offered by the County in necessary in order to achieve other order to continuously actions (2.2.1) that inform the inform homeowners and public of funding opportunities and rental property owners programs to further develop the within the City of City's housing stock. opportunities and to encourage preservation of existing housing stock. 2.2.7 Provide a copy of the In 2017, the Newport Crossings Mixed -Use project, a Ongoing New developments that provide Housing Element to water 350-dwelling unit mixed -use development, was The City will continue to incentivize housing for lower -income and sewer service submitted within the Airport Area under the the production of affordable households that help meet regional providers. Pursuant to Residential Overlay of the Newport Place Planned housing units by prioritize the needs shall have priority for the state law, water and sewer Community. The proposed project includes 78 allocation of resources towards provision of available and future providers must grant dwelling units affordable to low-income households. new development that provide resources or services, including priority to developments The Environmental Impact Report (EIR) was certified housing for lower income water and sewer supply and that include housing units households. services. affordable to lower -income and the project was approved by the Planning households which is Commission on February 21, 2019. The EIR concluded implemented continuously that adequate water and sewer capacity exist to as these projects are support the development. The plan check for submitted. construction drawing review was submitted on November 17, 2020, with building permit issuance expected in Summer 2021. 2.2.8 Continuously implement Implemented as projects are submitted. Density Ongoing Implement Chapter 20.32 (Density program as housing bonus information and incentives are included in an In accordance with State Law, the Bonus) of the Zoning Code and projects are submitted to informational brochure available to the public. City will continue to provide educate interested developers the City. In 2017, the Newport Crossings Mixed -Use project, a density bonuses to developments about the benefits of density 350-dwelling unit mixed -use development, was that provide housing to lower - bonuses and related incentives for submitted within the Airport Area under the income households. This action the development of housing that is proved successful during the 5`" Residential Overlay of the Newport Place Planned Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-9 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle affordable to very low-, low-, and Community. In exchange for providing 78 units Planning Cycle as 3 projects applied moderate -income households and affordable to low-income households, the developer for density bonuses that resulted in senior citizens. has requested a density bonus of 91 units (35 percent the creation of 94 affordable bonus), an incentive to allow for flexibility with unit housing units for lower -income mix, and a development waiver of building height. households. The Environmental Impact Report (EIR) was certified and the project was approved by the Planning Commission on February 21, 2019. In December 2019, an application was submitted for a new mixed -use development located at 2510 West Coast Highway that includes the development of 36 dwelling units, 3 of which would be restricted for very low-income households. In exchange for providing the very low-income units, the developer has requested a density bonus of 9 units (35 percent bonus) and development waiver of building height. The project was approved by the Planning Commission in February of 2021 and is pending review by the City Council. In 2020 an application was submitted for Residences at 4400 Von Karman, which included 312 apartments of which 13 very -low income housing units. The project was approved by the City Council in February 2021. Newport Airport Village - A General Plan Amendment, Planned Community Development Plan (PCDP), and a Development Agreement that would allow for the future redevelopment of the 16.46-acre property with up to 444 dwelling units (329 base units and 115 density bonus units) and 297,572 square feet of retail, office, and other airport supporting uses. The project was approved by City Council on September 22, 2020. Residences at 4400 Von Karman - In 2020, the former Koll Center Residences project was actively reviewed under a new project submittal called The Residences Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-10 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle at 4400 Von Karman. The request consists of 637rezoning nonresidential property to mixed -use land uses, including up to 260 residential units plus an allowance for density bonus units up to a total of 312 units (13 Very -Low Income units). On November 5, 2020, the Planning Commission considered the project and recommended approval to the City Council. The City Council approved the project on February 9, 2021, outside the reporting period. Policy 2.3 Approve, wherever feasible and appropriate, mixed residential and commercial use developments that improve the balance between housing and jobs. 2.3.1 Continuously implement In conjunction with the environmental review Ongoing Study housing impacts of proposed program as major required under the California Environmental Quality The City will continue to analyze major commercial/industrial commercial/industrial Act (CEQA), potential impacts to population, housing, the impacts of proposed projects during the development projects are submitted to and employment is reviewed and analyzed. Recent commercial and industrial projects review process. Prior to project the City. development trends have consisted of on housing the City. While no approval, a housing impact redevelopment of commercial and industrial sites for projects were proposed between assessment shall be developed by residential development or mixed -use, which has 2014 and 2019 that triggered the the City with the active involvement created new housing opportunities in the City. requirement for an impact of the developer. Such assessment No major commercial/industrial projects were assessment, the analysis in shall indicate the magnitude of jobs submitted in 2020-2014. coordination with CEQA identifies to be created by the project, where potential effects on housing and housing opportunities are expected the City's ability to reach RHNA to be available, and what measures allocations. (public and private) are requisite, if any, to ensure an adequate supply of housing for the projected labor force of the project and for any restrictions on development due to the "Charter Section 423" initiative. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-11 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle Policy 3 Mitigate potential governmental constraints to housing production and affordability by increasing the City of Newport Beach role in facilitating construction of affordable housing for all income groups. 3.1.1 Continuously implement The City prioritizes the development review process Ongoing Provide a streamlined "fast -track" program as housing for all affordable housing projects. The City has been successful in development review process for projects are submitted to The renovation for the Cove project, the Seaview streamlining projects that add to proposed affordable housing the City. Lutheran rehabilitation and any Senior Home Repair the affordable housing stock of developments. Program rehabilitation projects were provided "fast - Newport Beach. The City will track" plan check. continue to streamline and "fast - track" the development review process of affordable housing to incentivize developers to create affordable housing. 3.1.2 Continuously implement The City considers density bonuses and other Ongoing When a residential developer agrees provisions of Chapter 20.32 incentives on a project -by project basis. Chapter In accordance with State Law, the to construct housing for persons and Density Bonus in the 20.32 (Density Bonus) is included in the Zoning Code City will continue to provide families of very low, low, and Zoning Code as housing and is implemented as projects are submitted. density bonuses to developments moderate income above mandated projects are submitted to As mentioned in Program 2.2.8, the approved that provide housing to lower requirements, the City shall either the City. Newport Crossings Mixed Use project includes 78 income households. (1) grant a density bonus as required units affordable to low-income households, and the by state law, or (2) provide other developer has requested a density bonus of 91 units incentives of equivalent financial (35 percent bonus), an incentive to allow for value. flexibility with unit mix, and a development waiver of building height. Additionally, a 2020 development, Residences at 4400 Von Karman Project includes 312 apartment units (2510 West Coast Highway). Of which, 13 were designated very -low income. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-12 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle 3.1.3 Work with the Affordable Waivers and incentives are considered by the Ongoing Develop a pre -approved list of Housing Task Force to Planning Commission and City Council on a project- The City will continue coordinating incentives and qualifications for develop the list and obtain by -project basis. Staff received information from the with HCD to develop pre -approved such incentives to promote the City Council approval by Department of Housing and Community incentives for developing development of affordable housing. Fall 2014. Development (HCD) on examples of pre -approved affordable housing and review the Such incentives include the waiver incentive programs from the City of Los Angeles and eligibility of projects for fee waivers of application and development fees the City of Anaheim. Staff will continue research with and incentives. or modification to development HCD to develop pre -approved incentives. standards (e.g., setbacks, lot coverage, etc.). As mentioned in Program 2.2.8, the Newport Crossings Mixed -Use project includes 78 units affordable to low-income households, and the developer has requested a density bonus of 91 units (35 percent), an incentive to allow for flexibility with unit mix, and a development waiver of building height. As mentioned in Program 2.2.8, the Newport Crossings Mixed -Use project includes 78 units affordable to low-income households, and the developer has requested a density bonus of 91 units (35 percent bonus), an incentive to allow for flexibility with unit mix, and a development waiver of building height. The plan check for construction drawing review was submitted on November 17, 2020, with building permit issuance expected in Summer 2021. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-13 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle Policy 3.2 Enable construction of new housing units sufficient to meet City quantified goals by identifying adequate sites for their construction. Development of new housing will not be allowed within the John Wayne Airport (JWA) 65 dB CNEL contour, no larger than shown on the 1985 JWA Master Plan. 3.2.1 Continuously implement The City continually monitors requests for zone Ongoing When requested by property program as property changes of vacant and developed properties from The City has been successful in owners, the City shall approve owners bring their requests nonresidential to residential and approves when rezoning properties from rezoning of developed or vacant to the City. determined to be compatible and feasible. When nonresidential to residential uses. property from nonresidential to approved, these sites are mapped for residential uses The 6' Cycle Housing Element residential uses when appropriate. on both the Zoning District Map and General Plan identifies potential sites that could These rezoned properties shall be Land Use Map. be rezoned to permit housing added to the list of sites for Residences at 4400 Von Karman - In 2020, the former developments. The City will residential development. Koll Center Residences project was actively reviewed continue to review rezoning under a new project submittal called The Residences applications when appropriate for at 4400 Von Karman. The request consists of rezoning housing development. nonresidential property to mixed -use land uses, including up to 260 residential units plus an allowance for density bonus units up to a total of 312 units (13 Very -Low Income units). On November 5, 2020, the Planning Commission considered the project and recommended approval to the City Council. The City Council approved the project on February 9, 2021, outside the reporting period. Newport Airport Village - A General Plan Amendment, Planned Community Development Plan (PCDP), and a Development Agreement that would allow for the future redevelopment of the 16.46-acre property with up to 444 dwelling units (329 base units and 115 density bonus units) and 297,572 square feet of retail, office, and other airport supporting uses. The project was approved by City Council on September 22, 2020. Residences at Newport Center - Redevelopment of an underutilized commercial site in Newport Center to develop 28 condominiums. The project was submitted to the City in February 2020 and the Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-14 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle application was deemed complete in December 2020. The City is currently preparing the draft environmental impact report for public distribution in the spring 2021. 2510 West Coast Highway - In December 2019, an application was submitted for a new mixed -use development located at 2510 West Coast Highway that includes the development of 35 dwelling units, 3 of which would be restricted for Very Low -Income households. In exchange for providing the Very Low - Income units, the developer has requested a density bonus of 9 units (35 percent bonus), a development waiver for building height and a waiver regarding the unit mix. The project was approved by the Planning Commission in February 2021, and the decision will be reviewed by the City Council. In 2012, the City adopted an amendment to the North Newport Center Planned Community and approved an additional 79 residential units for construction within North Newport Center. The amendment now allows for the total construction of up to 524 residential units within the San Joaquin Plaza sub -area. On December 12, 2013, plans were submitted for the construction of a 524-unit apartment complex and building permits and demolition permits were issued in November 2014. Construction commenced in late 2014 and was completed in Summer 2017. 3.2.2 Continuously implement The Residential Overlay of the Newport Place Ongoing Recognizing that General Plan Policy program as projects are Planned Community implements this program by Through this policy, the City has LU6.15.6 may result in a potential submitted to the City. providing an exception to the 10-acre site successfully added 734 new units, constraint to the development of requirement for residential development projects in of which 193 are reserved for lower affordable housing in the Airport the Airport Area that include a minimum of 30 incomes. Area, the City shall maintain an percent of the units affordable to lower income exception to the minimum 10-acre households. To overcome constraints to the development of housing, and Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-15 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle site requirement for projects that In 2017, the Newport Crossings Mixed -Use project, a specifically affordable housing, the include a minimum of 30 percent of 350 dwelling unit mixed -use development was City will continue to provide the units affordable to lower- approved within the Airport Area under the exceptions to the minimum 10- income households. It is recognized Residential Overlay. In exchange for providing 78 acre site requirement when 30 that allowing a smaller scale units affordable to low-income households, the percent or more of the units are development within an established project is eligible for the 10-acre site requirement, a proposed to be affordable. commercial and industrial area may 91-unit density bonus, and development incentives result in land use compatibility and waivers. The application included a Site problems and result in a residential Development Review to ensure that the sufficient development that does not provide amenities and neighborhood integration sufficient amenities (i.e., parks) improvements are provided. The project provides and/or necessary improvements extensive on -site recreational amenities, including (i.e., pedestrian walkways). separate pool, entertainment, and lounge courtyards Therefore, it is imperative that the with eating, seating, and barbeque space; a rooftop exception includes provisions for terrace; a fifth -level view deck; a club room for adequate amenities, design entertainment and gatherings; and a fitness facility. considerations for the future In addition, a 0.5-acre public park is proposed to be integration into a larger residential constructed and dedicated to the City, and a public village, and a requirement to ensure plaza is located in front of the retail shops facing the collaboration with future main corner of the project at Corinthian Way and developers in the area. Martingale Way. The plan check for construction drawing review was submitted on November 17, 2020, with building permit issuance expected in Summer 2021. In 2019, the Newport Crossings Mixed -Use project, a 350 dwelling unit mixed -use development was approved within the Airport Area under the Residential Overlay. In exchange for providing 78 units affordable to low-income households, the project is eligible for the 10-acre site requirement, a 91-unit density bonus, and development incentives and waivers. The application included a Site Development Review to ensure that the sufficient amenities and neighborhood integration improvements are provided. The project provides extensive on -site recreational amenities, including Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-16 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle separate pool, entertainment, and lounge courtyards with eating, seating, and barbeque space; a rooftop terrace; a fifth -level view deck; a club room for entertainment and gatherings; and a fitness facility. In addition, a 0.5- acre public park is proposed to be constructed and dedicated to the City, and a public plaza is located in front of the retail shops facing the main corner of the project at Corinthian Way and Martingale Way. 3.2.3 Continuously implement Appendix H3 is the Sites Analysis and Inventory which Ongoing The City will encourage and program as housing identifies sites that can be developed for housing AB 1486 requires that the City facilitate residential and mixed -use projects are submitted to within the planning period and that are sufficient to identify and provide a list of sites development on vacant and the City. Review and provide for the City's share of the regional housing designated in the sites inventory if underdeveloped sites listed in update as necessary the need allocation to provide realistic opportunities for they are owner by the City. Appendix H3 by providing technical Site Analysis and Inventory the provision of housing to all income segments Through the 6th Housing Element assistance to interested developers and provide information to within the community. Appendix H3 can be found in planning Cycle, the City will review with site identification and interested developers. the Housing Element available at the Planning the opportunity sites identified and entitlement processing. The City will Division or online at: continue marketing opportunity support developers funding httP://www.newportbeachca.gov/index.aspx?page= applications from other agencies sites. 2087 and programs. The City will post the The City has completed the following: Sites Analysis and Inventory on the S an S 1. A user-friendly Sites Analysis and Inventory is on wesis City's and marketing the City's website. materials for residential and mixed- 2. A brochure is available on the website and in the use opportunity sites, and it will public lobby that promotes the incentives and equally encourage and market the opportunities for affordable housing projects, sites for both for -sale development which includes information of the City's Sites and rental development. To Analysis and Inventory. encourage the development of 3. A layer and note have been added in the City's affordable housing within Geographic Information System (GIS) to identify residential and mixed -use sites within the inventory to assist staff in developments, the City shall providing information to interested developers. educate developers of the benefits 1. The City will encourage density bonus and offer of density bonuses and related incentives to interested developers. incentives, identify potential funding opportunities, offer Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-17 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle expedited entitlement processing, Effective January 1, 2020, State law (Assembly Bill and offer fee waivers and/or 1486, Statutes of 2019) requires a listing of sites deferrals. owned by the City, that are included in the sites inventory, and that have been sold, leased, or otherwise disposed of in the prior year. The list shall include the entity to whom each site was transferred and their intended use. The City does not own any of the sites listed in the current housing opportunity sites; therefore, no listing of sites is provided. 3.2.4 Annually report staffs The City has significant projects on sites identified as Ongoing The City will monitor and evaluate findings within the annual underutilized: The City has been successful in the development of vacant and General Plan Status Report identifying underutilized sites and underdeveloped parcels on an including Housing Element ' In 20 construction began the development of aiding/facilitating the development annual basis and report the success Report provided to OPR a za Corona del Mar project, 6 detached the Plaza of housing on said properties. of strategies to encourage and HCD by April 1st each residential condominiums units on an identified residential development in its year. vacant site in Corona del Mar. Building permits The City will continue to seek out Annual Progress Reports required were issued in 2017. underutilized sites at the time of pursuant to Government Code • Uptown Newport was approved in February the annual General Plan Status Report or OPR and HCD. 65400. If identified strategies are 2013, for the construction of up to 1,244 not successful in generating residential units, 11,500 square feet of retail development interest, the City will commercial, and 2.05 acres of park space. The respond to market conditions and Uptown Newport Planned Community requires will revise or add additional densities between 30 du/acre and 50 du/acre, incentives. consistent with the densities of the General Plan, and allows additional density opportunities with a density bonus. Construction of the first phase of the project (462 apartment units, including 91 affordable units) began in 2014 and 227 of these units were completed and finalized in 2019. • The Newport Crossings Mixed -Use project is located on a site identified as underutilized. The project was submitted in 2017 and was under review in 2018. The project includes the development of 350 residential apartment units, including 78 units affordable to low-income Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-18 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle households. The Environmental Impact Report (EIR) was certified and the project was approved by the Planning Commission on February 21, 2019. • Residences at 4400 Von Karman - In 2020, the former Koll Center Residences project was actively reviewed under a new project submittal called The Residences at 4400 Von Karman. The request consists of rezoning nonresidential property to mixed -use land uses, including up to 260 residential units plus an allowance for density bonus units up to a total of 312 units (13 Very -Low Income units). On November 5, 2020, the Planning Commission considered the project and recommended approval to the City Council. The City Council approved the project on February 9, 2021, outside the reporting period. • Newport Airport Village - A General Plan Amendment, Planned Community Development Plan (PCDP), and a Development Agreement that would allow for the future redevelopment of the 16.46-acre property with up to 444 dwelling units (329 base units and 115 density bonus units) and 297,572 square feet of retail, office, and other airport supporting uses. The project was approved by City Council on September 22, 2020. • Residences at Newport Center — Redevelopment of an underutilized commercial site in Newport Center to develop 28 condominiums. The project was submitted to the City in February 2020 and the application was deemed complete in December of 2020. The City is currently preparing the draft Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-19 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle environmental impact report for public distribution in the spring of 2021. • Newport Village Mixed Use — Redevelopment of underutilized commercial sites for a new mix - use development including 14 residential condominiums and 108 Apartments on the North and South sides of West Coast Highway. The project was submitted in 2017 and has undergone several design revisions. In 2020, the City reviewed revised plans and continued preparation of the draft environmental impact report. The applicant and consultant prepared multiple technical studies for review. The City anticipates public release of the draft EIR in mid to late 2021. • In December 2019, an application was submitted for a new mixed -use development located at 2510 West Coast Highway that includes the development of 36 dwelling units, 3 of which would be restricted for very low-income households. In exchange for providing the very low-income units, the developer has requested a density bonus of 9 units (35 percent bonus) and development waiver of building height. The project was approved by the in February 2021 and is currently pending City Council review. • The VUE Newport (formally known as Newport Bay Marina) project was identified as an underutilized site. The project was approved by the City in 2007 and the Coastal Commission in 2009 and permitted the development of 27 residential condominium units and 36,000 square feet of commercial floor area. The units were completed and for sale in 2017. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-20 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle • In 2020 an application was submitted for Residences at 4400 Von Karman, which included 312 apartments of which 13 very -low-income housing units. The project was approved by the City Council in February of 2021. Policy 4.1 Continue or undertake the following programs to mitigate potential loss of "at risk" units due to conversion to market -rate units. These efforts utilize existing City and local resources. They include efforts to secure additional resources from public and private sectors should they become available. 4.1.1 Conduct as part of the Staff maintains an updated contact list for affordable Ongoing Annually contact owners of annual compliance units in conjunction with the 2014-2021 Housing The City will continue to annually affordable units for those monitoring program Element. LDM Associates (consultant) included this update its monitoring list of developments listed as part of the required by Program 2.1.4. information that was sent to the owners as a part of affordable housing units and City's annual monitoring of Contact list shall be the annual monitoring. During the RFP process for contact the property owners for affordable housing agreements to provided on City website the expenditure of the affordable housing funds, the details on whether they will obtain information regarding their and updated annually. City and LDM Associates reached out to the owners continue offering affordable units plans for continuing affordability on of the existing affordable housing units within the on their property. This promotes their properties, inform them of City and there was no interest to extend the existing relations between the public, financial resources available, and to affordable housing covenants except from Seaview developers, and the City, as well as encourage the extension of the Lutheran (see Program 1.1.2 for details). forecast the availability of affordability agreements for the affordable housing through the developments listed beyond the City. years noted. 4.1.2 Maintain registration as a The City of Newport Beach is registered as a Qualified Ongoing The City shall maintain registration Qualified Preservation Preservation Entity with HCD as of 2012. When The City has not received as a Qualified Preservation Entity entity with HCD. notification is received, City staff will evaluate the notification between 214 and 2019 with HCD to ensure that the City will Continuously implement potential use of monies to preserve the affordable of developments seeking to receive notices from all owners program as notices are units. convert affordable housing into intending to opt out of their Section received from property market -rate housing. 8 contracts and/or prepay their HUD owners. The City will maintain its insured mortgages. Upon receiving registration as a registered notice that a property owner of an Qualified Preservation Entity to existing affordable housing provide additional funding to development intends to convert the developers who seek to make this units to a market -rate development, the City shall consult with the Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-21 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle property owners and potential change during the 61h planning preservation organizations cycle. regarding the potential use of Community Development Block Grant (CDBG) funds and/or Affordable Housing Fund monies to maintain affordable housing opportunities in those developments listed in Table H12 or assist in the non-profit acquisition of the units to ensure long-term affordability. 4.1.3 Attend quarterly OCHA Pamphlets informing prospective tenants and Ongoing Continue to maintain information (Cities Advisory landlords about the Orange County Housing The City will continue to provide on the City's website and prepare Committee) that provide Authority (OCHA) Section 8 program have been made residents and developers with written communication for tenants updates on OCHA Section 8 available in the public lobby and information is information in the OCHA Section 8 and other interested parties about waiting list and housing posted on the City website. program and attend Cities Advisory Orange County Housing Authority opportunities to ensure Committee meetings to remain up - Section 8 opportunities and to assist information provided on to -date on opportunities relevant tenants and prospective tenants City website is up-to-date. to the City. acquire additional understanding of If Section 8 waiting list is housing law and related policy opened, promote the issues. availability of the program through marketing materials made available to the public. 4.1.4 Investigate availability of The City attends OCHA meetings and has continued Ongoing Investigate availability of federal, programs in February of to investigate available programs and evaluate the The City will continue to seek state, and local programs and each year when new feasibility of participating in such programs. availability of programs for funding pursue these programs, if found funding opportunities are The Cove project worked directly with to CHA of affordable housing and make feasible, for the preservation of typically announced. obtain project -based Veterans Affairs Supportive ppor this information available to the existing lower -income housing, Housing (VASH) vouchers. Orange County is provided public. especially for preservation of lower- VASH vouchers which are distributed to the Cities via income housing that may convert to OCHA. The project was awarded the project based market rates during the next 10 VASH vouchers in 2016. Renovations of the units years. In addition, continually Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-22 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle promote the availability of monies began in 2017 and lease -up of the project -based from the Affordable Housing Fund voucher units was complete in spring 2018. as a funding source for the Additionally, the project received Veterans Housing preservation and rehabilitation of and Homelessness Prevention (VHHP) funding lower -income housing. A list of through the Department of Housing and Community these programs, including sources Development. and funding amounts, will be identified as part of this program and maintained on an ongoing basis. 4.1.5 Conduct as part of the Staff and consultant LDM Associates ("LDM") were Modify The City shall inform and educate annual compliance able to coordinate meetings and phone calls with The policy action was unsuccessful owners of affordable units of the monitoring program property owners of existing units subject to at encouraging property owner to State Preservation Notice Law required by Program 2.1.4. affordable housing covenants or agreements. The maintain the affordable housing on (Government Code Section owners were not interested in extending the existing their property during the 5th Cycle 65863.10-13), if applicable. affordable housing covenants. Staff worked with planning period. Consequently, the Pursuant to the law, owners of LDM to provide a notice to potentially affected policy should be modified to government -assisted projects property owners. incentivize property owner cannot terminate subsidy contract, maintain the affordability of the prepay a federally assisted • 2019 - Newport Harbor I at 1538 Placentia units on their property. mortgage, or discontinue use Avenue is in the process of terminating. Their six - restrictions without first providing month notice was flagged by HCD. The City's new an exclusive Notice of Opportunity Housing Consultant. Priscila Davila &Associates, to Submit an Offer to Purchase. Inc. and City staff worked to resolve the issue Owners proposing to sell or with HCD, without requiring the notices to be otherwise dispose of a property at resent. The final termination document was any time during the 5 years prior to under review by City Attorney and is anticipated the expiration of restrictions must to be complete by March 2021. provide this Notice at least 12 • 2018 - LDM discovered that 1 of the expiring months in advance unless such sale affordable housing covenants did not provide or disposition would result in the state law required noticing to their tenants. preserving the restrictions. The In May 2017, LDM notified the owner and intent of the law is to give tenants management of 1544 Placentia Avenue and as a sufficient time to understand and result, the expiration date of the affordability prepare for potential rent increases, covenant was extended into 2018 to meet state as well as to provide local law noticing requirements. In 2018 the following governments and potential covenants for affordable housing expired and Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-23 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle preservation buyers with an staff was unable to reach an agreement to opportunity to develop a plan to extend the affordability agreements: preserve the property. This plan o 849 West 15th Street - 15 units typically consists of convincing the 0 1544 Placentia — 25 units owner to either (a) retain the rental o 843 West 15th Street — 65 units restrictions in exchange for additional financial incentives or (b) sell to a preservation buyer at fair market value. 4.1.6 Continuously implement Zoning Code Section 20.28.020 ensures compliance Ongoing In accordance with Government program as projects are with the Government Code Section. The City will continue to require a Code Section 65863.7, require a submitted to the City. One relocation impact report was submitted in relocation impact report as a relocation impact report as a September 2014 for the closure of the Ebb Tide prerequisite when an existing prerequisite for the closure or Mobile Home Park and City Council found it sufficient mobile home park seeks to close or conversion of an existing mobile pursuant to Government Code Section 65863.7 in convert. home park. January 2015. 4.1.7 Attend quarterly OCHA Staff attends the quarterly meetings of the OCHA Ongoing Participate as a member of the (Cities Advisory Cities Advisory Committee. The City will continue to work with Orange County Housing Authority Committee). Continue to the OCHA to provide Section 8 (OCHA) Advisory Committee and maintain information on Staff continually works in cooperation with the rental housing assistance to County to provide Section 8 rental housing assistance work in cooperation with the OCHA City's website informing to residents. residents and impose fair -market to provide Section 8 Rental Housing landlords of the program rent limits to increase the number Assistance to residents of the benefits of accepting A link to the Orange County Housing Authority of units eligible to participate in the community. The City will, in Section 8 Certificate holders. website has been placed on the City website to program. cooperation with the Housing provide information on the Section 8 program. The City will also continue to Authority, recommend and request City staff worked closely with OCHA staff to facilitate promote the availability of Section use of modified fair -market rent the award of the Veterans Affairs Supportive Housing 8 housing to lower -income limits to increase the number of (VASH) Vouchers to the Cove project (see Program households who may benefit from housing units within the City that 4.1.4). the aid. This allows the City to will be eligible to participate in the expand its income distribution and Section 8 program. The Newport retain affordable housing units. Beach Planning Division will prepare and implement a publicity program to educate and encourage landlords within the City to rent their units to Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-24 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle Section 8 Certificate holders, and to make very low-income households aware of availability of the Section 8 Rental Housing Assistance Program. Policy 4.2 Improve energy efficiency of all housing unit types (including mobile homes). 4.2.1 Continuously implement The City continued to investigate available programs Ongoing Implement and enforce the Water program as housing and evaluate the feasibility of participating in such The City will continue to implement Efficient Landscape Ordinance and projects are submitted to programs. and enforce the Water Efficient Landscape and Irrigation Design the City. All new development projects are reviewed for Landscape Ordinance and Standards in compliance with AB compliance with the City's Water Efficient Landscape Landscape and Irrigation Design 1881 (2006). The ordinance Ordinance. Standards for new construction establishes standards for planning, • The annual report on the City's Water Efficient and rehabilitation projects. Such designing, installing, and Landscape Ordinance for 2019 was submitted to landscaping limits the additional maintaining and managing water- California Department of Water Resources on cost (such as the cost of water and efficient landscapes in new maintenance) for both residents construction and rehabilitated January 31, 2020. and property owners. projects. • In 2019, all new development projects were reviewed for compliance with the City's Water Efficient Landscape Ordinance. • The Cove project incorporates water -efficient landscaping. 4.2.2 Continuously implement Implement as projects are submitted. Ongoing Affordable housing developments program as housing • 2019-2020 - As part of the SHARP program, City will continue to require that receive City assistance from projects are awarded funds energy efficiency is a priority with upgraded energy efficient appliances and energy Community Development Block from the City. devices to lower housing costs for Grant (CDBG) funds or from the sinks, water heaters, weather-proof windows affordable housing developments City's Affordable Housing Fund shall and new water efficient toilets. that receive CDBG funds. be required, to the extent feasible, • 2018-2015 - The Cove project and the Seaview include installation of energy Lutheran project incorporated the use of energy efficient appliances and devices, and efficient appliances and lighting. water conserving fixtures that will contribute to reduced housing costs for future occupants of the units. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-25 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle 4.2.3 Complete investigation by Continuously monitor requests for assistance and Completed Investigate the feasibility and Fall of 2014. Code Enforcement quarterly reports to determine The City completed the benefits of using a portion of its need. investigation by fall 2014. CDBG or other local funds for the establishment and implementation of an energy conserving home improvements program for lower - income homeowners. 4.2.4 Continually implement In 2020-2014, the City staff included 1 Leadership in Ongoing Maintain a process for LEED program as projects are Energy and Environmental Design (LEED) accredited The City will continue to provide certified staff members to provide submitted to the City. staff member who was available to provide technical technical assistance on LEED development assistance to project assistance when requested. certification. proponents seeking LEED certification, which will in turn increase the LEED points granted to projects. 4.2.5 Enhance City website to Staff will work on construction of a new webpage Modified To encourage voluntary green provide recognition of that will provide recognition to LEED certified The City was not able to complete building action, the City shall exceptional developments buildings by displaying their project with pictures and the website and information flyer maintain a green recognition and to promote the their name or other information they would want on LEED Certification during the 5th program that may include public sustainable construction by advertised. An informational flyer is also being Housing Cycle, therefore the recognition of LEED certified Spring of 2014. drafted to encourage green building that will program remains ongoing in order buildings (or equivalent advertise the new webpage and will be provided in to provide the public and certification), payment of a display the public lobby. developers information on the advertisement in the local benefits of creating LEED Certified newspaper recognizing the buildings and housing achievements of a project or developments. developing a City plaque that will be granted to exceptional developments. Policy 5.1 Encourage approval of housing opportunities for senior citizens and other special needs populations. 5.1.1 Continue to annually apply Through the approved Action Plans for Fiscal Years Ongoing Apply for United States Department for CDBG funds and submit 2014-20, the City allocated funding to the following The City has been successful in of Urban Development Community Annual Action Plan to HUD organizations to preserve the supply of emergency providing funding to local Development Block Grant (CDBG) in May of each year. and transitional housing: Human Options, Families organizations for providing shelter Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-26 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle funds and allocate a portion of such Forward, StandUp for Kids Orange County, Serving and services the individuals funds to subrecipients who provide People in Need (SPIN), Second Chance Orange experiencing homelessness. shelter and other services for the County, and Fair Housing Foundation. Considering the increased homeless. A new program - Newport Beach: City Motel Voucher importance of such help during the 51h Planning Cycle, the City will Program, was funded in 2020 through the Newport Beach Police Department (PD). The room key continue to apply for CDBG funds program allows PD to provide short-term (1 — 3 nights with the purpose of funding on average) motel rooms to individuals experiencing homeless services. homelessness in Newport Beach. Additional CDBG monies have been allocated to the City from Federal funds under the CARES Act, approximately $741,000, and will likely have a portion allocated to homeless transitional housing projects. An amendment to the Action Plan, to program these additional funds is anticipated to go to Council for consideration in early 2021. On November 24, 2020, the City Council approved the Memorandum of Understanding between the Cities of Costa Mesa and Newport Beach for the funding, development and Shared Use of a Temporary Homeless Shelter Facility. A shared shelter would enable both agencies to provide services to their respective homeless populations without duplicating efforts and thus better leveraging their respective resources. The Human Options organization has been funded to assist homeless battered women and children. 5.1.2 Attend quarterly OCHA The City refers low-income residents to Orange Ongoing Cooperate with the Orange County (Cities Advisory County for rehabilitation of mobile homes, to The City will continue to assist Housing Authority to pursue Committee) meetings to Neighborhood Housing for first time buyer programs, seniors in funding home repairs establishment of a Senior/Disabled keep up to date on and to Rebuilding Together for handyman service for and property rehabilitation. The or Limited Income Repair Loan and rehabilitation programs low-income and senior households. City has an aging population who is Grant Program to underwrite all or offered by the County in The City Council awarded Affordable Housing Funds more susceptible to limited part of the cost of necessary housing order to continuously for an agreement with Habitat for Humanity Orange income, as well as a large housing modifications and repairs. inform homeowners and stock of structures over 30 years Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-27 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle Cooperation with the Orange rental property owners County (Habitat OC) granting up to $600,000 to old that may be in need of County Housing Authority will within the City of establish a critical home repair program for low- renovations to maintain adequate include continuing City of Newport opportunities and to income seniors (Senior Home Assistance Repair quality of life and safety standards. Beach participation in the Orange encourage preservation of Program). It is estimated that approximately 30 County Continuum of Care and existing housing stock repair projects will be completed at various locations continuing to provide CDBG funding. throughout the City. To date, there have been 11 projects, including 9 already completed. There is money remaining in this program and applications are currently being accepted (see Program 1.1.2). 5.1.3 Continuously implement In 2017 and 2018, the City amended its regulations to Modify Permit, where appropriate, program as housing permit the development of Accessory Dwelling Units New 2020 State Law permitted and development of senior accessory projects are submitted to (ADUs) in single -unit residential zoning districts to facilitated the creation of ADUs in dwelling "granny' units in single- the City. Promotional conform with changes in State Law. single unit zones with a shot clock unit areas of the City. The City will materials will be available for the permitting timeline and promote and facilitate the to the public by Spring • In 2020 additional amendments were made torestrictions on development fees. development of senior accessory 2014. update the City's regulations on ADUs to be dwelling units by providing consistent with new State Law. There were 19 The City will continue to promote brochures and/or informational ADUs submitted, 8 ADUs permitted, and 2 ADUs and facilitate ADUs for senior finalized. households as well as provide materials at the building permit information on the permitting counter, online, and other • In 2019, there were 2 ADUs submitted, 3 ADUs process to the community. appropriate locations detailing the permitted, 2 ADUs under construction, and 1 benefits and the process for ADU finalized. obtaining approval. • In 2018, there were 6 approved ADUs and 3 additional ADUs were in the permit process. • In 2017, there were 5 ADUs (1 new construction and 4 conversions) in the plan check process under the new regulations. • No permits issued in between 2014 and 2016. 0 In 2015, staff provided a flyer that promotes senior accessory dwelling units and is provided in the public lobby and on City's website. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-28 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle 5.1.4 Attend annual HOPWA The management of the HOPWA funds transferred Modified. Work with the City of Santa Ana to strategy meetings for the from Santa Ana to Anaheim in 2016. As a result, City provide recommendations for the County. staff will stay up-to-date on services provided with allocation of HUD Housing HOPWA funds and Ryan White Program funds Opportunities for Persons with AIDS through the HIV Planning Council meeting agendas. If (HOPWA) funds within Orange needed, City staff will attend the related budget County. allocation meetings which are usually held in August or September of each year. 5.1.5 Continuously maintain a City maintains a list of resources that are available for Ongoing Maintain a list of "Public and Private list of resources on City housing and community development activities. A list The City will continue to maintain a Resources Available for Housing and website and update as of resources and links are provided on the City's list of resources for housing and Community Development necessary. website. community development activities Activities." to promote housing development throughout the City. 5.1.6 Continuously implement No projects were submitted that included the Modify Encourage the development of day program as housing establishment of a day care center (2020-2014). care centers as a component of new projects are submitted to affordable housing developments the City. and grant additional incentives in conjunction with a density bonus per the Chapter 20.32. 5.1.7 Continue to provide social The City provided $30,000 ($25,000 in 2018/2019, Ongoing Encourage senior citizen services, support groups, $26,900 in 2017 & $16,000 in 2014) in CDBG funds to The City was successful in assisting independence through the health screenings, fitness Age Well Senior Services home delivered meals the funding of senior housing promotion of housing services classes, and educational program. The mobile meals program provides home- services through the 51h Planning related to in -home care, meal services at the City's OASIS delivered meals to individuals who are homebound Cycle and will continue to provide programs, and counseling, and Senior Center. Offer due to age, illness, or disability. the same services and support maintain a senior centerthat affords affordable ride -share through the 6`h Cycle. The City has seniors opportunities to live transportation and meal The City also operates the OASIS Senior Center.Services an aging population that can be include: healthy, active, and productive lives services to seniors who are affected by limited income, so such in the City. unable to drive and/or A multi -purpose center owned and operated by projects can limit additional costs. prepare their own meals or the City of Newport Beach in partnership with dine out and have little the Friends of OASIS nonprofit dedicated to assistance in obtaining meeting needs of senior citizens and their adequate meals. families. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-29 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle • Classes in art, health & fitness, music & dance, foreign languages, technology, enrichment, and much more. • A state-of-the-art fitness center for those ages 50 and older which provides a safe, comfortable, senior -friendly exercise environment for the active older adult including access to hire a personal trainer for individualized programs. Separate membership required to join. • Regularly scheduled low-cost special events and socials such as luncheons, concerts, barbecues, a talent show and volunteer recognition. • Travel department coordination of day and overnight trips. • Curb -to -curb transportation program for residents of Newport Beach ages 60 and older who are no longer driving to use for medical appointments, grocery shopping, banking, and to attend OASIS classes (fee required). • Social services information and referral for seniors and their families dealing with a need for caregiver services, housing, transportation, work resources, legal matters, and more. Informational and supportive counseling is available to seniors and their family members on an individual basis. • Various health resources and screenings for seniors, including flu shots, blood pressure, memory screenings, hearing screenings, and health insurance counseling services. • Regularly scheduled support group meetings at the Center to help senior citizens and their Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-30 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle families cope with stress, illness, life transitions, and crises. • Lunch program for active and homebound senior citizens ages 60 and older that is funded by the federal government through the Older American Act. A donation is requested for meals, which are provided by Age Well Senior Services. 5.1.8 Summer 2014 Information was added to the City website under Ongoing The City shall work with the Regional Housing Assistance regarding resources through the The City will continue to work with Center of Orange County (RCOC) to RCOC which began implementation of an outreach the RCOC to provide families with implement an outreach program program. The City remains in contact with RCOC on information on services and informing families within the City of implementing outreach programs as they are housing available for persons with housing and services available for developed. The City works with the housing developmental disabilities. The City persons with developmental consultant at the RCOC. When projects are will also continue expediting future disabilities. Information will be submitted, they will be offered expedited permit projects that offer housing to made available on the City's processing and the possibility of fee waivers. persons with disabilities. website. The City shall also offer expedited permit processing and fee waivers and/or deferrals to developers of projects designed for persons with physical and developmental disabilities. Policy 6.1 Support the intent and spirit of equal housing opportunities as expressed in Title VII of the 1968 Civil Rights Act, California Rumford Fair Housing Act, and the California Unruh Civil Rights Act. 6.1.1 Adopt Analysis of The City contracted with the Fair Housing Foundation Ongoing Contract with an appropriate fair Impediments to Fair to provide these services. The Fair Housing The City was successful in reaching housing service agency for the Housing (2015-2020) by Foundation provided the following trainings, out to the community about fair provision of fair housing services for Summer of 2016. Provide seminars, and outreach activities in the City during housing services during the 51n Newport Beach residents. The City pamphlets on an ongoing the following 6`" Cycle years: Planning Cycle. will also work with the fair housing basis at community 2020: As required by State Law and HCD, service agency to assist with the facilities and provide a • Virtual Fair Housing Workshops — 2/3/20 and the City will continue to provide periodic update of the Analysis of minimum of 2 public 11/17/20 fair housing information and Impediments to Fair Housing workshops related to Fair document required by HUD. The Housing per year. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-31 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle City will continue to provide public • Virtual Walk -In Clinics — 5/13/20, 5/20/20, assistance to residents and outreach and educational 7/15/20, 9/2/20, and 11/18/20. developers. workshops, and distribute • PSA, City of Newport Beach TV — 6/5/20 pamphlets containing information • Literature Distribution — 2,250 related to fair housing. 2019: • 2 Community Booths — 9/28/19 and 10/19/19 • 2 Tenant Rights Workshops — 5/5/19 • 2 Landlord Workshops — 2/14/19 and 11/20/19 • 2 Management Trainings — 3/6/19 and 6/18/19 2018: • 2 Community Booths — 10/20/18 and 11/17/18 • 2 Tenant Rights Workshops — 4/19/18 and 11/7/18 • 2 Landlord Workshops — 3/27/18 and 8/30/18 • 2 Management Trainings — 6/25/18 and 9/20/18 2017: • 3 Community Booths — 6/15/17, 8/1/17, and 10/21/17 • 3 Presentations — 4/13/17, 5/11/17, 6/6/17 • 2 Tenant Rights Workshops — 3/1/17 and 12/7/17 • 2 Landlord Workshops—4/27/17 and 10/25/17 • 2 Management Trainings — 6/1/17 and 11/21/17 2016: • 1 Community Booth at National Night Out Event on 8/2/16 • 5 Presentations — 2/24/16, 3/9/16, 6/2/16, 7/18/16, and 12/8/16 • 2 Tenant Rights Workshops — 4/12/16 and 9/6/16 • 2 Landlord Workshops — 6/8/16 and 11/2/16 • 1 Walk in Clinic — 5/25/16 Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-32 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle • 2 Management Trainings — 5/12/16 and 12/21/16 201S: • 4 Community Booths at Pavilions Grocery- 5/17/15 Hagen's Food and Pharmacy 6/17/15 o National Night Out event on 8/4/15 o VA Landlord Appreciation Event 9/24/15 • 4 Presentations — 1/20/15, 4/18/15, 6/14/15, 10/23/15 • 2 Tenant Rights Workshops — 6/16/15 and 9/16/15 • 2 Landlord Workshop — 2/23/15 and 7/7/15 • 2 Walk -In Clinics - 4/14/15 and 8/5/15 • 2 Management Trainings—4/29/15, 8/6/15. 2014: • 2 Outreach Booths at the Newport Beach Farmers Market on 6/8/14 and the National Night Out event on 8/5/14 • 3 Presentations — 6/5/14 (2) and 8/23/14 • 2 Tenant Rights Workshops — 3/5/14 and 12/4/14 • 2 Landlord Workshop — 2/12/14 and 6/4/14 • 2 Walk in Clinics - 3/25/14 and 9/18/14 • 3 Management Training — 1/29/14, 5/7/14, and 11/3/14. • 1 Disability Policy Workshop on 6/10/14 Pamphlets containing information on Fair Housing and Dispute Resolution Services are available at the public counter. Policy 7.1 Review the Housing Element on a regular basis to determine appropriateness of goals, policies, programs, and progress of Housing Element implementation. 7.1.1 Annually report staffs This annual Housing Element Report will be Ongoing As part of its annual General Plan findings within the annual submitted to HCD. As required by HCD, the City will Review, the City shall report on the General Plan Status Report continue to provide annual reports Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-33 City of Newport Beach 2021-2029 HOUSING ELEMENT Policy Action Objective Program Accomplishments Status for Sixth Cycle status of all housing programs. The including Housing Element on the status of all housing portion of the Annual Report Report provided to OPR programs to ensure progress. discussing Housing Programs is to be and HCD by April 1st each distributed to the California year. Department of Housing and Community Development in accordance with California state law. Appendix A: Review of Past Performance (September 2022 Final Housing Element) A-34 City of Newport Beach 2021-2029 HOUSING ELEMENT The Housing Element is required to identify potential candidate housing sites by income category to meet the City's RHNA Allocation. The sites identified within the Housing Element represent the City's ability to plan for housing at the designated income levels within the 6t" housing cycle planning period (2021-2029). These sites are either residentially zoned or within a specific plan area or urban plan that permits residential uses at a minimum of 30 dwelling units per acre (du/ac). As described in this appendix, the development capacity for each site depends largely on its location within a "Focus Area." It should be noted that the sites evaluated here explicitly identify sites that have a favorable chance of redevelopment in the planning period. The actual number of sites subject to future rezone and the actual unit yield, by income category, on each site may vary. The intent of the identification of sites in this Appendix shall provide justification of the availability of sites to accommodate the 2021-2029 RHNA need at all times during the planning period. As part of the site selection process, letters of interest were sent out to all property owners within each Focus Area. Property owners were consulted to help the City better understand potential future housing growth on candidate housing sites within the City. Additionally, some property owners contacted the City requesting to be added and other requested their removal from consideration. Those requests were granted by the City and are reflected in the site analysis contained herein. This appendix contains Tables B-11, B-13, B-16, B-19, B-21, and B-22 which identify each candidate housing site within Newport Beach's sites inventory. The sites are identified by assessor parcel number (APN) as well as a unique identifier used to track sites within the inventory. Additionally, the following information is provided for each parcel. • Address • Ownership • Zoning (including Specific Plan areas and Overlays, if applicable) • Size (Net developable acres removing known development constraints) • Density • Vacancy status • Previous Housing Element identification • Potential Development Capacity (Dwelling Units) by income category • Description of existing use A summary of this information is included within the Housing Resources section (Section 3) of the City's 2021-2029 Housing Element. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-1 City of Newport Beach 2021-2029 HOUSING ELEMENT Candidate Sites Analysis and Identification Process The City of Newport Beach conducted a community driven Candidate Sites Analysis process beginning in 2019 with Newport, Together and concluding in 2021 with the work of the Housing Element Update Advisory Committee. Newport, Together Sites Identification by Newport Beach Residents and Stakeholders Newport, Together is a community -based effort that included a Listen and Learn process to guide and inform a future General Plan Update. As a component of the General Plan Update, the Steering Committee identified the need to share information on the state -mandated Regional Housing Needs Assessment (RHNA) housing allocation for Newport Beach. A key activity during outreach meetings for Phase I included a presentation on RHNA and an activity designed to allow participants to create a heat map identifying potential locations to zone for state -mandated housing allocations. Completed in the Fall of 2019, the Listen & Learn process included digital engagement, a launch event, and a workshop series in each of the seven council districts. The heat map of potential rezoning locations developed by the community, shown below, was the starting point for the work of the Housing Element Update Advisory Committee (HEAUC). Figure 13-1: Heat Map of Potential Rezoning Locations Appendix B: Sites Analysis (September 2022 Final Housing Element) B-2 City of Newport Beach 2021-2029 HOUSING ELEMENT Housing Element Update Advisory Committee and Identification of Candidate Sites Building upon the efforts of Newport, Together, the Candidate Sites Analysis process in Newport Beach was continued by the Housing Element Update Advisory Committee (HEUAC). The creation of the HEUAC was also the beginning of the formal Housing Element Update development process. The HEUAC is comprised of a variety of professionals with relevant experience in affordable housing development and financing, housing policy, local development, environmental matters, and community engagement. The primary role of the HEUAC was to provide analysis and feedback on the selection of sites to be included in the Adequate Sites Inventory. The Purpose & Responsibilities of the committee are as follows: • Ensure there is sufficient public outreach and stakeholder input regarding the update to the Housing and Land Use Elements of the City of Newport Beach General Plan and any other Elements deemed necessary; • Review responses to the Request for Proposal for services to update the Housing, Land Use, and other Elements deemed necessary; • Make recommendations to the City Council regarding the selection of consultants to assist in the update of the Housing, Land Use, and other Elements deemed necessary; • Provide guidance to City staff and the consultant through the outreach process; • Provide guidance to City staff, and the consultant, on goals and policies related to the update of the Housing, Land Use, and any other Elements deemed necessary by the Committee or City Council; and • Make other recommendations to the City Council regarding the update of the General Plan, as necessary. Composition of the Housing Element Update Advisory Committee (HEUAC) The HEUAC was appointed by the Newport Beach City Council for their demonstrated knowledge and expertise of housing, funding/financing, due diligence, site design among other factors. The HEUAC included the following members; • Larry Tucker, Chair— Real estate development, financing and law • Jeff Bloom — Real estate financing, specializing in affordable housing financing • Susan DeSantis — Planner and a former director of HCD • Paul Fruchbom — Affordable housing developer • Beth Kiley— Real estate appraiser • Geoffrey LePlastrier — Licensed Architect • Stephen Sandland — Licensed Architect • Debbie Stevens — Planner and CEQA practitioner • Michelle Thrakulchavee — Real estate development and financing Each of these experts provided professional insight for the identification and feasibility of sites to be included in the City 2021-2029 Housing Element. A summary of all meetings, efforts and conclusions of the HEUAC are provided in Appendix C of this Housing Element. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-3 City of Newport Beach 2021-2029 HOUSING ELEMENT Based on the heat map developed by the community during the Listen & Learn, The HEUAC further identified "Focus Areas" for housing development, which are detailed in this document. Within each Focus Area, Subcommittees of the Committee assigned all nonvacant parcels a feasibility rating ("Infeasible", "Potentially Feasible", or "Feasible") — analyzing the parcel's propensity to redevelop during the planning period. For each of the Focus Areas, the HEAUC assigned area -specific Subcommittees to analyze all opportunity sites within the area for feasibility. Feasibility was assessed as follows: • Feasible sites are those that appear that they could feasibly be redeveloped for housing or have housing added to the Parcel while the current use remains in whole or in part. • Potentially Feasible sites are those that may work as housing, but due to the size and/or configuration of a Parcel, or the quality and functionality of existing improvements, a Parcel might be somewhat less likely to be a candidate for a housing use. Potentially Feasible sites may also include Parcels that would be infeasible standing alone, but if combined with adjacent the Parcel(s) could become part of a potential housing site. • Infeasible sites are those that the Subcommittee determined would not work as housing due to existing improvements on the site, insufficient size, and or inefficiencies due to the configuration of the Parcel. Each site was also evaluated by the Subcommittees considering factors such as: • Access to schools and jobs • Access to parks, services, health care facilities and grocery stores • Proximity to infrastructure and utilities • Likelihood or redevelopment and reuse • Project feasibility based on existing site conditions and development features • Funding/Financing and feasibility considerations HEUAC Identification of Sites to be Included in the Sites Inventory Each Subcommittee developed detailed technical memorandums that were presented at public meetings summarizing the detailed, parcel -by -parcel analysis completed to assess feasibility within each Focus Area. Once these sites were identified, the City then sent out individual letters to each property owner whose property was deemed "Feasible" or "Potentially Feasible" for residential development by the HEUAC. Responses to these letters are captured as evidence to reinforce likelihood for redevelopment within Tables B-11, B-13, B-16, B-19, B-21, and B-23. Based on these responses, the City removed Feasible or Potentially Feasible sites where the property owner was expressly unwilling to providing housing opportunities on their site. Final Determination of Sites Inventory Final determination of housing sites was established utilizing the following criteria: • Identification of sites w/ a Realistic Potential to Redevelop During the Planning Period — The HEUAC identified only sites that adhered to the criteria established at the beginning of the Appendix B: Sites Analysis (September 2022 Final Housing Element) B-4 City of Newport Beach 2021-2029 HOUSING ELEMENT planning process. Supported by demonstrated features of recent development activity in the area and utilization of site selection criteria that provide sound analysis of site feasibility, the HEAUC identified only sites which can be realistically assumed to have the highest level of redevelopment potential during the 2021-2029 Planning Period. • Provision of a Significant Buffer of Sites to Accommodate Sites that may not Redevelop to Full Potential During the Planning Period —The HEUAC concluded that it is infeasible to assume 100% of the sites identified in the inventory would see redevelopment in the planning period. Therefore, a large buffer of additional sites was identified to ensure a larger inventory of opportunity, inclusion of a greater number of property owners and establishment of identical regulatory and land use standards on these parcels to encourage and incentivize redevelopment. As summarized in Table B-1, the sites buffer provides to adherence to no net loss considerations and significantly expands opportunity for housing within each focus area. • Identification of Sites That Would be Physically Able to Accommodate Housing In Place of or in Addition to Existing Uses — The HEUAC only identified sites that would physically be able to accommodate housing. Therefore, all sites identified have been evaluated for their ability to actually accommodate housing units based on site features, existing development and other site constraints. • Ensure the Public, Property Owners and Stakeholder Engaged in the Sites Identification Process — The HEUAC collaborated with these groups throughout the planning process to ensure local concerns were addressed, sensitive sites were properly evaluated and preliminary sites were made available to the public for review and discussion. • Ensure Site Inventory Feasibility is Based Supported by Local Examples that Demonstrate Sites can be Developed at Proposed Densities and Affordability — The HEUAC based project feasibility assumptions on actual projects constructed, under construction or in the entitlement process. It was important for the HEUAC to compare actual development opportunities within the Focus Area to provide a realistic assessment of the opportunities and constraints of developing and proposed densities and affordability levels. The HEUAC concluded that all sites in the inventory possess the ability to accommodate residential development. The local project examples are provided in the discussion for each Focus Area in this Appendix. All nonresidential sites that were deemed Feasible or Potentially Feasible were included in the Sites Inventory, except those sites whose owners expressly requested that their properties not be considered opportunity sites. Therefore, the City does not foresee the opportunity to potentially add additional sites to the Sites Inventory since all Feasible or Potentially Feasible sites have already been included. As shown within the following images, the Focus Areas and Candidate Sites identified by the HEAUC align closely with recommended sites within the SCAG HELPR Tool. This is primarily due to consistency in methodology between the HEUAC, comprised of local experts in relevant fields, and SCAG HELPR, a data - driven tool developed externally. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-S City of Newport Beach 2021-2029 HOUSING ELEMENT Figure B-2: Focus Areas for Residential Development Dover- Westcl iff Figure 13-3: SCAG HELPR - Sites with Propensity for Residential Redevelopment Select a Jurisdiction cry or cnunq [uninmrporered� is Newport Beach — Show Population and Housing Stars Standard Filters ADU"101.,, 6 YV.— parcels of eppropnare size ©0 0 Y Le--I-d mmmercie„retell © O r Y Puhlic-owned land r Ylns�de priorirygrowlh area, outside conelre�nteree ©� r Y aur�ideen.,�ranr.,enteuysensirroeea�ee ©O Y Inside higher opportunity emas ©� Y Inside environmenrel jusci�e areas © 0 6 Y elasepraximirytaservicea © 0 Costa Mesa r Yi-c - A Sen Joaquin L. -10I r.J cave The Housing Element is required to identify sites by income category to meet the City's RHNA Allocation. The sites identified within the Housing Element represent the City's ability to develop housing at the designated income levels within the planning period (2021-2029). These sites are (i) residentially zoned but for which no project has been proposed, (ii) have been entitled for a residential development project (but will not yet have received building permits and a certificate of occupancy by June 30, 2021) or (iii) Appendix B: Sites Analysis (September 2022 Final Housing Element) 3-6 City of Newport Beach 2021-2029 HOUSING ELEMENT have been identified for (a) a rezone to a residential use from a non-residential use, or (b) for an overlay to enable a housing use in addition to or in the place of a non-residential use. A summary of this information is included within the Housing Resources section (Section 3) of the City's 2021-2029 Housing Element. Table B-1 shows the City's 2021-2029 RHNA need by income category as well as a summary of the sites identified to meet that need. The analysis shows that the City of Newport Beach has the capacity to meet its 2021-2029 RHNA allocation through a variety of methods, including: • Identification of additional increased capacity on existing, residentially zoned sites • Identification of residential property for rezone to higher -density residential primary use • Identification of non-residential property for rezone to residential primary use • Development of approved projects which do not have certificates of occupancy • Future development of accessory dwelling units (ADUs) Water, Sewer, And Dry Utility Availability Each site has been evaluated to ensure there is adequate access to water and sewer connections as well as dry utilities. Each site is situated with a direct connection to a public street that has the appropriate water and sewer mains and other infrastructure to service the candidate site. The City's Sewer System Management Plan provides for the identification of sewer system distribution throughout the community. All sites identified in the sites inventory have existing sewer system capacity and a sewer system capacity assurance plan is provide as part of the Management Plan to ensure the availability of future capacity citywide. Threshold criteria have been adopted to trigger any capacity enhancements necessary based upon changes to land use and other considerations. The City's Jurisdictional Runoff Management Plan addresses stormwater management throughout the City as it provides for the identification and management of facilities to manage stormwater throughout the community. According to the City's Runoff Management Plan, facilities and mitigations for potential peak stormwater flows are not deemed a constraint to future residential development. The Newport Beach Utilities Department, the Municipal Water District of Orange County, and the Irvine Ranch Water District provide water service and management of the City's potable water system. As a built -out community, the City's existing water system services all areas within the City limits through various trunk lines and mains. Fire flow considerations are the primary factor in determining the adequacy of service for future residential development. The City conducts regular monitoring of the water system in the community and provides for system upgrades via capital improvement program to ensure continued adequate water availability and service to existing and future planned residential development. Southern California Gas Company provides natural gas services to the City of Newport Beach. SoCal Gas is a gas -only utility and, in addition to serving the residential, commercial, and industrial markets, provides gas for enhanced oil recovery (EOR) and EG customers in Southern California. Southern California Edison (SCE) is the electrical service provider for Newport Beach. SCE is regulated by the California Public Utilities Appendix B: Sites Analysis (September 2022 Final Housing Element) B-7 City of Newport Beach 2021-2029 HOUSING ELEMENT Commission (CPUC) and the Federal Energy Regulatory Commission (FERC) and includes 50,000 square miles of SCE service area across Central, Coastal, and Southern California. SCE will continue to provide adequate services to Newport Beach including increased household growth as projected by the City's RHNA allocation. In accordance with the California Public Utilities Commission all electric and gas service will be provided for future development in Newport Beach as requested. SoCal Gas and Southern California Edison regularly partner with the City to provide services and obtain authorization to construct any required facilities. The City has a mature energy distribution system that will be able to add additional service connections for future residential land uses. 2. Adequacy of Sites to Accommodate RHNA The City of Newport Beach has a total 2021-2029 RHNA allocation of 4,845 units. The City is able to take credit for 1,662 units currently within the planning process (Projects in the Pipeline), 327 units of 5t" Cycle Sites being projected at existing buildout capacity, and 240 units of ADU's (strategy described later in this section and in Appendix D). These three categories of existing capacity lower the total RHNA planning need to a "Remaining Need" of 2,616 units as shown in Table B-1. The Housing Element update lists sites that would be able to accommodate an additional 8,174 units, well in excess of the 2,616-unit RHNA need. In addition to the units provided to meet their RHNA, the City also plans to include potential units provided by the Banning Ranch Focus Area as extra buffer to ensure that the City would meet all of its housing needs. The inclusion of Banning Ranch would accommodate an additional 1,475 excess units, bringing the total potential units from rezone strategies to 9,649 units. Newport Beach has identified sites with a capacity to accommodate 2,714 lower income dwelling units, which is in excess of its 2,386-unit lower income housing need. The identified sites for lower income dwelling units are on parcels that will permit residential development as a primary use at a base density of between 30 and 60 dwelling units per acre and at an assumed density of between 50 and 60 dwelling units per acre. As described later in this section, the City believes that due to recent State legislation and local efforts to promote accessory dwelling unit (ADU) production, the City can realistically anticipate the development of 240 ADUs within the 8-year planning period. As outlined in the Sites Inventory later in this document, the City has compiled an inventory of sites for rezone that, combined, have development potential to wholly exceed and maintain the capacity to accommodate the RHNA Allocation throughout the 8-year planning period. Overall, the City has adequate capacity to accommodate its 2021-2029 RHNA. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-8 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 13-1: Summary of RHNA Status and Sites Inventory Extremely Low/ Very Low Income Low Income Moderate Income Above Moderate Income Total 2021-2029 RHNA 1,456 930 1,050 1,409 4,845 RHNA Credit (Units Built) TBD TBD TBD TBD TBD Total RHNA Obligations 1,456 930 1,050 1,409 4,845 Sites Available Projects in the Pipeline 175 32 1,455 1,662 Accessory Dwelling Units 163 72 5 240 51h Cycle Sites 0 287 40 327 Remaining RHNA 2,048 659 -- 2,707 Airport Area Environs Rezone 773 258 1,546 2,577 West Newport Mesa Rezone 332 111 664 1,107 Dover-Westcliff Rezone 156 52 313 521 Newport Center Rezone 732 244 1,463 2,439 Coyote Canyon Rezone 383 153 995 1,530 Total Potential Capacity of Rezones 2,376 818 4,981 8,174 TOTAL POTENTIAL DEVELOPMENT CAPACITY 2,714 1,209 6,481 10,403 Sites Surplus/Shortfall +328 +159 +5,072 +5,558 Percentage Buffer 14% 15% 360% 115% Scenario with Banning Ranch Banning Ranch Rezone 443 148 884 1,475 TOTAL POTENTIAL DEVELOPMENT CAPACITY 3,156 1,357 7,366 11,878 Surplus/ Deficit +770 +307 +5,957 +7,033 Percentage Over Need 32% 29% 423% 145% Suitability of Non -Vacant Sites The City has very limited vacant land resources and, therefore, understands that almost all future housing development must occur on infill, previously developed properties. Accordingly, suitability analysis for non -vacant sites takes into consideration history of development on infill sites and current entitlements on infill sites. For each of the Focus Areas identified, supportive evidence of past or current development activity within their environs have been identified. 3. Development of Very Low- and Low -Income Sites Inventory This section contains a description and listing of the candidate sites identified to meet the City's very low and low income RHNA need. A full list of these sites is presented in Tables B-11, B-13, B-16, B-19, B-21, and B-23. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-9 City of Newport Beach- 2021-2029 HOUSING ELEMENT-• w _ �`'� •:��:=yam' '� � _ �,,. :-i�.-„_ - Projects in the Pipeline The City has identified a number of projects currently in, or that have completed the entitlement process which are likely to be developed and/or first occupied during the planning period and count as credit towards the 2021-2029 RHNA allocation. Key project details are shown below in Table B-2. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-10 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-2: Projects in the Pipeline Units by Income Level Very Low Moderate Above Project Name Locations Project Description Density Total and Low Moderate Approved Projects' Newport Airport Northerly portion of the Redevelopment and consolidation of 15 lots that total 46 du/acre 48 32 240 320 Village Campus Tract, generally 16.46-acres. Up to 444 dwelling units and 297,572 sf of (69 du/acre bounded Birch Street, non-residential floor area would be developed. with density Campus Drive, bonus) MacArthur Blvd. and the extension of Corinthian Way Residences at 4400 Von Karman Redevelopment of an existing surface parking area. 44 du/acre 13 - 299 312 4400 Von Karman The project would result in 312 dwelling units, an 825- (53 du/acre space enclosed parking structure, a 284-space free- with density standing parking structure, and a one -acre public park. bonus) West Coast 2510 West Coast Redevelopment of a vehicle sales lot. The project 26 du/acre 3 - 33 36 Highway Mixed- Highway would develop 36 dwelling units and one 5,096 sf (36 du/acre Use office space. with density bonus) Newport 1660 Dove Street Redevelopment of the MacArthur Square commercial 50 du/acre 78 - 272 350 Crossings center. The project would result in the development of (67du/acre 350 dwelling units, 7,5000 sf of commercial space, and with density a 0.5-acre public park. bonus) Residences at 150 Newport Center Redevelopment of a carwash. The project would result 23 du/acre NA - 28 28 Newport Center Drive in the development of 28 dwelling units. Uptown Newport APN: 445 134 17 The project would result in the development of 30 19.71 du/acre NA - 30 30 Residences Phase dwelling units on a 1.52-acre site. 16 Plaza CDM 3900, 3928 East Pacific The project would result in the development of six - - - 6 6 Coast Highway detached dwellings included in a larger mixed -use development. Ullman Sail Lofts 410 291h Street The project would result in the construction of two - - - 4 4 retail tenant spaces and four condominium spaces over the tenant units. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-11 City of Newport Beach 2021-2029 HOUSING ELEMENT Units by Income Level Very Low Moderate Above Project Name Locations Project Description Density Total and Low Moderate Mariner's Square 1244 Irvine Avenue The project would demolish an existing 114-unit - - -22 -22 complex and construct 92 condominium spaces. Vivante Senior 850 San Clemente Drive Demolish the Orange County Museum. The project - - 90 90 Housing would result in a 6-story combination senior housing development with 90 dwelling units. Pending Projects' Uptown Newport APN: 445 134 17 The project would result in the development of 60 56.6 du/acre NA - 60 60 Residences Phase dwelling units on a 1.06-acre site. 1C Details Newport Village North Parcel is Redevelopment of 9.4-acres. The project would result 20 du/acre 9 - 111 122 Mixed -Use approximately 5.3 acres in 122 dwelling units, 128,640 non-residential space, and located at 2000— parking, mew pedestrian facilities, public open spaces, 2244 West Coast and marina improvements. Highway. The Project's South Parcel is approximately 4.1 acres and located at 2001- 2241 West Coast Highway 1300 Bristol 1300 Bristol Demolition of a 339,292 sf office building. The project 40 du/acre 24 - 169 193 Apartment would result in the development of 193 dwelling units. (98 du/acre Project with density bonus) Bay Back Landing - The proposed project involves land use amendments - - - 49 49 to provide the legislative framework that would allow for future mixed -use development of the site. Amendments to the general plan and coastal land use plan are required to change the land use designations to a mixed -use horizontal designation, and a planned community development plan is proposed to establish appropriate zoning regulations and development standards for the site. The requested approvals will allow for a horizontally distributed mix of uses, including recreational and marine commercial retail, Appendix B: Sites Analysis (September 2022 Final Housing Element) B-12 City of Newport Beach 2021-2029 HOUSING ELEMENT Units by Income Level Very Low Moderate Above Project Name Locations Project Description Density Total and Low Moderate marine office, marine services, enclosed dry -stack boat storage, and a limited mix of freestanding multi -family residential and mixed -use structures with residential uses above the ground floor. In addition to the land use amendments, other requested approvals are a lot line adjustment and traffic study pursuant to the city's traffic phasing ordinance. Specific project design and site improvement approvals will be sought at a later time. 10 Big Canyon APN: 442-221-52 The proposed project has three components: 1) a - - - 1 1 parcel map to subdivide a 1.9 acre portion of the golf course into a legal residential lot, 2) general plan amendment to create a new 1.9 acre parcel on the general plan land use map and change the land use from "parks and recreation" to "single unit residential - detached", and 3) amend the big canyon planned community (pc) to change the land use for the 1.9 acre parcel from "golf course" to "low density residential" and modify the appropriate text and pc land use map. The proposed 1.9 acre subdivision will create a large lot for one residential dwelling. Mesa Drive 1501 Mesa Drive and The project would result in six dwelling units. - - - 6 6 Townhomes 20462 Santa Ana Drive Advanced 503-505 East Balboa The project would merge two lots and construct new - - - 3 3 Champion LLC Avenue mixed -use buildings that would consist of three Mixed -Use residential and three commercial spaces. Ritz Carlton Owner has received approval of an entitlement 57 du/acre - - - 159 Residences application to convert 159 hotel rooms to 159 residences. Notes: 'Approved projects have been checked and approved by the City and are in progress to begin. z Pending projects have yet to get approval from the City but are in the process of approval. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-13 City of Newport Beach 2021-2029 HOUSING ELEMENT Accessory Dwelling Units (ADUs) In areas such as Newport Beach where land values are high and there is a large amount of single-family detached housing, ADUs present a potentially more naturally affordable housing option for renters. ADUs are often smaller in size than typical apartments or rental housing, ranging from 300 to 600 square feet in size. They are also attractive to property owners who are able to gain rental income. Based on the unique land values and policy planning in the City of Newport Beach, the City identified a total of 240 units of ADU development assumed to be developed for the 8 years The City of Newport Beach believes that ADUs present a viable option as part of the overall strategy to develop housing at all income levels during the 2021-2029 61" Cycle Housing Element planning period. Appendix D describes: • Recent ADU legislation and regional actions, • Local factors that may increase ADU development over the next eight years, and • Actions Newport Beach will take through housing programs to incentivizing ADU development As part of the sites analysis found within this Appendix, the City has accounted for future ADU and JADU production using the methodology and rationale described in Appendix D of this Housing Element. SCAG conducted a regional analysis of current market rents that can be used to assign ADUs to income categories in Sixth Cycle Housing Elements, the analysis surveyed, market rents of 158 existing ADUs. The analysis then determined the proportion of ADUs within each income category for both one -person and two -person households and made assumptions for what percentage of ADUs are rented for free based on existing literature and allocate those towards Extremely Low Income. Finally, the analysis combined rented and non -rented ADUs into single affordability breakdown by county. Newport Beach utilized SCAGs affordability assumptions for ADUs in Orange County. This equates to an anticipated ADU development of 240 ADUs over the next 8 years,163 of which are anticipated to be affordable. The ADUs not designated to meet the City's lower income RHNA need are anticipated to be 72 affordable at moderate income levels and 5 affordable at the above moderate -income level. Detailed analysis of City policies and monitoring requirements supporting this projection can be found within Appendix D: Accessory Dwelling Units. Remaining Need Table B-3 below displays the City's total RHNA allocation for the years 2021-2029 as well as the City's net RHNA allocation after the inclusion of Projects in the Pipeline and ADUs. Table 13-3: Low and Very Low -Income Remaining Need Very Low Income Low Income RHNA Allocation 1,456 930 Pipeline Projects 97 78 Existing Zoning 0 0 Accessory Dwelling Units 60 103 Remaining Low/Very Low -Income Need 1,299 749 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-14 City of Newport Beach 2021-2029 HOUSING ELEMENT Selection of Sites to Accommodate Remaining Need Sites identified to meet the City's very low and low-income RHNA were selected considering the AB 1397 size requirements of at least 0.5 acres but not greater than 10 acres. Based on a public process, sites were selected based on their realistic viability to accommodate lower -income housing within the 2021-2029 planning period. Sites were also evaluated based on access to resources, proximity to additional residential development, transportation and major streetway access, and resources and opportunity indicators. Section 3: Affirmatively Furthering Fair Housing, outlines all fair housing, opportunity indicators, and environmental resources in Newport Beach. The City has identified sites with capacity to accommodate the City's 2021-2029 RHNA. This capacity is based on a rezone strategy for several Focus Areas throughout the City. These Focus Areas are as follows: • Airport Area Environs • West Newport Mesa Area • Dover-Westcliff Area • Newport Center Area • Coyote Canyon Area • Banning Ranch Area' The City has analyzed potential capacity based on rezone strategies specific to each area. Each of the following sections describes the identified areas and contains a table of redevelopment assumptions and projected unit capacities. Additionally, each Focus Area is followed by a map detailing the adequate sites inventory, organized by area. Through a public process, the City has assessed the feasibility of parcels in the Focus Areas to redevelop residentially during the planning period. Those parcels deemed Feasible were then analyzed to ensure compliance with HCD's criteria for sites designated to accommodate lower income development (including sizing criteria). The inventory of feasible acreage for redevelopment within each Focus Area was developed with this process. Table B-4 below summarizes the key statistics for the rezone strategies for all Focus Areas. The specific development assumptions (both on affordability and overall development potential) that produce the Potential Units are described, area -by -area, in the Sites Inventory of this document. ' Units assigned to the Banning Ranch Focus Area are not used to accommodate any portion of the 6th cycle RHNA; however, to the extent the City is successful in creating housing opportunities at Banning Ranch, those opportunities may be used to satisfy a portion of the City's 6th cycle RHNA need. Appendix B: Sites Analysis (September 2022 Final Housing Element) City of Newport Beach 2021-2029 HOUSING ELEMENT Table 13-4: Low/Very Low -Income Rezone Strategy by Focus Area Focus Area Anticipated Feasible Acreage Assumed Average Rezone Density Potential Low/Very Low - Income Units Airport Area Environs 172 50 du/ac 773 units West Newport Mesa Area 47 50 du/ac 332 units Dover-Westcliff Area 20 50 du/ac 156 units Newport Center Area 163 50 du/ac 732 units Coyote Canyon Area 34 60 du/ac 383 units TOTAL 436 -- 2,376 units Banning Ranch Area 30 50 du/ac 443 units TOTAL with Banning Ranch 466 -- 2,819 units The City's recent history of granting entitlement to residential uses with affordable units is shown below: • Newport Airport Village • Residences at 4400 Von Karman • West Coast Highway Mixed -Use • Newport Crossings These projects provide evidence of recently approved projects with affordable components developed at higher densities. Additional details, including project status, evidence of affordability, evidence of nonvacant residential development, and evidence of lot consolidation are shown in Table 13-2: Projects in the Pipeline and Attachment B-3. The Section 4: Housing Plan outlines actions the City will take to promote the development of affordable units within the Focus Areas. 4mall 4itP� Notably, 20 sites within the sites inventory do not meet the recommended sizing criteria of a minimum of 0.5 acres and are proposed to provide low and very low income housing. Although all 20 small sites are non -vacant, all small site referenced in this section have had specific written development interest. Of the 20 small sites included in the Inventory, one is part of an existing pipeline project. The rest of the small sites are included in the inventory because each site's owner has expressed written interest in housing development on that site during the planning period. Table B-5 below provides a brief summary of each small site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-16 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 13-5: Small Sites Inventory Above Letter of Moderate Total Net APN Vacant Acreage Focus Area LVL Units Moderate Interest? Units Units Units 445 14104 No 0.26 Y Airport Area 4 1 8 13 445 141 13 No 0.29 Y Airport Area 4 1 9 14 Dover- 049 122 03 No 0.14 Y 2 1 4 7 Westcliff Dove r- 047 041 05 No 0.11 Y 2 1 2 5 Westcliff Dove r- 047 041 25 No 0.06 Y 1 0 2 3 Westcliff West 42414117 No 0.23 Y Newport 3 1 7 11 Mesa Area West 42414117 No 0.23 Y Newport 3 1 7 11 Mesa Area Pipeline 425 471 55 No 0.20 3 0 32 35 Project 445 141 31 No 0.40 Y Airport Area 6 2 12 20 Newport 44216106 No 0.33 Y 5 2 8 15 Center Area Newport 44216107 No 0.20 Y 3 1 5 9 Center Area West 42414110 No 0.37 Y Newport 5 2 9 16 Mesa Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-17 City of Newport Beach 2021-2029 HOUSING ELEMENT Table 13-5: Small Sites Inventory Above Letter of Moderate Total Net APN Vacant Acreage Focus Area LVL Units Moderate Interest? Units Units Units 427 141 13 No 0.37 Y Airport Area 6 2 11 19 Newport 442 09106 No 0.32 Y 5 2 9 16 Center Area Newport 442 09101 No 0.44 Y 7 2 13 22 Center Area Newport 442 09108 No 0.39 Y 6 2 11 19 Center Area Newport 442 09102 No 0.25 Y 4 1 7 12 Center Area Newport 442 09104 No 0.38 Y 6 2 11 19 Center Area Newport 442 09103 No 0.36 Y 5 2 11 18 Center Area Newport 442 09107 No 0.13 Y 2 1 4 7 Center Area 439 021 13 No 0.31 Y Airport Area 2 1 5 8 439 021 12 No 0.17 Y Airport Area 2 1 5 8 439 02103 No 0.16 Y Airport Area 5 2 9 16 439 352 21 No 0.44 Y Airport Area 6 2 13 21 439 352 17 No 0.37 Y Airport Area 5 2 11 18 439 352 20 No 0.44 Y Airport Area 6 2 13 21 439 352 22 No 0.21 Y Airport Area 3 1 6 10 Total: 111 units 38 units 244 units 393 units Appendix B: Sites Analysis (September 2022 Final Housing Element) B-18 City of Newport Beach 2021-2029 HOUSING ELEMENT History of Small Site Development The City of Newport Beach has made a practice of consolidating sites in order to develop housing (see Attachment A, Lidos Villas Project). Furthermore, the City has recently been in the process of approving projects that would consolidate sites below the 0.5 acre HCD sizing criteria. For example, a recently approved project proposed to consolidate five individual lots ranging in size from 0.05 to 0.49 acres into a larger parcel that would accommodate 36 units at a density of 26 du/acre in addition to a 5,096 s.f. office space (see Attachment B-3, West Coast Highway Mixed -Use Project). Another recently approved project proposed the consolidation of three parcels, two of which were below HCD's sizing criteria. The proposed project would provide up 350 residential units as well as commercial and open space components (see Attachment B-3, Newport Crossings Project). Given the interest expressed in the small sites above, the City will likely continue approving lot consolidation projects in the future. Calculation of Unit Capacity Taking into account development standards, unit capacity for sites identified to accommodate low and very low units was calculated by multiplying the net acreage of the site by the assumed density established for each focus area. To support this assumption, the City has identified programs and policies to encourage developer interest and financial feasibility. These programs and policies are detailed in Section 4: Housing Plan. Additionally, based on previous development trends, the City assigned each Focus Area a percentage of its land area which the City projects to redevelop — meaning the percentage of land area within each Focus Area, which is expected to "turn over", or develop with residential units during the planning period. City Commitments to Higher Density Housing Although high density housing has not been achieved in some zones of the City, projects in areas such as the Airport Area prove that when zoning allows, high density housing is developed. The City has successfully implemented projects with high densities such as Phase 1A One Uptown Newport Apartments, which has a density of 56 du/acre. This project was developed in the Airport Area and construction was completed in 2017. The project provides approximately 492 total dwelling units with 91 being Low and Very Low -Income dwelling units. The Project has two more phases of construction that would result in high density housing as well. Evidence Supporting Development of Opportunity Sites at Higher Densities Pursuant to Government Code Section 65583.2, a minimum density of 30 du/ac shall be deemed appropriate to accommodate housing for lower -income households for urbanized areas. Within the current General Plan, the Airport Area is the only area in City that allows higher density residential housing with a maximum allowed density of 50 dwelling units per acre. This higher density residential opportunity was created as part of the 2006 Comprehensive General Plan Update. The General Plan identified this area as one of the greatest opportunities in the community to create new residential neighborhoods including workforce housing, through the replacement of existing uses and new construction on underutilized surface parking lots. Most of the properties in the area are currently designated by the General Plan as Mixed -Use Horizontal (MU-1-12), which provides for the horizontal intermixing of uses, including the development of free-standing multi -family residential units. Residential units in the MU-H2 designation must developed at a maximum density of 50 units per acre (excluding Appendix B: Sites Analysis (September 2022 Final Housing Element) B-19 City of Newport Beach 2021-2029 HOUSING ELEMENT density bonus) and minimum density of 30 units per acre. Additionally, General Plan Policy 6.15.5 states that of the 2,200 units permitted within the Airport Area, only 550 units may be developed as infill on surface lots or areas not occupied by buildings. The remaining 1,650 units are permitted as the replacement of existing nonresidential uses or industrial uses. When a development phase includes a mix of residential and nonresidential uses or replaces existing industrial uses, the number of peak hour trips generated by the cumulative development of the site shall not exceed the number of trips that would have resulted from the development of the underlying permitted nonresidential uses. Based on recent trends in residential development projects, and discussions with property owners, developers, and real estate professionals, it has become evident that the single most important land use change leading the new residential redevelopment has been the 30- 50 dwelling unit per acre allowances that were created in 2006. As illustrated in Table 13-2: Projects in the Pipeline, the City has approved several new residential projects in the Airport Area, all designed at or exceeding the maximum densities allowed of 50 dwellings per acre. In cases were the base densities were proposed below 50 dwellings per unit, the density was maximized based on the replacement trips the underlying commercial uses allowed for. But in all cases, a density bonus was utilized to exceed the maximum 50 dwelling unit per acre limit and increase the development yield. The City believes these projects are evidence that increasing densities to 50 dwelling per acre provide the necessary incentive to redevelop the existing nonvacant sites. Although the 2006 Comprehensive General Plan also created new mixed -use housing opportunities in other parts of the City such as Mariners Mile and Westcliff Dover, the allowable densities are limited to 26.7 dwelling to the acre. Based on discussion with prospective developers and existing property owners who have contemplated residential development in these other opportunity areas, the allowable density of 26.7 dwelling per acre is not sufficient to create an adequate return on investment. Additionally, several of the mixed -use zoning opportunities in the City require a minimum ratio of commercial floor area to be provided in order to development a residential component. This minimum commercial component adds significant cost to a project due the intensive parking needs commercial uses generate, the need to incorporate expensive parking structures to accommodate the parking demand, and increased construction costs due to the increased size of a compliant project. In West Newport Mesa, additional multi -family residential opportunities were created; however, densities are limited to an average of 18 dwellings per acre. Based on discussion with prospective developers and existing property owners, the low -density limits were cited as constraints to redevelopment. Given the success with housing opportunities that were created with densities of 50 dwelling per acre, the City believes committing to rezoning the other focus Areas to allow higher density residential with similar 50 dwelling per acre allowance. The City has committed to rezoning of sites to accommodate these higher densities in Policy Actions 1A through 1F. These rezone programs will include the requisite zoning standards that support the development of housing at these densities. Additionally, Policy 3A addresses the development of objective design standards appropriate for higher density product, Policy 4C and 4D addresses incentives for affordable housing and Policy 4H addresses furthering opportunities for residential in mixed use zones. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-20 City of Newport Beach 2021-2029 HOUSING ELEMENT Given the success of housing opportunities created with densities of 50 dwelling units per acre, the City believes that it can successfully rezone other Focus Areas to allow for similar housing densities. Notably, each focus area has a redevelopment percentage applied to it, meaning a reduction in anticipated potential capacity based on the understanding that not every candidate site in the inventory will develop as housing during the planning period. These redevelopment percentage assumptions mean that the City has identified sites with the potential to accommodate far more than the anticipated "Total Net Units" shown below. Rezoning these Focus Areas would result in an increase of high -density housing in six different zones of the City and would increase the stock of affordable housing throughout the City of Newport Beach. Below is Table B-6: Focus Area Strategies that describes the characteristics of and contribution to the housing stock of each Focus Area. Table 13-6: Focus Area Strategies Total Net Units Inventory Low and Focus Redevelopment Assumed Total Net Above Area Acres) Percentage Density Moderate Units ( Low Moderate irport 50 Area 172 30% du/Ore 773 258 1,546 2,577 West Newport 50 Mesa 47 47% du/acre 332 111 664 1,107 Area 20 52/ 156 52 313 521 W stcliff du/Ore Newport 50 Center 163 30% du/acre 732 244 1,463 2,439 Area Coyote 60 Canyon 34 75% du/Ore 383 153 995 1,530 Area Totals: 435 - - 2,376 818 4,981 8,174 Banning 30 100% 443 148 884 1,475 Ranch du/Ore Totals with 465 - - 2,818 966 5,865 9,649 Banning Ranch: The City has also identified strategies in which these densities can be achieved in Section 4: Housing Plan under Housing Goal #1. For additional information about recently completed projects, see Attachment B- 1: Completed Projects of Mixed Densities. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-21 City of Newport Beach 2021-2029 HOUSING ELEMENT Evidence Supporting Residential Development in Mixed -Use Zones Considering existing development and a lack of vacant land, the City's housing strategy to demonstrate capacity for the 2021-2029 RHNA growth need relies on infill development opportunities within six focus areas. In each of these areas, existing land use policy either allows residential by -right, allows residential by -right through a mixed -use development project, or does not allow residential at all. As part of the identification of new sites for each area, the City will adopt new land use regulations (Policy Actions 1A to 1F) that will ensure residential development is permitted by -right with densities ranging between 50 and 60 du/ac. It is not the City's intent to exclude the permitting of nonresidential development in these areas, as it is a vital land use component that contributes to a livable, mixed -use character in support of many citywide goals. While the City understands its RHNA obligations, it must also continue to accommodate growth for jobs, retail, services, and amenities, especially in existing mixed -use land use category areas. In order to account for and address this, the City has evaluated each of the focus areas and has assigned a redevelopment percentage for each area to account for assumptions of nonresidential growth. The percent assumptions vary depending on the past performance of recent development and future projected trends. In areas where there are pending applications and owner or developer interest, assumptions for residential were increased. Unit yields were primarily based upon written developer interest from property owners of these sites. Conversely, assumptions were decreased in areas where residential development is more speculative. The resulting percentages for residential redevelopment are as follows: • In the Airport Focus Area, 30% of the 140 acres area is assumed to accommodate residential units • In the West Newport Mesa Focus Area, 47% of the 47 acres is assumed to accommodate residential units • In the Dover-Westcliff Focus Area, 52% of the 20 acres is assumed to accommodate residential units • In the Newport Center Focus Area, 30% of the 163 acres is assumed to accommodate residential units • In the Coyote Canyon Focus Area, 75% of the 34 acres is assumed to accommodate residential units • While the Banning Ranch Focus Area identifies opportunity sites, they are not used to accommodate any part of the 2021-2029 RHNA growth need Beyond this conservative approach with residential redevelopment percentages, the actual development trends for projects in existing mixed -use areas of Newport Beach, including the Airport Area, are heavily towards residential and away from commercial. This is evidenced by projects identified in Table B-10 (Airport Area Pipeline Projects Summarized). It is notable that none of these sites were zoned for primarily residential development, rather residential development was a redevelopment option. With the exception the MacArthur at Dolphin -Striker project (a small commercial center), there have been no major standalone commercial projects in the Airport Area for over two decades. Furthermore, projects in other Appendix B: Sites Analysis (September 2022 Final Housing Element) B-22 City of Newport Beach 2021-2029 HOUSING ELEMENT mixed -use areas, including Mariner's Mile, where zoning requires a minimum commercial component as part of a mixed -use development, have been requesting and obtaining development incentives through density bonus to reduce the amount of commercial floor area required. Recent examples include the West Coast Highway Mixed -Use project, which included 36 new residential units and a development incentive to reduce the required nonresidential floor area from 0.25 floor area ratio (FAR) to just under 0.125 FAR. In the same area, the City recently accepted a preliminary development application for a larger -scale project (Newport Village) that will also include a request to reduce the required commercial floor area as part of the mixed -use project. Between the redevelopment percentage and the demonstrative projects exhibiting a solid trend towards residential development, the City believes mixed -use designated areas are conducive to residential development and essential to maintaining thriving, vibrant neighborhoods. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-23 City of Newport Beach 2021-2029 HOUSING ELEMENT Development of Moderate and A,bo ve Moderate Sites Inventory This section contains a description and listing of the candidate sites identified to meet the City's moderate and above moderate income RHNA need. A full list of these sites is presented Tables B-12, B-14, B-17, 13- 20, B-22, and B-24. Projects in the Pipeline The City has identified a number of projects currently in the entitlements process which are likely to be developed and/or first occupied during the planning period and count as credit towards the 2021-2029 RHNA allocation. Notably, Projects in the Pipeline can completely accommodate the City's Above Moderate RHNA allocation. Table B-7 below summarizes the potential units from Projects in the Pipeline: Table 13-7: Moderate and Above Moderate -Income Projects in the Pipeline Moderate Income Above Moderate Income Pipeline Projects 32 units 1,455 units Accessory Dwelling Units for Moderate and Above Moderate -Income Households As noted in Section 3 of this Appendix, the City anticipates a total of 72 ADUs affordable at moderate income levels and 5 ADUs affordable at the above moderate -income level. The ADU production strategy for the City is thoroughly described in Appendix D: Accessory Dwelling Units. Remaining Need Table B-8 below displays the City's RHNA allocation need affordable to moderate and above moderate - income households for the years 2021-2029 as well as the City's net RHNA allocation need affordable to moderate and above moderate households after the inclusion of Projects in the Pipeline and ADUs. Table 13-8: Moderate and Above Moderate -Income Remaining Need Moderate Income Above Moderate Income RHNA Allocation 1,050 units 1,409 units Pipeline Projects 32 units 1,455 units Existing Zoning 287 units 40 units Accessory Dwelling Units 72 units 5 units Remaining Moderate/Above Moderate -Income Need 659 units No remaining need Selection of Sites to Accommodate Remaining Need As noted in Section 3 of this Appendix, the City conducted a public process to establish Focus Areas for rezone. Similar to the strategies laid out for lower -income units, the development of moderate and above moderate units was projected within each Focus Area as well. Although the specific buildout assumptions (both on affordability and overall development potential) that produce the Potential Units are described, area -by -area, in the Sites Inventory of this document, Table B-9 below serves as a summary: Appendix B: Sites Analysis (September 2022 Final Housing Element) B-24 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-9: Moderate/Above Moderate -Income Rezone Strategy by Focus Area Focus Area Anticipated Feasible Acreage Assumed Rezone Density Potential Moderate -Income Units Potential Above Moderate - Income Units Airport Area Environs 172 ac 50 du/ac 258 1,546 West Newport Mesa Area 47 ac 50 du/ac 111 664 Dover-Westcliff Area 20 ac 50 du/ac 52 313 Newport Center Area 163 ac 50 du/ac 244 1,463 Coyote Canyon Area 34 ac 60 du/ac 153 995 TOTAL 436 ac - 818 units 4,981 units Banning Ranch Area 30 ac 50 du/ac 148 units 884 units TOTAL with Banning Ranch 466 ac -- 966 units 5,865 units 5. The Sites /n ventory Each of the following sections describes the identified areas and contains a table of redevelopment assumptions and projected unit capacities. Additionally, each Focus Area is followed by a map detailing the adequate sites inventory, organized by area. This inventory should be understood as a large pool of sites from which the City can accommodate development and maintain capacity to meet the RHNA allocation as assigned. It is unlikely every site will develop housing units; therefore the larger inventory has been presented with realistic buildout assumptions. These buildout assumptions serve to both help the City properly project housing development for transportation and infrastructure needs, and to more accurately project development for the purposes of the Sites Inventory. Letters of Interest Many sites within the sites inventory are characterized as non -vacant. Of those sites, 91 have received letters of interest from developers that would like to build housing and other mixed -use projects on the parcels. Approximately 25 percent of all sites in the inventory have an explicit letter of interest from an owner/developer. The large volume of letters of interest proves that there is a strong appetite within the City of Newport Beach to develop on non -vacant sites including small, non -vacant sites (see Section 3, Small Sites). This is further supported by the list of in the pipeline projects list in this Appendix. Airport Area Environs The Airport Area Environs has been an active area for development in the City for several years. The development of higher -density residential units within this Focus Area can be expected to accommodate 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 Updates. As a result, high -density developments such as Phase 1A of the Uptown Newport Apartments have been made possible. This development achieved a density of 56 du/acre and provided about 91 units of Low and Very Low -Income housing in the City. There are plans to continue this development, which are described below. In addition to the Uptown Newport Apartment Project, there is interest to develop multi -family housing. As of November 2021, there are four approved and two pending projects within the Airport Area. These projects would construct higher density housing for the area. Table B-10 is a summarized version of Attachments 1 through 3. For more detailed information, please visit the Attachments. Appendix B: Sites Analysis (September 2022 Final Housing Element) 13-25 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-10: Airport Area Pipeline Projects Summarized Project Density Evidence for Future Development Approved Projects Newport Airport Village 46 du/acre (69 du/acre with The Project consolidates multiple density bonus) smaller lots into one large development site. The Project demonstrates that nonvacant sites are viable for redevelopment into high -density residential and mixed -use developments. Residences at 4400 Von Karman 44 du/acre (53 du/acre with This Project would convert an density bonus) underutilized parking lot into higher density residential development. Newport Crossings 67 du/acre (50 du/acre The Subject Property is a pentagonal - excluding density bonus) shape site and consists of three contiguous parcels. The lot line adjustment allows the reconfiguration of the underlying parcels to create a 0.5- acre parcel (Parcel 2) to be deeded to the City for public park use consistent with General Plan requirements, a 0.11-acre parcel (Parcel 3) for public parking for park use and emergency vehicle access for the mixed -use development, and 5.08-acre parcel (Parcel 1) for the mixed -use development. Uptown Newport Residences 19.71 du/acre The Project site currently has a single - Phase 16 story office building. The Project would demonstrate that nonvacant sites can be viable for redevelopment into higher density residential and mixed -use developments. Pending Projects Uptown Newport Residences 56.60 du/acre The Project site currently has a single - Phase 1C story office building. The Project would demonstrate that nonvacant sites can be viable for redevelopment into higher density residential and mixed -use developments. 1300 Bristol Apartment 98 du/acre (40 du/acre The Project site currently has a two - excluding the density bonus) story office building. The Project would demonstrate that nonvacant sites can be viable for redevelopment into higher density residential and mixed -use developments. Of the 223 acres of land deemed suitable for residential development in the Airport Area, 172 acres met the criteria required by AB 1397 for sites projected to accommodate Low and Very Low -Income units. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-26 City of Newport Beach 2021-2029 HOUSING ELEMENT •;�:�=yam' •�. � �-r�.-.,_ _� Although the parcels within the Sites Inventory have the capacity to accommodate approximately 8,272 units of development (at an assumed unit yield of 50 du/ac), an assumption of approximately 30% redevelopment has been applied considering development history, economic factors, and AFFH requirements. The assumed buildout is therefore projected at 2,440 units, 732 of which are projected to develop affordably. Table B-11 below displays the capacity and opportunity in this Focus Area which can help accommodate the City's RHNA allocation. Figure B-3 below maps the sites identified within this Focus Area which can help accommodate a portion of the City's RHNA allocation. Table B-11: Airport Area Environs - Redevelopment Analvsis Feasible Assumed Net Units Above Acreage Density Low Very Low Moderate Total Moderate 172 acres 50 du/ac 732 units 258 units 1,464 units 2,440 units Appendix B: Sites Analysis (September 2022 Final Housing Element) B-27 City of Newport 2021-2029 HOUSING Beach Figure 13-3: Airport Area Environs — Sites Inventory Site Inventory: Airport Area Environs LEGEND City Boundary 5th Cycle Sites Pipeline Projects Opportunity Sites Key Map i3 ea h� 5M'c� •r { {IIfG YI - mmmmmE=== Feet NORTH 0 500 1,000 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-28 City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod This parcel currently has an aging apartment complex that does not show signs of renovation and several parking Palm Mesa lots. This parcel has the opportunity to Airport 43924120 Ltd SP 7 RM No 148 5.88 5.88 Yes 0 50 294 146 44 15 87 redevelop at a higher density or to Area 17 accommodate additional development to the units currently on the property on the parking lot areas. This parcel was formerly a part of the "Koll Residences" and are contemplated as potential "infill housing' (not "replacement housing") located on Beachwood surface parking lots under the Airport area 427 121 24 Properties OA AO No 0 0.67 0.67 Yes 0 50 33 33 10 3 20 provisions of the 2006 General Plan. An Airport 18 LLC application has been filed with the City by Area Picerne for a new design of a residential project and this should be sufficient evidence of the desire of the owner to use the property for housing. This parcel was formerly a part of the "Koll Residences" and are contemplated as potential "infill housing' (not "replacement housing") located on Beachwood surface parking lots under the Airport area 427 121 24 Properties OA AO No 0 0.67 0.67 Yes 0 50 33 33 10 3 20 provisions of the 2006 General Plan. An Airport 18 LLC application has been filed with the City by Area Picerne for a new design of a residential project and this should be sufficient evidence of the desire of the owner to use the property for housing. The surface parking lot on this parcel is owned by the Irvine Company at SEC MacArthur & Campus. The parking structure on this parcel is a part of the Airport 445 121 17 Co Irvine PC CO-G No 0 0.91 0.91 Yes 0 50 45 45 14 5 26 Irvine Company Class A offices. The Area 20 sizeable parking fields and parking structure on the parcel give opportunity for housing development. Todd Todd This parcel is already approved by the City Airport 445 161 03 Schiffman PC MU-H2 No 0 0.69 0.69 Yes 0 50 34 34 10 3 21 for Newport Crossings multi -tenant Area 21 housing project. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-29 City of Newport Beach 2021 �"'... Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod This parcel is already approved by the City 445 16103 Todd Todd PC MU-112 No 0 1.04 1.04 Yes 0 50 51 51 15 5 31 for Newport Crossings multi -tenant Airport 22 Schiffman Area housing project. The current owner of the property has Newport Golf Airport 119 300 17 SP-7 PR No 0 1.38 1.38 Yes 0 50 69 57* 17 6 34 expressed to City staff written interest to Y 23 Club LLC Area develop housing. The current owner of the property has Newport Golf Airport 119 310 04 SP-7 PR No 0 3.70 3.70 Yes 0 50 184 152* 46 15 91 expressed to City staff written interest to Y 24 Club LLC Area develop housing. The current owner of the property has Newport Golf Airport 119 300 15 SP-7 PR No 0 1.52 1.52 Yes 0 50 76 62* 19 6 37 expressed to City staff written interest to Y 25 Club LLC Area develop housing. The current owner of the property has Newport Golf Airport 119 300 16 SP-7 PR No 0 7.30 7.30 Yes 0 50 364 299* 89 30 180 expressed to City staff written interest to Y 26 Club LLC Area develop housing. Birch This parcel contains vegetation and excess 427 131 16 Development OA AO No 0 0.67 0.67 Yes 0 50 33 33 10 3 20 parking stalls and is identified as a site for Airport 27 Co potential housing. Area This parcel contains office space for an Dekk Airport 427 12101 OA AO No 0 0.73 0.73 Yes 0 50 36 36 11 4 21 analytical data company and is identified 28 Associates LP as a site for potential housing. Area This parcel is currently under construction 427 131 14 Chiappero OA AO No 0 0.67 0.67 Yes 0 50 33 33 10 3 20 as a multi -story high rise apartment Airport 29 complex. Area This parcel is a part of the "Koll Office Condos" (SEC Campus and Von Karman). 427 12102 Birch OA AO No 0 0.67 0.67 Yes 0 50 33 33 10 3 20 Due to the existing use of the parcel, it is Airport 30 identified as a possible site of housing Area development. This parcel is a part of the "Koll Office Condos" (SEC Campus and Von Karman). 427 131 15 Chiappero OA AO No 0 0.67 0.67 Yes 0 50 33 33 10 3 20 Due to the existing use of the parcel, it is Airport 31 identified as a possible site of housing Area development. This parcel contains office space for an City National Airport 445 131 26 PC MU-H2 No 0 1.10 1.10 Yes 0 50 55 55 17 6 32 architecture company and is identified as 32 Bank Area a site for potential housing. 4400 This parcel contains vegetation and paved 445 122 13 Macarthur PC MU-112 No 0 0.71 0.71 Yes 0 50 35 35 11 4 20 sidewalk and is identified as a site for Airport 33 Property potential housing. Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-30 City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod Mandarin The current owner of the property has 445 133 06 Investment PC MU-H2 No 0 0.75 0.75 Yes 0 50 37 37 11 4 22 expressed to City staff written interest to Y Airport 34 Group allow housing. Area This parcel was formerly a part of the "Koll Residences" and are contemplated as Von Karman potential "infill housing" (not Airport 445 131 21 Ventures LLC PC MU-H2 No 0 1.19 1.19 Yes 0 50 59 59 18 6 35 "replacement housing") located on Area 35 surface parking lots under the Airport area provisions of the 2006 General Plan. This parcel is occupied by an office Carl's Jr building at SWC Campus and Von Karman. Airport36 445 121 11 Restaurants PC CG No 0 1.38 1.38 Yes 0 50 68 68 20 7 41 This parcel could be combinable with Area LLC parcel 59. This parcel contains office space for 445 13123 Big Man On PC MU-H2 No 0 0.53 0.53 Yes 0 50 26 26 8 3 15 lawyers and identified as a site for Airport 38 Campus LLC potential housing. Area Although this parcel is bisected by the 65dB line, City policy regarding noise Hg Newport dampening eliminates this impediment to Airport 44513115 Owner LLC PC MU-H2 No 0 2.01 2.01 Yes 0 50 100 100 30 10 60 development. Additionally, the presence Area 39 of an auto -detailing shop presents the opportunity to develop housing. This parcel is a small banking building, regular in shape and could potentially 445 122 05 Craig Realty PC MU-H2 No 0 0.80 0.80 Yes 0 50 39 39 12 4 23 stand on its own as housing. Consolidating Airport 40 this parcel would make for a more Area developable scale. John Hancock This parcel represents existing commercial Airport 44513118 Life PC MU-H2 No 0 1.61 1.61 Yes 0 50 80 80 24 8 48 development. Area 41 John Hancock This parcel represents existing commercial Airport 44513119 Life PC MU-H2 No 0 2.30 2.30 Yes 0 50 115 115 35 12 68 development. Area 42 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-31 City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod 4400 This parcel contains office space for 445 122 12 MacArthur PC MU-H2 No 0 1.17 1.17 Yes 0 50 58 58 17 6 35 banking and insurance companies and Airport 44 Property identified as a site for potential housing. Area This parcel is owned by Hoag. Staff has informed the subcommittee that UCI will be building a major medical facilities and hospital across the Jamboree (in Irvine). It Hoag Mem is likely that this parcel will be used by Airport 445 15109 Hosp PC MU-H2 No 0 1.35 1.35 Yes 0 50 67 67 20 7 40 Hoag to complement the UCI medical Area 45 Presbyterian facilities, but it is possible that Hoag may consider workforce housing. A letter should be sent to Hoag to confirm Hoag's long-term land for those parcels. This parcel does not look to have any parking facilities, as the parcel is not much Ferrado Airport 445 122 09 PC MU-H2 No 0 1.03 1.03 Yes 0 50 51 51 15 5 31 larger than the building footprint, yet is 46 Newport LLC identified as a potential site for housing Area development. Kcn This parcel has a functioning office and 445 131 31 Management PC MU-H2 No 0 2.58 2.58 Yes 0 50 128 128 38 13 77 identified as a potential location for Airport 47 LLC housing. Area This parcel is owned by the Irvine Company at SEC MacArthur & Campus. Mac Arthur There are somewhat sizeable parking Airport 445 12105 Court LLC PC CO-G No 0 0.74 0.74 Yes 0 50 37 37 11 4 22 fields on the parcel, and the property Area 49 owner should be advised that the addition of housing to the parcel might be possible. The current owner of the property has 445 13109 4440 Vka Tic PC MU-H2 No 0 0.66 0.66 Yes 0 50 32 32 10 3 19 expressed to City staff written interest to Y Airport 50 3 LLC allow housing. Area This parcel is already approved by the City 445 15101 County Of PC PF No 0 7.78 7.78 Yes 0 50 388 388 116 39 233 for Newport Crossings multi -tenant Airport 52 Orange housing project. Area This parcel is owned by the Irvine Company at SEC MacArthur & Campus. Mac Arthur There are somewhat sizeable parking Airport 44512114 Court LLC PC CO-G No 0 7.81 7.81 Yes 0 50 390 390 117 39 234 fields on the parcel, and the property Area 53 owner should be advised that the addition of housing to the parcel might be possible. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-32 City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod This parcel is designated for a hotel use that is an identified as a possible Bre & Esa candidate for housing. The property Airport 445 121 18 Properties PC CG No 0 2.65 2.65 Yes 0 50 132 132 40 13 79 owner should be advised that a land use Area 54 LLC change to accommodate housing might be possible. This parcel is already approved by the City 445 16104 4425 PC MU-H2 No 0 1.69 1.69 Yes 0 50 84 84 25 8 51 for Newport Crossings multi -tenant Y Airport 55 Jamboree LLC Area housing project. The current owner of the property has 445 14104 Coastal Azul PC MU-H2 No 0 0.26 0.26 No 0 50 13 13 4 1 8 expressed to City staff written interest to Y Airport 56 Management allow housing. Area This parcel contains a restaurant 445 122 17 Pacific Club PC MU-H2 No 0 1.95 1.95 Yes 0 50 97 97 29 10 58 overlooking a pond and is identified as a Airport 58 site for potential housing. Area This parcel is occupied by a "Carl's Jr." This Nf Von parcel appears to be more underutilized Airport 445 12109 Karman LLC PC CG No 0 1.00 1.00 Yes 0 50 49 49 15 5 29 than parcel 36, and these parcels could be Area 59 combinable. This parcel is a viable commercial M4 development that front Bristol and the 73 Airport 44512219 Macarthur PC MU-H2 No 0 0.51 0.51 Yes 0 50 25 25 8 3 14 freeway and is identified as a site for Area 60 LLC potential housing. This parcel contains a parking lot and Airport 427 121 27 Birch OA AO No 0 1.41 1.41 Yes 0 50 70 70 21 7 42 61 identified as a site for potential housing. Area This parcel is a small banking building, regular in shape and could potentially Bank First Airport 427 173 01 PC MU-H2 No 0 1.00 1.00 Yes 0 50 49 49 15 5 29 stand on its own as housing. Consolidating 62 And Inc Area this parcel would make for a more developable scale. This parcel contains office space a hotel Bsp Bristol Airport 427 332 02 PC CO-G No 0 2.38 2.38 Yes 0 50 118 118 35 12 71 and is identified as a site for potential 63 LLC housing. Area Newport The current owner of the property has 427 332 04 Place PC CO-G No 0 1.70 1.70 Yes 0 50 85 85 26 9 50 expressed to City staff written interest to Y Airport 64 Investment allow housing. Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-33 City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod This parcel is an improved parking lot that could be a potential location for infill 427 332 03 Crown PC CO-G No 0 1.41 1.41 Yes 0 50 70 70 21 7 42 housing. If suitable, the owner of this Airport 65 Building parcel should be advised that the addition Area of housing might be possible. This parcel was formerly a part of the "Koll Residences" and are contemplated as potential "infill housing' (not "replacement housing") located on surface parking lots under the Airport area Ndh America Airport 427 221 14 PC MU-H2 No 0 1.50 1.50 Yes 0 50 75 75 23 8 44 provisions of the 2006 General Plan. An 66 Inc application has been filed with the City by Area Picerne for a new design of a residential project and this should be sufficient evidence of the desire of the owner to use the property for housing. This parcel contains office space for real Macarthur Airport 427 181 01 PC MU-H2 No 0 1.45 1.45 Yes 0 50 72 72 22 7 43 estate developers and identified as a site 67 Pacific Plaza Area for potential housing. Newport The current owner of the property has 427 241 13 Plaza Office PC CG No 0 3.95 3.95 Yes 0 50 197 197 59 20 118 expressed to City staff written interest to Y Airport 68 LLC allow housing. Area This parcel has a functioning office 1200 Quail St Airport 427 221 13 PC MU-H2 No 0 1.00 1.00 Yes 0 50 49 49 15 5 29 building but could be a location for 69 LLC housing. Area This parcel contains office space for a Elite West Airport 427 174 04 PC MU-H2 No 0 6.32 6.32 Yes 0 50 315 315 95 32 188 manufacturing company and is identified 70 LLC as a site for potential housing. Area This parcel is currently under construction 427 22101 Nf Dove LLC PC MU-H2 No 0 3.99 3.99 Yes 0 50 199 199 60 20 119 as a multi -story high rise apartment Y Airport 71 complex. Area Gurcharan The current owner of the property has 427 181 08 Singh PC MU-H2 No 0 0.72 0.72 Yes 0 50 35 35 11 4 20 expressed to City staff written interest to Y Airport 72 Sandher allow housing. Area The current owner of the property has 427 222 05 Malaguena PC MU-H2 No 0 0.90 0.90 Yes 0 50 45 45 14 5 26 expressed to City staff written interest to Y Airport 73 allow housing. Area Pmc The current owner of the property has 427 222 06 Macarthur PC MU-H2 No 0 1.56 1.56 Yes 0 50 77 77 23 8 46 expressed to City staff written interest to Y Airport 74 LLC allow housing. Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-34 City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod Sbs Dove This parcel contains office space for an 427 221 10 Street PC MU-H2 No 0 1.71 1.71 Yes 0 50 85 85 26 9 50 architectural firm and is identified as a site Airport 75 Partners for potential housing. Area Hankey This parcel contains office space for a 427 221 11 Investment PC MU-H2 No 0 1.52 1.52 Yes 0 50 76 76 23 8 45 manufacturing company and is identified Airport 76 Company as a site for potential housing. Area This parcel has a two -level parking structure for a multi -story office structure Dove Owner that could be re -worked to add housing. Airport 427 22106 Ag PC MU-H2 No 0 3.59 3.59 Yes 0 50 179 179 54 18 107 The owner of this parcel should be Area 77 advised that the addition of housing might be possible. J Ray The current owner of the property has 427 174 06 Macarthur PC MU-H2 No 0 0.94 0.94 Yes 0 50 47 47 14 5 28 expressed to City staff written interest to Y Airport 78 Sanderson allow housing. Area This parcel shares a parking lot with parcel 72. The two buildings on this parcel are newer, vintage commercial buildings, and Ridgeway due to the existing use, identified as a Airport 427 18107 Real Estate PC MU-H2 No 0 1.10 1.10 Yes 0 50 55 55 17 6 32 potential source for housing development. Y Area 79 The current owner of the property has expressed to City staff written interest to allow housing. This parcel is a commercial retail building Gs 1600 Dove operated by national food and beverage Airport 427 18103 LLC PC MU-H2 No 0 2.49 2.49 Yes 0 50 124 124 37 12 75 companies and likely to be housing sites if Area 80 combined with neighboring sites. This parcel is an oddly shaped parcel that would not be able to efficiently be Feb Dove planned as separate housing projects. The Airport81 427 22109 Street PC MU-H2 No 0 1.51 1.51 Yes 0 50 75 75 23 8 44 City will work with the owner to Area Partners encourage housing development with adjacent parcels nearby. The current owner of the property has 427 22102 Westerly Ow- PC CO-G No 0 1.46 1.46 Yes 0 50 72 72 22 7 43 expressed to City staff written interest to Y Airport 82 Aberdeen Area allow housing. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-3S City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod J Ray The current owner of the property has 427 174 05 Macarthur PC MU-H2 No 0 1.50 1.50 Yes 0 50 75 75 23 8 44 expressed to City staff written interest to Y Airport 83 Sanderson allow housing. Area This parcel is a parking lot and large enough for a sizable, standalone project. If combined with parcel 85, there would be Jones enough land for a good-sized project. The Airport 42734202 Fletcher Jr. PC MU-H2 No 0 3.70 3.70 Yes 0 50 184 184 55 18 111 property owner will be advised that the Area 84 use of housing of Parcel 84 alone or in combination with 85 would be possible, both as very feasible housing projects. The current owner of the property has Hilbert Airport 427 342 01 PC MU-H2 No 0 1.97 1.97 Yes 0 50 98 98 29 10 59 expressed to City staff written interest to Y 85 Properties II allow housing. Area The current owner of the property has 427 221 16 1500 Quail PC CO-G No 0 4.76 4.76 Yes 0 50 238 238 71 24 143 expressed to City staff written interest to Y Airport 86 Property LLC allow housing. Area This parcel is a community recreation Men's center with a large parking lot and several 439 40101 Christian PF PF No 0 4.03 4.03 Yes 0 50 201 201 60 20 121 grass fields which present the opportunity Y Airport 87 Young for additional housing development on Area the site. Hankey This parcel has a functioning office 427 22107 Investment PC MU-H2 No 0 1.75 1.75 Yes 0 50 87 87 26 9 52 building but could be a location for Airport 88 Company housing. Area Davenport The current owner of the property has 427 221 15 Quail PC MU-H2 No 0 1.47 1.47 Yes 0 50 73 73 22 7 44 expressed to City staff written interest to Y Airport 89 Partners allow housing. Area The current owner of the property has Sa Abanoub Airport 427 141 14 PC CO-G No 0 0.64 0.64 Yes 0 50 31 31 9 3 19 expressed to City staff written interest to Y 90 LLC allow housing. Area This parcel contains space for cosmetic Jrj services an education center, and Airport 936 790 44 Investments PC CO-G No 0 0.97 0.97 Yes 0 50 48 48 14 5 29 stockbrokers that are identifies as sites for Area 91 LP potential housing. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-36 City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod The current owner of the property has 936 790 50 Sa Abanoub PC CO-G No 0 0.86 0.86 Yes 0 50 42 42 13 4 25 expressed to City staff written interest to Y Airport 92 LLC allow housing. Area The current owner of the property has Sa Abanoub Airport 427 141 04 PC CO-G No 0 0.52 0.52 Yes 0 50 26 26 8 3 15 expressed to City staff written interest to Y 93 LLC allow housing. Area The current owner of the property has Sa Abanoub Airport 427 141 11 PC CO-G No 0 0.52 0.52 Yes 0 50 26 26 8 3 15 expressed to City staff written interest to Y 94 LLC allow housing. Area The current owner of the property has Sa Abanoub Airport 936 790 48 PC CO-G No 0 0.72 0.72 Yes 0 50 36 36 11 4 21 expressed to City staff written interest to Y 95 LLC allow housing. Area The current owner of the property has 427 14107 Sa Abanoub PC CO-G No 0 0.58 0.58 Yes 0 50 29 29 9 3 17 expressed to City staff written interest to Y Airport 96 LLC allow housing. Area The current owner of the property has Sa Abanoub Airport 427 14108 PC CO-G No 0 0.51 0.51 Yes 0 50 25 25 8 3 14 expressed to City staff written interest to Y 97 LLC allow housing. Area The current owner of the property has 427 141 16 Sa Abanoub PC CO-G No 0 8.61 8.61 Yes 0 50 430 430 129 43 258 expressed to City staff written interest to Y Airport 98 LLC allow housing. Area Uptown This parcel is currently under construction 445 134 22 Newport PC MU-H2 No 0 0.67 0.67 Yes 0 50 33 33 10 3 20 as a multi -story high rise apartment Airport 100 Jamboree LLC complex. Area This parcel is a part of the "Koll Office Condos" (SEC Campus and Von Karman). 445 141 11 Ncp GI PC MU-H2 No 0 0.29 0.29 N/A 0 50 14 14 4 1 9 Due to the existing use of the parcel, it is Airport 103 Owner LLC identified as a possible site of housing Area development. This parcel is a part of the "Koll Office Condos" (SEC Campus and Von Karman). 445 141 12 Lyon Housing PC MU-H2 No 0 0.48 0.48 N/A 0 50 23 23 7 2 14 Due to the existing use of the parcel, it is Airport 104 LLC identified as a possible site of housing Area development. The current owner of the property has 445 141 13 Ncp GI PC MU-H2 No 0 0.29 0.29 N/A 0 50 14 14 4 1 9 staff expressed to City stawritten interest to Y Airport 105 Owner LLC allow housing. Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-37 City of Newport Beach 2021 � "' f7 Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod Although this parcel is bisected by the 65dB line, City policy regarding noise Global dampening eliminates this impediment to Airport106 427 171 02 Alliance PC CG No 0 1.20 1.20 Yes 0 50 59 59 18 6 35 development. Additionally, the presence Area Caesar of an auto -detailing shop presents the opportunity to develop housing. This parcel is not developed and identified Westerly Ow- as a site for potential housing. It is Airport 42722103 Aberdeen PC COG No 0 1.46 1.46 Yes 0 50 73 73 22 7 44 bordered by a manufacturing office and Y Area 107 multi -story apartment complex. Although this parcel is bisected by the 65dB line, City policy regarding noise Beni dampening eliminates this impediment to Airport 42717103 Investments PC CG No 0 1.40 1.40 Yes 0 50 69 69 21 7 41 development. Additionally, the presence Area 108 LLC of an auto -detailing shop presents the opportunity to develop housing. Although this parcel is bisected by the 65dB line, City policy regarding noise dampening eliminates this impediment to 936 790 46 Orange PC CO-G No 0 0.97 0.97 Yes 0 50 48 48 14 5 29 development. Additionally, the presence Airport 109 County Bar of undeveloped building pads at the site Area presents the opportunity to develop housing. The current owner of the property has 427 221 17 0 PC MU-H2 No 0 6.46 6.46 Yes 0 50 322 322 97 32 193 expressed to City staff written interest to Y Airport 335 allow housing. Area The current owner of the property has 445 141 31 0 PC MU-H2 No 0 0.40 0.40 N/A 0 50 20 20 6 2 12 expressed to City staff written interest to Y Airport 338 allow housing. Area Gurcharan The current owner of the property has 427 18109 Singh PC MU-H2 No 0 0.72 0.72 Yes 0 50 35 35 11 4 20 expressed to City staff written interest to Y Airport 343 Sandher allow housing. Area The current owner of the property has Sa Abanoub Airport 427 141 13 PC CO-G No 0 0.37 0.37 No 0 50 19 19 6 2 11 expressed to City staff written interest to Y 344 LLC allow housing. Area The current owner of the property has 427 13109 DMP OA AO No 0 4.19 4.19 Yes 0 50 209 209 63 21 125 expressed to City staff written interest to Y Airport 356 Properties allow housing. Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-38 City of Newport Beach Table B-12: Airport Area Sites Inventory Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Sizing Existing Rezoned Unit Net Yield Low/ Propensity Interest Area Map ID Land Use 7 Site. 7 Criteria. Zone Density Yield Very Mod Above 7 Density (Assumed) Low Mod The current owner of the property has 442 282 02 CHC Bayview No 0 5.23 2.0 Yes 0 50 100 100 30 10 60 expressed to City staff written interest to Y Airport 357 Holdings, Inc Area allow housing. The current owner of the property has Bristol expressed to City staff written interest to Airport 439 021 13 Zenith, LLC No 0 0.31 0.31 No 0 50 8 8 2 1 5 allow housing. Consolidated onto Map ID Y Area 358 Sites 358, 359, 360 The current owner of the property has Bristol expressed to City staff written interest to Airport 43902112 Zenith, LLC No 0 0.17 0.17 No 0 50 8 8 2 1 5 allow housing. Consolidated onto Map ID Y Area 359 Sites 358, 359, 360 The current owner of the property has Bristol expressed to City staff written interest to Airport 439 02103 Zenith, LLC No 0 0.16 0.16 No 0 50 16 16 5 2 9 allow housing. Consolidated onto Map ID Y Area 360 Sites 358, 359, 360 The property is adjacent to another with property owner interest. Consolidation of 439 352 21 David Chen No 1 0.44 0.44 No 0 50 21 21 6 2 13 Map ID 363, 364, 365, 366, and 367 is a Airport 363 possibility and would be encouraged by Area current policy. The property is adjacent to another with Estate of property owner interest. Consolidation of 439 34101 Edward J No 0 0.87 0.87 Yes 0 50 43 43 13 4 26 Map ID 363, 364, 365, 366, and 367 is a Airport 364 Kisner possibility and would be encouraged by Area current policy. The current owner of the property has Charles F Airport 439 352 17 No 4 0.37 0.37 No 0 50 18 18 5 2 11 expressed to City staff written interest to Y 365 Moothard Area allow housing. The current owner of the property has 439 352 20 Charles F No 1 0.44 0.44 No 0 50 21 21 6 2 13 expressed to City staff written interest to Y Airport 366 Moothard Area allow housing. The property is adjacent to another with property owner interest. Consolidation of 439 352 22 Jackson No 1 0.21 0.21 No 0 50 10 10 3 1 6 Map ID 363, 364, 365, 366, and 367 is a Airport 367 Schuyler possibility and would be encouraged by Area current policy. Airport Area Total Acreage Development Potential 8,272 units The city is aware of a development Pipeline 427 111 03 Ap Center PF PF No 0 0.73 0.73 Yes 0 0 346 17 0 329 proposal on this site. Project 260 The city is aware of a development Pipeline 427 11109 Corp Jrsm PF PF No 0 3.19 3.19 Yes 0 0 28 0 0 28 proposal on this site. Project 250 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-39 City of Newport Beach Table B-12: Airport Area Sites Inventory :- �.• :dW _ Density (Du/Ac) Assumed Net Unit Existing Potential Yield Parcel Existing General 5th Existing Gross Buildable HCD Rezoned Assumed Existing Use and Explanation of Letter Focus Inventory/ Owner Vacancy Cycle Sizing Interest Number Zoning Plan 7 Site. Units Acreage Acreage 7 Criteria. Existing Rezoned Unit Net Yield Low/ Propensity 7 Area Map ID Land Use Zone Density Yield Very Mod Above Mod Density (Assumed) Low Macarthur The city is aware of a development Pipeline 427 172 02 Starboard PF PF No 0 1.83 1.83 Yes 0 0 117 26 0 91 proposal on this site. Project 266 Macarthur The city is aware of a development Pipeline 427 172 06 Starboard PF PF No 0 1.71 1.71 N/A 0 0 117 26 0 91 proposal on this site. Project 252 Macarthur The city is aware of a development Pipeline 427 172 03 Starboard PF PF No 0 1.94 1.94 Yes 0 0 117 26 0 91 proposal on this site. Project 267 44513129 Slf-Kc Towers PF PF No 0 6.22 6.22 N/A 0 0 325 13 0 312 The city is aware of a development Pipeline 249 LLC proposal on this site. Project Newport The city is aware of a development Pipeline 445 133 07 Jamboree PF PF No 0 12.57 12.57 N/A 0 0 66 0 0 66 Y 253 proposal on this site. Project Uptown Tsg-Parcel The city is aware of a development Pipeline 445 134 17 LLC PF PF No 0 2.58 2.58 Yes 0 0 0 30 0 0 30 proposal on this site. Project 99 Airport Area Pipeline Project Total: 1,146 units *Please Note — these net unit totals have been manually manipulated to accurately reflect development interest Appendix B: Sites Analysis (September 2022 Final Housing Element) B-40 City of Newport Beach 2021-2029 HOUSING ELEMENT West Newport Mesa Area West Newport Mesa has been identified by the City as a reinvestment and redevelopment opportunity, where older industrial, smaller -scale development can transition to support future residential development. In 2017, the West Newport Mesa Area gained 81 detached condominiums in addition to 73 mobile home spaces through the development of the Ebb Tide Project. The development area achieved a density of approximately 17 du/acre. The adjacent Hoag hospital and supportive medical -related activities further support the opportunity to provide housing for local workers of various income levels and encourage multi -family living spaces in the area adjacent to the Hospital. Of the 55 acres of land deemed suitable for residential development in the West Newport Mesa Area, 47 acres met the criteria required by AB 1397 for sites projected to accommodate Low and Very Low -Income units. Although the parcels within the Sites Inventory have the capacity to accommodate approximately 2,000 units of development (at an assumed unit yield of 50 du/ac), an assumption of approximately 47% redevelopment has been applied considering development history, economic factors, and AFFH requirements. The assumed buildout is therefore projected at 1,107 units, 332 of which are projected to develop affordably. Table B-12 below displays the capacity and opportunity in this Focus Area which can help accommodate the City's RHNA allocation. Figure B-4 below maps the sites identified within this Focus Area which can help accommodate the City's RHNA allocation. Table B-13: West Newport Mesa Environs - Redevelopment Analvsis Feasible Assumed Net Units Above Acreage Density Low Very Low Moderate Total Moderate 47 acres 50 du/ac 332 units 111 units 664 units 1,107 units Appendix B: Sites Analysis (September 2022 Final Housing Element) B-41 City of Newport Beach 2021-2029 HOUSING ELEMENT Figure B-4: West Newport Mesa Area — Sites Inventory Site Inventory: West Newport Mesa Area LEGEND City Boundary ® 5th Cycle Sites Pipeline Projects Opportunity Sites Key Map It wine - mmmmmff==== Feet NORTH 0 50D 1,0170 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-42 Ciryrytyy of Newport Beach 20-202— iVk Table B-14: West Newport Mesa Sites Inventory Existing Density (Du/Ac) Assumed Net Unit HCD Potential Yield Parcel Existing General 5th Existing Gross Buildable Sizing Rezoned Assumed Existing Use and Explanation of Letter Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Criteria Existing Rezoned Unit Net Yield Low/ Above Propensity Interes Focus Area Map ID Land Site? ? Zone Density Yield Very Mod Mod t? Use Density (Assumed) Low This parcel contains office buildings School and available parking spaces. The Costa site is borders residential housing West 114 170 51 Mesa PF PF No 0 11.56 10 No 0 50 578 578 173 58 347 to the southwest and can be Newport 215 Union converted to housing Mesa Area redevelopment. The current owner of the property West 424 141 17 Taormina IG IG No 0 0.23 0.23 No 0 50 11 11 3 1 7 has expressed to City staff written Y Newport 216 Property interest to allow housing. Mesa Area The current owner of the property West 424 141 17 Taormina IG IG No 0 0.23 0.23 No 0 50 11 11 3 1 7 has expressed to City staff written Y Newport 216 Property interest to allow housing. Mesa Area The current owner of the property West Chi Ltd 892 080 02 RM RM No 61 4.34 4.34 Yes 13 50 155 94 28 9 57 has expressed to City staff written Y Newport 218 Ptnrship interest to allow housing. Mesa Area The current owner of the property West Chi 424 15101 RM RM No 56 4.77 4.77 Yes 14 50 182 126 38 13 75 has expressed to City staff written Y Newport 219 Limited interest to allow housing. Mesa Area This parcel is a portion of a mobile home park and has been identified as an opportunity for higher- West 892 090 55 Brian RM RM No 56 4.27 4.27 Yes 13 50 157 101 30 10 61 density housing. The current owner Newport 220 Bellerose of the property has expressed to Mesa Area City staff written interest to develop housing. This parcel is a portion of a mobile Charlotte home park and has been identified West 892 109 03 Patronite RM RM No 36 1.90 1.90 Yes 13 50 59 23 7 2 14 as an opportunity for higher - Newport 221 density housing. Mesa Area This parcel is City -owned property City Of West and a portion of this site has been 114 170 82 Newport PF PF No 0 3.05 0.92 Yes 0 50 45 45 14 5 26 identified as an opportunity site for Newport 222 Beach Mesa Area higher -density housing. This parcel is City -owned property City Of and a portion of this site has been West 424 401 12 Newport PF PF No 0 2.00 0.60 Yes 0 50 29 29 9 3 17 identified as an opportunity site for Newport 223 Beach Mesa Area higher -density housing. This parcel is City -owned property City Of and has been identified as an West 425 171 01 Newport PF PF No 0 7.95 2.38 Yes 0 50 119 119 36 12 71 opportunity site for higher -density Newport 224 Beach housing. The City will consolidate Mesa Area and move current existing uses. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-43 Ciryrytyy of Newport Beach 20-202— Table B-14: West Newport Mesa Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit HCD Potential Yield Parcel Existing General 5th Existing Gross Buildable Sizing Rezoned Assumed Existing Use and Explanation of Letter Inventory/ Number Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Criteria Existing Rezoned Unit Net Yield Low/ Above Propensity Interes Focus Area Map ID Land Site? Zone Density Very Mod t? ? Yield Mod Use Density (Assumed) Low This parcel contains middle aged industrial buildings. Redevelopment Michael of this site to accommodate West 424 11105 Voorhees IG IG No 0 0.55 0.55 Yes 0 50 27 27 8 3 16 housing is feasible as an individual Newport 225 parcel or in combination with Mesa Area neighboring sites. This parcel contains middle aged, tilt up, construction, industrial West Scab Wrks 424 14106 IG IG No 0 0.52 0.52 Yes 0 50 25 25 8 3 14 buildings that are feasible for Newport 226 LLC housing redevelopment with zoning Mesa Area overlay. Trico The current owner of the property West 424 11106 Newport IG IG No 0 3.23 3.23 Yes 0 50 161 161 48 16 97 has expressed to City staff written Y Newport 227 Properties interest to allow housing. Mesa Area This parcel contains middle aged industrial buildings. Redevelopment Howland West of this site to accommodate 424 40104 Associates IG IG No 0 1.86 0.56 Yes 0 50 27 27 8 3 16 housing is feasible as an individual Newport 228 LLC parcel or in combination with Mesa Area neighboring sites. This parcel contains older industrial buildings including an auto shop and large parking lot. Redevelopment of this site to accommodate housing is feasible as West Richard 424 14101 IG IG No 0 2.73 2.73 Yes 0 50 136 136 41 14 81 an individual parcel or in Newport 229 Hunsaker combination with neighboring sites. Mesa Area The City will work with relevant property owners to explore lot consolidation and housing development opportunities. This parcel contains middle aged, tilt up, construction, industrial West 424 142 14 Lois For IG IG No 0 0.74 0.74 Yes 0 50 37 37 11 4 22 buildings that feasible for housing Newport 230 Horness redevelopment with zoning Mesa Area overlay. This parcel contains middle aged, Orangeth tilt up, construction, industrial West 424 141 04 orpe IG IG No 0 0.69 0.69 Yes 0 50 34 34 10 3 21 buildings that feasible for housing Newport 231 Properties redevelopment with zoning Mesa Area overlay. Brent & This parcel contains middle aged, West 424 141 05 Ami IG IG No 0 0.53 0.53 Yes 0 50 26 26 8 3 15 tilt up, construction, industrial Newport 232 Ducoing buildings that feasible for housing Mesa Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-44 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-14: West Newport Mesa Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit HCD Potential Yield Parcel Existing General 5th Existing Gross Buildable Sizing Rezoned Assumed Existing Use and Explanation of Letter Inventory/ Owner Plan Vacancy Cycle Existing Rezoned Low/ Interes Focus Area Number Zoning Units Acreage Acreage Criteria Unit Net Yield Above Propensity Map ID Land Site? Zone Density Very Mod t? 7 Yield Mod Use Density (Assumed) Low redevelopment with zoning overlay. This parcel contains automotive shops and parking that present the Riverport opportunity to be redeveloped into West 424 131 16 Properties OM CO-M No 0 1.07 1.07 Yes 0 50 53 53 16 5 32 housing. The parcel owner should Newport 233 LLC be notified of the land use change Mesa Area to accommodate for potential housing. This parcel contains middle aged, James tilt up, industrial buildings that West 424 14103 DeGraw IG IG No 0 1.08 1.08 Yes 0 50 54 54 16 5 33 feasible for housing redevelopment Newport 234 with zoning overlay. Mesa Area This parcel contains middle aged, Metal West tilt up, industrial buildings that are 424 142 11 Finishing IG IG No 0 1.31 1.31 Yes 0 50 65 65 20 7 38 Newport 235 feasible for housing Hixson redevelopment. Mesa Area This parcel contains middle aged, Newport tilt up, industrial buildings that are West 424 40106 Business IG IG No 0 1.14 1.14 Yes 0 50 56 56 17 6 33 feasible for housing Newport 236 Center redevelopment. Mesa Area This parcel contains middle aged industrial buildings. Redevelopment Richard of this site to accommodate West 424 14102 Hunsaker IG IG No 0 1.61 1.61 Yes 0 50 80 80 24 8 48 housing is feasible as an individual Newport 237 parcel or in combination with Mesa Area neighboring sites. This parcel contains middle aged, Allred West tilt up, industrial buildings that are 424 40108 Newport IG IG No 0 0.76 0.76 Yes 0 50 38 38 11 4 23 feasible for housing Newport 238 LLC redevelopment. Mesa Area This parcel contains middle aged, Glynn Van tilt up, industrial buildings adjacent West 424 14109 De Walker IG IG No 0 0.56 0.56 Yes 0 50 28 28 8 3 17 to existing housing that are feasible Newport 239 for housing redevelopment. Mesa Area The current owner of the property West 424 141 10 0 IG IG No 0 0.37 0.37 No 0 50 16 16 5 2 9 has expressed to City staff written Y Newport 342 interest to allow housing. Mesa Area West Newport Mesa Total Acreage Development Potential: 2,000 units *Please Note — these net unit totals have been manually manipulated to accurately reflect development interest Appendix B: Sites Analysis (September 2022 Final Housing Element) B-45 City of Newport Beach 2021-2029 HOUSING ELEMENT 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. In 2019, the Dover-Westcliff Area gained 23 townhouse style multi -family homes through the completion of the Lidos Villas Project. The development area achieved a density of approximately 19 du/acre. This project demonstrates the ability to develop multi -family housing in this desirable part of the City. In addition to the Lidos Villas Project, there is interest to continue developing multi -family housing. As of November 2021, there is one approved and one pending project within the Dover-Westcliff Area. These projects would construct higher density housing for the area. Table B-15 is a summarized version of Attachments 1 through 3. For more detailed information, please visit the Attachments. Table B-15: Dover-Westcliff Area Pipeline Projects Summarized Project Density Evidence for Future Development Approved Projects West Coast Highway Mixed -Use 36 du/acre (26.7 du/acre The Project consolidates excluding the density bonus) multiple smaller lots into one large development site. The Project demonstrates that nonvacant sites are viable for redevelopment into high - density residential and mixed - use developments. Pending Projects Newport Village Mixed -Use 20 du/acre The Project site currently has older office buildings and associated parking lots. The Project would demonstrate that nonvacant sites can be viable for redevelopment into higher density residential and mixed - use developments. Of the 29 acres of land deemed suitable for residential development in the Dover-Westcliff Area, 18 acres met the criteria required by AB 1397 for sites projected to accommodate Low and Very Low -Income units. Although the parcels within the Sites Inventory have the capacity to accommodate approximately 889 units of development (at an assumed unit yield of 50 du/ac), an assumption of approximately 52% redevelopment has been applied considering development history, economic factors, and AFFH requirements. The assumed buildout is therefore projected at 458 units, 137 of which are projected to develop affordably. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-46 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-16 below displays the capacity and opportunity in this Focus Area which can help accommodate the City's RHNA allocation. Figure B-5 below maps the sites identified within this Focus Area which can help accommodate the City's RHNA allocation. Table B-16: Dover-Westcliff Environs - Redevelopment Analysis Feasible Assumed Net Units Above Acreage Density Low Very Low Moderate Total Moderate 20 acres 50 du/ac 137 units 46 units 275 units 458 units Appendix B: Sites Analysis (September 2022 Final Housing Element) B-47 City of Newport Beach 2021-2029 HOUSING ELEMENT `: Figure B-5: Dover Westcliff Area — Sites Inventory Site Inventory: Dover-Westcliff Area LEGEND City Boundary 5ttr Cycle Sites Pipeline Projects Opportunity sites Key Map =' r Rii�c vi - mmmmmE=== Feet NORTH 0 500 1,000 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-48 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5`" HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low This parcel is an existing commercial center with some small restaurants. The current owner of the property has expressed to City staff written Donna MU- interest to develop housing and Dover- 049 122 03 Carpenter MM MU-H1 No Yes 0 0.14 0.14 No 21 50 7 7 2 1 4 the City will work with relevant Y Westcliff 132 property owners on the adjacent parcels to encourage lot consolidation and provide viability to accommodate lower income housing. This parcel is an existing commercial center with some small galleries. The current owner of the property has expressed to City staff written 047 04105 Newport Beach MU-T CV/15 MU-H4 No Yes 0 0.11 0.11 No 18 50 5 5 2 1 2 interest to develop housing and Y Dover- 133 Alano Club ST the City will work with relevant Westcliff property owners on the adjacent parcels to encourage lot consolidation and provide viability to accommodate lower income housing. This parcel is an existing commercial center with some small galleries and shops. The current owner of the property has expressed to City staff Patrick MU- written interest to develop 047 041 25 Chamberlai CV/15T MU-H4 No Yes 0 0.06 0.06 No 15 50 3 3 1 0 2 housing and the City will work Y Dover- 134 n " ST with relevant property owners Westcliff on the adjacent parcels to encourage lot consolidation and provide viability to accommodate lower income housing. This parcel is a church on a 2+ acre parcel with a sizeable Corp Of parking lot. The owner will be 117 631 12 The MU MU-H1 No 0 2.15 2.15 Yes 26 50 107 107 32 11 64 made aware that a portion of Dover- 135 Presiding DW the property could be Westcliff designated to accommodate housing if that would fit in with the mission of the church. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-49 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5`" HCD Potential Yield Letter Parcel Existing Gross Buildable Sizing Rezoned Assumed Existing Use and Explanation of Focus Inventory Number Owner g Plan Vacancy Cycle Units Acreage Acreage Criteria Existing Rezoned Unit Net Yield Low/ Above Propensity Interest Area /Map ID Zoning Land Site? Zone Density Very Mod ? 7 Yield Mod Use Density (Assumed) Low The current owner of the Westcliff Mu property has expressed to City Dover- 117 631 22 Properties DW MU-H1 No 0 1.67 1.67 Yes 26 50 83 83 25 8 50 staff written interest to allow Y Westcliff 136 LLC housing. The current owner of the M Horning MU- property has expressed to City Dover- 117 631 17 Jr. DW MU-H1 No 0 1.30 1.30 Yes 26 50 65 65 20 7 38 staff written interest to allow Y Westcliff 137 housing. This parcel is a part of a series of office buildings, some appearing more updated than others. Some of the parcels could 901 Dover MU accommodate housing alone, or Dover- 117 631 18 Ltd MU-H1 No 0 1.10 1.10 Yes 26 50 55 55 17 6 32 138 DW in combination with others. The Westcliff Partnership owners of this parcel have contacted the city in the past about the potential for housing uses. This parcel has a functioning 11763111 Lincoln Yee MU-H1 No 0 0.87 0.87 Yes 26 50 43 43 13 4 26 medical office project but could Y Dover- 139 DW Westcliff be a location for housing. This parcel is a developed medical facility. The owner of this parcel will be advised that Donna housing development in 117 811 18 Adele OG CO-G No 0 1.51 1.51 Yes 0 50 75 75 23 8 44 combination with site 143 may Dover- 142 Westcliff Gallant be most feasible (as the owner of 143 has already expressed written interest in housing development). The current owner of the Russell E R property has expressed to City Dover- 117 811 19 Fluter OG CO-G No 0 0.79 0.79 Yes 0 50 39 39 12 4 23 staff written interest to allow Y Westcliff 143 housing. This 1.6-acre parcel is a small commercial center including office space and medical office Carol Rex space. Although this parcel has Dover- 049 271 30 Reynolds OG CO-G No 0 1.64 1.64 Yes 0 50 81 81 24 8 49 existing parking lot area, the Westcliff 144 current use presents the viable opportunity for full -parcel redevelopment as housing. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-50 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5`" HCD Potential Yield Letter Parcel Existing Gross Buildable Sizing Rezoned Assumed Existing Use and Explanation of Focus Inventory Number Owner g Plan Vacancy Cycle Units Acreage Acreage Criteria Existing Rezoned Unit Net Yield Low/ Above Propensity Interest Area /Map ID Zoning Land Site? Zone Density Very Mod ? 7 Yield Mod Use Density (Assumed) Low This parcel is a large commercial center including office space, restaurants, and shops. Although this parcel has an existing parking lot area, the LIDO current use presents the viable Dover- 423 11101 PARTNERS CG CG No 0 4.82 4.82 Yes 0 50 241 128 38 13 77 opportunity for full -parcel Y Westcliff 334 redevelopment as housing. The current owner of the property has expressed to City staff written interest to develop housing. This parcel is a commercial development on Jamboree and Bayside Cove with a large parking lot and very desirable 050 391 12 Investment CM CM No 0 1.45 1.45 N/A 0 50 38 38 11 4 23 location for housing. The Y Dover- 337 s Llc Westcliff current owner of the property has expressed to City staff written interest to develop housing. The current owner of the DMP MU- property has expressed to City Dover- 117 631 21 Properties DW MU-H1 No 0 4.19 0.86 Yes 0 50 43 43 13 4 26 staff written interest to allow Y Westcliff 355 housing. The current owner of the Palmo property has expressed to City Dover- 049 191 30 Investment RM RM NO 0 1.55 1.55 Yes 0 50 117 117 35 12 70 staff written interest to allow Y Westcliff ff 361 housing. Dover-Westcliff Total Acreage Development Potential: 889 units The city is aware of a 425 06109 Ms 36 Dev RM- RM No 114 5.76 5.76 Yes 92 0 0 -22 0 0 -22 development proposal on this Pipeline 243 LLC 6000 Project site. Bayside The city is aware of a 440 132 60 Village PC MU-W2 No 0 0 4.74 4.74 N/A 0 0 49 0 0 49 development proposal on this Pipeline 256 Project Marina I I I I Isite. Nb The city is aware of a 425 471 27 Mariner's MU- MU-H1 No 0 0 4.37 4.37 N/A 26 0 0 198 9 0 189 development proposal on this Pipeline 246 Mile LLC MM site. Project Appendix B: Sites Analysis (September 2022 Final Housing Element) B-51 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5t" HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low The city is aware of a 425 471 55 Jeffrey M MU-H1 No 0 0 0.20 0.20 N/A 24 0 0 35 3 0 32 development proposal on this Pipeline 242 Shafer MM Project site. Dover-Westcliff Pipeline Total: 260 units This site is adjacent to sites identified by the City during the 5t" Cycle Housing Element Existing 049 130 18 Quay MU- MU-W1 No Yes 0 1.31 1.31 Yes 5 0 0 7 0 7 Update and is a location suitable Zoning 15 Works LLC W1 for housing at the existing Density zoning density during this update. This site is adjacent to sites identified by the City during the Newport 5t" Cycle Housing Element Existing 049 130 14 Beach MU MU-W1 No Yes 0 1.21 1.21 Yes 5 0 0 7 0 7 Update and is a location suitable Zoning 16 Waterfront W1 for housing at the existing Density zoning density during this update. This site is adjacent to sites identified by the City during the 51" Cycle Housing Element Existing 049 121 22 Realty Corp MU-H1 No Yes 0 0.43 0.43 No 25 0 0 11 0 11 0 Update and is a location suitable Zoning 316 MM for housing at the existing Density zoning density during this update. This site was identified by the City during the 51" Cycle Housing DMP PCH- MU Element Update and remains a Existing 425 471 14 NEWPORT MM MU-H1 No Yes 0 0.12 0.12 No 24 0 0 7 0 7 0 location suitable for housing at Y Zoning 276 LLC the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing DMP PCH- MU Element Update and remains a Existing 425 471 15 NEWPORT MM MU-H1 No Yes 0 0.23 0.23 No 26 0 0 3 0 3 0 location suitable for housing at Zoning 270 LLC the existing zoning density Density during this update. This site was identified by the City during the 51" Cycle Housing Mariners MU- Element Update and remains a Existing 04915029 Mile LLC W1 MU-W1 No Yes 0 1.65 1.65 Yes 5 0 0 9 0 0 9 location suitable for housing at Zoning 4 the existing zoning density Density during this update. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-52 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5t" HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low This site is adjacent to sites identified by the City during the 5t" Cycle Housing Element Existing 425 471 23 Susan Cuse MU- MU-H1 No Yes 0 0.53 0.53 Yes 26 0 0 14 0 14 0 Update and is a location suitable Zoning 12 Inc MM for housing at the existing Density zoning density during this update. This site was identified by the City during the 51" Cycle Housing Nb Existing 04915026 Mariner's MU- MU-W1 No Yes 0 2.18 2.18 Yes 5 0 0 1 0 0 1 Element Update and remains a Zoning 3 W1 location suitable for housing at Mile LLC the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing Chino Hills MU- Element Update and remains a Existing 04915016 Mall LLC W1 MU-W1 No Yes 0 0.52 0.52 Yes 5 0 0 3 0 0 3 location suitable for housing at Zoning 7 the existing zoning density Density during this update. This site was identified by the City during the 51" Cycle Housing Nb MU Element Update and remains a Existing 049 150 21 Mariner's W1 MU-W1 No Yes 0 0.92 0.92 Yes 5 0 0 5 0 0 5 location suitable for housing at Zoning 6 Mile LLC the existing zoning density Density during this update. This site is adjacent to sites identified by the City during the Mariners 51" Cycle Housing Element Existing 425 471 26 Mile North MM MU-H1 No Yes 0 0.95 0.95 Yes 26 0 0 25 0 25 0 Update and is a location suitable Zoning 8 LLC for housing at the existing Density zoning density during this update. This site is adjacent to sites identified by the City during the 5t" Cycle Housing Element Existing Sadie Mary MU- 425 471 24 MU-H1 No Yes 0 0.54 0.54 Yes 25 0 0 14 0 14 0 Update and is a location suitable Zoning 13 Stegmann MM for housing at the existing Density zoning density during this update. This site was identified by the City during the 5t" Cycle Housing 2436pch MU- Element Update and remains a Existing 42547157 LLC MM MU H1 No Yes 0 0.56 0.56 Yes 26 0 0 15 0 15 0 location suitable for housing at Zoning 11 the existing zoning density Density during this update. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-53 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5t" HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low This site was identified by the City during the 5t" Cycle Housing Shafer MU- Element Update and remains a Existing 42547156 Irrevoc Tr MM MU H1 No Yes 0 0.49 0.49 No 26 0 0 7 0 7 0 location suitable for housing at Zoning 268 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing SAMANTH MU- Element Update and remains a Existing 42547119 A LLC MM MU H1 No Yes 0 0.49 0.49 No 26 0 0 13 0 13 0 location suitable for housing at Zoning 315 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing DMP PCH- MU Element Update and remains a Existing 425 471 13 NEWPORT MM MU-H1 No Yes 0 0.14 0.14 No 21 0 0 2 0 2 0 location suitable for housing at Zoning 275 LLC the existing zoning density Density during this update. This site was identified by the City during the 51" Cycle Housing Shafer MU- Element Update and remains a Existing 42547156 Irrevoc Tr MM MU H1 No Yes 0 0.49 0.49 No 26 0 0 7 0 7 0 location suitable for housing at Zoning 268 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing Shafer MU- Element Update and remains a Existing 42547156 Irrevoc Tr MM MU H1 No Yes 0 0.49 0.49 No 26 0 0 7 0 7 0 location suitable for housing at Zoning 268 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing Shaw MU- Element Update and remains a Existing 42547112 Kathleen A MM MU-H1 No Yes 0 0.16 0.16 No 25 0 0 2 0 2 0 location suitable for housing at Zoning 272 the existing zoning density Density during this update. Shafer MU- The city is aware of a Pipeline 425 471 55 Family MU-H1 No 0 0 0.20 0.20 N/A 24 0 0 35 3 0 32 development proposal on this 242 1983 T MM site. Project This site was identified by the City during the 5t" Cycle Housing Investment MU- Element Update and remains a Existing 04912204 s Llc MM MU H1 No Yes 0 0.17 0.17 No 22 0 0 2 0 2 0 location suitable for housing at Zoning 273 the existing zoning density Density during this update. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-54 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5t" HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low This site was identified by the City during the 5t" Cycle Housing MU- Element Update and remains a Existing 04912225 Llc MM MU-H1 No Yes 0 0.09 0.09 No 22 0 0 1 0 1 0 location suitable for housing at Zoning 277 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing Humphries MU- Element Update and remains a Existing 42547154 Family Tru MM MU H1 No Yes 0 0.43 0.43 No 25 0 0 11 0 11 0 location suitable for housing at Zoning 318 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing WYNN MU- Element Update and remains a Existing 04912206 JERRY TR MM MU-H1 No Yes 0 0.17 0.17 No 24 0 0 4 0 4 0 location suitable for housing at Zoning 320 the existing zoning density Density during this update. This site is adjacent to sites identified by the City during the THE YU TER 51" Cycle Housing Element Existing 049 110 25 MU-H1 No Yes 0 0.33 0.33 No 24 0 0 8 0 8 0 Update and is a location suitable Zoning 319 LIVING MM for housing at the existing Density TRUST zoning density during this update. This site was identified by the City during the 51" Cycle Housing Mariners MU Element Update and remains a Existing 049 110 30 Center M2 MM MU-H1 No Yes 0 1.68 1.68 Yes 26 0 0 1 0 1 0 location suitable for housing at Zoning 1 LLC the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing 2751 & MU Element Update and remains a Existing 049 122 05 2801 PCH MM MU-H1 No Yes 0 0.17 0.17 No 24 0 0 4 0 4 0 location suitable for housing at Y Zoning 321 LLC the existing zoning density Density during this update. This site was identified by the City during the 51" Cycle Housing MU- Element Update and remains a Existing 04912118 Llc MM MU-H1 No Yes 0 0.42 0.42 No 26 0 0 11 0 11 0 location suitable for housing at Zoning 317 the existing zoning density Density during this update. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-55 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5tn HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low This site was identified by the City during the 5tn Cycle Housing THE MU Element Update and remains a Existing 049 110 19 GARDEN MM MU-H1 No Yes 0 0.32 0.32 No 24 0 0 5 0 5 0 location suitable for housing at Zoning 269 M2 LLC the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing THE MU Element Update and remains a Existing 049 110 21 GARDEN MM MU-H1 No Yes 0 0.25 0.25 No 24 0 0 3 0 3 0 location suitable for housing at Zoning 271 M2 LLC the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing CITY OF MU Element Update and remains a Existing 423 12103 NEWPORT W2 MU-W2 No Yes 0 0.07 0.07 No 13 0 0 1 0 1 0 location suitable for housing at Zoning 298 BEACH the existing zoning density Density during this update. This site was identified by the City during the 5" Cycle Housing MU Element Update and remains a Existing 423 12105 3 L P W2 MU-W2 No Yes 0 0.30 0.30 No 26 0 0 4 0 4 0 location suitable for housing at Zoning 289 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing DJM AR MU- Element Update and remains a Existing 423 12106 LIDO LLC W2 MU-W2 No Yes 0 0.08 0.08 No 26 0 0 1 0 1 0 location suitable for housing at Zoning 292 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing MU- Element Update and remains a Existing 42312304 Partnership W2 MU-W2 No Yes 0 0.24 0.24 No 25 0 0 6 0 6 0 location suitable for housing at Zoning 326 the existing zoning density Density during this update. This site was identified by the City during the 5tn Cycle Housing DJM AR MU- Element Update and remains a Existing 423 122 11 LIDO LLC W2 MU-W2 No Yes 0 0.17 0.17 No 23 0 0 4 0 4 0 location suitable for housing at Zoning 327 the existing zoning density Density during this update. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-56 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5t" HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low This site was identified by the City during the 5t" Cycle Housing Wypark MU Element Update and remains a Existing 423 123 08 Investment W2 MU-W2 No Yes 0 0.59 0.59 Yes 25 0 0 15 0 15 0 location suitable for housing at Zoning 14 s Pc the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing Lido Group MU- Element Update and remains a Existing 42312201 Retail LLC W2 MU-W2 No Yes 0 1.34 1.34 Yes 26 0 0 5 0 5 0 location suitable for housing at Zoning 2 the existing zoning density Density during this update. This site was identified by the City during the 5t" Cycle Housing BATAVIA MU Element Update and remains a Existing 423 123 10 BUSINESS W2 MU-W2 No Yes 0 0.50 0.50 No 26 0 0 7 0 7 0 location suitable for housing at Zoning 288 PARK LP the existing zoning density Density during this update. This site was identified by the City during the 51" Cycle Housing 047 031 19 Developme MU- CV/15T MU-H4 No Yes 0 0.29 0.29 No 23 0 0 4 0 4 0 Element Update and remains a Existing Zoning 280 nt Lllp H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing MU- Element Update and remains a Existing 047 041 31 Llc CV/15T MU-H4 No Yes 0 0.07 0.07 No 14 0 0 1 0 1 0 Zoning 312 H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing MU- Element Update and remains a Existing 047 04106 Partnership CV/15T MU-H4 No Yes 0 0.11 0.11 No 18 0 0 2 0 2 0 location suitable for housing at Zoning 330 H ST the existing zoning density Density during this update. This site was identified by the City during the 51" Cycle Housing 047 041 35 Close 2010 MU- CV/15T MU-H4 No Yes 0 0.09 0.09 No 22 0 0 1 0 1 0 Element Update and remains a Existing Zoning 296 Irrevoc T H ST location suitable for housing at Density the existing zoning density during this update. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-57 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5t" HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low This site was identified by the HILTON City during the 5t" Cycle Housing 047 041 24 DANNY MU CV/15T MU-1-14 No Yes 1 0.06 0.06 No 15 0 0 1 0 1 0 Element Update and remains a Existing Zoning 314 CHARLES H ST location suitable for housing at Density TR the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing 047 03102 KERRAGEO M U- CV/15T MU-H4 No Yes 0 0.06 0.06 No 15 0 0 1 0 1 0 Element Update and remains a Existing Zoning 310 US I LLC H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing Golden MU Element Update and remains a Existing 049 130 22 Hills W1 MU-W1 No Yes 0 1.39 1.39 Yes 5 0 0 8 0 0 g location suitable for housing at Y Zoning 5 Towers LLC the existing zoning density Density during this update. This site was identified by the City during the 51" Cycle Housing 047 041 33 KERRAGEO M U- CV/15T MU-H4 No Yes 0 0.19 0.19 No 26 0 0 5 0 5 0 Element Update and remains a Existing Zoning 322 US I LLC H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing 047 03103 KERRAGEO MU- CV/15T MU-1-14 No Yes 0 0.19 0.19 No 26 0 0 3 0 3 0 Element Update and remains a Existing Zoning 283 US I LLC H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing 047 032 04 Charlotte L MU- CV/15T MU-1-14 No Yes 0 0.06 0.06 No 15 0 0 1 0 1 0 Element Update and remains a Existing Zoning 308 Jackson H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing BATAVIA MU- Element Update and remains a Existing 047 031 20 BUSINESS T CV/15 MU-1-14 No Yes 0 0.24 0.24 No 25 0 0 3 0 3 0 location suitable for housing at Zoning 281 PARK LP H ST the existing zoning density Density during this update. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-58 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5t" HCD Potential Yield Letter Parcel g Plan Vacancy Cycle Existing Gross Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation of Interest Focus Inventory Number Owner Units Acreage Acreage Criteria Unit Net Yield Above Propensity Area /Map ID Zoning Land Site? 7 Zone Density Yield Very Mod Mod ? Use Density (Assumed) Low This site was identified by the City during the 5t" Cycle Housing MU- Element Update and remains a Existing 047 032 03 Ellison Tr CV/15T MU-H4 No Yes 0 0.06 0.06 No 15 0 0 1 0 1 0 Zoning 303 H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing 047 041 12 KERRAGEO MU- CV/15T MU-H4 No Yes 0 0.10 0.10 No 20 0 0 2 0 2 0 Element Update and remains a Existing Zoning 328 US I LLC H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5t" Cycle Housing MU- Element Update and remains a Existing 047 043 11 Tr CV/15T MU-H4 No Yes 0 0.06 0.06 No 15 0 0 1 0 1 0 Zoning 301 H ST location suitable for housing at Density the existing zoning density during this update. C-N MU- The city is aware of a Pipeline 047 042 32 Properties CV/15T MU-H4 No 0 0.06 0.06 N/A 15 0 0 3 0 0 3 development proposal on this 247 LP H ST site. Project This site was identified by the City during the 5t" Cycle Housing MU- Element Update and remains a Existing 047 042 07 Ptnshp CV/15T MU-H4 No Yes 0 0.06 0.06 No 15 0 0 1 0 1 0 Zoning 305 H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 51" Cycle Housing 047 042 04 Marshall MU- CV/15T MU-H4 No Yes 0 0.06 0.06 No 15 0 0 1 0 1 0 Element Update and remains a Existing Zoning 306 Family Tr H ST location suitable for housing at Density the existing zoning density during this update. 410 Twenty The city is aware of a Pipeline 047 052 01 Ninth MU-H4 No 0 0 0.05 0.05 N/A 0 0 0 4 0 0 4 development proposal on this 259 Street LLC site. Project This site was identified by the City during the 51" Cycle Housing 047 042 20 PAPA JET MU- CV/15T MU-H4 No Yes 0 0.06 0.06 No 15 0 0 1 0 1 0 Element Update and remains a Existing Zoning 302 LLC H ST location suitable for housing at Density the existing zoning density during this update. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-59 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-17: Dover-Westcliff Sites Inventory Existing DensityDu Ac (/) Assumed Net Unit Existin General 5tn HCD Potential Yield Letter Parcel Existing Gross Buildable Sizing Rezoned Assumed Existing Use and Explanation of Focus Inventory Number Owner g Plan Vacancy Cycle Units Acreage Acreage Criteria Existing Rezoned Unit Net Yield Low/ Above Propensity Interest Area /Map ID Zoning Land Site? Zone Densit y Very Mod ? Yield Mod Use Density (Assumed) Low This site was identified by the City during the 5th Cycle Housing CANNERY MU- Element Update and remains a Existing 047 032 19 CV/15T MU-H4 No Yes 0 0.27 0.27 No 25 0 0 4 0 4 0 Zoning 279 LLC H ST location suitable for housing at Density the existing zoning density during this update. This site was identified by the City during the 5th Cycle Housing EVERGREE MU- Existing 047 032 07 N POPPY CV/15T MU-H4 No Yes 1 0.06 0.06 No 15 0 0 1 0 1 0 Element Update and remains a Zoning 313 LLC " ST location suitable for housing at Density the existing zoning density during this update. DMP Owner requested addition of 117-631-21 Properties No No 0.86 0.86 No 43 site to the Inventory 355 Palmo Owner requested addition of Existing 049-191-30 Investment MU-H4 No No 1.55 1.55 Yes 117 Zoning 361 site to the Inventory s GP Density 5th Cycle Sites Total: 336 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-60 City of Newport Beach 2021-2029 HOUSING ELEMENT Newport Center Area Newport Center has recently had construction of several new residential developments. In 2016, construction was completed on the Meridian project, which replaced eight underutilized tennis courts and resulted in a gain of 79 condominium units at 18.5 du/acre. This project required the approval of a General Plan amendment from the City and a Local Coastal Program (LCP) amendment from the Coastal Commission. In 2017, the area gained 524 apartment units from the completion of the Villas at Fashion Island Project, which replaced a large office plaza. The development area achieved a density of approximately 36 du/acre and demonstrates the possibility of high -density housing in the Newport Center Area. The project included an affordable housing component where nearby market rate housing units were converted to moderate income units. This fact demonstrates the City's ability to provide affordable housing opportunities when entitling market rate housing in the Newport Center area. In 2019, the City granted entitlements for the redevelopment of a museum site formerly occupied by the Orange County Museum of Art. This project, Vivante Senior Housing, resulted in a gain of 90 new senior living units at a density of 30 du/acre. These projects further demonstrate that nonvacant sites are viable in the Newport Center area. The City expects the continuation of these development opportunities that create housing adjacent to major employment opportunities and support retail. Currently, there is strong owner interest to develop additional multi -family housing in the area on several sites that are occupied by large surface parking lots and older commercial developments. Additionally, The Newport Beach Tennis Club site (Map IDS. 214, 182, 240, and 257) was entitled to construct a new tennis facility, hotel accommodations and low -density housing in 2012 and 2018. The property owner is currently conducting due diligence to seek entitlements to construct a high -density housing project consisting of 350 units on a 7-acre site creating a 50 du/acre project. Based on track record of development in the Newport Center Area and recent discussions with property owners, existing development is not presumed to be impediment to housing development due to the high values achieved with residential use. Put simply, when the value of residential development exceeds the value of the existing development sufficiently to absorb the cost to redevelop, the existing improvements are not considered an impediment to housing. The high property values and rents currently achieved in Newport Center with existing residential uses that replaced prior uses is compelling evidence that nonvacant sites are feasible for future residential use. Table B-18 is a summarized version of Attachments 1 through 3. For more detailed information, please see the Attachments. Table B-18: Newport Center Area Pipeline Projects Summarized Project Density Evidence for Future Development Approved Projects Residences at Newport Center 23 du/acre The Project site currently has one carwash. The Project demonstrates that nonvacant sites are viable for redevelopment into high - density residential and mixed - use developments. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-61 City of Newport Beach 2021-2029 HOUSING ELEMENT Approved Projects Ritz Carlton Residences 57 du/ac Owner has received approval of an entitlement application to convert 159 hotel rooms to 159 residences. Of the 432 acres of land deemed suitable for residential development in the Newport Center Area, 172 acres met the criteria required by AB 1397 for sites projected to accommodate Low and Very Low -Income units. Although the parcels within the Sites Inventory have the capacity to accommodate approximately 7,883 units of development (at an assumed unit yield of 50 du/ac), an assumption of approximately 30% redevelopment has been applied considering development history, economic factors, and AFFH requirements. The assumed buildout is therefore projected at 2,374 units, 712 of which are projected to develop affordably. Table B-19 below displays the capacity and opportunity in this Focus Area which can help accommodate the City's RHNA allocation. Figure B-6 below maps the sites identified within this Focus Area which can accommodate the City's RHNA allocation. Table B-19: Newport Center Area — Redevelopment Analvsis Feasible Assumed Net Units Above Acreage Density Low Very Low Moderate Total Moderate 172 acres 50 du/ac 712 units 237 units 1,425 units 2,374 units Appendix B: Sites Analysis (September 2022 Final Housing Element) B-62 City of Newport Beach 2021-2029 HOUSING ELEMENT Figure 13-6: Newport Center Area — Sites Inventory Site Inventory: Newport Center Area LEGEND City Boundary Sth Cycle Sites Pipeline Projects opportunity Sites Key Map IInYt.n - cow P —h Lasta - 'L ] wn f Wr f 4In -iiiiiiiiiiiiiiiiiiii==Feel NORTH 0 500 1,000 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-63 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Above Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Land Site? Units Acreage Criteria? Zone Density Unit Net Yield Very Mod of Propensity Interest? Area /Map ID a Mod Use Density (Assumed) Yield Low This parcel is a site that was proposed for 21 housing units but the application was withdrawn before it went to Pacific Bell the Planning Commission. The Newport 458 361 10 Telephone PF PF No 0 1.29 1.29 Yes 0 50 64 64 19 6 39 site is feasible for housing, Y Center 141 Company although the density may Area have to be reduced in order for a design to be achieved that meets any safety concerns. This parcel contains the Newport Beach Tennis Club. Given the minor amount of Newport 440 281 02 Ath LLC PC PR No 0 7.60 7.60 Yes 0 50 379 379 114 38 227 Center 145 building improvements, the site could readily be Area redeveloped for housing. These parcels are a religious facility with large parking lots. Church Newport Additional development or 458 341 02 Newport PI PI No 0 3.03 3.03 Yes 0 50 151 151 45 15 91 replacement development are Center 146 Center both feasible paths for Area residential units on this site. These parcels are a religious facility with large parking lots. Wardens Additional development or Newport 45834101 Rector PI PI No 0 3.60 3.60 Yes 0 50 179 179 54 18 107 replacement development are Center 147 both feasible paths for Area residential units on this site. This parcel contains an improved parking lot for the surrounding office buildings and cosmetic surgery offices. Due to the excess amount of Irvine parking on the site, there is Newport 442 271 30 PC CO-R No 0 0.75 0.75 Yes 0 50 37 37 11 4 22 Center 148 Company feasible room to accommodate housing units. Area The property owner should be advised that a land use change to allow housing might be possible. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-64 2Ciryryty of Newport Beach 01 Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Above Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Land Site? Units Acreage Criteria? Zone Density Unit Net Yield Very Mod of Propensity Interest? Area /Map ID a Mod Use Density (Assumed) Yield Low This parcel contains an improved parking lot for the surrounding office buildings and cosmetic surgery offices. Due to the excess amount of Irvine parking on the site, there is Newport 442 271 30 Company PC CO-R No 0 0.75 0.75 Yes 0 50 37 37 11 4 22 feasible room to Center 148 accommodate housing units. Area The property owner should be advised that a land use change to allow housing might be possible. These parcels are a portion of the large commercial development including retail and office space in Newport The Irvine Center. Mixed -use Newport 442 02147 Company LLC PC CR No 0 0.54 0.54 Yes 0 50 26 26 8 3 15 development of residential Center 152 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport The Irvine Center. Mixed -use Newport 442 02147 Company LLC PC CR No 0 0.54 0.54 Yes 0 50 26 26 8 3 15 development of residential Center 152 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. This parcel includes the Palisades Tennis Club. Given the minor amount of building improvements, the site could Jgkallins readily be redeveloped for Newport 44013240 Investments PR PR No 0 1.79 1.79 Yes 0 50 89 89 27 9 53 housing. If the site is found Center 154 suitable, the property owner Area should be advised that a land use change to allow housing might be possible. The current owner of the 180 Investors property has expressed to City Newport 44223108 LLC OR CO-R No 0 1.17 1.17 Yes 0 50 58 58 17 6 35 staff written interest to allow Y Center 155 housing. Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-65 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Above Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Land Site? Units Acreage Criteria? Zone Density Unit Net Yield Very Mod of Propensity Interest? Area /Map ID a Mod Use Density (Assumed) Yield Low The current owner of the property has expressed to City Newport 442 082 11 Ncmb No LLC PC CO-M No 0 2.72 2.72 Yes 0 50 135 135 41 14 80 Y Center 157 staff written interest to develop housing. Area The current owner of the property has expressed tCity o Newport 442 082 14 Ncmb No LLC PC COW No 0 4.05 4.05 Yes 0 50 202 202 61 20 121 staff written interest Y Center 158 develop housing. Area The current owner of the o property has expressed tCity Newport 442 082 08 Ncmb No LLC PC COW No 0 3.46 3.46 Yes 0 50 173 173 52 17 104 Y Center 159 staff written interest develop housing. Area This parcel is an older office building on a smaller parcel that is a potential site for housing. If the site is found Newport 442 082 12 Ncmb No LLC PC COW No 0 1.17 1.17 Yes 0 50 58 58 17 6 35 Y Center 160 suitable, the property owner should be advised that a land Area use change to allow housing might be possible. This parcel contains office space for corporate companies with large amounts of surrounding landscape. Due to the large Newport 442 271 17 17 Corporate PC CO-R No 0 1.04 1.04 Yes 0 50 51 51 15 5 31 parcel size, this site can be a Center 162 Plaza Assoc potential site for housing. The Area property owner should be advised that a land use change to allow housing might be possible. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-66 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Above Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Land Site? Units Acreage Criteria? Zone Density Unit Net Yield Very Mod of Propensity Interest? Area /Map ID a Mod Use Density (Assumed) Yield Low This parcel contains office space for corporate companies with large amounts of surrounding Mark landscape. Due to the large Newport 442 271 23 Robinson Jr PC CC-R No 0 0.55 0.55 Yes 0 50 27 27 8 3 16 parcel size, this site can be a Center 163 LLC potential site for housing. The Area property owner should be advised that a land use change to allow housing might be possible. The current owner of the Mitchell to City property has expressedto Newport 442 271 12 JunkiArea PC CO-R No 0 0.76 0.76 Yes 0 50 38 38 11 4 23 staff written interest allow Y Center 164 housing. The current owner of the Property property has expressed to City Newport 442 271 05 Reserve Inc PC CO-R No 0 0.89 0.89 Yes 0 50 44 44 13 4 27 staff written interest to allow Y Center 165 housing. Area The current owner of the Property property has expressed to City Newport 44227103 Reserve Inc PC CO-R No 0 0.89 0.89 Yes 0 50 44 44 13 4 27 staff written interest to allow Y Center 166 housing. Area This parcel contains office space for corporate companies with large amounts of surrounding landscape. Due to the large Newport Burnham- 442 271 32 PC CO-R No 0 0.98 0.98 Yes 0 50 49 49 15 5 29 parcel size, this site can be a Center 167 Newport LLC potential site for housing. The Area property owner should be advised that a land use change to allow housing might be possible. This parcel contains office space for corporate companies with large amounts of surrounding Newport landscape. Due to the large Newport 442 271 16 Corporate PC CO-R No 0 1.02 1.02 Yes 0 50 51 51 15 5 31 parcel size, this site can be a Center 168 Plaza potential site for housing. The Area property owner should be advised that a land use change to allow housing might be possible. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-67 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield Parcel Existing General 5th Existing Gross Buildable HCD Existing Rezoned I Assumed Low/ Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Plan Vacancy Cycle Units Acreag Acreage Sizing Zone Density Rezoned Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low This parcel contains office space for corporate companies with large amounts of surrounding landscape. Due to the large Newport 442 271 15 Heritage One PC CO-R No 0 0.68 0.68 Yes 0 50 33 33 10 3 20 parcel size, this site can be a Center 169 LLC potential site for housing. The Area property owner should be advised that a land use change to allow housing might be possible. This parcel contains office space for corporate companies with large amounts of surrounding Pacific landscape. Due to the large Newport 442 271 01 Development PC CO-R No 0 0.84 0.84 Yes 0 50 41 41 12 4 25 parcel size, this site can be a Center 170 Group potential site for housing. The Area property owner should be advised that a land use change to allow housing might be possible. These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 271 34 Scott Boras PC CO-R No 0 0.51 0.51 Yes 0 50 25 25 8 3 14 development of residential Center 172 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport GeorgeCenter. Mixed -use Newport 44227114 Randy PC CO-R No 0 0.88 0.88 Yes 0 50 44 44 13 4 27 development of residential Center 173 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. The current owner of the o property has expressed tCity Newport 442 271 04 Division Tax PC CO-R No 0 0.97 0.97 Yes 0 50 48 48 14 5 29 staff written interest Y Center 174 develop housing. Area Appendix B: Sites Analysis (September 2022 Final Housing Element) B-68 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield Parcel Existing General 5th Existing Gross Buildable HCD Existing Rezoned I Assumed Low/ Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Plan Vacancy Cycle Units Acreag Acreage Sizing Zone Density Rezoned Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low These parcels are a portion of the large commercial development including retail Chico and office space in Newport Newport Center. Mixed -use 442 271 13 Associates PC CO-R No 0 0.76 0.76 Yes 0 50 38 38 11 4 23 development of residential Center 175 Inc units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. This parcel contains office space for corporate companies with large amounts of surrounding landscape. Due to the large Newport 442 271 19 Co Irvine PC CO-R No 0 1.13 1.13 Yes 0 50 56 56 17 6 33 parcel size, this site can be a Center 176 potential site for housing. The Area property owner should be advised that a land use change to allow housing might be possible. These parcels are a portion of the large commercial development including retail and office space in Newport Irvine Center. Mixed -use Newport 442 271 31 Company PC CO-R No 0 3.00 3.00 Yes 0 50 149 149 45 15 89 development of residential Center 178 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport ratate 24 Corporate Center. Mixed -use Newport 44227133 Plaza II LC PC CO-R No 0 0.98 0.98 Yes 0 50 49 49 15 5 29 development of residential Center 179 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-69 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Above Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Land Site? Units Acreage Criteria? Zone Density Unit Net Yield Very Mod of Propensity Interest? Area /Map ID a Mod Use Density (Assumed) Yield Low These parcels are a portion of the large commercial development including retail and office space in Newport Baldwin Newport Center. Mixed -use 442 271 24 Bone PC CO-R No 0 0.70 0.70 Yes 0 50 35 35 11 4 20 development of residential Center 180 Properties units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. This parcel contains the Newport Beach Country Club. A large part of this parcel is a parking lot, yet can offer Newport 442 011 53 Fainbarg PC PR No 0 2.98 2.98 Yes 0 50 149 149 45 15 89 housing redevelopment above Center 181 the club parking. The property Area owner should be advised that a land use change to allow housing might be possible. The current owner of the Golf Realty MU property has expressed to City Newport 44201164 Fund LP PC H3/PR No 0 2.96 2.96 Yes 0 50 148 25 * 6 2 17 staff written interest to Y Center 182 develop housing. Area This parcel includes the Palisades Tennis Club. Given the minor amount of building improvements, the site could readily be redeveloped for Newport 440 132 48 Russell Fluter PR PR No 0 2.80 2.80 Yes 0 50 140 140 42 14 84 Center 184 housing. If the site is found suitable, the property owner Area should be advised that a land use change to allow housing might be possible. These parcels are a portion of the large commercial development including retail and office space in Newport Southwest Center. Mixed -use Newport 44223109 Investors OR CO-R No 0 0.51 0.51 Yes 0 50 25 25 8 3 14 development of residential Center 185 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-70 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Above Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Land Site? Units Acreage Criteria? Zone Density Unit Net Yield Very Mod of Propensity Interest? Area /Map ID a Mod Use Density (Assumed) Yield Low This parcel contains an improved parking lot for nearby commercial and retail stores. Due to the excess amount of parking on the site, Newport Design Plaza 442 161 17 OR CO-R No 0 7.17 7.17 Yes 0 50 358 358 107 36 215 there is feasible room to Center 186 Owners Assn accommodate housing units. Area The property owner should be advised that a land use change to allow housing might be possible. These parcels are a portion of the large commercial development including retail and office space in Newport 100 Newport Center. Mixed -use Newport 442 231 13 Center Drive OR CO-R No 0 0.61 0.61 Yes 0 50 30 30 9 3 18 development of residential Center 187 LLC units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. This parcel contains the Marriot Hotel, with two hotel towers and an irregularly shaped three-story hotel room building that can be Newport Hhr Newport 442 491 02 CV CV No 0 9.54 9.54 Yes 0 50 476 476 143 48 285 converted to housing. If the Center 188 Beach LLC addition of housing is found Area suitable, the property owner should be advised that a land use change to allow housing could be possible. These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 082 05 Co Irvine PC CO-M No 0 4.10 4.10 Yes 0 50 204 204 61 20 123 development of residential Center 189 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-71 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield Parcel Existing General 5th Existing Gross Buildable HCD Existing Rezoned I Assumed Low/ Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Plan Vacancy Cycle Units Acreag Acreage Sizing Zone Density Rezoned Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 28 Co Irvine PC CR No 0 1.74 1.74 Yes 0 50 87 87 26 9 52 development of residential Center 190 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport Irvine Center. Mixed -use Newport 442 021 26 Company LLC PC CR No 0 2.50 2.50 Yes 0 50 125 125 38 13 74 development of residential Center 191 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. This parcel in combination with parcel 203 contains parking for surrounding office space buildings. Due to the excess amount of parking on Newport 442 231 11 Co Irvine PC CO-R No 0 2.83 2.83 Yes 0 50 141 141 42 14 85 the site, there is feasible room Center 192 to accommodate housing Area units. The property owner should be advised that a land use change to allow housing might be possible. These parcels are a portion of the large commercial development including retail and office space in Newport Irvine Center. Mixed -use Newport 442 021 13 Company LLC PC CR No 0 1.73 1.73 Yes 0 50 86 86 26 9 51 development of residential Center 193 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-72 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield Existing Rezoned Low/ Parcel Existing General 5th Existing Gross Buildable HCD I Assumed Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Plan Vacancy Cycle Units Acreag Acreage Sizing Zone Density Rezoned Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 08 Co Irvine PC CR No 0 0.80 0.80 Yes 0 50 40 40 12 4 24 development of residential Center 194 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 32 Co Irvine PC CR No 0 0.63 0.63 Yes 0 50 31 31 9 3 19 development of residential Center 195 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport Irvine Center. Mixed -use Newport 442 021 29 Company LLC PC CR No 0 4.09 4.09 Yes 0 50 204 204 61 20 123 development of residential Center 196 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 30 Co Irvine PC CR No 0 1.24 1.24 Yes 0 50 62 62 19 6 37 development of residential Center 197 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-73 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield Parcel Existing General 5th Existing Gross Buildable HCD Existing Rezoned I Assumed Low/ Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Plan Vacancy Cycle Units Acreag Acreage Sizing Zone Density Rezoned Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 27 Co Irvine PC CR No 0 1.17 1.17 Yes 0 50 58 58 17 6 35 development of residential Center 198 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport The Irvine Center. Mixed -use Newport 442 02140 Company LLC PC CR No 0 0.87 0.87 Yes 0 50 43 43 13 4 26 development of residential Center 199 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport The Irvine Center. Mixed -use Newport 44202146 Company LLC PC CR No 0 4.11 4.11 Yes 0 50 205 205 62 21 122 development of residential Center 200 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 35 Co Irvine PC CR No 0 0.56 0.56 Yes 0 50 28 28 8 3 17 development of residential Center 201 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-74 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Above Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Land Site? Units Acreage Criteria? Zone Density Unit Net Yield Very Mod of Propensity Interest? Area /Map ID a Mod Use Density (Assumed) Yield Low These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 33 Co Irvine PC CR No 0 4.03 4.03 Yes 0 50 201 201 60 20 121 development of residential Center 202 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. This parcel in combination with parcel 192 contains parking for surrounding office space buildings. Due to the excess amount of parking on Newport 442 231 14 Co Irvine PC CO-R No 0 4.10 4.10 Yes 0 50 205 205 62 21 122 the site, there is feasible room Center 203 to accommodate housing Area units. The property owner should be advised that a land use change to allow housing might be possible. This parcel is the Fashion Island Hotel and parking structures that could be reconfigured to accommodate Newport Island Hotel 442 101 27 PC MU-H3 No 0 5.37 5.37 Yes 0 50 268 268 80 27 161 housing. If the site is found Center 204 Finance LLC suitable, the property owner Area should be advised that a land use change to allow some housing might be possible. These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 31 Co Irvine PC CR No 0 8.25 8.25 Yes 0 50 412 412 124 41 247 Center 205 development of residential units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-75 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield Parcel Existing General 5th Existing Gross Buildable HCD Existing Rezoned I Assumed Low/ Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Plan Vacancy Cycle Units Acreag Acreage Sizing Zone Density Rezoned Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 021 11 Co Irvine PC CR No 0 0.56 0.56 Yes 0 50 27 27 8 3 16 development of residential Center 206 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport Irvine Center. Mixed -use Newport 442 021 17 Company PC CR No 0 1.74 1.74 Yes 0 50 87 87 26 9 52 development of residential Center 207 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport The Irvine Center. Mixed -use Newport 442 02143 Company LLC PC CR No 0 5.43 5.43 Yes 0 50 271 271 81 27 163 development of residential Center 208 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport The Irvine Center. Mixed -use Newport 442 02145 Company LLC PC CR No 0 0.99 0.99 Yes 0 50 49 49 15 5 29 development of residential Center 209 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-76 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield Parcel Existing General 5th Existing Gross Buildable HCD Existing Rezoned I Assumed Low/ Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Plan Vacancy Cycle Units Acreag Acreage Sizing Zone Density Rezoned Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low These parcels are a portion of the large commercial development including retail and office space in Newport Irvine Co LLC Center. Mixed -use Newport 442 02144 The PC CR No 0 1.25 1.25 Yes 0 50 62 62 19 6 37 development of residential Center 210 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. These parcels are a portion of the large commercial development including retail and office space in Newport The Irvine Center. Mixed -use Newport 442 02142 Company LLC PC CR No 0 4.16 4.16 Yes 0 50 208 208 62 21 125 development of residential Center 211 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. This parcel has a two mid -rise office buildings and a large parking structure with some adjacent surface parking that might be able to be re Brett reconfigured to create a Newport 44241101 Feu tein PC CG No 0 1.12 1.12 Yes 0 50 56 56 17 6 33 housing site. If the site a Center 212 found suitable, the property Area owner should be advised that a land use change to allow some housing might be possible. These parcels are a portion of the large commercial development including retail and office space in Newport Center. Mixed -use Newport 442 261 21 Co Irvine MU-H3 No 0 2.23 2.23 Yes 0 50 111 111 33 11 67 development of residential Center 213 units or replacement housing Area (possibly incorporating the surrounding parking lots) are both possibilities on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-77 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Units Acreage Zone Density Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low The current owner of the Golf Realty MU property has expressed to City Newport 44201165 Fund LP PC H3/PR No 0 1.18 1.18 Yes 0 50 60 50 * 11 4 35 staff written interest to Y Center 257 Area develop housing. The current owner of the Newport David property has expressed to City 44201137 OG CO-G No 0 1.21 1.21 N/A 0 50 60 60 18 6 36 Y Center 339 Michael Ellis staff written interest Area develop housing. The current owner of the Newport property has expressed to City 442 161 06 Llc OR CO-R No 0 0.33 0.33 No 0 50 15 15 5 2 8 Y Center 340 staff written interest to allow Area housing. The current owner of the T Y Newport property has expressed to City 44216107 NEWPORT OR CO-R No 0 0.20 0.20 No 0 50 9 9 3 1 5 Y Center 341 staff written interest to allow LLC Area housing. The current owner of the EASTLUND Newport property has expressed to City 442 091 01 PROPERTIES OR CO-R No 0 0.44 0.44 No 0 50 22 22 7 2 13 Y Center 346 staff written interest to allow LLC Area housing. The current owner of the TRAIL ASSET Newport property has expressed to City 442 091 08 MANAGEME OR CO-R No 0 0.39 0.39 No 0 50 19 19 6 2 11 Y Center 347 staff written interest to allow NT LLC Area housing. The current owner of the EASTLUND Newport property has expressed to City 442 091 02 PROPERTIES OR CO-R No 0 0.25 0.25 No 0 50 12 12 4 1 7 Y Center 348 staff written interest to allow LLC Area housing. SAN MIGUEL The current owner of the Newport PLAZA to City property has expressedto 442 091 15 OR CO-R No 0 3.54 3.54 No 0 50 177 177 53 18 106 Y Center 349 OWNERS staff written interest allow ASSN housing. Area The current owner of the BURNHAM property has expressed to City Newport 44209104 OR CO-R No 0 0.38 0.38 No 0 50 19 19 6 2 11 Y Center 350 SCOTT T TR staff written interest to allow housing. Area ZIA TRUST This property was identified INC TR THE as a possible redevelopment Newport 442 091 03 BENJAMIN OR CO-R No 0 0.36 0.36 No 0 50 18 18 5 2 11 opportunity with the Center 351 KRAUT adjoining property owners Area SURVIVORS expressing interest. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-78 2Ciryryty of Newport Beach 01 Table B-20: Newport Center Sites Inventory Existing Density (Du/Ac) Potentia Assumed Net Unit Yield General 5th Gross HCD I Parcel Existing Plan Vacancy Cycle Existing Acreag Buildable Sizing Existing Rezoned Rezoned Assumed Low/ Existing Use and Explanation Letter Focus Inventory Number Owner Zoning Units Acreage Zone Density Net Yield Very Mod Above of Propensity Interest? Area /Map ID Land Site? a Criteria? Unit Mod Use Density (Assumed) Yield Low This property was identified 1333 as a possible redevelopment Newport 442 091 07 AVOCADO OR CO-R No 0 0.13 0.13 No 0 50 7 7 2 1 4 opportunity with the Center 352 LLC adjoining property owners Area expressing interest. The current owner of the Newport Golf Realty property has expressed to City 44201152 PC PR No 0 0.84 0.84 No 0 50 25 25 8 3 14 Y Center 353 Fund staff written interest to allow Area housing. The current owner of the Golf Realty property has expressed to City Newport 442 011 52 Fund PC PR No 0 .0.72 0.72 No 0 50 25 25 8 3 14 staff written interest to allow Y Center 354 Area housing. NEWPORT The current owner of the BEACH property has expressed to City Newport 44209106 OR CO-R No 0 0.32 0.32 No 0 50 16 16 5 2 9 Y Center 345 ATHLETIC staff written interest to allow Area CLUB LLC housing. City of Planned relocation of Police Newport 442 261 07 Newport PF PF No 0 3.99 3.99 Yes 0 50 199 199 60 20 119 and Fire Station will make Center 362 Beach property available. Area Orange The current owner of the Newport County property has expressed to City 44201422 PC PF No 0 2.43 2.43 Yes 0 50 121 121 36 12 73 Center 368 Transit staff the desire to allow Area District housing or other uses. The current owner of the Golf Realty MU property has expressed to City Newport 44201165 PC No 0 1.72 1.72 Yes 0 50 86 25 * 6 2 17 Y Center 240 Fund H3/PR staff written interest to allow Area housing. Newport Center Total Acreage Development Potential: 7,852 units The city is aware of a Auto Spa Of Pipeline 459 123 41 RM RM No 0 0.27 0.27 No 8 0 0 6 0 0 6 development proposal on this 245 Corona Del Project site. Vivante The city is aware of a Pipeline 442 261 17 Newport PC MU-H3 No 0 2.91 2.91 N/A 0 0 90 0 0 90 development proposal on this 258 Project Center I I I I I I I I I I site. Newport Center Pipeline Project Total: 96 units *Please Note — these net unit totals have been manually manipulated to accurately reflect development interest Appendix B: Sites Analysis (September 2022 Final Housing Element) B-79 City of Newport Beach 2021-2029 HOUSING ELEMENT ^oyote Canyon Area The Coyote Canyon focus area is in the northeastern part of the City. Currently, the City is in ongoing communication with a developer, Tait and Associates, that has expressed written and verbal interest in developing 34 acres of the focus area at 60 du/acre. The property owner, the County of Orange, has expressed interest written interest in housing development and they have entered into an option agreement with the developer to plan and develop the property Environmental Constraints Tait has extensive experience in the development of large projects adjacent to, or on top of former landfill sites. They have developed a core competency and expertise in this area and were selected by the County of Orange in large part because of this expertise. In summary, there are approximately 34 acres of non - landfill "terra -firma" area within the 375 acres that are suitable and feasible for structural and residential development. With thoughtful engineering and environmental planning, these portions of the site would be considered ideal for residential development. In addition to those 34 acres, there are another approximately 34.5 acres of area where the debris + landfill -cap depth is low enough (less than 25') that it would be feasible and economical to use proven and previously used techniques to remove and re- locate debris and build residential on terra -firma land below. As with all development around former landfill sites, there are extensive processes and mitigation measures that must be taken to ensure safety. While siting buildings atop a landfill includes structural and environmental constraints, Tait is an industry leader in developing more productive uses on and around closed landfills. Tait believes both the structural and environmental constraints can be overcome with proven previously used techniques. Two opportunities exist with the property. First is residential development atop the landfill itself. Sizable portions of the closed landfill have shallow depths (i.e., less than 25 feet) that can be excavated to a solid substrate that could then accommodate residential construction. This area may be up to 34.5 acres in size. The second opportunity on the County -owned parcel is an approximately 34-acre portions adjacent to the landfill that is not subject to the environmental constraints of the landfill itself. These portions of are considered an ideal opportunity for future residential development. Either location would include methane mitigation systems ensuring the health and safety of future residents. Developer Interest The City has received specific outreach for two parcels, both of which are reflected within this inventory. Of primary note is the closed Coyote Canyon landfill and adjacent areas. The parcel is owned by the County of Orange (County) who has entered into an agreement with Tait and Associates (Tait) for the future development. Both Tait and the County have expressed interest in developing the site with affordable and market rate housing. Tait has recently communicated an interest to develop 34-acres of the site at a density of 60 du/acre and at a 75 percent redevelopment rate. Of secondary note is the approximately 28-acre property across Newport Coast Drive with a development proposal for 10 units. Less than one acre of this property is expected to develop with housing. The site is presently developed with a private school and the school is interested in developing low-cost housing for a portion of its workforce. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-80 City of Newport Beach 2021-2029 HOUSING ELEMENT Sites Inventory Information Although the parcels within the Sites Inventory have the capacity to accommodate 2,630 units of development (at an assumed unit yield of 60 du/ac), an assumption of approximately 75% redevelopment has been applied considering developer interest and agreements. Therefore, the assumed buildout is projected at 1,530 units, 383 of which are projected to develop for low and very low-income households. An extensive analysis of site feasibility and site level due diligence has occurred on the site in consideration of the current environmental constraints. An extensive effort to identify the actual feasible area of development potential. As shown in the figure below, extensive site analysis has identified the acreage on the site that has the most appropriate conditions for residential development. The analysis has concluded that the assumed acreage with development potential represents the most feasible opportunity for residential development. The identified site acreage suitable for residential development, therefore, is an accurate representation of site development potential. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-81 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-21 below displays the capacity and opportunity in this Focus Area which can help accommodate the City's RHNA allocation. Figure B-7 below maps the portion of the property within Coyote Canyon which can help accommodate the City's RHNA allocation. Table B-21: Coyote Canyon Environs - Redevelopment Analysis Net Units Feasible Assumed Above Low Very Low Moderate Total Acreage Density Moderate 34acres 60 du/ac 383 units 153 units 995 units 1,530 units Appendix B: Sites Analysis (September 2022 Final Housing Element) B-82 --rA ,4 1 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-22: Coyote Canyon Sites Inventory Existing Density (Du/Ac) Assumed Net Unit Yield General 5th HCD Potential Existing Use and Letter Parcel Existing Existing Gross Buildable Sizing Existing Rezoned Assumed Low/ Focus Inventory Number (s) Owner Zoning Plan Vacancy Cycle Units Acreage Acreage Criteria Zone Density Rezoned Net Yield Very Mod Above Explanation of Interest Area /Map ID Land Site? Unit Yield Mod Propensity ? Use 7 Density (Assumed) Low The City is aware of a development proposal on 120 571 12 County this site. Details on the 478 032 10 PF PF Yes 0 341.93 44 No 0 60 2,640 2,640 660 264 1,676 development proposals Canyon, 131 Orange are provided in the etc. section above. The current owner of the SCHOOL property has expressed to Coyote 478 031 56 SAGE PC PR No 0 28.41 28.41 N/A 0 60 20 20 5 2 13 Y Canyon, 336 City staff written interest HILL to allow housing. etc. 477 261 0 PC MU- No 0 5.16822 5.168229 N/A 0 0 0 76 0 0 76 The city is aware of a Pipeline 265 54 W3 9152 152 development proposal Project on this site. Coyote Canyon Total Acreage Development Potential: 2,736 units Appendix B: Sites Analysis (September 2022 Final Housing Element) B-84 City of Newport Beach 2021-2029 HOUSING ELEMENT Banning Ranch Area In the development of adequate sites to accommodate the City's 2021-2029 RHNA growth need, the City of Newport Beach believes Banning Ranch is a viable opportunity for future residential development as evidenced by prior development submittals, pre -zoning of the area and consistent General Plan land use policies. Upon review of this opportunity, multiple agencies at the State of California expressed concerns about the viability of future residential in the area. In response to this, the Banning Ranch Focus Area is not used to accommodate any portion the City's 2021-2029 RHNA growth need. The City's 2021-2029 RHNA will be accommodated through analysis of the other Focus Areas identified in this Housing Element. Banning Ranch is therefore an additional policy option the City desires to preserve, as it is consistent with existing land use policy in the Newport Beach General Plan. Units assigned to the Banning Ranch Focus Area are not used to accommodate any portion of the 61" cycle RHNA; however, to the extent the City is successful in creating housing opportunities at Banning Ranch, those opportunities may be used to satisfy a portion of the City's 61" cycle RHNA need. The approximately 527-acre Banning Ranch Focus Area is inclusive of the 401-acre Banning Ranch property and has been identified in prior planning periods to accommodate future housing needs. Specific to the Banning Ranch property, the site has been the subject of environmental review by the City of Newport Beach. Consistent with the City of Newport Beach General Plan, The Banning Ranch site is designated OS(RV), Open Space/Residential Village, which establishes Open Space as the Primary Use and Residential Village as the Alternative Use. The General Plan Land Use Element specifies that if the property is not acquired for open space within a time period and pursuant to terms agreed to by both the City and property owner, the property could be developed as a Residential Village containing a mix of housing types, limited supporting retail, visitor accommodations, a school, and active community parklands with a majority of the property preserved as open space. The General Plan identifies the maximum intensity of development allowed on the property to include up to 1,375 dwelling units (du), 75,000 square feet (sf) of retail commercial uses oriented to serve the needs of local and nearby residents, and 75 hotel rooms in a small boutique hotel or other type of overnight visitor accommodation. The Newport Beach Banning Ranch Project and Program EIR were approved by the City during the 5tn RHNA cycle. The active oilfield with surface and subsurface oil production facilities was proposed for development consistent with the allowable land uses and development intensity set forth in the Newport Beach General Plan. Banning Ranch is in the coastal zone and the project approved by the City of Newport Beach required approval by the California Coastal Commission. In 2016, the Coastal Commission staff recommended approval of a modified project subject to multiple conditions of approval. Approximately 19.7 acres of the site (non-contiguous) were identified by Coastal Commission staff for development noting that the developable land was outside of mapped constraints. Mapped constraints included biological and cultural resources. Staff recommended approval of the project as conditioned to include oil well abandonment and clean-up to the appropriate levels with habitat restoration, protection of all sensitive resources both biological and cultural, development of water quality improvements, and the residential areas connected with a road with all infrastructure and utilities outside of the mapped constraints, and vehicular access Appendix B: Sites Analysis (September 2022 Final Housing Element) 13-85 City of Newport Beach 2021-2029 HOUSING ELEMENT limited to 17th Street. Staff also recommended that 329 acres be dedicated to open space and habitat restoration. The project applicant and the Coastal Commission could not reach agreement on the Coastal Commission staffs revised development proposal including the conditions of approval and the Coastal Commission denied the project in September 2016. The property owner was not provided the ability to adequately rebut these presumptions that ultimately led to the denial of the project. The complete extent of those resource constraints and the extent that development buffers were necessary was not fully vetted at the time the project was denied. While the City supports conservation of the site, the City also believes more land can be determined free of environmental constraints allowing residential development. For this reason, the City is assuming that 30 acres within the Banning Ranch Focus Area can be developed for housing. The Coastal Act allows for the resolution of conflicts between competing priorities. The State is in a housing crisis and the Coastal Act encourages housing development, including affordable housing, when not subject to hazards. The Coastal Act also requires development to avoid and mitigate environmental impacts. These two seemingly conflicting goals can be balanced in ways that provides for both housing production and sensitive resource protection. Any housing development will mitigate impacts to sensitive resources leading to further restoration of nearby degraded resources in the area. Additionally, the Coastal Act promotes maximum access to the coast for all Californians and development of Banning Ranch will provide significant enhancements to access in an environmentally sensitive way while assisting the City to meet environmental justice principles. Ultimately the City believes future opportunities exist for housing development on the Banning Ranch. The property owner is negotiating the possible sale of the property to the Trust for Public Lands for conservation. However, while significant funds have been pledged, a significant gap in funds to acquire the site remains. If retained as open space, the General Plan Land Use Element specifies that the Primary Open Space land use alternative include consolidation of oil operations; restoration of wetlands; the provision of nature education and interpretative facilities and an active park containing playfields and other facilities to serve residents of adjoining neighborhoods. Under both the Open Space and Residential Village land use designations, the Orange County Master Plan of Arterial Highways identifies roadways through the property extending from Pacific Coast Highway to 17th Street. The property owner has expressed a desire to pursue development of the site with housing and other community -serving uses if the site is not acquired for public use. The value of the development opportunities will assist with the consolidation of the oil drilling operations and site remediation. Based on City staff understanding of the previous development proposal, the Banning Ranch property, consultations with the property owner, the site has the potential to feasibly accommodate a minimum of 1,475 units of development on approximately 30 acres of the considerably larger property. The assumed buildout is therefore projected at 1,475 units, 443 of which are projected to develop for low and very low- income households. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-86 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-23 below displays the capacity and opportunity for Banning Ranch which illustrates the assumed development potential but does not assume accommodation of the City's 2021-2029 RHNA growth need. Figure B-8 below maps Banning Ranch. Table B-23: Banning Ranch Environs - Redevelopment Analysis Feasible Assumed Net Units Above Acreage Density Low Very Low Moderate Total Moderate 30 acres 50 du/ac 443 units 148 units 884 units 1,475 units Appendix B: Sites Analysis (September 2022 Final Housing Element) B-87 City of Newport Beach 2021-2029 HOUSING ELEMENT Figure B-8: Banning Ranch Area — Sites Inventory _k Appendix B: Sites Analysis (September 2022 Final Housing Element) r. Y • � ..kLl/ Site Inventory: Banning Ranch Area LEGEND City Boundary Sth Cycle Sltes Pipeline Projects . Opportunity Sites Key Map h eet NORTH 0 500 1.000 B-88 City of Newport Beach 2021-2029 HOUSING ELEMENT Table B-24: Banning Ranch Sites Inventory Density (Du/Ac) Assumed Assumed Net Unit Yield Parcel Existing Existing General 5th Existing Gross Buildable HCD Sizing Potential Existing Use and Letter Focus Inventory/Map Existing Rezoned Low/ Vacancy Cycle Rezoned Unit Above Explanation of Number Owner Zoning Plan Land Use Units Acreage Acreage Criteria? Zone Density Net Yield Very Moderate Interest? Area ID Site? Yield Moderate Propensity Density (Assumed) Low The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a Newport development proposal. 114 170 Beach PF PF Yes 0.00 130.87 130.87 No 0.00 0.00 0.00 383 115 38 230 As described in Section Banning 110.00 72 Ranch Cherokee 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a Newport development proposal. 114 170 Beach PC PR Yes 0.00 74.64 74.64 No 0.00 0.00 0.00 218 66 22 130 As described in Section Banning 111.00 52 Ranch Cherokee 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a Newport development proposal. 114 170 Beach PI PI Yes 0.00 65.05 65.05 No 0.00 0.00 0.00 190 57 19 114 As described in Section Banning 112.00 50 Ranch Cherokee 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land Newport within the City's sphere 114 170 Beach PI PI Yes 0.00 74.64 74.64 No 0.00 0.00 0.00 149 45 15 89 of influence and has Banning 111.00 52 Ranch Cherokee previously received a development proposal. As described in Section Appendix B: Sites Analysis (September 2022 Final Housing Element) B-89 City of Newport Beach 2021-2029 HOUSING ELEMENT Density (Du/Ac) Assumed Assumed Net Unit Yield Parcel Existing Existing General 5th Existing Gross Buildable HCD Sizing Potential Existing Use and Letter Focus Inventory/Map Existing Rezoned Low/ Vacancy Cycle Rezoned Unit Above Explanation of Number Owner Zoning Plan Land Use Units Acreage Acreage Criteria? Zone Density Net Yield Very Moderate Interest? Area ID Site? Yield Moderate Propensity Density (Assumed) Low 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a Newport development proposal. 114 170 Beach PC CO-R Yes 0.00 44.78 44.78 No 0.00 0.00 0.00 131 39 13 79 As described in Section Banning 114.00 83 Ranch Cherokee 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a United development proposal. 114 170 States Of PC CO-R Yes 0.00 41.20 41.20 No 0.00 0.00 0.00 121 36 12 73 As described in Section Banning 115.00 71 Ranch America 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a United development proposal. 114 170 States Of OR CO-R Yes 0.00 19.35 19.35 No 0.00 0.00 0.00 57 17 6 34 As described in Section Banning 116.00 76 Ranch America 4, the City will work with the property owner and local developers to pursue housing development on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-90 City of Newport Beach 2021-2029 HOUSING ELEMENT Density (Du/Ac) Assumed Assumed Net Unit Yield Parcel Existing Existing General 5th Existing Gross Buildable HCD Sizing Potential Existing Use and Letter Focus Inventory/Map Existing Rezoned Low/ Vacancy Cycle Rezoned Unit Above Explanation of Number Owner Zoning Plan Land Use Units Acreage Acreage Criteria? Zone Density Net Yield Very Moderate Interest? Area ID Site? Yield Moderate Propensity Density (Assumed) Low The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a development proposal. NO AP # #N/A OR CO-R Yes 0.00 15.76 15.76 No 0.00 0.00 0.00 46 14 5 27 As described in Section Banning 117.00 Ranch 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a United development proposal. 114 170 States Of PC CR Yes 0.00 14.32 14.32 No 0.00 0.00 0.00 42 13 4 25 As described in Section Banning 118.00 74 Ranch America 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a United development proposal. 114 170 States Of PC CR Yes 0.00 11.48 11.48 No 0.00 0.00 0.00 34 10 3 21 As described in Section Banning 120.00 78 Ranch America 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere CHEROKEE of influence and has 424041 NEWPORT PR PR Yes 0.00 10.81 10.81 No 0.00 0.00 0.00 32 9 3 20 previously received a Banning 121.00 04 BEACH Ranch development proposal. LLC As described in Section 4, the City will work with the property owner and Appendix B: Sites Analysis (September 2022 Final Housing Element) B-91 City of Newport Beach 2021-2029 HOUSING ELEMENT Density (Du/Ac) Assumed Assumed Net Unit Yield Parcel Existing Existing General 5th Existing Gross Buildable HCD Sizing Potential Existing Use and Letter Focus Inventory/Map Existing Rezoned Low/ Vacancy Cycle Rezoned Unit Above Explanation of Number Owner Zoning Plan Land Use Units Acreage Acreage Criteria? Zone Density Net Yield Very Moderate Interest? Area ID Site? Yield Moderate Propensity Density (Assumed) Low local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a Newport development proposal. 114 170 Beach OR CO-R Yes 0.00 6.52 6.52 Yes 0.00 0.00 0.00 19 6 2 11 As described in Section Banning 122.00 43 Ranch Cherokee 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a United development proposal. 114 170 States Of OR CO-R Yes 0.00 5.79 5.79 Yes 0.00 0.00 0.00 17 5 2 10 As described in Section Banning 123.00 65 Ranch America 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a City Of development proposal. 114 170 Newport PC CO-M Yes 0.00 3.86 3.86 Yes 0.00 0.00 0.00 11 3 1 7 As described in Section Banning 124.00 80 Ranch Beach 4, the City will work with the property owner and local developers to pursue housing development on this site. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-92 City of Newport Beach 2021-2029 HOUSING ELEMENT Density (Du/Ac) Assumed Assumed Net Unit Yield Parcel Existing Existing General 5th Existing Gross Buildable HCD Sizing Potential Existing Use and Letter Focus Inventory/Map Existing Rezoned Low/ Vacancy Cycle Rezoned Unit Above Explanation of Number Owner Zoning Plan Land Use Units Acreage Acreage Criteria? Zone Density Net Yield Very Moderate Interest? Area ID Site? Yield Moderate Propensity Density (Assumed) Low The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a Newport development proposal. 114 170 Beach PC COW Yes 0.00 0.37 0.37 No 0.00 0.00 0.00 1 0 0 1 As described in Section Banning 126.00 24 Ranch Cherokee 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a City Of development proposal. 114 170 Newport PC CO-M Yes 0.00 5.33 5.33 N/A 0.00 0.00 0.00 16 5 2 9 As described in Section Banning 127.00 81 Ranch Beach 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a Newport development proposal. 114170 Beach PC COW Yes 0.00 0.21 0.21 N/A 0.00 0.00 0.00 1 0 0 1 As described in Section Banning 128.00 75 Ranch Cherokee 4, the City will work with the property owner and local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere Newport of influence and has 114170 Beach PC CO-R Yes 0.00 1.10 1.10 N/A 0.00 0.00 0.00 3 1 0 2 previously received a Banning 129.00 49 Ranch Cherokee development proposal. As described in Section 4, the City will work with the property owner and Appendix B: Sites Analysis (September 2022 Final Housing Element) B-93 City of Newport Beach 2021-2029 HOUSING ELEMENT Density (Du/Ac) Assumed Assumed Net Unit Yield Parcel Existing Existing General 5th Existing Gross Buildable HCD Sizing Potential Existing Use and Letter Focus Inventory/Map Existing Rezoned Low/ Vacancy Cycle Rezoned Unit Above Explanation of Number Owner Zoning Plan Land Use Units Acreage Acreage Criteria? Zone Density Net Yield Very Moderate Interest? Area ID Site? Yield Moderate Propensity Density (Assumed) Low local developers to pursue housing development on this site. The Banning Ranch area is currently vacant land within the City's sphere of influence and has previously received a Orange development proposal. 114 170 County PC CO-R Yes 0.00 1.49 1.49 N/A 0.00 0.00 0.00 4 1 0 3 As described in Section Banning 130.00 66 Ranch Flood 4, the City will work with the property owner and local developers to pursue housing development on this site. Banning Ranch Total Development Potential: 1,475 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-94 City of Newport Beach 2021-2029 HOUSING ELEMENT Attachment B-1: Completed Projects of Mixed Densities Project Name Description Affordable Component Affordability Confirmation Additional Justification Project Provides Uptown Summary: The total Uptown Newport Master Plan The total Uptown Affordable housing Phase 1A completed February 2020. • Realistic Capacity of Airport Area density. Airport Area Newport approval consists of redevelopment of a 438,127 square Newport Master Plan covenant recorded allows minimum density of 30 du/ac and maximum of 50 Summary and foot industrial complex into 1,244 residential units, development requires requiring affordability for a du/ac. Actual project density equates to 54 du/ac. Phase 1A One 11,500 square feet of neighborhood serving retail area, a minimum of 102 term of 55 years. Uptown and development of two acres of public parks on a 25 very low-income • Suitability of Nonvacant Sites: Demonstrates nonvacant Newport acre site. units. sites are viable for redevelopment into higher density Apartments Phase 1A development resulted in the demolition and Phase 1A residential and mixed -use developments. Existing uses (APN 445 134 08 redevelopment of an existing single -story, 126,675 development includes consisted of existing single -story, 126,675 square foot office and 09) square foot office building into two new apartment 91 very low-income building. buildings totaling 462 units and approximately 10,700 units. • Airport Area Desirability square feet of retail floor area. - o Project Approvals and Status: The zoning entitlements - and EIR for the Uptown Newport Master Plan project !pqp ' were approved on February 26, 2013. On January 14, 2016, the Minor Site Development review for Phase 1_ ` was approved. Phase 1 was completed in February'il I' 2020. ! Density: Excluding the two acre parks, the overall project results in an effective density of approximately 54 units per acre, which includes 322 density bonus units. Phase 1A development consists of 4.63 acres, resulting in an effective density of 100 units per acre. }} . ■ . - - F I aka Approved Height Limit: The maximum height for low- rise and mid -rise buildings is 75 feet. The maximum .a building eight for high-rise portions of building is 150 feet. Phase 1 development measure 66 feet in height Appendix B: Sites Analysis (September 2022 Final Housing Element) B-95 City of Newport Beach 2021-202° uOUSING ELEMENT Project Name Description Affordable Affordability Confirmation Additional Justification Project Provides Component Ebbtide Summary: The project involved the redevelopment of a None, but relocation N/A Construction completed in • Suitability of Nonvacant Sites: Demonstrates nonvacant 73-space residential mobile home park with a new 81- benefits provided to December 2017. sites are viable for redevelopment. Existing uses consisted (APN 424 131 unit detached condominiums on a 4.7 acre site. displace mobile home of a 73-space residential mobile home park. 27) Project Approvals and Status: A Tentative Tract Map, residents. • West Newport Mesa Desirability Planned Development Permit, Traffic Study and Mitigated Negative Declaration. The project was approved by the Planning Commission on August 6, 2015. Density: 17 du/ac. The maximum allowed density is 18 Il' du/ ac. Iry Approved Height Limit: Approx. 38 feet iiiin Lido Villas Summary: The project involved demolition of a three- None N/A Construction completed in • Suitability of Nonvacant Sites: Demonstrates nonvacant story 32,469-square-foot commercial building and single- December 2019. sites are viable for redevelopment. Existing uses consisted (APN 423 112 story, 8,961-square-foot church and construction of 23 of a three-story 32,469-square-foot commercial building 05) townhouse style multi -family dwelling units on a 1.2 acre and single -story, 8,961-square-foot church. site in the coastal zone. • Lot Consolidation The subject property consisted of 6 legal Project Approvals and Status: A General Plan lots . Amendment, Coastal Land Use Plan Amendment, Zoning Code Amendment, Site Development Plan Review, Tentative Tract Map and Mitigated Negative Declaration. The project was approved by the California Coastal Commission on October 9,2014. I Density: 19 du/ac proposed and maximum allowable. r�rm�l Approved Height Limit: 35 feet - Villas Fashion Summary: The project involved the redevelopment of a 105 moderate- Affordable housing Construction completed 2017. • Suitability of Nonvacant Sites: Demonstrates nonvacant Island five -building office complex with a 524-unit apartment income rental units covenant recorded sites are viable for redevelopment. Existing uses consisted complex on a 14.4-acre site. provided at an off -site requiring affordability fora of a five office buildings ranging in height from 2 to 3 story. (APN 442 261 location. term of 30 years. • Newport Center Desirability 03) Project Approvals and Status: Master Plan Review approved on November 3, 2014 administratively. Construction completed 2017. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-96 City of Newport Beach 2021-202° uOUSING ELEMENT Project Name Description Affordable Component Affordability Confirmation Additional Justification Project Provides Density: 36 du/ac proposed and maximum allowable Approved Height Limit: 65 feet Appendix B: Sites Analysis (September 2022 Final Housing Element) B-97 City of Newport Beach 2021-2029 HOUSING ELEMENT Attachment B-2: Pending Projects - Anticipated Completion in 6th Cycle Project Name Description Affordable Component Affordability Confirmation Additional Justification Project Provides Uptown Summary: Development of 60 residential condominium units on a None- Addressed in None -Addressed in Phase Under review and approvals • Realistic Capacity of Airport Area density. Airport Area allows Newport 1.06 acre portion of the Uptown Newport Master Plan. Plans are Phase 1A 1A anticipated in early 2021. minimum density of 30 du/ac and maximum of 50 du/ac. Actual Residences currently in process. project density equates to 56.60 du/ac. Part of the overall Uptown Phase 1C Newport Master Plan that has an overall density of 54 du/ac. Details • Suitability of Nonvacant Sites: Demonstrates nonvacant sites are Project Approvals and Status: The zoning entitlements and EIR for viable for redevelopment into higher density residential and mixed- (APN 445 the Uptown Newport Master Plan project were approved on use developments. Existing uses consisted of existing single -story, 134 17) February 26, 2013. The application for this PhaselC is in process. 126,675 square foot office building. • Airport Area Desirability Density: 56.60 units per acre ,r ter„ 7 �t 1 Approved Height Limit: Proposed and allowed height is 75 feet. # ■� ■i' ql�i iii� Newport Summary: Project would result in the mixed -use redevelopment Above -moderate If affordable units Pending project. Applicant is . Lot Consolidation of 6 individual lots (ranging in size from 0.44-4.37 Village of approximately 9.4 acres currently comprised of six underlying income; however, provided, an Affordable redesigning project to add acres) into a larger development site Mixed -use parcels that will be consolidated into two parcels on the north and applicant is Housing Implementation more density, including • Realistic Capacity of Mixed -Use Mariner's Mile zoning district, which south sides of West Coast Highway. The Project s North Parcel is considering Plan will be required and affordable units and allows for up to 26.7 units per. Actual project density equates to 20 (The approximately 5.3 acres and the Projects South Parcel is amending project to affordability covenant maximize density bonus du/ac on North Parcel. Projects approximately 4.1 acres. The Project consists of 14 residential include 9 very low- recorded. allowances, and to make the • Suitability of Nonvacant Sites: Demonstrates nonvacant sites are North Parcel condominium units on the South Parcel and 108 apartment units income units and take project eligible for Housing viable for redevelopment into higher density mixed -use p g y is on the North Parcel; 128,640 square feet (sf) of nonresidential advantage of a Accountability Act (HAA) development. Existing uses consist of older office buildings and large p g g g approximate floor area (including 96,905 sf of existing and new office, 19,820 sf density bonus. protections and expediate parking lots currently utilized for vehicle sales. ly 5.3 acres of boat and vehicle sales, and 11,915 sf of existing and new the review process. . Mariners Mile Desirability and located at 2000- retail/food service uses); surface, subterranean, and structured 2244 West parking; a new pedestrian promenade along the waterfront; Coast public open space areas; landscaping; a new bulkhead/seawall - Highway. and reinforcement of existing portions of bulkhead/seawall; and 0. The Project's marina improvements. South Parcel Project Approvals and Status: is A Site Development Review to allow for construction of approximate development, and Tentative Tract Map to consolidate parcel and ly 4.1 acres create condominiums. Application is currently incomplete and and located applicant has indicated they will redesign to add more density, at 2001-2241 including affordable units. Appendix B: Sites Analysis (September 2022 Final Housing Element) B-98 City of Newport Beach 2021-2029 HOUSING ELEMENT Project Name Description Affordable Component Affordability Confirmation Additional Justification Project Provides West Coast Density: Current application would result in a density of 3.42 du/ Highway) ac on south parcel and 20.33 du/ac on north parcel. f Pending redesigned project would result in density of 8.9 du/ ac _ r on south parcel and a net density of 26.5 du/ac on north parcel. The net density does not include the 20 percent density increase n. (33 units) that is allowed by the State Bonus Density law and the Newport Beach Municipal Code in exchange for the 5-percent or 9 units set aside for affordable housing. With density bonus, the effective density on south parcel is 33 du/ac Approved Height Limit: Base height limit is 26 feet flat roof/31 feet sloping roof; increases up to 35 feet flat roof/40 feet sloping roof. 1300 Bristol Summary: Demolition of a two-story, 33,9292-square-foot office 169 market -rate and The approved Affordable Application under review. • Realistic Capacity of Airport Area density. Airport Area allows Apartment building and redevelopment with a new 193-unit apartment complex 24 low-income units. Housing Implementation minimum density of 30 du/ac and maximum of 50 du/ac. Actual Project on a 1.97 acre site. The proposed units consist of 77 base units, 77 Plan (AHIP) will require project density equates to 98 du/ac. Without density bonus or transfer of development units, and a density bonus of 39 units. the recordation of an transfer of development rights, based density is 40 du/acre. affordable housing covenant. • Suitability of Nonvacant Sites: Demonstrates nonvacant sites are Project Approvals and Status: The project applications include a site viable for redevelopment into higher density residential and mixed - development review, transfer of development rights (77 unit use developments. Existing use consists of two-story, 33,9292- transfer), density bonus and affordable housing implementation square -foot office building. plan. Applied for in June of 2021 and in process. • Airport Area Desirability Density: • 98 du/ac total project • 40 du/ac base project (no transfer or density bonus)". Proposed Height Limit: 80 feet Appendix B: Sites Analysis (September 2022 Final Housing Element) B-99 City of Newport Beach 2021-2029 HOUSING ELEMENT Attachment 13-3: Recently Approved Projects — Completion Anticipated in 6th Cycle Planning Period Project Name Description Affordable Component Affordability Confirmation Anticipated Availability in Planning Period Additional Justification Project Provides Newport Summary: The project would result in consolidation and The residential The approved Highly motivated developer in full • Lot Consolidation of smaller individual lots into larger Airport Village redevelopment of 15 lots totaling 16.46-acres of existing development shall include development agreement ownership of property. Zoning in place to development site nonresidential property for mixed -use development. More specifically, affordable housing as and adopted Newport accommodate the density and height of . Realistic Capacity of Airport Area density. Airport Area (Northerly the development would consist of two Planning Areas (PA1 and PA2). follows: a minimum of 5% Airport Planned residential development. Environmental allows minimum density of 30 du/ac and maximum of 50 portion of the PA1 is 7.14 acres and would allow for the development of up to 444 of units for very -low Community require the clearance prepared and adopted in the du/ac. Actual project density equates to 46 du/ac (69 Campus Tract, dwelling units (329 base units and 115 density bonus units) and 94,583 income households (16 minimum levels of form of an Addendum to the Program du/ac with density bonus). generally square feet of nonresidential floor area (i.e., retail, office, and other units), or a minimum of affordability to be Environmental Impact Report to the 2006 . Suitability of Nonvacant Sites: Demonstrates nonvacant bounded Birch airport supporting uses). PA2 would consist of 9.32 acres and would 10% of units for low- provided. General Plan Update and Supplemental sites are viable for redevelopment into higher density Street, Campus allow for the development of up to 202,989 square feet of income households (32 Environmental Impact Report to the 2014 residential and mixed -use developments. Existing uses Drive, nonresidential floor area. units), or a minimum 10% update to the Land Use Element of the consist of older office buildings, vehicle rental facilities, MacArthur of units for moderate- General Plan. retail uses, and restaurants. Blvd. and the income households 32 ( Airport Area Desirability extension of Project Approvals and Status: A General Plan Amendment to allow for units) within a common- Corinthian mixed -use development, Planned Community Development Plan (PC- interest development. p z j Way) 60) to establish the zoning and development standards for the site, and a Development Agreement providing vested development rights j s in exchange for public benefits. The project was approved by City Y �A Council on September 22, 2020. Density: Planning Area 1 is 7.14 acres, to which the construction of 329 units would have an effective density of 46 units per acre. With the requested density bonus, the 493 total units would result in an N, I41 effective density of 69 units per acre. Approved Height Limit: Within PA1, residential or mixed -use structures are permitted a height of 85 feet. Residences at Summary: Project would result in the redevelopment of an existing Of the 312 rental units, The approved Affordable Recent project approval in place. . Suitability of Nonvacant Sites: Demonstrates ability to 4400 Von surface parking area with five percent of the base Housing Implementation develop underutilized parking lot. Karman a 312-unit apartment building units atop an 825-space parking units, or 13 units, will be Plan (AHIP) and • Realistic Capacity of Airport Area density. Airport Area structure, an approximately one -acre public park, and a 284-space affordable and restricted development agreement allows minimum density of 30 du/ac and maximum of 50 free-standing parking structure to replace parking displaced by the to very low-income for the project will require du/ac. Actual project density equates to 44 du/ac (53 residential building and park. households for 55 years the recordation of an du/ac with density bonus). and the remaining 299 affordable housing 0 Airport Area Desirability Project Approvals and Status: A Site Development Review to allow units will be market -rate covenant. for construction of development, Planned Community rentals. Development Plan Amendment (PC-15) to establish residential overlay zone and development standards for the site, and a Development Agreement providing vested development rights in Appendix B: Sites Analysis (September 2022 Final Housing Element) B-100 City of Newport Beach 2021-2029 HOUSING ELEMENT �- .emu. _-���"`�'`• - - Project Name Description Affordable Component Affordability Confirmation Anticipated Availability in Planning Period Additional Justification Project Provides exchange for public benefits. Lot Line Adjustment to adjust underlying parcels, and Affordable Housing Implementation Plan establishing the density bonus, incentives, waivers, and affordability requirements. The City Council approved the project p. on February 9, 2021. .. . Density: The project has a net developable residential area of 5.9 0 +� acres, which includes the project site of 4.51 acres and the free- « standing parking area of 1.39 acres. The net density of the project is 44 units per acre. The net density does not include the 20 o 7- °"°` percent density increase (52 units) that is allowed by the State Bonus Density law and the Newport Beach Municipal Code in ��• ." ...., exchange for the 5-percent or 13 units set aside for affordable housing. Altogether, the project has an overall density of 53 units per net acre. Approved Height Limit: 71-foot height limit West Coast Summary: The project would result in the redevelopment of a Three of the 36 residential The approved Affordable Project approval in place. . Lot Consolidation of 5 smaller individual lots (ranging in Highway vehicle sales office with a mixed -use development consisting of 36 units would be reserved Housing Implementation size from 0.05-0.49 acres) into a larger development site Mixed -Use units and a 5,096 square foot office. for very low-income Plan (AHIP) will require the . Realistic Capacity of Mixed -Use Mariner's Mile zoning households. recordation of an district, which allows for up to 26.7 units per. Actual (2510 West Project Approvals and Status: A Site Development Review and affordable housing project density equates to 36 du/ac utilizing density bonus Coast Coastal Development Permit to allow for construction of covenant. (base units equates to 26 units per acre). Highway) development, Tentative Parcel Map to consolidate the underlying . Suitability of Nonvacant Sites: Demonstrates nonvacant parcels, and Affordable Housing Implementation Plan establishing sites are viable for redevelopment into higher density the density bonus, incentives, waivers, and affordability mixed -use development. Existing uses consist of older requirements. The City Council approved the project on July 27, office buildings and large parking lots currently utilized for 2021. vehicle sales. Density: The site is 0.98 acres, to which the construction of base 26 • Mariners Mile Desirability units and 10 density bonus units results in an effective density of 36 unit per acre (26 units per acre is maximum 26.7 units per acre is maximum allowable density in MU-MM zoning district applicable •„ to subject lot). Approved Height Limit: 35 feet utilizing density bonus - development standard waiver allowance. A71 1 Appendix B: Sites Analysis (September 2022 Final Housing Element) B-101 City of Newport Beach 2021-2029 HOUSING ELEMENT Project Name Description Affordable Component Affordability Confirmation Anticipated Availability in Planning Period Additional Justification Project Provides Newport Summary: The project would redevelop an existing 58,277-square-foot Consistent with the The approved Affordable Project approval. Plans are in plan check Crossings commercial center known as MacArthur Square with a mixed -use affordable housing Housing Implementation with permits expected later early 2022. development consisting of 350 residential dwelling units, 7,500 square requirements of the Plan (AHIP) will require the (1660 Dove St) feet of commercial floor area, and a 0.5-acre public park. Residential Overlay, 30 recordation of an percent of the project's Project Approvals and Status: A Site Development review to allow base apartment units (78 affordable housing construction of the development, a Lot Line Adjustment to reconfigure units) would be set aside as covenant. the three underlying lots, and Affordable Housing Implementation Plan affordable unitsto low- establishing the density bonus, incentives, waivers, and affordability income requirements. The project was approved by the Planning Commission households. Of the 78; . on February 21, 2019. affordable units provided, X- 52 units would be set ti Density: Net acres is 5.19 acres. The project has a base density of 50 aside for households' units per net acre (259 units) which is consistent with a maximum of earning 60 percent or less , 50 du/acre allowance by this policy. This base density does not of the area median include the 35- percent density bonus of 91 units that is allowed by incomel for a minimum • Lot Consolidation The subject property is a pentagonal - the Newport Place Planned Community and State Bonus Density law term of 55 years. The shape site and consists of three contiguous parcels. The in exchange for the 30-percent or 78 units set aside for affordable remaining 26 affordable lot line adjustment allows the reconfiguration of the housing. Altogether, the project has an effective density of 67 units units would be set aside underlying parcels to create a 0.5-acre parcel (Parcel 2) to be per net acre. for households earning 80 deeded to the City for public park use consistent with percent or less of the area General Plan requirements, a 0.11-acre parcel (Parcel 3) median income for a for public parking for park use and emergency vehicle Approved Height Limit: 78 feet utilizing density bonus minimum term of 30 access for the mixed -use development, and 5.08-acre developments standard waiver (base height limit is 55 feet with years. parcel (Parcel 1) for the mixed -use development. height increases permitted through site development review). • Realistic Capacity of Airport Area density. Airport Area allows minimum density of 30 du/ac and maximum of 50 du/ac. Actual project density equates to 67 du/ac (50 du/ac excluding density bonus). • Suitability of Nonvacant Sites: Demonstrates nonvacant sites are viable for redevelopment into higher density mixed -use development. Existing uses consist an eight building shopping center built in 1974. Tenants included retail stores, professional offices, and restaurants. • Airport Area Desirability Appendix B: Sites Analysis (September 2022 Final Housing Element) B-102 City of Newport Beach 2021-2029 HOUSING ELEMENT Project Name Description Affordable Component Affordability Confirmation Anticipated Availability in Planning Period Additional Justification Project Provides Residences at Summary: Project would result in the redevelopment of an existing All unit would be above- NA Project approval in place. Newport car wash with a new 28 residential condominium development. moderate income. Center Development Agreement Project Approvals and Status: General Plan Amendment to change includes payment of $2.5 r (150 Newport land use designation to Multiple Residential (RM), Site million public benefit fee, Center Drive) Development Review to allow for construction of development, of which $325,000 would _ •�..,;, Planned CommunityDevelopment Plan to establish development p p be reserved for affordable standards for the site, a Tentative Tract Map to establish housing and $150,000 Y n L7�— condominiums, and Development Agreement. The City Council reserved to fund services r approved the project on October 12, 2021. for those experiencing '�- Density: 1.26 acre site, resulting in a density of 23 units per acre. homelessness. Residential was not previously allowed on the site. • Suitability of Nonvacant Sites: Demonstrates nonvacant sites are viable for redevelopment into medium density Approved Height Limit: 53 feet high with additional height (60 residential development. Existing use consists of a feet) for rooftop appurtenances successful car wash. However, residential allowance in desirable area incentives the redevelopment of the site. • Newport Center Desirability Uptown Summary: Development of 30 residential condominium units on a None- Addressed in Phase None- Addressed in Phase Entitlements approved. Construction is Newport p 1.52 acre portion of the Uptown Newport Master Plan. p p p 1A 1A anticipated in 2022. • Realistic Capacity of Airport Area density. Airport Area Residences allows minimum density of 30 du/ac and maximum of 50 Phase 1B du/ac. Actual project density equates to 19.71 du/ac. Part Details Project Approvals and Status: The zoning entitlements and EIR for the of the overall Uptown Newport Master Plan that has an Newport Master Plan project were approved on February 26, overall density of 54 du/ac. (APUptown 445 134 2013. On October 22, 2020, 2016, the Minor Site Development review • Suitability of Nonvacant Sites: Demonstrates nonvacant 17) 7) for Phase 16 was approved. Construction is anticipated in 2022. sites are viable for redevelopment into higher density residential and mixed -use developments. Existing uses consisted of existing single -story, 126,675 square foot Density: 19.71 du/ac (Within the MU-H2 designation applicable to the office building. site, density is limited to a maximum of 50 unit and minimum of 30 • Airport Area Desirability units per acre.) Approved Height Limit: 63 feet proposed, 75 feet allowed _ Appendix B: Sites Analysis (September 2022 Final Housing Element) B-103 City of Newport Beach 2021-2029 HOUSING ELEMENT Section 65583 of the Government Code sates that, "the local government shall make diligent effort to achieve public participation of all economic segments of the community in the development of the housing element, and the program shall describe this effort." Meaningful community participation is also required in connection with the City's Assessment of Fair Housing (AFH). A summary of citizen participation is provided below. As part of the 6th Cycle Housing Element Update process, Newport Beach has conducted extensive public outreach activities beginning in 2019. In October 2019, the City launched Newport Together, a Listen & Learn process to guide and inform a future General Plan Update. The goal of the Listen & Learn was to hear from a broad spectrum of community members on community values, assess the current General Plan Vision, and provide recommendations for a future General Plan Update. Newport Together was guided by the General Plan Update Steering Committee, a body appointed by City Council to oversee the Listen and Learn process. The following series of Community Workshops occurred in each of the Newport Beach Council Districts: • November 12, 2019 from 6 — 8 p.m. at 161h Street Recreation Center —District 2 • November 14, 2019 from 6 — 8 p.m. Back Bay Science Center — District 3 • November 20, 2019 from 6 — 8 p.m. Newport Coast Community Center — District 7 • November 21, 2019 from 6 — 8 p.m. OASIS Senior Center — District 6 • December 3, 2019 from 6 — 8 p.m. Central Library's Friend Meeting Room — District 5 • December 11, 2019 from 6 — 8 p.m. Bonita Creek Community Center - District 4 • December 12, 2019 from 6 — 8 p.m. Marina Park Community Center — District 1 Beginning in 2020 the City began additional focused discussion for the 6th Cycle Housing Element Update. These recent outreach efforts included Community Workshops, Digital Engagement, Planning Commission Study Sessions, Housing Element Advisory Committee Meetings, digital media, and noticed Public Hearings. Project materials, including summaries from community workshops and public meetings, notices, and draft public review documents are available on the City's website: https://www.newporttogether.com/housing. Outreach for the 6th Cycle Housing Element to the Newport Beach community, includes the following actions: • Community Workshop #1 — The City conducted a virtual community workshop on October 20, 2020. Advertising for the workshop included emailing the City's list serve, posting on social media, creating an item on the City's calendar, newspaper ads, water bill notices, and announcing the event on the project website. The recorded workshop is available for viewing on the workshop's webpage at https://www.newporttogether.com/virtual workshop. The 82 workshop participants were provided with an overview of the Housing Element Update process, community and housing characteristics, and also participated in engagement activities. Takeaways from the workshop include the following: Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-1 City of Newport Beach 2021-2029 HOUSING ELEMENT o Many believe Newport Beach has opportunities to overcome housing challenges in communities where density may be increased and through a mixture of housing types that meets the needs of many different family types and income levels; o Traffic impacts and parking are important issues to be addressed along with housing; o Different densities are suitable in different areas of the City; o And, some people are opposed to the development of more housing. • Community Workshop #2 and #3 — The City conducted a second and third community workshop on November 161" and 171", 2020. Advertising for the workshop included emails out to the City's distribution list, social media posts, creating an item on the City's calendar, newspaper ads, water bill notices, and announcing the event on the project website. The recorded workshop is available for viewing on the workshop's webpage at https://www.newporttogether.com/housing- suitability. The workshop included an ice breaker that asked participants to guess the density of various housing types. The activity's goal was to have participants think about density and to associate density numbers with housing projects in Newport Beach. Participants could submit comments and questions via the Zoom chat box in the first half of the workshop. In the second half, during the public comment section, participants could use the "raise hand" function to indicate that they would like to speak verbally, and project staff would then unmute their microphone. Each participant was allotted three minutes to ask questions or provide comments. Participants were also able to submit comments via the chat box. A primary objective of the workshop was allowing participants opportunities to comment on the housing suitability analysis for focus areas in the City. Participants were asked to consider if focus areas were suitable for housing development and if there were challenges and opportunities associated with these specific areas. Attendance for the part 1 and part 2 of the workshop was as follows: o Part 1: 61 participants (4 called in and 57 participated on the web) o Part 2: 55 participants (1 called in and 54 participated on the web) • Community Workshop #4 — The City conducted a fourth community workshop on March 22 nd, 2021. Advertising for the workshop included emails out to the City's distribution list, social media posts, creating an item on the City's calendar, newspaper ads, water bill notices, and announcing the event on the project website. The recorded workshop is available for viewing on the workshop's webpage at https://www.newporttogether.com/housing-element-initial-draft. The workshop provided an introduction to the initial draft and provided opportunities for the public to provide questions and comments. • Community Workshop #5 — The City conducted a fifth community workshop on June 21" , 2021. Advertising for the workshop included emails out to the City's distribution list, social media posts, creating an item on the City's calendar, newspaper ads, water bill notices, and announcing the event on the project website. The recorded workshop is available for viewing on the workshop's webpage at https://www.newporttogether.com. The workshop provided an overview of inclusionary housing, accessory dwelling units, and housing overlays. Staff also introduced a Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-2 City of Newport Beach 2021-2029 HOUSING ELEMENT revised housing production scenario that would be shared with City Council for feedback the following night. • Property Owner Outreach — The City provided direct contact to all property owners with sites identified in the draft Sites Inventory. There were two rounds of mailers that were sent out to registered owners of properties. In instances where a property owner expressed disinterest in participating, those sites were removed from consideration. • Planning Commission Study Session —The City held a Planning Commission Study Session on March 22nd, 2021. During the study session, the project team provided a presentation with an overview of the Public Review Draft Housing Element and Housing Element update process to date. Community members had the opportunity to give public comments. • City Council Study Sessions —The City held nine City Council Study Sessions on April 27tn, June 8tn June 22nd, July 13tn, September 14tn (inclusionary), October 26tn, November 16tn, 2021, and January 25tn, and April 261n, 2022 to discuss the draft Housing Element, the City Council review draft RHNA accommodation scenarios and provided input and direction in consideration of community comments received. • Housing Element Update Advisory Committee (HEUAC) Meetings — The City established a Housing Element Update Advisory Committee to: o Ensure there is sufficient public outreach and stakeholder input regarding the update to the Housing, Land Use, and Circulation Elements of the Newport Beach General Plan and any other Elements deemed necessary. o Review responses to the Request for Proposal for services to update the Housing, Land Use, Circulation, and other Elements deemed necessary. o Make recommendations to the City Council regarding the selection of consultants to assist in the update of the Housing, Land Use, and other Elements deemed necessary. o Provide guidance to City staff and the consultant through the outreach process. o Provide guidance to City staff, and the consultant, on goals and policies related to the update of the Housing, Land Use, and any other Elements deemed necessary by the Committee or City Council. o Make other recommendations to the City Council regarding the update of the General Plan, as necessary. The HEUAC meeting agendas, minutes, and videos are available on the City's webpage at: https://ecros.newportbeachca.gov/Web/Browse.aspx?startid=2503780&cnb=BoardsCommissio ns. Nine Newport Beach residents were appointed by the Mayor and Confirmed by the City Council to be part of the committee. • Housing Element Update Website —A website was developed for public consumption and can be accessed at https://www.newporttogether.com/housing. The website provided relevant Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-3 City of Newport Beach 2021-2029 HOUSING ELEMENT information about the update process, key features of the housing element, project timeline and a calendar of events for outreach activities. The website also provided a link to the community survey tool, past recorded meetings and summaries, as well as the contact information of the City for residents and community members to send additional comments or request additional information. • Targeted Outreach —From the time the City kicked off an update of the General Plan in 2019, there has been an extensive broad -sweeping outreach and engagement effort. To get the whole community involved, the City published materials in the local newspaper (The Daily Pilot), provided inserts in utility bill mailers, posted on social media, distributed flyers, and relied upon word-of-mouth through City council announcements and neighborhood conversations. As part of the analysis of Affirmatively Furthering Fair Housing, the City conducted a variety of informal meetings with internal city staff and stakeholders to provide anecdotal evidence supporting the requisite analysis contained in Chapter 3 of this Housing Element. • Planning Commission Public Hearing —On December 9, 2021, the City held a duly noticed Public Hearing to recommend adoption of the Housing Element to the City Council. The Planning Commission received public comments, made findings pursuant to CEQA and adopted Resolution PC2021-034 recommending adoption of the General Plan Amendment No. GP2021-005 for the 2021 6th Cycle Housing Element. • City Council Public Hearing —On February 8, 2022, the City held a duly noticed Public Hearing to adopt of the Housing Element to the City Council. The City Council received public comments, made findings pursuant to CEQA and adopted Resolution No. 2022-14 adopting the General Plan Amendment No. GP2021-005 for the 2021 6th Cycle Housing Element. For all community engagement events, staff contacts in Spanish were provided to community members who required language assistance. The City's website provided links for assistance to those needing Spanish language services. No Spanish translation services requests were made by the public at any Workshop, Study Session or community activity. In addition, a centralized website (www.NewportTogether.com) was created to act as an accessible, interactive landing point for all those interested in learning more about the City's efforts. It is important to know that contact information was provided in case there is any trouble reviewing the information or translation services were required. Hard copies of draft Housing Element updates were also made available at City Hall for review for those who may not have digital access capabilities. Newport Beach has been named a "deaf -friendly city" and Deaf, hard -of -hearing, and non-English speakers now have access to tablets that allow them to connect to interpreters who help translate information regarding city services at libraries, City Hall, and other facilities. Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-4 City of Newport Beach 2021-2029 HOUSING ELEMENT S _i The City distributed meeting flyers/event notices for all public outreach activities to a variety of local and County services agencies, interest groups, universities, private/public services agencies, advocacy organizations that support and advocate for extremely -low and low-income households in Orange County. Many of these groups actively participated and provided comments at the Workshops, HEUAC and Hearings before the Planning Commission and City Council. There comments area summarized in the meeting summaries provided in this Appendix. An email registration sign up was offered, that provided regular updates to local residents, agencies and organizations who desired continued participation in the process. Registrants were regularly informed of outreach and engagement activities throughout the planning process. Through the City's website and the project website, interested individuals have been able to sign up for newsletter updates and alerts about upcoming activity. In this manner, nongovernmental organizations have been able to stay informed. In addition, workshop notices were included in the Kennedy Commission (local nonprofit housing organization) newsletters that are sent via electronic mail to a wide variety of housing stakeholders in the Orange County area. At the City's Housing Element workshops, representatives of YIMBY Law, the Kennedy Commission, and other nongovernmental organizations attended. Comments are provided during the workshop discourse and are always included in the prepared summary for consideration as the update continues. Also, the Chair of the Housing Element Update Advisory Committee (HEUAC) invited Kennedy Commission's Executive Director Cesar Covarrubias to make a presentation to the HEUAC at its October 21, 2020 meeting. The City has made every attempt to engage a broad cross representation of residents in the development of housing policy. Individuals and organizations were invited to participate and comment throughout the development of the draft Housing Element. Many of these organizations also outreached to their own constituents informing them of the opportunity. Those invited and encouraged to participate through the means described above and/or were active participants in the creation of the Housing Element included: • Kennedy Commission • Public Law Center • Campaign for Fair Housing • YIMBY Law • People for Housing • SPON • Jamboree Housing • Trellis, Homeless outreach • St. James Episcopal Church • Serving People in Need • Be Well Orange County Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-S City of Newport Beach 2021-2029 HOUSING ELEMENT As required by Government Code Section 65585(b)(2), all written comments regarding the Housing Element made by the public have previously been provided to each member of the City Council. This Appendix contains a summary of all public comments regarding the Housing Element received by the City at scheduled public meetings, and the Appendix has been provided to the City Council. Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-6 City of Newport Beach 2021-2029 HOUSING ELEMENT S _i This section contains all the related materials from the virtual Community Workshop 1. This includes the outreach flyer, materials provided to participants, and the workshop summary. Comments were received in the chat box, polling questions, and open-ended questions with types responses. Video recording of the workshop and verbal comments are available at https://www.newporttogether.com/. Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-7 port ENVISIONING THE FUTURE OF HOUSING: Housing Element Virtual Workshop Summary ctober zo20 4 Prepared by Kearns & West _ November 4, 2020 Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 1 Introduction 3 Takeways from the Workshop 3 Project Overview 3 Public Outreach Overview 4 Virtual Workshop 1: Envisioning the Future of Housing Activities 4 Activity 1: Ice Breaker 5 Activity 2: What is your connection to Newport Beach? 5 Activity 3: How familiar are you with the term "environmental justice"? 6 Activity 4: What surprised you about the community profile? 6 Activity 5: What are creative solutions to meet our housing needs? 6 Activity 6: Envisioning a Range of Housing Alternatives ►A Activity 7: What are the challenges to meeting our housing needs? g `-Newport, \\T�gether. Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 2 Introduction The City of Newport Beach (City) has initiated a focused update to the General Plan Housing Element. In October 2020, the project team hosted the first public workshop to review community input from previous Listen & Learn outreach, identify the process and framework for the Housing Element, explore housing challenges and solutions, and envision a range of housing alternatives. Takeaways from the Workshop The virtual workshop produced many different data points, which will be used to inform the Existing Conditions and Visioning part of the General Plan Update process. While this document summarizes the information collected, four key takeaways are important to note. • Many believe Newport Beach has opportunities to overcome housing challenges including: o Communities where density may be increased o A mixture of housing types that meets the needs of many different family types and income levels • Traffic impacts and parking are important issues to be addressed along with housing • Different densities are suitable in different areas of the City • Some people are opposed to the development of more housing Additional public engagement opportunities will help the City learn more, including from people who chose not to respond during this first workshop Project Overview The effort to update the City's General Plan Housing Element will enable the City to comply with State housing law. Compliance is mandatory, although details of how the City complies is left to the City, subject to approval by the State. This amendment will focus on housing mandates, but will also necessarily result in amendments to the Land Use and Circulation Elements, and the incorporation of environmental justice policies. The Housing Element will provide for policies, programs and actions addressing existing and projected future housing needs in the community for the 2021-2029 planning period. The Land Use Element will need to be updated for consistency with required changes to the Housing Element to accommodate future housing growth needs as determined by the State. The Circulation Element will describe policies, programs, and actions that consider the implications of future growth on the City's transportation and circulation system. The update will be evaluated and the impacts to Level of Service (LOS) and Vehicle Miles Travelled (VMT) will be examined within an Environmental Impact Report. This will include the incorporation of Complete Streets policies. The Environmental Justice Element, as required by SB 1000, describes related goals, policies, and objectives that identify "disadvantaged communities" within the area covered by the General Plan. The environmental justice goals, policies, and objectives will identify objectives and policies (1) to reduce the unique or compounded health risks in disadvantaged communities by means that include, but are not limited to, the reduction of pollution exposure, including the improvement of air quality, and the promotion of public facilities, food access, safe and sanitary homes, and physical activity, (2) to promote civil engagement in the public decision -making process, and (3) prioritize improvements and programs that address the needs of disadvantaged communities. Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 3 Public Outreach Overview Public outreach is integral to each step of the process. Phase 1 Existing Conditions, Education, and Visioning; Phase 2 Policy Development; and Phase 3 Draft Plan Development. Members of the public may participate in workshops, activities on the project website, and in Community Advisory Committee meetings. Phase 4 Draft & Final Plan Development/EIR/CEQA, the draft plan will be circulated for comments, which will also be received at Planning Commission and City Council meetings. Virtual Workshop 1: Envisioning the Future of Housing Activities Objectives During the first workshop, the goals were to review input from the Listen & Learn outreach that took place during Winter 2020, identify the process and framework for the Housing Element, and engage and educate participants in the discussion of housing alternatives compliant with state law and challenges presented by the State's requirements. Date, Time, Platform, and Attendance The meeting took place during the evening of October 20, 2020. The City chose the Zoom platform to involve 82 unique participants. On average, 65% percent of participants engaged in workshop activities. Those who responded provide a preliminary understanding of the range of opinions among community members. About 35% of participants did not engage in the activities. It is difficult to infer meaning from this data point. However, the comments typed during the workshop may explain some of the reasons for not responding. Through additional engagement the City will deepen its understanding of participant opinions. Getting the Word Out Information about the workshop was shared through the City's distribution email, on social media platforms, as an item on the City's calendar, announced on the project website (NewportTogether.com). A Outreach Event Activitie and Input The first workshop was comprised of seven activities, which included entries into the chat box, polling questions, and open-ended questions with typed responses. Each activity is described below along with a summary of results. Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 4 Activity 1: Ice Breaker Using the chat box, participants were invited to introduce themselves by sharing their neighborhood and the view from their windows. Out of 82 participants, 12 people responded. Participants.. Corona Del Mar Of Newport Back Bay Newport Crest Newport Crest Newport Crest The Bluffs Newport Back Bay West Newport Beach West Newport Beach Banning Ranch Newport Island Trovare Community of Newport Coast Newport Bay Two additional participants are connected to the Airport Area. One is a business owner and the other is a commercial property owner. Activity 2: What is your connection to Newport Beach? The second activity provided more information about participants. Chart 1 illustrates the breakdown with residents being the majority. Chart 1: Participant Connection to Newport Beach 1'd Bus Ow 20% Workers 2% Nearby 5 % Residents 61% Residents Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 5 Activity 3: How familiar are you with the term"environmental justice"? The State requires that local jurisdictions incorporate environmental justice policies into their General Plans. According to the California Environmental Justice Agency',environmental justice policies "call for fairness, regardless of race, color, national origin or income, in the development of laws and regulations that affect every community's natural surroundings, and the places people live, work, play and learn." Out of 27 respondents, most (37%) are somewhat familiar and a large percentage (33%) are unfamiliar with the term. Chart 2 shows the distribution of responses. Chart 2: Familiarity With The Term "Environmental Justice" Somewhat Familiar What Does This Mean? Very Familiar Somewhat Unfamiliar Activity 4: What surprised you about the community profile? i7% The presentation included a community profile to provide participants with resident and housing characteristics. Participants were asked what surprised them about the community profile and they were able to type their responses. This question received 31 responses, which are included in Appendix A: Data Summary. The following topics received comments from multiple people. • Not a surprise: Of all participants 11 participants were not surprised by the data. • Age: A few participants commented on age demographics, noting that more than half of the population is 45 years or older. • Multi -family housing: Two participants noted the proportion of multi -family housing, which makes up more than 30% of the housing stock. 1 https://calepa.ca.gov/envjustice/ Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 6 Activity 5: What are creative solutions to meet our housing needs? Participants were asked about solutions to meet Newport Beach's housing needs. They were encouraged to make two to three comments in the chat. This question garnered a total of 47 responses. The full list of comments is available in Appendix A: Data Summary. The word cloud in Figure 1 illustrates the text responses. The size of the word represents the number of times it was typed by participants. Increasing density, development in the airport area, and the use of strip commercial/ excess retail for residential development were all noted in five comments. Three comments made note of transportation solutions, construction of accessory housing units, and additional multi -family units. The following solutions were noted in two comments each: parking lots, mixed uses, fewer industrial properties, Newport Center, and development in Banning Ranch. Figure 1: Participant Responses Word Cloud ti Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 7 Activity 6: Envisioning a Range of Housing Alternatives In addition to solutions, participants were asked about the appropriateness of six different housing types in five areas of the City. The map in Figure 2 shows the five areas and the questions referred to the housing types illustrated below. Figure 2: Housing Activity Responses Single Family Duplex Townhome Small Lots Mid -Rise Housing High -Rise Housing vow"'Mm- UWMEIJ n rl The responses presented below are a summary of responses in Chart 3. Area 1: Duplexes are perceived as the most appropriate. Single family, small lots, townhomes, and mid -rise also received relatively high response rates. Area 2: Like Area 1, duplexes received a high number of responses and small lots, mid -rise, and single family received a high response rate. Area 3: Higher density was viewed as appropriate in Area 3, with mid -rise being the most popular closely followed by small lots. Town -homes received several responses followed by high-rise and duplexes. Area 4: Mid -rise, townhomes, and high-rise are viewed as most appropriate in Area 4. Area 5: Single family homes, with 14 responses, are seen as most appropriate in Area 5. Duplexes, townhomes, and mid -rise also received a notable number of responses. Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 8 Chart 3: Appropriateness of Housing Type by Area Area 1 Area 2 Area 3 Area 4 Area 5 ilex 0 5 10 15 20 Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 9 Several comments were submitted in the chat during this activity. The complete chat record may be found in Appendix B. Multiple comments addressed the following: • Airport Area: The airport area generated three comments. One reinforced the responses to the polling question. The other two are paraphrased below: o Existing business invested in a business environment. There are not sufficient pedestrian and residential amenities. o The airport area should be thoughtfully planned with an integrated approach, weaving together a mixed -use landscape in a manner sensitive to existing issues. • Area 1: Three people said that Area 1 has been developed enough, and should be an open area, and needs remidiation. • Banning Ranch: Four people noted that do not want housing developed in Banning Ranch. • Do not want development: Several different comments indicate that people would have chosen "none" if it were an option. Activity 7: What are the challenges to meeting our housing needs? The ability to overcome challenges is important for the development of housing units. Participants were asked to identify one or more challenges from a list. Chart 4 illustrates responses. Of all the choices, available land, cost of housing, and traffic impacts received the most responses. Chart 4: Challanges to Meeting Housing Needs 9% Approval & 9°% Housing Choices 12% Parking Impacts 4% Local Control 28% Available Land 21% ost of )using 17% Traffic Impacts Envisioning the Future of Housing: Housing Element Virtual Workshop Summary 10 ew o rt Together. Community Involvement Every Step of the Way The City has initiated a focused amendment of the Newport Beach General Plan in 2020. The purpose of this amendment is to enable the City to comply with State laws, including the State Housing Law and others relating to transportation and environmental justice. COMMUNITY ENGAGEMENT OPPORTUNITIES DIGITAL COMMITTEE VIDEO ENGAGEMENT ADVISORY MEETING WORKSHOP PRESENTATION e 0 O Fall 2020 Exis-Lio g �.uriuitiuns, Education and Visioning Housing Element Combined Public ;; Circulation Element Winter 2020 Development WEBINAR 4 L 11 How do you get involved? The process chart below offers you a glimpse into the many engagement opportunities you will have to participate in the General Plan Update from Virtual Workshops to Planning Commission Meetings. Dates and times for items below will be available through NewportTogether.com Spring 2021 DratL eia(i Lieye,upment Summer/ Fall 2021 4.0r a t dt r'ii lal 11-1di Development/EIR/CEQA PLANNING DRAFT PLAN FINAL PLAN PLANNING DRAFT PLAN COMMISSION EIR SLOPING DEVELOPMENT ADOPTION/ STUDY COMMISSION MEETING DEVELOPMENT EIR PUBLIC FINAL EIR SESSION PRESENTATION /EIR REVIEW ewport, Together. Housing Element Focus .. Virtual Workshop 1 - Envis' ning Housing Alternativ You're invited to the f virtual work eries of A^ Help Shape the Future of Housing in Newport Beach! The City of Newport Beach has initiated a focused amendment of the Newport Beach General Plan, including updates to the Housingand Circulation Elements to comply with State laws. This workshop will introduce the Housing Element process and include opportunities for you to provide input future housing alternatives in Newport Beach. OCTOBE 20,2020 6: :30PMl ZOOM REGISTRATION & MORE INFO AT WWW.NEWPORTTOGETHER.COM Scan Me EXISTING CONDITIONS, POLICY DRAFT PLAN FINAL PLAN EDUCATION AND DEVELOPMENT DEVELOPMENT ADOPTION/CEQA VISIONING Fall 2020 Winter 2021 Spring 2021 Summer/Fall 2021 -.0 --0 VToearn more about Housing and RHNA head to the website www.NewportTogether.com City of Newport Beach 2021-2029 HOUSING ELEMENT S -i This section contains the summary and chat responses from the virtual Community Workshop 2/3. Comments were received in the chat box and verbally during the meeting. Video recording of the workshop and verbal comments are available at https://www.newporttogether.com/. Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-8 Newport, Together. Housing Suitability - Virtual Workshop Held On: November 16 & 173 2020 Workshop Summary Prepared by Kearns & West December 29, 2020 Housing Suitability Virtual Workshop: Workshop Summary 1 Introduction On November 16 and 17, 2020, the City of Newport Beach (City) hosted a Housing Suitability Virtual Workshop to gather community input on potential housing sites and their suitability. The City chose to host the virtual workshop in two parts to provide enough time for public input and question and answer sessions for different areas in the City. Part 1 (November 16) focused on the Airport Area, West Newport, and Newport Mesa. Part 2 (November 17) focused on Newport Center and Coyote Canyon. The workshop built on the community input and exploration of housing alternatives from previous workshops. The workshop summarized in this report focused on presenting the site feasibility analysis and the process used by the Housing Element Update Advisory Committee to identify candidate sites for review. Workshop Objectives The workshop had two objectives. The first was to present the site feasibility analysis and potential areas for candidate sites. The second objective was to allow the public to comment on this analysis and the potential sites. A primary driver for this workshop was providing a workshop format to allow members of the public to provide input and engage with staff in a question and answer style meeting. Getting the Word Out Information about the workshop was shared through the City's email distribution list, on social media platforms, as an item on the City's calendar, and as an announcement on the project website (NewportTogether.com). Newport, Together (Online Input Opportunities) The workshop page on the Newport, Together project website includes recordings from both workshop dates and virtual tools to gather input. The platform allows the project team to expand input opportunities beyond the workshop dates and for participants to engage with the project on -demand. Participants are currently able to submit geo-located comments on identified housing sites. Workshop Format: Date, Time, Platform, and Attendance Summary The workshop took place during the evening of November 16 & 17, 2020. Both workshop parts were hosted using Zoom to continue to build participant familiarity with the virtual platform and its tools. Over the two nights, the workshop had a total of 133 registered participants and combined attendance of 116 participants. Attendance details are below. Part 1: Pa rt 2: • Total attendance of 61 participants. • Four participants called in • 57 web -based participants • Total attendance of 55 participants. • One participant called in • 54 web -based participants Housing Suitability Virtual Workshop: Workshop Summary 2 Activities The workshop included an ice breaker that asked participants to guess the density of various housing types. The activity's goal was to have participants think about density and to associate density numbers with housing projects in Newport Beach. Response rates for the ice breaker were: Part 1: 90 responses were submitted Part 2: 60 responses were submitted Input Opportunities Participants could submit comments and questions via the Zoom chat box in the first half of the workshop. In the second half, during the public comment section, participants could use the raise - hand function to indicate that they would like to speak verbally and project staff would then unmute their microphone. Each participant was allotted three minutes to ask questions or provide comments. Participants were also able to submit comments via the chat box. Major Themes from Public Questions and Comments A primary objective of the workshop was allowing participants opportunities to comment on the housing suitability analysis for focus areas in the City. Participants were asked to consider if focus areas were suitable for housing development and if there were challenges and opportunities associated with these specific areas. The following section outlines the key themes and comments highlighted by participants. Themes consider overall responses and ideas shared during the public input section for each area. Chat responses can be found in Appendix A. Airport Area: • Participants expressed concern over the impact of noise levels on new housing development. It was noted flight paths could impact development. • It was suggested that the area could become a higher density area, but the City should have an overall plan that incorporates services, recreation space, and other necessary amenities for a community. • Participants stated concerns with housing developments sitting close to or within industrial areas that have contamination issues. • The question was asked how the City makes sure that developments create affordability. West Newport: • Participants noted that housing development in the area is limited. • Concern was expressed over the displacement of mobile homeowners. • A potential partnership with Hoag Hospital for mixed -use development was mentioned. • A concern was raised over the number of available sites for development and if property owners would be open to development. • Concern over limited parking availability for new residents with new development was expressed. • It was suggested Newport -Mesa Unified School District could be a partner in workforce development. Housing Suitability Virtual Workshop: Workshop Summary 3 Newport Mesa: Dover/Westcliff/Mariners Mile • Some participants noted a preference for lower density housing typologies. • Comments included concern over developer affordability with development near the coast. • Another concern involved property ownership interest in the development of low- income units. • The question was asked if there is any surplus property to considered for development. Newport Center • Some participants identified the possibility of high-rise development as well as mixed -use development. • Concern was expressed over Irvine Company property ownership development restrictions. • Residents who live close to Newport Center noted a request to keep existing height restriction agreements in place at Newport Center. • Property owners expressed interest in market -rate development. • It was stated that amenities are essential for residents; the City needs to consider community benefits. • A commenter noted that placing affordable housing near Newport Center would be ideal because of the availability of jobs. • Questions were posed about the conversion of retail to housing with shifting trends. Coyote Canyon • Several participants noted there could be an opportunity for higher density units. • Participants commented that area development would require further incorporation of services to the area. • Concern was expressed over environmental impacts because of the potential location of affordable housing units near the landfill. • Participants noted that development of the non -landfill area on the north section could be most feasible. • Participants noted future development needs to consider the expansion of infrastructure. • A commenter noted that access to development might be a concern for development north of the landfill. Housing Suitability Virtual Workshop: Workshop Summary 4 Appendix A: Chat Responses Nov 16 Housing Suitability Virtual Workshop Chat From Susan Eaton : Park Newport From Susan De Santis : Susan De Santis, Trovare in Newport Coast From Bruce Bartram : Bruce Bartram Newport Crest From Sam Shams : East Bluff From Jenna Tourje, Facilitator : Thanks everyone for sharing! 'W , From P. Matheis : The Airport Area is, by my observations, a eclectic series of kveloped properties. Some of these properties are significant class A properties, while others are old and dilapidated. Given the figures of about 4,800 new dwelling units I read in the print news that NB planning officials suggest that this is not possible given self described restrictions. Because of my experience in Newport Beach and understanding of the situa ' e the ground I dispute this view. If I were to suggest that this housing could be meet entirely Oithin the Airport Ar he community development people explain why this is not possible. From Jenna Tourje, Facilitator : Thanks, P. We will incorporate your co From David Tanner: Hi Seimone & Jim, Please provide an overview of the existing setting for the Housing Element Update project. Include the physical and regulatory setting and the impact housing regulations have had on the buildout of the existing General Plan. After you provide the existing setting upon buildout of the General Plan, please summarize how staff proposes to address General Plan buildout in the Housing Element Update Project. From P. Matheis : As I recall, on or about the 1980s/90s the permitted housing development in Area2 was downzoned in a way that impacted about 320 dwelling units. Is this something that is being reconsidered? From David Tanner: Please confirm (yes or no) if the existing General Plan is in compliance with state law. If no, what does Staff propose to remedy the deficiencies and will it be a part of the Housing Element Update Project? From David Tanner : Please provide the legislative steps the Ci has and is proposing to take relative to the Housing Element Update Project, and the location(s) where Housing Ele nt Update information can be found (GP diagnostic memo, communications between the City and HCD, Congresswoman Norris, SCAG, other cities and legislators, etc.). From David Tanner: The scope of the Housing Element Project (the other Elements to be amended as part of the Project and how staff hopes to achieve internal consistency among the Elements (example: General Plan Vision Statement)). From David Tanner : What is Staff's strategy for meeting the HCD deadline for submittal of an adopted Housing Element (if you feel a vote of the public to make the Housing Element Update effective is not required, please provide a detailed explanation. If staff believes other governmental approvals are not required, (example: Coastal Commission review/ approval) please explain why. From Nancy Scarbrough : Thi4area seems like an area that could become a higher density, but I believe the City should have A overall plan for the area that incorporates services, recreation space and other uses that are necessary to a community. We don't want to create an environmentally disabled area. From David Tanner : TRis information will provide the public with a clear picture of the situation facing the City, the challenges that lay ahead and the City's plan to address these challenges. this information should be provided to the public prior to asking the public for recommendations. From Susan De Santis : What is the capacity in the Airport Area for housing if developed on the available sites at 60 units per acre? Housing Suitability Virtual Workshop: Workshop Summary 5 From P. Matheis : In the 1990s the entitlements in Newport Center (Area 3) were reduced following a vote of the people. Is this area being considered for future additional development? From Allyson Presta : what is the response from property owners in the area? From Adriana Fourcher : I am a property owner and not in favor of this. From David Tanner: Will existing housing laws allowing ADUs impact the City Jobs Housing Balance? From David Tanner: Will existing housing laws allowing ADUs impact the city circulation system? From David Tanner: Will existing housing laws allowing ADUs impact emergency services and public safety? From Susan De Santis: What is the potential for finding 100 percent affordable housing locations for a workforce housing? From Nancy Scarbrough : Can we focus on projects that are 100% low income or very low income with a subsidy whether in this area or another area of the city? We can't possible comply wit e state mandates if only 5% of a project is low or very low income housing. If we allow projects with only 5% low y low income we will have to approve 40,000 (plus or minus) residential units in our city of approximately 45,0 ing residents I units From David Tanner: How many ADUs can be constructed within the City? From Susan De Santis : How many stories is the Uptown Newport project? How is the noise added? From Susan De Santis : How is the noise issues addressed in Uptown Newport? From P. Matheis : I suspect that there a number of properties in the Lity that couNhenegt this State mandate. By focusing on the Airport Area an opportunity seems to exist to answer a good dealee. From Adriana Fourcher : Susan - noise was not addressed. Uptown is 5 stories. is not fully occupied so there is not a lot of information on noise compI I with Covid all air traffic is unusually low. This will change when things return to "normal". From David Tanner : Is there a penalty if the RHNA allocation is not met within the timeframe? From Jonathan Langford : Do we anticipate�he 65 dB CNEL lineLanging? From Alexis Mondares : If there is a focus of affordable density housing within the airport area, is there a concern that clustering affordable housing within such a noisy area that others find unsuitable would be discriminatory? From Adriana Fourcher : Jonathan - we have monitored noise levels at 4340 and the decibels range from 65 to 70. From Adriana Fourcher : Alexis - Environmental Justice is not a term that fits in this discussion. From P. Matheis : Should legal questions be answered by the people best suited to answer those questions? From Susan De Santis : Can you discuss how the affordable units in the new Picerne project were created? From Cesar Covarrubias : How will affordable housing will be incorporated into these focus areas. Density alone will not be create affordable housing in the focus areas. What policies are we putting in place to address AH in the focus areas? From Nancy Scarbrough : The City just approved a project in the 65 CNEL without regard for noise. They ignored the Airport Commision recommendation. From Adriana Fourcher : Susan - Only small # of affordable units in Picerne project. Doesn't make a dent. From David Tanner : Housing in West Newport - What impact will the conversion of housing in west Newport and the Airport area have on Jobs? Housing Suitability Virtual Workshop: Workshop Summary 6 From Nancy Scarbrough : If you displace the mobile homes, which are already low income housing, will those individuals who lose their mobile homes new housing that they can afford? From Adriana Fourcher : Nancy - Thank you. Taxpayers don't want to bear the financial consequences if the City gets sued. The developer fees are driving this. From David Tanner : If we convert employment areas to housing. What steps will the City take to replace lost jobs and create new jobs for the increase in population? From Adriana Fourcher : David - Great question! From P. Matheis : This area seems to have a limited payoff versus the Airport Area. From Adriana Fourcher : Business owners don't want to be disregarded in the conversation. From Adriana Fourcher : P. Matheis - there is no payoff, hopefully. From David Tanner: What will the cumulative impact from RHNA (1.3 million units) have on jobs within Newport Beach? From Charles Klobe : The pie charts shown in each slide do not reflect a no build answer,. Participants were not offered the choice of no units. That translates to the false belief that residents agreed to some additional residential units in each area. This does not reflect actual responses. Why is the total focus of this meeting on affordable housing to our housing element? From P. Matheis : This area is a significant industrial area, and I wonder if this is somethi g that needs to be maintained for business needs in the City. From Adriana Fourcher: Charles - Very good point. From Charles Klobe : We have to TRY to plan. We do not have to succeed. From David Tanner: What wi4e caulative impact from ADUs in Southern California have on jobs within the City? From Adriana Fourcher : 4,80O units now but what is going to be later and after that. The City of Newport Beach should combine efforts with otherrCities and fight back on RHNA allocations. From Susan De n51a tis : How many units have already been approved that will be counted towards the RHNA allocation? From Sam Shams : Is the plan able to assume the conversions of existing properties, or does it require open space? So can the plan basically be that one large development becomes even bigger? Fr atheis : I believe it is important that the City plan for this mandate. I suspect that the idea that the City simply fail is something that will not succeed in 2020 and beyond. rom Alexis Mondares : Adriana - the City has already appealed its RHNA allocation. However, it is unlikely that the City's share will be reduced in a meaningful way From Debbie Stevens: I have concerns with siting housing closer or within industrial areas that have contamination issues, as there are such properties in this area. From David Tanner : Staff's statement - The City has no choice but to increase density. This is not a foregone conclusion. This is Staff's conclusion. Fact - The City Council is proceeding on a 3 pronged approach. Compliance is one. There is no evidence to date that Compliance is feasible. I From Adriana Fourcher : Alexis - An appeal is the first step. The City has too much to loose to simply accept central planning from Sacramento. From Sam Shams : Thank you for the response! Housing Suitability Virtual Workshop: Workshop Summary 7 From Adriana Fourcher : It seems like we are going thru an exercise but there will not be any meaningful consensus from both residents and businesses. From Charles Klobe : There is no stated penalty for not finding willing property owners. From Alexis Mondares : If density housing is created in this area, I would think parking would be an e issue for new residents. From Allyson Presta : in this area isn't the road & track site zoned for residential? From Sylvia Walker :Doing away with the mobile homes, which are likely affordablQ housing, to put in other housing seems like a less than opportune way to meet RNHA goals, if that is what was sugges From Sam Shams : I am curious if dorm rooms for coastline college would be wort1k,inking of, I am not familiar with that college though. From Angelica Astorga : If density housing is built they should provid a parking structure and not street parking so that residents can park. From P. Matheis : Is senior housing something that is considered "affordable" housi40111111 From P. Matheis : Due to the proximity to Hoag Hospital is seems like senior housing might be something to consider if it meets the definition of affordable. From Susan De Santis : Senior and workforce housing are both considered affordable hosing From Adriana Fourcher: I understand the committee's role in identifying opportunity zones. that same process was used I a few years ago which resulted in the business park that our business is located as being marked as an "opportunity zone for residential". Most of the building owners were not part of that discussion. We invested in a business park. We do not believe that residential should be approved in a commercial zone, simply because it gets colored "pink" on a City map. From David Tanner : Everyone review the State Housing and Community Development ADU handbook published in September 2020 to learn the facts on the potential for ADUs: https://www.hcd.ca.gov/policy-research/docs/adu-ta- handbook-final.pdf From Adriana Fourcher : Senior housing is important. From Charles Klobe : Anyone notice that they have not answe)rd one of Dave Tanner's questions? Why the total focus on finding sites for affordable housing only? Our housing element includes housing needs for the entire city. Adriana Fourcher : Housing needs for young professionals. P. Matheis :Staff is doing a great job here. am Angelica Astorga : Many people are commenting on affordable housing, then that is obviously an issue especially California. Cesar Covarrubias : The Hoag area creates a lot of service sector jobs. It will be appropriate to prioritize affordable for the workforce and families. From Angelica Astorga : I am a college student and we need more affordable housing, discussions around that are extremely important, in all of my circles it is a huge problem. From Adriana Fourcher : People commute and make their own choices based upon what things are important to them. Irvine has lots of apartments and housing choices that is definitely more affordable than Newport Beach. From David Tanner: Everyone, ask Staff to share the findings of the General Plan Diagnostic Memo prepared as part of the Housing Element Update. The Memo identifies the existing deficiencies in the General Plan that must be remedied. Ask Housing Suitability Virtual Workshop: Workshop Summary 8 Staff to discuss how these deficiencies will be remedied. From Angelica Astorga : You want to push people out of Newport because they cannot find affordable housing? That is classist. What about students and young people who work in Newport? From Sylvia Walker : Irvine has an affordable housing issue. From Angelica Astorga : Sylvia - exactly. both cities need more options. From P. Matheis : At Dover and West Coast Hwy is an empty lot that is not painted blue. Why? From Adriana Fourcher : Angelica - College Students can rent rooms in people's homes, share apartments, work 2 jobs, etc. Affordable housing in Newport Beach is a different level of rent than in other Cities. From Allyson Presta : I am an apartment complex at bayshores and pch AA From Allyson Presta : would I be part of this area From Adriana Fourcher : Angelica - I moved here from the Midwest right out of college and had to adjust to CA. It is expensive here. From Sylvia Walker : Rents in Newport Beach are not necessarily higher than rents for apartments in Irvine. From David Tanner : Staff updated the City Councjl last week on the Housing Element Update. staff warned the City Council that they might have to break the Housing Element Update into 2 stages. If Staff does this only a portion of the General Plan would be updated. Staff said the cost of the total General Plan Update would increase from $1.S to $3.5 million dollars (2 EIRs and 2 General Plan amendment processes). Ask Staf to explain what they are thinking. From Allyson Presta : not currently From Angelica Astorga : Well I was born in California, I have lived a life of knowing how important it is to have access to affordable housing. As a student, we do all of those things and the way wages have remained stagnant in this state and housing costs only go up is challenging for new graduates. r � From Allyson Presta: that ate is rented long term From David Tanner: Will the Housing Element Update go to a vote of the public per the City Charter? Staff does not want to answer this question. Why? Ask Staff to explain. Op From P. Matheis : The properties on West Coast Hwy appear to be under used retail properties. From Adriana Fourcher: Jenna, thanks for reminding us of those slides. My recollection is someone could earn somewhere above $50 to $60K a yeftr and qualify for affordable housing. However, there are very few units. The Picerne project stacks the affordable units to Studio units. That might be fine for a single person but won't work for a young family. From Allyson Presta : he rented the entire site From Allyson Presta : russ fluters From P. Matheis : The proximity to the water is a silent point. This speaks to the value of maximizing the development in the Airport Area for this challenge. From P. Matheis : Should read "Salient." From Adriana Fourcher : Mariners Mile is very expensive property. P. Matheis there is a cost to purchasing existing buildings in airport area and scraping the property and then building residential. From David Tanner : The City's Local Coastal Plan prohibits impacts to coastal bluffs and blockage of ocean/harbor views How can the City possibly make a finding that high density residential is consistent with the Local Coastal Plan? Housing Suitability Virtual Workshop: Workshop Summary 9 From Susan De Santis : Should the City provide housing for its seniors and its essential workers? From Cesar Covarrubias : Have surplus land sites from the City and the Special Districts been identified at opportunity sites? From Adriana Fourcher : Angelica, that explains why so many residents and businesses have moved out of state. It is not because those states provide them with subsidized housing it is because the cost of development is lower, the cost of land is lower and the government doesn't tax, tax, tax. From David Tanner : Why is Staff been un-willing to discussing these obvious General Plan inconsistencies? These questions have been asked since day 1. From Adriana Fourcher: If we give CA a few more months this problem might resolve by the law of natural consequences. The State if Broke. Businesses and residents might move which will make pr ty values decrease and increase supply. From P. Matheis : I submit that if we take this time to properly plan for thi ate we could design something that is the best it can be under the circumstances. I do not see a change in theilitical environment i acramento in the near term, and it is likely this mandate will stand. From P. Matheis : How is an area outside the City included in this plan, i.e., item 1? From David Tanner : Seimone - provide a date certain when these questions will be answered. Quit putting this off! From Adriana Fourcher : Seimone - the committee has been given an impossible task. The policy recommendations unfortunately impact property owners. Again, we are in a Business Park that was colored "Pink" a few years ago based upon some committee discussion and few community input. Now the business owners arE�all fighting residential infill proposals. 1W From Technical Support: www.newporttogether.com, ' From Sam Shams: This might but what are the chances of changing the city borders to get some of Costa Mesa? From Adriana Fourcher: Seimone - the in -fill residential project that is being proposed in our parking lot will take around 3 years to build. That is a real negative impacj to the employees and businesses. A parking lot that is common area. Think about that. am From Charles Klobe : The NMUSD property is prime for workforce housing. Susan DeSantis has previously offered this to the committee. Likely nothing will come of this until the new trustees are seated. We should work toward this as it is good for the city, good for the district and good for the NMUSD employees. I hope we pursue this in 2021. Adriana Fourcher : Charles - Absolutely no subsidized housing units for Public Sector employees. Do not use our dollars to pay for housing for government employees. Sorry. From David Tanner: All A are assumed by the State to be Affordable Housing. From Sam Shams: Does r ontrol qualify as affordable housing? From Adriana Fourcher - good question. From Sam Shams : ecause affordable housing options usually don't appreciate much in value relative to market prices, and when you consider mortgage etc, it may be a better alternative for low income people to rent From Charles Klobe : Not suggesting subsidized by the city. The idea is to take the NMUSD property and have the district build rental housing for their new employees, The offer of this could factor into their labor negocistions From Adriana Fourcher: Who owns the NMUSD property? Housing Suitability Virtual Workshop: Workshop Summary 10 From Charles Klobe : spell check. Fred: I will send you the outline via email. From Susan De Santis : How will the city and consultants use the input that you received this evening? From Adriana Fourcher : Charles - this is Adriana. IN From Allyson Presta : are we going to cover Newport center tonight? From David Tanner: ADUs are considered affordable by the State - period. The state requires documentation to demonstrate they are in fact affordable. ADUs can be a few hundred square fee to 1,200 sq. feet How will this not be affordable? From Charles Klobe: NMUSD owns the property. Banning Ranch Conservancy would not oppose the project of workforce housing for NMUSD employees. From Debbie Stevens: FYI - Newport Center will be covered tomorrow nig From Allyson Presta : thank you From Adriana Fourcher : Charles - no workforce housing for public�service employees. That is pure socialism. The next step will be imminent domain to take private property for public sector employee housing. From Mary Ann Soden : How long will you be looking at input through the website. I have folks not able to attend the workshops. Is there a deadline? 14 14 From Susan De Santis : Will the city be pursuing partnerships with Hoag and the school district as part of this process? From Adriana Fourcher : Thank you Jenna. From P. Matheis : Can a large developer build in one area and site the affordable units in another area of the City? From Sam Shams: Thank you! I From Bruce Bartram : My thanks to Staff and everyone for an interesting and informative presentation. From Sylvia Walker: Good job by Newport Beach staff. From Debbie Stev Nice job and thanks! From Charles Klobe k You. From Susan De Santis : hank you! From Adriana Four er : Thank you. From Kevin Martin tood job Newport team. Talk to you tomorrow! From Mary Ann Soden : See you tomorrow. Thank you. From Jonathan Langford : Appreciate the work. From Allyson Presta : see you tomorrow. thank you 1+ Housing Suitability Virtual Workshop: Workshop Summary 11 Nov 17 Housing Suitability Virtual Workshop Chat Susan Eaton: Park Newport formerly Eastbluff Allyson Presta: Big Canyon Resident, property owner thru newport Charles Klobe: Anyone who participated did not have the option for no housing. So the charts are skewed to give the impression that residents wanted more housing throughout the city. David Tanner: Hi Seimone & Jim, As a preface to public input at tonight's Housing Suitability meeting please provide the following information in Staff's introductory remarks: 1. As professional planners, please provide an overview of the long-term regional effects of State housing laws. Please assume for this discussion the literal interpretation of the laws which create the potential for development of millions of Accessory Dwelling Units (ADUs) and 1.3 million additional RHNA units (by 2029) within southern California (SCAG boundary). For example, what impacts will likely occur to the following sectors: (beneficial impact, negative impact or no impact) a. The ability of the existing transportation systems and urban infrastructure to accommodate the increased population. b. Jobs and employment opportunities (will people in inland areas continue to commute long distances to Job centers or'will urban in -fill take those jobs?). c. W i I I there be a need for additional Jobs to meet the population increase? F e. Social and economic impacts: i. Will there be higher or lower costs to consumgrs? ii. Will business be attracted to or leave southern California? f. Public safety and quality of life. i.What will be the regional impact? Based on the answers to the regional concerns in question #1, what are the potential long-term impacts to the City of Newport Beach from housing laws and RHNA? a. Will the impacts mirror the regional impacts or will Newport Beach be disproportionally impacted? (better or worse) b. What impact will this regional growth have on tourism within Newport Beach? c. What impact will this regional growth have on the city's-circulation system and transportation infrastructure? d. Would you expect the increased regional population would put pressure on John Wane Airport to expand the number of flights beyond current limitations? e. Will there be more competition for jobs in Newport Beach as a result of regional growth? f. If you believe increased population will increase the competition for jobs, can the City expect to get a higher quality workforce? i. What impact will this ave on the City of Newport Beach demographics? ii. What sectors might benefit and wha sectors might decline? iii. What impact will this have on wages? g. What will be the regional impact on Newport WBeacsesh water supplies? David Tanne Question 3 3. What are the constraints the City faces in formalizing the Housing Element Update? For Example: a. As professional planners would you recommend the City locate housing in: (yes, no, maybe) i. Disadvantaged rnmmi mitiac ii. Areas subject flooding iii. Areas subject to wildfire iv. Areas subject to liquefaction v. Areas subject to vi. Under the flight path of John Wayne Airport vii. Areas subject to health hazards viii. Areas subject to inificant earthquake hazards ix. Within or adjacent to protected biological areas x. Areas subject to high '05 CNEL or greater) xi. Hazardous waste sites xii. Areas that do not have job opportunities for new residents significant jobs/housing imbalance) that would result in an unavoidable decline in emergency services/public health and safety. David Tanner: Question 4 4. What are the consequences to the City if the RHNA housing allocations identified in the Housing Element Update are not met? Is there a difference in the consequences between un-met affordable and market rate units? Answers to these 4 questions will provide the public with a clearer picture of the regional impacts facing the City. It will provide insight if the City does nothing and the rationale behind the City's plan to address these challenges. Charles Klobe: There is no stated penalty by the state for trying and failing to find willing landowners who want to rezone Housing Suitability Virtual Workshop: Workshop Summary 12 their land for high density lower income housing. The city is trying through the Housing committee but they will almost certainly fail to find landowners to rezone their property without state or federal subsidy. Alejandra Reyes: Is Jenna breaking for anyone else or only me? Allyson Presta: I can't hear her either Andrew Campbell: breaking up for all Kevin Martin: breaking up for me as well Taylor York (Technical Support) : Apologies for the technical delays! Allyson Presta: my site can be high rise Mary Ann Soden: what site is that? P. Matheis: is Fashion Island designed for additional building stock? Sam Shams: I think we need to consider public access to the sand beaches at the dunes, I would imagine there might be some restrictions to development to allow public access. Charles Klobe: What percentage would you propose as affordable Allyson? Allyson Presta: i don't know I'm not a developer Cesar Covarrubias: Is Newport Center a mixed use zone or do you need an overlay for w development P. Matheis: I foresee significant high-rise potential in Newport Center w%see rrela ng ADUs in the Airport Area. P. Matheis: Is the Fashion Island property seen as something that might ge in zoning due to changes in how people shop? Mary Ann Soden: An 4por lement is the impact on traffic circulation, so these two general plan updates need to be considered at0some point together. A4 Susan Eaton: Thank you Cesar. Charles Klobe: No property owner has expressed any interest in developing lower income housing without City, State, or Federal subsidy. NONE! Many owners would like to rezone their property for high density market rate apartments. The City does not need to offer density bonuses beyond what the state requires for any area of Newport Beach. Residents will suffer the increased traffic and drain on resources. David Tanner: Has th*EUC determined this site is feasible for residential development? Alejandra Reyes: Echoing a few comments (and responding to others) and as a housing researcher and UCI faculty member, I want to highlight that there are many new state and assembly bills that do emphasize the importance of this Housing Element update: In 2017, SB-35 created consequences for failing to meet local housing targets and AB-1397 now requires cities and counties to ensure that proposed development sites have a demonstrated potential for development. Since 2019, AB-686 also pushes cities to site low-income housing in high opportunity neighborhoods and grants the California Department of Housing and Community Development increased oversight capacity. Also since 2019, SB 330 limits some jurisdictions' abilities to restrict development due to their failure to meet their RHNA goals. David Tanner: The cost of development on this site makes this site economically infeasible. David Tanner: Would you want your family members to live on a landfill given its environmental constraints. I see the potential for litigation. Sam Shams: Development of the non -landfill area here on the north section seems like the most feasible development Housing Suitability Virtual Workshop: Workshop Summary 13 I have seen so far in the city. Allyson Presta: i think the garbage site would be bad for health P. Matheis: If housing can be developed on the 30 acres then why would the City not use this op p nity given the external pressure. Lin He: Non -landfill area makes sense as it's close to freeway etc. David Tanner: It would make a nice site for habitat restoration/mitigation. Nancy Scarbrough: I think the 30 available acres seems like a great place to build low and very low income homes. It is close the freeway. P. Matheis: My sense is that the bulk of the opportunity for development of ADUs will be in the Airport Area above SR-73 given the cost limitations. Charles Klobe: Nearly every single family home in Newport Beach ij&ligible to have an ADU and junior ADU. David Tanner: High density development on the 30 acre portion of the landfill would pro de a great visual window from the toll road to the high quality homes in the area. , Mary Ann Soden: To Mr. Smith's question and Mr. Barquist's comments now, the City might need to use its own land to meet the planning goals Sam Shams: What are those two zones on the south if the landfill zone? P. Matheis: I do not believe that the City should reduce parkland for development. Allyson Presta: i agree Allyson Presta: my kids use the sports park for activities Sam Shams: sure David Tanner: Are they fule mod zones? Susan Eaton: Elephant in the room - what are issues Wement rowners to consider any level of "Affordable" Housing - David Tanner: Why doesn't the cityItisfy the RHN with ADUs? Debbie Stevens:The Newport Tennis Club should be considered as potentially feasible. P. Matheis: I suspect that area 29 (fir; police station location) are potentially feas Mary Ann Soden: Please update the maps per Larry Tucker's comments so that the folks who participate through "Ilthe website will have the corrected maps. Thank you. a Tourje, Facilitator: Thanks Mary Ann - we will update the maps on the website as well P. Matheis: I believe that the preservation of the natural resources are critical to this process. While this may result in intensification of development in other areas the City is special because of the natural resources. Charles Klobe: Every developer may be willing to redevelop their property to market rate apartments. NO developer is willing to redevelop without Federal, State or City subsidy any more than 5% affordable. To get to 2,400 or so affordable they need to build 48,000 market rate apartments @ 5% which pencils according to the developers I have spoken to. Never going to happen although the developers are drooling to build them. David Tanner: Staff updated the City Council a week ago and said Staff was concentrating on the Housing Element. Please clarify Housing Suitability Virtual Workshop: Workshop Summary 14 P. Matheis: As I recall the City was considering moving the police facility to the city yard site at one point, and there is a Newport Beach fire station relocation study that moves the Newport Center Fire Station adjacent to the OCTA bus station. Mary Ann Soden: How will the housing and circulation elements be harmonized given their separate committees Brad Avery: Great resident input and effort from the CD team, many thanks! Brad David Tanner: How can the City possible meet the Housing Element Update by October 2020. David Tanner: Is this not piecemealing? David Tanner: Why does the schedule not include a vote of the public per the City charter? Sam Shams: Thank you everyone! Debbie Stevens:Great job Jenna, Jim, Dave and Ben! Alejandra Reyes: Thank you! Mary Ann Soden: Thank you for this learning opportunity and input opportunity. This is very important. Allyson Presta: Thank you so much Susan De Santis: Thank you all. Well-done! Housing Suitability Virtual Workshop: Workshop Summary 15 City of Newport Beach 2021-2029 HOUSING ELEMENT This section contains the summary and chat responses from the virtual Community Workshop 4. Comments were received in the chat box and verbally during the meeting. Video recording of the workshop and verbal comments are available at https://www.newporttogether.com/. Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-9 m-m- N_� mt-- pop ip lots . rl, rr ". re; •T•r- You are viewing Kearns& West's screen View Options Zoom Ratio Fit to Window a Request Remote Control Exit 4 .r Side -by -side mode i IFNI ri i f i. i 'ii'i11I,Fiiill�l!�11ioil! ;ewp. NPPPIP IVII El t i jenna Tourje,. 00:04:0) ... View dam IP Mute Stop Video E.-ticipant- Chat Share Screen Record ReactionF Leave Productive `"' WE ARE HAPPY AND EXCITED YOU CAN JOIN US! • Actively participate - we need your input! • Be respectful • Listen for understanding • Share your ideas with room for others • Respect differences qdkshop • Have fun! This workshop is being recorded and will be posted on March 22, 2021 www.NewportTogether.com 3 7 ^vkshop Out'' it 1, Welcome and Introductions 2. Overview of Housing Element Outreach Process Components of the Housing Element Sites Analysis/Identification a Policy Summary 7. Future Community Engagement March 22, 2021 Welcome Introductmions March 22, 2021 Introductions USING THE CHAT POD AND THE RAISE HAND FEATURE, SHARE: • Your name • Name a project or place you consider has great housing. The facilitation team will call on 2-3 participants to share You are viewing Kearns& West's screen View Options Zoom Ratio Fit to Window a Request Remote Control Exit 4 .r Side -by -side mode i IFNI ri i f i. i 'ii'i11I,Fiiill�l!�11ioil! ;ewp. NPPPIP IVII El t i jenna Tourje,. 00:04:0) ... View dam IP Mute Stop Video E.-ticipant- Chat Share Screen Record ReactionF Leave Virtual Workshop Goals • Share overview of the Housing Element; • Review components of Housing Element; • Review and discuss summary of sites by area; • Review and discuss policiesm • Overview how to provide comments on draft Housing Element March 22, 2021 8 Overview of the Housing Element March 22, 2021 Ah • Ah ■ . . I Ah I1) Required Element of the Newport Beach General Plan Provides Goals, Policies, Programs, and Objectives related to housing in CO.)** Newport Beach Identifies projected housing growth need by income category Requires certification by the State Department of Housing and Community Development (HCD) for compliance with State housing laws What is the Regional Housing Needs Assessment (RHNA)* • Estimate of housing growth need for the 2021-2029 • Housing growth need by income category • Newport Beach must show capacity to accommodate future growth Very Low Income 0 - 50% AMI 11F$0 $,500 W 11456 units T Low Income 51— 80% AMI $51,501 $82,400 930 units Moderate Income 81-120% AMI $82,401 $123,600 11050 units Above Moderate Income >120% AM $123,601 >$123,601 1,409 units 6W 9=- L 8, March 22, 2021 *Income range is based on the 2020 HUD Median Family Income (MFI) for Orange County of $103,0000. First-time opportunities for housing Opportunities for families to stay and live in the City FMI Ability to downsize and retire in City Maintains housing opportunities for future generations What does housing mean for Examples of qualifying salaries in Newport Beach Notes: 1. Derived from open job listings on City website May 2017. 2. Derived from Glassdoor. 3. Derived from teacher pay scale listing on NMUSD website. October 20, 2020 ��A Newport Mesa Unified School District Teacher $54,043 - $8236893 Librarian 1 $57,179 - $80,4331 Hoag Memorial Hospital Registered Nurse $743880 - $8532802 Police Officer $66,185 - $118,8721 Paralegal $62,129 — $87,4221 New Statutory Considerations • Many new laws related to housing in California • City required to comply with all statutory provisions in law • Affects analysis, sites selection criteria and policy considerations • Monitoring, accountability and enforcement March 22, 2021 Outreach Process March 22, 2021 15 Housing Element Engagement Overview March 22, 2021 Components of the Housing Element March 22, 2021 Overview of Content of Draft Housing Element • Section 1 - Introduction • Section 2 - Community Profile • Section 3 - Housing Constraints and Resources • Section 4 - Housing Plan • Appendix A - Past Performance • Appendix B - Sites Analysis • Appendix C - Community Engagement DRAFT City of Newport Beach 2021-2029 HOUSING EWE"NT March 22, 2021 Section 1 - Introduction • Statutory Authority • Relationship to General Plan • Data Sources Used • Element Organization March 22, 2021 Section 2 - Community Profile • Population trends • Household characteristics • Economic characteristics • Housing problems • Overcrowding • Overpayment • Special needs groups • Housing stock profile Section 2: V 1 Y i-IKOFILE March 22, 2021 Section 3 - Housing Constraints and Resources • Non -governmental constraints • Land/construction costs Governmental constraints *, _ • Land use controls • Infrastructure/environmental z =� • Fair housing analysis (AFFH) it71;S\ • Housing resources Section 3: HOUSING CONSTRAINTS, RESOURCES, • Adequate sites summary AND AFFIRMATIVELY FURTHERING FAIR HOUSING • Financial resources • Energy conservation March 22, 2021 Section 4 - Housing Plan • Overall housing goals • Stated "ends" • Policies • Stated "means" • Program actions • Specific action(s) • Timeline • Responsible party • Funding source • Existing needs and growth need Section 4: HUUSiNG PLAN March 22, 2021 Appendix A - Review of Past Performance • Review of 5t" cycle housing element programs • Assessment of progress • Qualitative/quantitative • Basis for 6t" cycle programs Appendix A: fV PAST PERFORMANCE March 22, 2021 Appendix B - Adequate Sites Analysis • Detailed analysis of adequate sites to accommodate RHNA • Evaluation of capacity by APN • Mapping of sites • Statistical summary • Discussion of feasibility and likelihood of redevelopment Appendix B: March 22, 2021 Appendix C - Summary of Outreach • Summary of all outreach efforts • Meeting presentations, minutes and summaries • Demonstrates "diligent efforts" to engage public and stakeholders Appendix C: i-EACH N/ March 22, 2021 Questions ? March 22, 2021 26 You are viewing Kearns& West's screen View Options Zoom Ratio Fit to Window a Request Remote Control Exit 4 .r Side -by -side mode i IFNI ri i f i. i 'ii'i11I,Fiiill�l!�11ioil! ;ewp. NPPPIP IVII El t i jenna Tourje,. 00:04:0) ... View dam IP Mute Stop Video E.-ticipant- Chat Share Screen Record ReactionF Leave Demonstrating Adequate Sites March 22, 2021 28 Demonstrating Adequate Sites • City must demonstrate the capacity to accommodate 4,845 new housing units for the 2021-2029 planning period • Units Determined by the Regional Housing Needs Assessment (RHNA) "Fair Share" Allocation • State Department of Housing and Community Development (HCD) • Southern California Association of Governments (SCAG) • Sites Identification Must Consider and Variety of New Laws and Requirements • "No Net Loss" Provisions - identify sites above RHNA allocations • More stringent criteria to define an adequate site • Sites must be demonstrated as viable opportunities • Monitoring and enforcement provisions on progress in meeting RHNA objectives March 22, 2021 Demonstrating Adequate Sites Extremely Low/ Very Low Income 1,456 units Low Income 121 units 228 units 0 units 930 units 2,037 units Moderate Income 1,050 units 0 units 100 units 342 units 608 units Above Moderate Income 1,409 units Total 4,845 units 2,183 units 2,304 units 6 units 334 units 40 units 382 units 0 units 2,645 units March 22, 2021 17, O ^. 63' "e e o 27 •..i "^ .o Aw.a rlre' O 20 Newport Beach -Ow o w s O tM•[• A& ■ J Am Ci /sue �� w` � �• >�� w t� EL ,y j .;.,Cus Areas • ., �, � is . F' .. .� � ..+.>� , Airport Environs West Newport Are of Poten .0-0— Nange in P4pr ADEQUATE SITE ,ACCESSORY DWELLING UNITS, AND INCLUSIONARY HOUSING POLICIES March 22, 2021 Demonstrating Adequate Sites POLICY STRATEGIES: • Demonstrates capacity to meeting need that is not accommodated with current land use policy • Based on Focus Areas identified • Considers unique circumstances • Overlay or similar rezone strategy • Accessory Dwelling Units (ADUs) • Inclusionary Housing March 22, 2021 A 0 -T, r:TO-UVF.1 ir:21%4.4ti lr�-m UA ur": 41 :qFl - r*41# 7 �11 z 4Z nY db jr 77r LN 'o. '41L WA 'J �� � EPA. 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T J JiJ � { • v F..� •�.� y �} JF i. }V Lai- �t � :. ti � '�• �'. joy IF -4f it Y J � • S.tiL �' � F v �� K � v M1 Ly :. � a y1 � � M1 } l:� • } Y 4 1 ✓ y� �� �+` + �� ��G- ice. utivc AT*rtj• Ah Am U Am AT*rtj• • Ah • - - On Fps Li • ;- _ r 4 w •- e`er �_el'_� „`�`' ��' f M1 2 -a�•. �� �Y.•tF 1f • r F J • • ,,,� r How To Provide Comment March 22, 2021 How to Submit Comments/Questions • Please provide your comments on the initial draft no later than April 30, 2021. A revised version is anticipated to be available for review late Spring 2021. • If you have any questions or to submit comments, please reach out to City staff by emailing GPUpdate@newportbeachca.gov. Wrap Up Next Steps March 22, 2021 Yolow insighk will continue to be used by technical team to inform the drafting of the Housing Element Update March 22, 2021 Outreach Schedule February 14 March 18 May 15 Circulation Element Planning Commission - Review Submit Progress Draft Vision Workshop Draft Circulation Element April 7 Housing Element to HCD May - August EIR Completion; Fiscal/Market February 24 Planning Commission - Analysis; HUEC, Planning Virtual Housing Review of Draft Housing Commissions, City Council as Workshop Element neccessary V March 17 April 5 September/October HEUAC Meeting Circulation Element Workshop - Review Draft of The ^ Planning Commission & City Council review and adoption of t.J Circulation Element iJ Housing and Circulation Elements February 17 March 22 April 27 HEUAC Meeting Virtual Housing Workshop- City Council - Review Review of Draft Housing Draft Housing Element Element We are here March 22, 2021 54 �f Contact JIM CAMPBELL, DEPUTY DIRECTOR P: 949-644-3210 www.NewportTogether.com BEN PZDEBA SENIOR � P:949-644-3253 gpupdate@newportbeachca.gov March 22, 2021 Newport, gether. Newport, Together. Housing Element Initial Draft Housing Element Workshop March 22, 20213 6 - 8 p.m. Workshop Chat Prepared by Kearns & West March 23, 2021 Housing Element - Initial Draft Housing Element Workshop 1 Housing Element - Initial Draft Housing Element Workshop 17:54:03 From Christian Mendez (K&W) Technical Support to Everyone (in Waiting Room) : Welcome to the Newport Beach - Housing Element Workshop. We will open the meeting room at 5:55 pm, and the workshop will begin at 6:00 pm. Thank you, and we will see you soon! 18:00:57 From Christian Mendez (K&W) Technical Support to Everyone (in Waiting Room) : Welcome to the Newport Beach - Housing Element Workshop. We will open the meeting room at 5:55 pm, and the workshop will begin at 6:00 pm. Thank you, and we will see you soon! 18:03:52 From Ivana Rosas (K&W) Technical Support, she/her to Everyone (in Waiting Room) : Hello everyone. If you have any technical issues during today's webinar, please send me, Ivana Rosas, a private message describing your issue. I will help diagnose the problem. 18:04:06 From Ivana Rosas (K&W) Technical Support, she/her to Everyone: Hello everyone. If you have any technical issues during today's webinar, please send me, Ivana Rosas, a private message describing your issue. I will help diagnose the problem. 18:07:44 From Ivana Rosas (K&W) Technical Support, she/her to Everyone: Hello everyone. If you have any technical issues during today's webinar, please send me, Ivana Rosas, a private message describing your issue. I will help diagnose the problem. 18:11:58 From Ivana Rosas (K&W) Technical Support, she/her to Everyone : You can access the chat button at the menu of the bottom of your screen. 18:12:09 From John Loper to Everyone : John I think the Villas at Fashion Island are a great example of high density units done very well 18:12:46 From Suzanne Gignoux to Everyone : I don't live in a unit or project. I love Newport Shores. 18:13:12 From Melanie Schlotterbeck to Everyone : Melanie Schlotterbeck (representing Olen Properties), Great housing: San Jose 18:13:27 From Charles Klobe to Everyone: Baker Block in Costa Mesa 18:13:30 From Dorothy Kraus to Everyone: One Nautical Mile, 15th street, West Newport 18:13:55 From Sonja Trauss to Everyone: Sonja Philadelphia! Row houses, classic human scale form 18:18:39 From Susan Eaton to Everyone: Camarillo Homeless Housing Community formed at a decommissioned military facility. It is a large group of housing with medical facilities, local bus service, rehabilitated older units and family area in newer LEED certified housing. It felt like Park Newport where I live and love where I live. 18:22:04 From Susan Eaton to Everyone : Camarillo is in Long Beach. 18:23:11 From Mary Ann Soden to Everyone : I wish I could stay for this entire meeting, but cannot tonight. Here are my two cents. The plan appears to propose zoning a whopping 9,957 dwelling units to meet the 4845 allocation. That is not in the best interest of the City. Plan definitely needs reduction of the DU within the sight plane over Newport Center to ensure the zoning is compliant with that municipal commitment. Consideration of housing partnerships with affordable housing non profits to build what is needed and required, not 3217 above mod units that are not responsive Housing Element - Initial Draft Housing Element Workshop 2 to the FHNA allocation. I'll follow up further online. Thank you. 18:24:46 From Jenna Tourje to Everyone: Thank you, Mary Ann! We are glad you could join tonight and are looking forward to your input online 18:25:04 From Christian Mendez (K&W) Technical Support to Everyone : To find the draft Housing Element, copy and paste this link into your browser: www.newportbeachca.gov/DraftHEUpdate 18:26:24 From Sonja Trauss to Everyone : I have q.s specifically about section 3 18:26:56 From Sonja Trauss to Everyone : Particularly about the map on page 70, figure 3-8 18:27:14 From Christian Mendez (K&W) Technical Support to Everyone: Hi Sonja, we will have an opportunity for questions in a few minutes 18:34:14 From Christian Mendez (K&W) Technical Support to Everyone: To find the draft Housing Element, copy and paste this link into your browser: www.newportbeachca.gov/DraftHEUpdate 18:41:09 From Christian Mendez (K&W) Technical Support to Everyone: Technical Support: Hello, everyone. If you have any technical issues during today's workshop, please send me (Technical Support) a private message describing your issue. I will help diagnose the problem. 18:53:50 From Herman Basmaciyan to Everyone: Herman Basmaciyan 18:54:01 From Christian Mendez (K&W) Technical Support to Everyone: To find the draft Housing Element, copy and paste this link into your browser: www.newportbeachca.gov/DraftHEUpdate 18:54:10 From Dorothy Kraus to Everyone : Question: Does the "overlay" for Newport Mesa include Banning Ranch? So, some of 347 low/very low, 86 mod units would be zoned on Banning Ranch? If yes, how many? Thank you. 18:58:58 From Herman Basmaciyan to Everyone : Is my understanding correct that the City has to show the capacity for accommodating these units, not necessarily make sure that the units are constructed? What happens if no developer comes in to construct the units? Are there any consequences? Will this plan require an environmental review and require that it is consistent with all other elements of the General Plan? 19:00:27 From Herman Basmaciyan to Everyone : The preceding questions are from Herman Basmaciyan. 19:07:07 From Sonja Trauss to Everyone: RHNA is a minimum, so if Newport Beach produces more housing and exceeds its RHNA, that's great, all the better. California has a housing shortage. 19:07:35 From John Loper to Everyone : Is there a reason why there are no plans for new housing in the Coastal Zone? Such as the Peninsula. Are there some sites that could be redeveloped? 19:07:45 From Christian Mendez (K&W) Technical Support to Everyone: To find the draft Housing Element, copy and paste this link into your browser: www.newportbeachca.gov/DraftHEUpdate 19:22:51 From Dorothy Kraus to Everyone: Jenna/Jim, will the City respond to each public comment submitted regarding the Draft HE update? Thank you. 19:22:58 From Glenn Hellyer to Everyone : Thanks to staff for presenting a plan to accomplish the RHINA goals Housing Element - Initial Draft Housing Element Workshop 3 and recognized that NB is showing good faith in providing new housing stock. 19:33:51 From Glenn Hellyer to Everyone : Again thanks to Staff for recognizing ADUs as the low hanging fruit opportunity for increasing much needed housing stock. Why would the incentives take 2 years to employ? 19:36:49 From karen martin to Everyone : will this recording be available on the website? 19:37:45 From Jenna Tourje to Everyone : Hi Karen - the recording will be available this week on www. NewportTogether.com 19:37:54 From Jenna Tourje to Everyone : including a transcript of the chat as well 19:43:01 From John Loper to Everyone: would this be something as 5% very low, 5% low and 5% mod income levels? 19:44:02 From Glenn Hellyer to Everyone : Would the Inclusionary program be voluntary with density bonus as opposed to mandatory? 19:45:02 From John Loper to Everyone : thank you 19:47:50 From Christian Mendez (K&W) Technical Support to Everyone: To find the draft Housing Element, copy and paste this link into your browser: www.newportbeachca.gov/DraftHEUpdate 19:48:27 From Christian Mendez (K&W) Technical Support to Everyone: To find more information on the project, copy and paste this link into your browser: www.newporttogether.com. 19:49:05 From Charles Klobe to Everyone: The final draft will go to the City Council for a vote to submit, modify and submit, or revisit and submit nearer to the date it is due. It takes four City Council Members to advance this or another version. You will note that there has been no direct answer to the max possible units question. Estimates have run over 20,000 new apartments. Newport Beach land prices do not support single family homes or condos as affordable. This is about high density, high rise apartment construction only. There are alternative approaches that the City has chosen not to pursue. If you think the City should seek alternate ideas, please write to the City Council Members and ask them to slow this process down and visit alternate ideas. 19:50:06 From Dorothy Kraus to Everyone : will we get a response from city for our comments like what's done with either 19:50:46 From Dorothy Kraus to Everyone : Thank you. 19:51:23 From Dorothy Kraus to Everyone: will comments be made public? 19:52:11 From Dorothy Kraus to Everyone : comments in response 19:55:56 From Glenn Hellyer to Everyone : Thank you all! 19:57:10 From Susan De Santis to Everyone: Thank you! 19:57:17 From Christian Mendez (K&W) Technical Support to Everyone: To find the draft Housing Element, copy and paste this link into your browser: www.newportbeachca.gov/DraftHEUpdate Housing Element - Initial Draft Housing Element Workshop 4 City of Newport Beach 2021-2029 HOUSING ELEMENT This section contains presentation from the virtual Community Workshop 5. Comments were received in the chat box and verbally during the meeting. Video recording of the workshop and verbal comments are available at https://www.newporttogether.com/. Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-10 You are viewing Kearns& West's screen View Options Zoom Ratio Fit to Window a Request Remote Control Exit 4 .r Side -by -side mode i IFNI ri i f i. i 'ii'i11I,Fiiill�l!�11ioil! ;ewp. NPPPIP IVII El t i jenna Tourje,. 00:04:0) ... View dam IP Mute Stop Video E.-ticipant- Chat Share Screen Record ReactionF Leave Accessory Dwelling Units Policies POLICY CONSIDERATIONS: • Current average of 21 ADUs constructed each year • Pursue "aggressive" approach to ADU construction on planning period • Allows for "safe harbor" determination of affordability Accessory Dwelling Units Policies POLICY ACTION 1H: ACCESSORY DWELLING UNIT CONSTRUCTION • Public awareness campaign • Web -based resources • Evaluate additional incentives to encourage ADU construction • Evaluate permit -ready program with pre -approved plans • Evaluate methods - 12 months • Adopt programs - 24 months Accessory Dwelling Units Policies POLICY ACTION 11: ACCESSORY DWELLING UNIT MONITORING PROGRAM • Track progress of ADU construction in planning period • Annual review of progress to meeting "aggressive" approach • Adjust programs and requirements, as necessary Accessory Dwelling Units Policies POLICY ACTION 1J: ACCESSORY DWELLING UNITS AMENSTY PROGRAMS • Allow existing unpermitted ADUs to obtain permits to legalize • Permit, inspect and legalize existing unpermitted ADUs of any size • Develop program - 24 months You are viewing Kearns& West's screen View Options Zoom Ratio Fit to Window a Request Remote Control Exit 4 .r Side -by -side mode i IFNI ri i f i. i 'ii'i11I,Fiiill�l!�11ioil! ;ewp. NPPPIP IVII El t i jenna Tourje,. 00:04:0) ... View dam IP Mute Stop Video E.-ticipant- Chat Share Screen Record ReactionF Leave Inclusionary Housing Policies POLICY CONSIDERATIONS: • Ability to provide opportunity for lower income units in Newport Beach's current market • Explore opportunities to accommodate lower income units as a requirement for certain types of development Inclusionary Housing Policies POLICY ACTION 1K: INCLUSIONARY HOUSING • Process to explore inclusionary policy • Provides opportunities for mixed -income developments • City of evaluate/analyze inclusionary policies/programs to determine viability and effectiveness • Interim requirement 15 % - 6 months • Adopt inclusionary provisions - 24 months City of Newport Beach 2021-2029 HOUSING ELEMENT All recordings, agendas, and minutes for the March 22, 2021 meeting can be found on the City's website at https://www.newportbeachca.gov/government/data-hub/agendas-minutes. Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-11 City of Newport Beach 2021-2029 HOUSING ELEMENT All recordings, agendas, and minutes for City Council Study Sessions occurring on the following dates can be found on the City's website at https://www.newportbeachca.gov/government/data-hub/agendas- mini itoc April 27, 2021 June 8, 2021 July 13, 2021 September 14, 2021 (Inclusionary Housing) October 26, 2021 November 16, 2021 January 25, 2022 April 26, 2022 Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-12 City of Newport Beach 2021-2029 HOUSING ELEMENT S -i This section contains the meeting minutes and public comments for each meeting held up to March 315t 2021. All recordings, agendas, and minutes can be found on the City's website at www.newportbeachca.gov/government/data-hub/agendas-minutes-housing-element-update-advisory- committee Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-13 CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES CITY COUNCIL CHAMBERS —1 aD CIVIC CENTER DRIVE WEDNESDAY, JULY 1, 2020 REGULAR MEETING — 6 P.M. I. CALL MEETING TO ORDER — 6 p.m. II. WELCOME, INTRODUCTIONS AND ROLL CALL MEMBERS PRESENT: Chair Larry Tucker, Jeffrey Bloom, Susan DeSantis, Paul Fruchbom, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Ed Selich, Debbie Stevens, (Ex Officio Member) Mayor Will O'Neill MEMBERS ABSENT: None Staff Present: City Manager Grace Leung, Community Development Director Seimone Jurjis, Deputy Community Development Director Jim Campbell, Principal Planner Jaime Murillo, Senior Planner Ben Zdeba, City Traffic Engineer Tony Brine, Administrative Support Technician Amanda Lee Chair Tucker welcomed everyone to the inaugural meeting of the Housing Element Update Advisory Committee (HEUAC). The Housing Element Update process begins with the State determining the number of housing units that agencies must plan for over the ensuing planning period. Mayor O'Neill thanked committee members for their service to the City. The Council spent quite a bit of time in December 2019 and January 2920 thinking about how to address the Housing Element Update. Committee members were selected for specific reasons, including their background and expertise. In 2019, the Council talked to residents to ensure it understood what residents were looking for. Given the size and scope of the Housing Element, the Council will need to engage stakeholders. Finding the number of housing units will be incredibly difficult and will likely be divisive. At the beginning of the year, the Council adopted an approach to object to the State's mandate legally and politically/legislatively and to comply with the mandate. The goal for the HEUAC is to find a way for the City to comply or to explain why the City cannot comply with the mandate. Technically, the Southern California Association of Governments (SCAG) has not provided a certified number of housing units required for this planning cycle. SCAG has requested the California Department of Housing and Community Development (HCD) grant extensions for all municipalities. HCD has not responded. Indications are HCD will deny the request; however, enforcement will be extremely difficult. The City has been working with Senator John Moorlach and Assembly Member Cottie Petrie -Norris. In reference to his role on the HEUAC, Mayor O'Neill explained that he represents the Council, but he cannot speak for the Council without a majority vote on a topic. He may offer his personal opinion and present a topic or question to the Council. Ill. PUBLIC COMMENTS ON NON -AGENDA ITEMS Jim Mosher hoped any conflicts of interest would be handled transparently given committee members' expertise in real property development and HEUAC's recommendations to the Council regarding the use of real property. If people are paid to attempt to influence committee members' opinions, they are regarded as lobbyists and should register with the City. Housing Element Update Advisory Committee Meeting July 1, 2020 Page 2of5 IV. CURRENT BUSINESS a. Three -Pronged Strategy of City Council and Focus of the Committee Recommended Action: No action taken Chair Tucker reported the City is working legislatively and with other agencies to better define the Regional Housing Needs Assessment (RHNA) number and credits that can be applied to the number. Community Development Director Seimone Jurjis advised that the City has engaged with multiple State agencies. SCAG has issued a draft RHNA number of 4,832 housing units for the City. The Mayor has written letters to SCAG opposing the methodology and to HCD requesting clarification. State law requires the City to permit accessory dwelling units (ADUs), but HCD's guidelines d❑ not provide sufficient credits for ADUs to meet RHNA numbers. Staff has drafted legislative changes, and Assembly Member Petrie -Norris has introduced legislation that defines RHNA credits and provides guidelines for substantial evidence. The City needs to build a coalition to support the bill and will appeal its RHNA numbers. Chair Tucker indicated the City has to identify sites where residential development could occur and prepare an Inventory of Sites. The Tax Assessor's parcel number for each property must be listed on the Inventory. The certified number of RHNA units and credits will not be known for some period of time. Any political efforts to reduce housing units will likely occur late in the process. Chair Tucker invited the public to comment. Jim Mosher noted HEUAC's purpose and responsibilities do not include a complete focus on RHNA numbers. HEUAC is more of a forum for public input. The General Plan Update Steering Committee (GPUSC) attempted to conduct outreach and research, which could inform HEUAC's discussions. HEUAC shouid obtain input from the people who will be impacted by the need for housing as well as developers. David Tanner suggested HEUAC direct the public as to how it can help HEUAC achieve its goals. He requested an update regarding staffs efforts to expedite the processing of the Housing Element amendment, specifically an exemption from the California Environmental Quality Act (CEQA), to affect the Greenlight provision or Measure S. Mayor O'Neill noted that Still Protecting Our Newport (SPON) submitted the same request as Mr. Tanner. The City has requested State Representatives sponsor legislation to exempt or at least expedite the CEQA process for a Housing Element Update. The sole purpose of the City's request was to try to meet the timing aspects of the Housing Element Update. The representatives declined the request. Chair Tucker advised that he raised the issue of a CEQA exemption with the GPUSC in order to emphasize that HCD's schedule would be difficult to meet and if an EIR had to be prepared then additional time would be needed to complete a Housing Element Update. With respect to Mr. Mosher's comments, the resolution directs HEUAC to make any recommendations it believes necessary. To begin the compliance process, HEUAC will need to identify sites. Greenlight will not change the Committee's work, but rather will merely add one more layer of approval, a public Housing Element Update Advisory Committee Meeting July 1, 2020 Page 3of5 vote, after the Committee, Planning Commission and City Council complete their work. Therefore, Greenlight is outside HEUAC's purview. In response to a committee member's question, Deputy Community Development Director Jim Campbell understood a housing project that is approved but not completed before June 30, 2021 may be counted towards the City's RHNA numbers. Currently, there is no information regarding counting live-aboards towards RHNA numbers. Staff will provide HEUAC with a tally of housing units. Committee Member ❑eSantis noted SCAG has joined the San Diego Association of Governments and the Sacramento Area Association of Governments to sign a letter to the Governor and HC❑ to push back on the schedule. The Governor or the Legislature can change the timeline for the Housing Element Update, but HC❑ cannot. HCD recently extended the timeline for the local assistance program by six to eight months. b. Discuss Methods to Identify Possible Housing Opportunity Sites Recommended Action: Discuss procedures for (i) identifying and contacting owners of potential housing opportunity sites; (ii) discuss approach to encouraging sites that could enable affordable housing in whole or in part; and (ii►) prioritizing sites in case the RHNA requirements are lower than currently anticipated Chair Tucker related that there may be underutilized or vacant parcels in the City that can be opportunity sites. Newport Center, the west Newport area, and the Airport Area will be opportunity sites. He noted that in GPUSC community workshops, participants favored placing housing in Newport Center, the Airport Area, the area near Hoag Hospital, Banning Ranch, and the former landfill in Newport Coast. HEUAC will have to review each parcel in areas that might provide opportunity sites. The standard for opportunity sites is land that is suitable and available (feasible). Determining whether a parcel is available will require some technical analysis. Determining whether a parcel is suitable will be decided by the full Committee and will require public input. HEUAC will form a subcommittee to analyze sites to see how the process will play out. Anyone with ideas for potential opportunity sites should contact staff or committee members. Committee Member Fruchbom added that feasibility means economically feasible. Chair Tucker noted the City is required to plan for development, not to ensure sites are developed. State law states a municipality that plans to use non -vacant land for more than 50 percent of lower - income RHNA requirements has to provide substantial evidence that there are no impediments to the use of the property in order to claim credit for the property. In reply to Committee Member Kiley's query, Chair Tucker advised that HEUAC will review recent housing applications that were not developed. The first step is to identify sites where development is feasible. If sites are feasible, HEUAC will consider their suitability. The hot topic for the community will be which sites are suitable for housing. In answer to Committee Member Sandland's inquiry, Chair Tucker agreed that his memorandum proposed HEUAC rank opportunity sites. He did not believe the State would reduce the RHNA numbers materially. However, if the City cannot comply with the RHNA numbers and the State does reduce the numbers, the Council can use the ranking of sites by the Committee and supporting information rather than having to start the process again. Housing Element Update Advisory Committee Meeting July 1, 2020 Page 4 of 5 Committee Member DeSantis believed community input on a range of scenarios will be important when HEUAC prioritizes sites. The Orange County Business Council's in -fill capacity study focused on capacity within Orange County for additional housing development. Perhaps HEUAC can invite the study author to present information about changing market trends and the study's results. Chair Tucker invited the public to comment. Jim Mosher remarked that the public may not be familiar with committee members, which could be a problem if committee members want to engage with the public. He hoped committee members would have open minds. The infeasibility of the former landfill site is not obvious. Chair Tucker indicated if development of the former landfill site was feasible, someone would have developed it by now. An unnamed resident provided an unrelated comment about the COVID-19 pandemic. C. Formation of Affordable Housing Subcommittee and Opportunity Sites Subcommittee Recommended Action: Form an affordable housing subcommittee and a housing opportunity sites subcommittee to divide up workload Chair Tucker reviewed the City's RHNA numbers by income level and stated he thought that three committee members had expertise in development of affordable housing. it was his hope that an affordable housing subcommittee would be able to educate HEUAC regarding choices. Mayor O'Neill advised that Committee Members Bloom and Fruchbom have experience with affordable housing. Chair Tucker proposed Committee Members Selich and Sandland form a housing opportunity sites subcommittee, which will analyze sites for feasibility. HEUAC will form a subcommittee for outreach in the future. Jim Mosher asked if the affordable housing subcommittee will propose revisions to the goals and policies of the Housing Element and engage people living in or seeking affordable housing. Chair Tucker reported the purpose of the subcommittee is to assist HEUAC in understanding the financing and tax aspects of affordable housing and how the City can seek as many new affordable units as possible while still complying with RHNA. The subcommittee will not review the existing Housing Element regarding affordable housing from the vantage point of people living in or seeking affordable housing. Mayor O'Neill suggested the City not only needs to zone for affordable housing, but hast to think it will actually happen. The question of whether the required number of affordable housing units can be constructed given the cost of land is legitimate. The Council needs to know if it is possible. If it is not possible, the Council needs to know the amounts of a subsidy and incentives that could achieve more affordable housing. The Council will need a primer on affordable housing and an explanation of what is needed to achieve affordable housing. In response to Committee Member DeSantis' question, Chair Tucker stated programs that involve larger employers in the City to incentivize affordable housing is outside HEUAC's purview, although Housing Element Update Advisory Committee Meeting July 1, 2020 Page 5of5 he noted that is something that Committee Member DeSantis might want to discuss directly with the City Council. Chair Tucker invited the public to comment. Seeing no one wishing to comment, he moved, seconded by Committee Member Selich, to appoint Committee Members Bloom and Fruchbom and Chair Tucker to the affordable housing subcommittee and Committee Members Selich and Sandland and Chair Tucker to the housing opportunity sites subcommittee. AYE: Tucker, Bloom, DeSantis, Fruchbom, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: None d. Discuss Agenda Items for Next Meeting Recommended Action: No action taken Chair Tucker requested agenda items for a CEQA project description, a definition of substantial evidence, and an outreach process. In reply to Committee Member Selich's query, Principal Planner Jaime Murillo advised that the proposed recommendations for substantial evidence were taken from the initial legislative amendments. Chair Tucker invited the public to comment. Charles Klobe suggested committee members may be confronted by folks who need a planning incentive to make affordable housing work. Residents may be resigned to the RHNA number, but they may not accept the City granting a subsidy or incentive that the resident has to pay for. HEUAC may not find enough sites to comply with the requirements, but the State will be hard pressed to impose fines for not trying. V. COMMITTEE ANNOUNCEMENTS OR MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON -DISCUSSION ITEM) Committee Member DeSantis requested the author of the in -fill capacity study address HEUAC regarding development trends and data from the study relevant to Newport Beach. Committee Member Sandland requested staff advise HEUAC regarding the consultant's work and how the consultant's work will affect HEUAC's work. In answer to Committee Member Bloom's question, Chair Tucker indicated HEUAC will receive information about housing units entitled or permitted before June 30, 2021. Community Development Director Jurjis recommended a presentation from the consultant regarding HCD's guidelines and information HCD is seeking. VI. ADJOURNMENT — 7.36 p.m. Next Meeting: July 15, 2020, 6 p.m. in the City Council Chambers. CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES CITY COUNCIL CHAMBERS — 100 CIVIC CENTER DRIVE WEDNESDAY, JULY 15, 2020 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, Paul Fruchbom, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Ed Selich, Debbie Stevens MEMBERS ABSENT: (Ex Officio Member) Will O'Neill — arrived at 6:31 p.m. Staff Present: Community Development Director Seimone Jurjis, Deputy Community Development Director Jim Campbell, Principal Planner Jaime Murillo, Senior Planner Ben Zdeba, City Traffic Engineer Tony Brine, Administrative Support Specialist Clarivel Rodriguez III. PUBLIC COMMENTS ON NON -AGENDA ITEMS Deborah Allen, Harbor View Hills Community Association President, questioned the rationale of holding a public meeting on such an important topic in light of the coronavirus and suggested the City fight the State regarding the timing of the Housing Element Update. Jim Mosher asked if the City would defend voters' disapproval of the Housing Element Update in a court because a provision of AB 1063 authorizes a court to order the Housing Element Update approved if the City submits it timely but final approval is delayed due to a local requirement for voter approval. Philip Bettencourt believed consultants Kimley-Horn and LSA would serve the City well and appreciated the substantial materials provided to the public. Dorothy Kraus hoped members of the Housing Element Update Advisory Committee (Committee) would introduce themselves and noted the foremost objective of the Committee is to serve as a public forum as stated in the Council resolution forming the Committee. David Tanner inquired about the City's strategy to successfully update the Housing Element and public involvement in the process. Chair Tucker advised that Committee members would introduce themselves later in the meeting. The Committee will serve as a forum for public comments. The Council needs a draft Housing Element Update to consider and possibly adopt if it chooses to comply with the California Department of Housing and Community Development's (HCD) requirements. With respect to AB 1063, if thresholds are met and a Measure S vote is required, there will be a further approval process for Council actions. Measure S means the electorate can decide whether to proceed. Housing Element Update Advisory Committee Meeting July 15, 2020 Page 2of9 IV. CONSENT CALENDAR a. Minutes of July 1, 2020 Recommended Action: Approve and file Chair Tucker noted his and Mr. Masher's revisions. Chair Tucker moved, seconded by Committee Member Selich, to approve the minutes of the July 1, 2020 meeting as amended by himself and Mr. Mosher. AYE: Tucker, Bloom, DeSantis, Fruchbom, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: None V. CURRENT BUSINESS a. Overview of Project Schedule Recommended Action: No action; receive presentation from Kimley-Horn on the tentative project schedule and discuss as necessary. David Barquist, Kimley-Horn & Associates, reported the State of California has imposed deadlines on all Metropolitan Planning Organizations (MPO), and the Southern California Association of Governments (SCAG), the MPO for Newport Beach, has imposed deadlines on all jurisdictions within its region. The Housing Element planning period extends from October 15, 2021 to October 15, 2029, and the Housing Element due date is October 15, 2021. The October 15, 2021 due date may be delayed for up to six months. Legislative action is required to extend the due date. The State provides the Regional Housing Needs Assessment (RHNA) allocations. The RHNA process includes development of allocations, an appeal period, and final adoption of the allocations at SCAG. Because of a number of issues, the State postponed the appeal period for up to 120 days, and the final allocations may not be approved until the end of 2020. In order to update the Housing Element, the City is assuming the draft allocation will be its final allocation. The baseline analysis, which will extend through October 2020, includes a demographic housing profile, a constraints and resources analysis, analysis of fair housing issues, and a review of the performance of the prior Housing Element. Drafting of the Housing Element will extend through February 2021. The public review period will extend from March through July 2021. A draft Housing Element will be submitted to HCD for compliance review in June 2021. HCD has 60 days to review the draft Housing Element. During that review, HCD staff and City staff can and will communicate regarding issues. Staff anticipates public hearings will be held in September or early October 2021 in order to comply with the adoption deadline. Committee Member Sandland requested the fiscal analysis, Task 7.3, begin prior to February 2021. In response to Chair Tucker's questions, Mr. Barquist advised that the market analysis will be conducted by Keyser Marston Associates. The analysis will look at the implications of growth as it relates to the fiscal model prepared by a prior City consultant. It will determine the cost dynamic for such things as future opportunities for growth, affordability levels, and the rental market versus the owner market. Task 2.2, development of housing plan, is the policy component of the Housing Element, and work on it will occur along with Task 2.4, draft Housing Element. A draft Housing Element could be ready for presentation by November 2020, but work and analyses may be Housing Element Update Advisory Committee Meeting July 15, 2020 Page 3of9 presented to the Committee prior to November. The project description is scheduled for an extended time period because there could be some issues with sites and decisions may affect the project description. Before the Environmental Impact Report (EIR) process begins in earnest, the project description should be accurate. The scoping meeting is typically held just after the notice of preparation is issued, but it can be held earlier or later in the process. The scoping meeting will define the bounds of the project for the public. The Initial Study, notice of preparation, and public process to begin the EIR is meant to focus on specific environmental issues. In reply to Committee Member Selich's inquiries, Mr. Barquist indicated the EIR public review period is generally the final two months of the process. The public review period will be determined by the hearing dates before the Planning Commission and City Council. The public review period could occur between June and September 2021. In answer to Committee Member DeSantis' query, Mr. Barquist related that the length of a Housing Element Update process depends on the jurisdiction and outreach and collaboration opportunities. The average process extends for 12-16 months. The COVID situation, the nature of outreach, and potential legislative changes will influence the length of the process. The proposed schedule is feasible. In response to Committee Member Sandland's question, Mr. Barquist stated funding and financing opportunities for affordable housing are part of the requisite analysis for the Housing Element. The analysis will consider existing local programs and regional, state, federal and private programs for affordable housing. A summary of the programs will be provided to the Committee. In reply to Committee Member DeSantis' inquiries, Mr. Barquist noted the area subject to the VMT analysis will be determined in the next few weeks and will be shared with the Committee. October or November may be too early to have information from VMT analyses. In answer to Committee Member Stevens' query, Mr. Barquist advised that a baseline assessment is part of the Housing Element policy. Committee Member Stevens suggested including the baseline environmental study as a separate task. The scoping meeting should be held during the public comment period for the Initial Study and notice of preparation. Jim Mosher agreed that the scoping meeting seems to be scheduled late in the process. He inquired about the City's position regarding the SoCal Connect Plan. He wanted to know what the public review draft, Item 2.6, would be and how long the review period would be. David Tanner stated under normal times, the Housing Element Update process would extend over two years. The schedule is unrealistic. if it is realistic, there will not be any public participation. The schedule shows very little public involvement. He requested inclusion of Measure S in the schedule because Measure S will be required. He asked why the City is pursuing legislation that will exempt Measure S from a vote. Chair Tucker assumed the consultant prepared the schedule based on the due date. The process will include public input. The Committee's task is to complete a draft Housing Element. Measure S is not within the Committee's purview. Housing Element Update Advisory Committee Meeting July 15, 2020 Page 4 of 9 b. Lessons Learned from Prior Outreach and Discussion of Future Outreach Recommended Action: No action; receive presentation from staff on previous outreach efforts under the now dissolved General Plan Update Steering Committee and discuss future outreach efforts. Senior Planner Ben Zdeba reported a major product of the General Plan Update Steering Committee was branding for the overall General Plan Update effort. Public engagement disclosed that the Land Use and Housing Elements were two of the most important elements for the community. A public workshop was held in each Council district on different days. More than 600 people were engaged in person and online during those workshops. One lesson learned from the prior outreach is engaging the public on such a complicated matter is not easy. The prior process developed a list of shared community values. Early in the process, outreach focused on community values and a vision statement. Approximately 400 people attended a kickoff event. The first workshop garnered the highest attendance with 68 people, and a workshop in December garnered the lowest attendance with 8 people. Workshops included an exercise for participants to reap locations for housing. A large amount of housing was placed in the Airport Area, Banning Ranch, the Hoag area, Newport Coast, and Fashion Island/Newport Center. Some housing was scattered around the City and placed in boats off the coast. Chair Tucker advised that he attended five of the seven workshops and found the usual community members at the workshops. An Outreach Subcommittee will be appointed, but engaging the community is difficult. Mildred Perez, Kennedy Commission, suggested the City engage community organizations early in the process to discuss meeting the housing needs of low-income people and to engage low- income communities. The Kennedy Commission would like to assist with public outreach. David Tanner remarked that the questions asked at the workshops reflected the consultant's view and not the public's view. He requested a discussion of the numerous impacts to the General Plan from housing laws. Dorothy Kraus suggested advertising begin now for the Housing Element Update, perhaps through a banner on the City's homepage and announcements on social media platforms. Committee Member Stevens noted the pandemic, the closure of City Hall, and misconceptions are impediments to outreach. Committee Member DeSantis believed outreach would probably not be in person; therefore, different strategies and technologies will be needed. C. Overview of Current Housing Opportunity Sites, HCD Guidebook for Site Selection Criteria and Substantial Evidence Recommended Action: No action; receive presentation from Kimsey -Horn and staff regarding current housing opportunity sites inventory of the Housing Element as well as the current site selection criteria pertaining to the update. The discussion should also touch on what "substantial evidence" means. Nick Chen, Kimsey -Horn, reported sites are suitable for residential development if zoned appropriately and available for residential use during the planning period. Approximately half of the City's RHNA allocation is designated for very -low-income and low-income housing. HCD's Housing Element Update Advisory Committee Meeting July 15, 2020 Page 5of9 memorandum is generally oriented toward meeting the lower -income need. The analysis of sites begins with units entitled after the start of the projection period, June 30, 2021, which can be counted towards the RHNA allocation. Next are the most available or the easiest to develop sites, also known as vacant sites, but vacant sites are not a readily available resource in Newport Beach. Next in the analysis are non -vacant or underutilized sites, which are sites currently zoned for residential or other uses that are deemed, based on substantial evidence, re -developable for affordable housing within the planning period. New guidance states if 50 percent or more of the allocation is fulfilled with non -vacant or underutilized sites, there is an impediment to housing development and further evidence must be provided, evidence such as past performance in developing these types of sites or market analysis. The City is not responsible for development of sites, but for providing an environment for development of sites. Creative measures or alternative methods, such as accessory dwelling units, can be used to fulfill the allocation. HCD's memorandum provides methods for anticipating the number of accessory dwelling units that can be counted toward the allocation. Boats as housing units may be an alternative method. Development has to result in no net housing loss, and any loss of units has to be accounted for in the Housing Element and sites analyses. Fair housing and the equitable distribution of housing has to be addressed and analyzed. The HCD memorandum defines substantial evidence as facts, reasonable assumptions or expert opinion that can be supported by facts. In reply to Committee Member Fruchbom's query, Mr. Chen advised that if the analysis shows that fulfilling a requirement is infeasible, staff would have to discuss with HCD next steps and an approach for addressing the situation. Chair Tucker commented that locating affordable units on the coast will result in fewer units than locating them near Hoag or the airport. Equitable distribution will be a challenge. Mr. Chen explained that equitable distribution ensures units are not concentrated in lower resource areas. All census tracts in Newport Beach are likely high resource areas. Chair Tucker noted the Airport Area is zoned for a different school district. HCD suggests a jurisdiction vary its development standards if it cannot generate sufficient affordable units. At some point, increased density becomes counterproductive. Landowners' decisions to redevelop their properties will be driven by economics. In response to Committee Member LePlastrier's inquiry, Principal Planner Jaime Murillo explained staffs development of the sites inventory prepared for the 2006 General Plan Update. Staff included justification for the sites being legitimate opportunity sites. The Airport Area provided the greatest opportunity for housing, followed by Newport Center, Mariners Mile, and a few smaller sites. More analysis is needed to determine sites that can accommodate lower -income units. State law provides that if a site can accommodate at least 30 dwelling units per acre, it is presumed the site can accommodate lower -income housing. The Airport Area is the only area in the City with that minimum density. The Airport Area requires a minimum 10-acre site, and the City implemented a housing overlay exempting a development with at least 30 percent affordable units from the site requirement. Lower -income housing sites are concentrated in the Airport Area, but it is a high resource area. Unfortunately, development projects have reduced the number of lower -income units that can be developed in the Airport Area. Committee Member Kiley remarked that because of the proximity to employment and transportation, the Airport Area is the logical location for affordable housing. In answer to her query, Principal Planner Murillo related that staff is looking at the possibility of accessory dwelling units (ADU) qualifying as affordable units. The potential for development of ADUs in the City is great. SCAG is developing pre -approved methodologies to count ADUs regionally. At the time of Housing Element Update Advisory Committee Meeting July 15, 2020 Page 6of9 permitting, property owners complete a questionnaire indicating the rent for an ADU, and in some cases the ADUs can be counted as low-income housing units. In answer to Committee Member Fruchbom's question, Principal Planner Muriilo explained that in the Airport Area the minimum density is 30 units per acre and the maximum is 50 units per acre. Staff used 30 units per acre and parcel size to develop the realistic capacity for the Airport Area. The actual capacity of the Airport Area is closer to 4,000 units. Staff did not consider 60 or 80 units per acre because the General Plan does not allow such high densities. Chair Tucker recalled the Mayor's letters to legislators regarding credit for ADUs. Public opinion seems to be split as to whether ADUs will be developed. In response to Committee Member DeSantis' inquiries, Principal Planner Murillo believed the Committee will explore the potential for redeveloping existing land uses as housing. Changes in retail business models and the pandemic may provide justification for redevelopment of sites as housing. Chair Tucker indicated surface parking lots are being redeveloped for other uses. The Sites Subcommittee is exploring all possibilities and hopes to find sites on the perimeter of town. In reply to Committee Member Sandland's inquiry, Principal Planner Muriilo reported the Newport Crossings project with 350 units and Uptown Newport project with approximately 600 units have been entitled, but they have not been submitted for plan check. As such, it is likely they will be counted towards the City's RHNA allocation for the upcoming cycle. Unfortunately, the units that can be counted will be moderate or above -moderate -income units because the lower -income components have been completed. Staff will prepare a list of projects and units for the next meeting. Jim Mosher commented that the vast majority of opportunity sites identified in 2013 have not been redeveloped during the current planning period, but some of the areas that have been redeveloped with housing were not identified as housing opportunity sites. The Committee may want to know the number of ADUs to which the safe harbor provisions of the HCD memo refer. Locating housing on the County's portion of Banning Ranch may not be a good idea because of the requirements to annex the property and to assume the County's RHNA allocation for the site. Deborah Ailen indicated the community strongly supports locating 4,800 units on the periphery of the City. David Tanner requested clarification of the viability under the new regulations of opportunity areas previously shown on the General Plan and not developed. Current laws allow each residential property owner within the City to construct an ADU on his property. More than 40,000 ADUs could be built within the City. Dorothy Kraus inquired about preparation of a baseline number of units that have been built and the remaining capacity and about the Coastal Commission's review of opportunity sites in the Coastal Zone and the impact of the Coastal Commission's review on the October 2021 deadline. Chair Tucker advised that opportunity sites within the Coastal Zone are not under consideration presently. Housing Element Update Advisory Committee Meeting July 15, 2020 Page 7of9 Deputy Community Development Director Jim Campbell explained that the City has a robust GIS database of density. Much of the under -built density is located on R-2 properties. Staff has not created any summaries but has created maps, which have been provided to the consultant for evaluation of the current baseline. Staff will work with HCD to develop projections for ADUs and work with the community to increase development of ADUs. Redeveloping single-family homes on R-2 lots as duplexes may be an untapped resource for housing units, but it could be difficult to justify to HCD because staff would have to assess the amount of redevelopment over the next eight years based on a nonexistent program. In response to Committee Member Kiley's inquiry, Deputy Community Development Director Campbell related that staff would like to count existing, unpermitted ADUs. However, HCD might take the position that existing ADUs are not a net increase in housing. The City may need to develop policies and programs to promote permitting of existing unpermitted ADUs and redevelopment on R-2 parcels so that HCD will accept the housing units. d. CEQA Project Description Recommended Action: No action; receive presentation from staff on the project description as it pertains to compliance with the California Environmental Qualify Act (CEQA) and discuss as necessary. Deputy Community Development Director Campbell reported the environmental review will be programmatic. The CEQA analysis will be based on discrete geographies and specific densities, which are the fundamental components of a project description. This approach to a programmatic environmental review will likely result in an EIR that reflects more impacts than what will be approved. There will not be an opportunity to change the project description to match the final inventory. In reply to Chair Tucker's questions, Deputy Community Development Director Campbell explained sites may be removed from the inventory if they are not feasible or do not meet legal definitions, but sites cannot be added to the inventory. The project scope may be larger than the final sites inventory. Amendments to the Circulation Element may require environmental review and analysis. Policies added to the Housing Element and Land Use Element may need to be evaluated. The project description has to be broader than potential sites. Many components will need to be analyzed before preparation of the EIR begins. The sites inventory will be specific while areas of interest can be fairly broad. Sites will be considered in parallel to preparation of the EIR. Staff and the consultants will prepare a project description and present it to the Committee for review and action. Meanwhile, the Committee will be reviewing potential sites. A Statement of Overriding Considerations is a possibility even if the RHNA allocation is fulfilled. While Level of Service has been replaced with Vehicle Miles Traveled, a Level of Service analysis will be needed to properly plan for intersections and to ensure housing fits as best it can within projections. In answer to Committee Member DeSantis' inquiry, Deputy Community Development Director Campbell indicated staff will attend SCAG's workshop regarding a new tool for the site inventory. In response to Committee Member Fruchbom's query, Deputy Community Development Director Campbell related that there has been talk about exempting the Housing Element Update from CEQA requirements so that jurisdictions can complete it on time. Staff will proceed under the assumption that the Housing Element Update is not exempt from CEQA requirements. Housing Element Update Advisory Committee Meeting July 15, 2020 Page 8of9 David Tanner stated the project description should not be developed by staff or consultants. The City's Traffic Phasing Ordinance will require a Level of Service analysis. There will be massive gridlock if ADUs are developed and RHNA numbers are met. e. Subcommittee Progress Reports Recommended Action: Receive verbal progress reports from both subcommittees and discuss as necessary. Chair Tucker advised that the Affordable Housing Subcommittee discussed funding, financing, tax credits, subsidies, and rent restrictions for affordable housing. The challenge will be creating incentives that allow the construction of as much affordable housing as possible. At this time, achieving the RHNA allocations for affordable housing does not appear realistic. Committee Member Fruchbom introduced himself as an affordable housing developer. The cost of providing an affordable unit in Newport Beach is higher than in many other cities, but state and federal regulations for affordable housing rents do not consider that fact. Tax credits generally do not provide sufficient income to construct the required number of affordable units. Because rents are high in Newport Beach, increasing the density to some economic limit creates more value for projects in Newport Beach than in an area with lower rents. Hopefully, the developer's profit from high -rent units will be sufficient to subsidize the affordable rents. Committee Member Jeffrey Bloom introduced himself as the head of commercial lending for a regional bank. In addition, he oversees the bank's investment in low-income housing tax credits. Finding tax credit investments in higher -income areas is extremely difficult. Incentives are needed for developers to construct projects in high -income areas and allocate funds saved from that project to projects in less -costly areas. Chair Tucker indicated the Sites Subcommittee began analyzing parcels in a portion of the Airport Area for potential opportunities. There are many large parking lots in the area; however, office buildings have the rights to park in those lots. The subcommittee will probably draft letters to the property owners. The Airport Area is limited to 550 infill units, but that number will probably change. Committee Member Selich introduced himself as a housing developer and a former member of the Newport Beach City Council, Planning Commission, Affordable Housing Task Force, and Local Coastal Program Implementation Committee. Committee Member Sandland introduced himself as a licensed architect and retired real estate developer, primarily in infill and reuse projects. He has served on the City Hall Design Committee and the Building and and Fire Board of Appeals. The Sites Subcommittee also discussed buildings that could be repurposed or demolished for a higher and better use and wrap and podium projects. For all of these projects, the property owner has to be willing to redevelop his property. Committee Member LePlastrier introduced himself as a business adviser and a member of the Board for Olson Urban Housing. Committee Member Kiley introduced herself as a commercial real estate appraiser. Committee Member De Santis introduced herself as a consultant for stakeholder engagement and advised that she has worked with the California Association of Realtors, as the Director of the State Department of Housing, and with an urban planning firm. Housing Element Update Advisory Committee Meeting July 15, 2020 Page 9of9 Committee Member Stevens introduced herself as an environmental consultant primarily for CEQA documents and as President of the Corona del Mar Residents Association. Chair Tucker introduced himself as a former attorney for residential, retail and industrial real estate developers, an investor in commercial properties, and a former licensed real estate broker. He has also served on the Planning Commission, City Hall Design Committee, and Finance Committee. Jim Mosher appreciated the introductions and the detailed subcommittee reports and hoped future agendas would include subcommittee reports. f. New Subcommittee Appointments Recommended Action: Appoint an additional opportunity sites subcommittee and appointment an outreach subcommittee. Chair Tucker appointed Committee Members LePlastrier, Selich and Kiley to the Opportunity Sites Subcommittee for West Newport/Mesa and Committee Members DeSantis and Stevens to the Outreach Subcommittee. Chair Tucker moved, seconded by Committee Member Selich, to confirm the appointments to the Opportunity Sites Subcommittee and the Outreach Subcommittee. AYE: Tucker, Bloom, DeSantis, Fruchbom, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: None VI. COMMITTEE ANNOUNCEMENTS OR MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON -DISCUSSION ITEM) Chair Tucker did not believe a presentation of the 2018 Orange County Business Council study would be useful even though it is an interesting study. The study could be good support for a draft Housing Element Update. VII. ADJOURNMENT — 8:41 p.m. Next Meeting: August 19, 2020, 6 p.m. in the City Council Chambers. CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES CITY COUNCIL CHAMBERS — 100 CIVIC CENTER DRIVE WEDNESDAY, SEPTEMBER 2, 2020 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 ❑eSantis, Elizabeth Kiley, Geoffrey LePlastrier (remote), Stephen Sandland, Ed Selich, Debbie Stevens, (Ex Officio Member) Will O'Neill (arrived at 6:10) 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, City Traffic Engineer Tony Brine, Administrative Technician Amanda Lee Ill. PUBLIC COMMENTS ON NON -AGENDA ITEMS David Tanner inquired regarding the City's strategy for updating the Housing Element; the rationale for spending more than $2 million to update the Housing Element; a Greenlight election; and the City's involvement in AB 1063. He offered to explain an alternative strategy that would save the City time and money. Jim Mosher noted there have not been agenda items to discuss the frequency of the Housing Element Update Advisory Committee (HEUAC) meetings or the consultant's work on the Environmental Impact Report (EIR). The Circulation Element Update has been delegated to the Planning Commission when the City Council charged the HEUAC with updating the Circulation Element. Nancy Scarbrough asked if the City has applied for any planning grants offered by the California Department of Housing and Community Development (HCD). Senior Planner Ben Zdeba reported the City has been awarded grants under the SB 2 planning grant program and the Local Early Assistance Planning (LEAP) grant program. The grant funds have been used to update the City's land management software. Chair Tucker suggested the City Council is the appropriate body to consider Mr. Tanner's alternative strategy. The City Council has indicated a Greenlight vote will be held if the Housing Element Update triggers one. Chair Tucker believed a vote would be necessary. AB 1063 failed to receive the support necessary for advancing through the Legislature. The HEUAC will meet as needed and when necessary information is available. The HEUAC will receive updates regarding the environmental document. The decision has been made to delegate the Circulation Element Update to the Planning Commission. Housing Element Update Advisory Committee Meeting September 2, 2020 Page 2 of 7 Mayor O'Neill advised that the need for a Greenlight vote will not be known until the end of the update process. IV. CONSENT CALENDAR a. Review Minutes of the July 15, 2020 Meeting Recommended Action: Approve and file the minutes of July 15, 2020 At Committee Member Sandland's request, Principal Planner Jaime Murillo clarified that the Newport Crossings project has been entitled, but it has not been submitted for plan check. Staff anticipates the project's housing units can be counted towards the City's Regional Housing Needs Assessment (RHNA) allocation for the upcoming cycle. Committee Member Sandland requested the minutes reflect Mr. Murillo's clarification of comments in the fifth paragraph on page 6 and reflect Building and Fire Board of Appeals rather than Building and Life Safety Board of Appeals on page 8. David Tanner asked the City to create a folder to store all public comments rather than including public comments in each agenda item. Chair Tucker requested the incorporation of Mr. Mosher's correction of typographical errors and proper names. Committee Member Sandland moved, seconded by Committee Member Selich, to approve the minutes of the July 15, 2020 meeting as amended. AYE: Tucker, Bloom, DeSantis, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: Fruchbom V. CURRENT BUSINESS a. Community Outreach Plan Recommended Action: Review and discuss the draft outreach plan. Provide direction to staff on how to proceed. David Barquist, Kimley-Horn & Associates, reported the purpose of the plan is to ensure community engagement is sustained throughout the planning process. The overall goal is to provide a transparent process that provides sufficient and varied opportunities for public participation. The plan can be adapted to respond to the COVI❑ situation. The process chart depicts the planning phases and outreach activities for each phase. He summarized the use of Bang the Table, the online platform, and workshops; the HEUAC's and City Council's involvement; and opportunities for feedback regarding the EIR. Committee Member ❑eSantis appreciated staff and the consultant incorporating the outreach subcommittee's comments in the plan. In response to her questions, Mr. Barquist recommended a four -week lead time to promote the initial workshop in October. Staff and consultants are working on the details of the workshop. A specific date in October has not been announced. Consultants will suggest technologies they feel are best for tasks. Bang the Table can be used for polling, Housing Element Update Advisory Committee Meeting September 2, 2020 Page 3 of 7 analysis, mapping, and many other activities and will be the base technology. Workshops will be recorded and available for the public to review and provide feedback. In reply to Committee Member Stevens' inquiry, Senior Planner Zdeba advised that the website has been updated and is live. A member of the public has commented on the removal of the prior planning effort, and staff is working on returning it to the website. The website will be updated throughout the process. In answer to Committee Member Sandland's queries, Mr. Barquist indicated the overall schedule and associated action items are being updated and will be provided to the HEUAC. at or before its next meeting. Chair Tucker remarked that the HEUAC needs to review and understand information about housing sites before it can provide direction regarding outreach. The HEUAC needs the information in order to obtain specific input from the public. Deborah Allen, Harbor View Hills Community Association President, agreed with Chair Tucker's comments. The sites will be the issue for public comment. Notices of meetings and workshops should be provided to community associations and homeowners associations for distribution to the members. Jim Mosher inquired regarding the anticipated deliverables from the workshops and the purpose of outreach. For outreach to be effective, the topic for public comment should be specific, and the input should have a meaningful effect on the outcome of the process. The HEUAC should consider better branding for the update effort. The number of community members who have used the outreach tools is probably small, and community familiarity with the tools is not sufficient reason to continue using the tools. Stakeholders should include potential future residents with low incomes. David Tanner suggested the workshops be dialogs with the community such that the community helps draft the document. The schedule should be revised to accommodate a Greenlight election and Coastal Commission approval. None of the documentation refers to updating the Safety Element. Voters want to know the assumptions being used in modeling. Nancy Scarbrough expressed concern about the timing of the outreach program. The content of workshops should be reviewed in advance to ensure the workshops will be productive and effective. Community input needs to be more than responses to questions. Chair Tucker believed sites would drive discussions and community input. Hopefully, the outreach program will be designed to elicit input about sites. Stakeholders are residents, businesses, and owners of commercial properties where housing sites may be located. Committee Member Stevens suggested a review of the housing sites subcommittee's work would help the public understand the complexities of selecting sites. Committee Member DeSantis understood the community wants to know the location of housing sites and the effect of development at those sites on the look of the community. This will add another layer to the complexity of identifying sites. Chair Tucker expected the look of potential developments to be a factor in decisions. In all likelihood, only a small number of sites could accommodate an all affordable housing project. The Housing Element Update Advisory Committee Meeting September 2, 2020 Page 4 of 7 majority of affordable units would likely be components of large, above -moderate -income development projects. b. Subcommittee Progress Reports Recommended Action: Receive verbal progress reports from all subcommittees and discuss as necessary. Chair Tucker reported the sites subcommittee has reviewed sites in the Airport Area to determine possible sites for housing. He reviewed each of the sites and pros and cons for redeveloping the sites. Committee Member Selich advised that limited housing opportunities are available in West Newport areas zoned for residential, medical office, and public facility uses. Housing may be possible in areas zoned for industrial/commercial uses and in areas containing mobile home lots. Chair Tucker explained that a zoning overlay retains the current use and adds a new use. An overlay may be important for the east side of MacArthur Boulevard. Tenants of affordable housing pay rent, but the rent amount is based upon income. Incentives will be needed for the development of affordable housing. Committee Member Kiley related that rezoning a one or two-story commercial building to residential could increase the utilization of the site, which may be preferable to the property owner. The cost of demolishing a commercial building from the 1970s and replacing it with housing could be less than remodeling the commercial building. Jim Mosher believed the State allows housing with adequate sound attenuation in 65 dB areas. However, Noise Element Policy N 3.2 prohibits new residential development in 65 dB areas. A General Plan amendment has been noticed for the September 8 City Council meeting. The amendment would extend the existing overlay for housing into an area where housing is not allowed. He requested clarification of Committee Member Bloom's concept of incentives for development of projects in high -income areas. Chair Tucker indicated developers could pay a fee for projects in high -income areas, and the fees would be used for affordable housing projects in areas with lower land costs. In answer to Committee Member DeSantis' questions, Chair Tucker stated the HEUAC does not advise the Council regarding planning applications. If the Council approves the General Plan amendment, the HEUAC will have less to consider. The units have been incorporated into the roadmap. C. Housing Element Sites Strategy Recommended Action: Receive an overview of current projects in the development pipeline that can count towards the RHNA allocation and discuss strategies to identify housing opportunities. Senior Planner Zdeba reported the City's draft RHNA allocation will be increased to 4,834 units. The roadmap is simplistic and does not include income designations. Entitled and unbuilt projects may be under construction but have not received a certificate of occupancy and will provide 1,136 units. Projects under review have not been entitled and could provide 878 units. Housing Element Update Advisory Committee Meeting September 2, 2020 Page 5 of 7 In reply to Chair Tucker's questions, Senior Planner Zdeba indicated the unit count for the Uptown Newport project pertains to Phase 2. Phase 2 will begin when TowerJazz's lease expires. Principal Planner Murillo explained that the Newport Crossings project was approved under the Newport Place affordable housing overlay. The overlay allows housing development up to 50 dwelling units per acre subject to design review only. To qualify for housing under the overlay, the developer has to commit to providing a minimum of 30 percent of units at the low-income level. The developer has received a density bonus in exchange for low-income housing. This is the first application to utilize the overlay. Plans have not been submitted for plan check. The Airport Area has a maximum development limit of 2,200 units, but most of those units have to be developed through the conversion of commercial floor area. Five hundred fifty infill units are also allowed. The Residences at 4400 Von Karman project is utilizing 260 of those infill units. The developer received a density bonus for providing very -low-income units. The Newport Village project complies with minimum commercial standards and maximum residential standards and is currently under review. The project does not seek more intensity than is allowed. Committee Member Kiley suggested the RHNA allocation and business closures caused by COVID may provide an opportunity to amend the General Plan to support more residential and less commercial space in mixed -use projects. In answer to Mayor O'NeiII's queries, Principal Planner Murillo explained that if a project is permitted and built prior to June 30, 2021, the units in the project will be credited to the current cycle. The guidelines state the cutoff date is the date of entitlement, permitting, or issuance of a certificate of occupancy. Staff relies on the date a certificate of occupancy is issued. The Newport Crossings project has been entitled but has not obtained permits. The Uptown Newport project is subject to a Development Agreement. Senior Planner Zdeba advised that 781 units from the 2014-2021 Housing Element inventory could count if they comply with the guidelines for the current cycle. The number of units does not include any units at Banning Ranch because annexation probably could not occur prior to the deadline. In response to Committee Member Sandland's inquiry, Senior Planner Zdeba indicated the 781 units are based on the realistic development capacity of the existing inventory and do not include sites slated for redevelopment. He agreed to provide a tabulation of the units. Senior Planner Zdeba described alternatives to new construction as preservation of existing affordable units and conversion of market -rate units to affordable units. The guidelines limit the number of alternative units to 25 percent of the City's very low and low-income requirements. Mobile home units can be identified as committed and preserved for affordable housing, but the 55-year minimum affordability term may be a deterrent to property owners taking that action. In, reply to Chair Tucker's queries, Senior Planner Zdeba stated realistically 12 units could be preserved within the timeframe for the current cycle. Chair Tucker believed there are few opportunities to achieve the 594 units. Senior Planner Zdeba related that 1,000 units is an aggressive target for the production of accessory dwelling units (ADUs). With the changes in State law, the production of ADUs is much easier. To achieve this number, the City would have to commit to promoting ADUs, monitoring ADU production, and being held accountable should 1,000 units not be achieved. The ADU target number is open for discussion. Housing Element Update Advisory Committee Meeting September 2, 2020 Page 6 of 7 In response to Chair Tucker's inquiries, Senior Planner Zdeba indicated there would be consequences for failing to achieve 1,000 ADUs. State law does not allow the imposition of new or existing private restrictions on ADUs. Senior Planner Zdeba explained that the City could commit to a rezoning program that would account for shortfalls in achieving goals. In answer to Committee Member Sandland's questions, Senior Planner Zdeba advised that the beginning of the planning period is June 30, 2021. None of the goals include potential units at Banning Ranch. Principal Planner Murillo reported live-aboards with permanent utility hookups can count towards the allocation. Moorings in Newport Harbor do not provide permanent utility hookups and cannot count. In reply to Committee Member Selich's queries, Senior Planner Zdeba reported the number of units obtained through rezoning could be 445 if the other goals are achieved. Staff has not analyzed the number of units from the existing inventory to suggest a realistic number of units that could be achieved. The assumptions for existing inventory sites, alternatives to new construction, and ADUs will affect the target for rezoning. Committee Member Bloom remarked that the net number of needed units is 2,009 absent income restrictions. With income restrictions, the target for low-income units is about 3,300 units. Approximately 6,200 units will be needed to satisfy the income restrictions. Principal Planner Murillo related that only 88 of the 1,136 units entitled and unbuilt are lower -income units. Staff needs to present the number of units per income category for each target. In answer to David Tanner's question, Chair Tucker stated the HEUAC will attempt to find sufficient sites to accommodate housing. If the HEUAC cannot accomplish that, it will report it to the Council. Mr. Tanner suggested the HEUAC ask staff and consultants about the strategy if the allocation cannot be fulfilled. He inquired about opportunities for public input in the roadmap. Jim Mosher remarked that the HEUAC is not envisioning all affordable housing projects. The goal for low and very -low-income units is more than 2,000. To achieve 2,000 units, the number of overall units will have to be more than 4,834. The City Council has asked the Harbor Commission to review live-aboards, perhaps with the idea of counting them towards the RHNA allocation. The Harbor Code prohibits houseboats. Chair Tucker reported approximately 2,400 units in the lower affordability range are required. If market -rate housing projects can include no more than 20 percent affordable housing, 12,000 housing units will be needed to provide 2,400 affordable units. Mayor O'Neill recalled the Council's direction for three paths: providing a compliant Housing Element, pushing back legislatively, and pushing back legally. The Council will consider an appeal and legal options when it receives the formal RHNA allocation. The Council's legislative efforts ended when the bill it supported died. Completing the Housing Element Update in 14-15 months is not possible. The expectation for the HEUAC is to find as much compliance as possible and make recommendations to the Council. The Council will then review its options. In reply to Committee Member Selich's question, Principal Planner Murillo advised that a rezoning program, if needed, would be contained in the Housing Element that the City Council adopts. The City will have three years to complete rezoning, which could include General Plan amendments. A Housing Element Update Advisory Committee Meeting September 2, 2020 Page 7 of 7 Greenlight vote would not occur until rezoning and associated General Plan amendments are proposed. A Greenlight vote and Coastal Commission approval are not needed to submit the Housing Element to HCD. Committee Member DeSantis remarked that affordable housing does not have to be achieved through inclusionary requirements only. The HEUAC can explore other methods to achieve affordable housing that will not increase the number of overall units. A housing trust fund and mortgage programs are examples of such methods. Newport Beach employers could be interested in contributing to a housing trust fund for workforce housing. Chair Tucker commented that the HEUAC will need to document and describe the reasons it cannot meet the RHNA allocation, if that occurs. Mayor O'Neill referred to the City's efforts to subsidize permanent supportive housing, which could aid compliance with the RHNA allocation. Mary Ann Soden encouraged the HEUAC to consider nonprofit and affordable housing partners to build affordable housing. In answer to Committee Member Sandland's question, Chair Tucker indicated he is working with staff to draft a letter to property owners regarding redevelopment of their properties. d. Appointment of an Additional Sites Subcommittee Recommended Action: Appoint an additional sites subcommittee. Chair Tucker moved, seconded by Committee Member Selich, to establish an Additional Sites Subcommittee composed of Chair Tucker and Committee Members Selich and Stevens. AYE: Tucker, Bloom, ❑eSantis, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: Fruchbom VI. COMMITTEE ANNOUNCEMENTS OR MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT [NON -DISCUSSION ITEM] Chair Tucker requested details of affordable housing. Vll. ADJOURNMENT — 8:39 p.m. Next Meeting: October 7, 2020, 6 p.m. in the City Council Chambers. 1T1 CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES CITY COUNCIL CHAMBERS — 100 CIVIC CENTER DRIVE WEDNESDAY, OCTOBER 7, 2020 REGULAR MEETING — 6 P.M. CALL MEETING TO ORDER — 6 p.m. WELCOME AND ROLL CALL MEMBERS PRESENT: Chair Larry Tucker, Jeffrey Bloom, Susan DeSantis, Paul Fruchbom (remote), Geoffrey LePlastrier, Stephen Sandland, Ed Selich, Debbie Stevens MEMBERS ABSENT: Elizabeth Kiley (excused), (Ex Offici❑ Member) Will O'Neill 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 PUBLIC COMMENTS ON NON -AGENDA ITEMS Jim Mosher noted the City Council has amended the General Plan and approved a development agreement for a developer to build housing that does not require low-income or very -low income units on property adjacent to the Airport. Allowing all developers to do this would result in the need to find locations for up to 49,000 units to achieve quotas for affordable housing. Nancy Scarbrough commented that the Circulation Element had been delegated to the Planning Commission without a Council vote or public awareness. She wanted to know when and where that decision was made and whether staff or consultants have begun work on updating the Circulation Element. CONSENT CALENDAR a. Minutes of the September 2, 2020 Recommended Action: Approve and file the minutes of September 2, 2020 Chair Tucker indicated Mr. Mosher has provided a minor correction. Chair Tucker moved, seconded by Committee Member Selich, to approve the minutes of the September 2, 2020 meeting as presented. AYE: Tucker, Bloom, ❑eSantis, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: Fruchbom ABSENT: Kiley Housing Element Update Advisory Committee Meeting October 7, 2020 Page 2 of 8 V. CURRENT BUSINESS a. Subcommittee Progress Reports Recommended Action: Receive verbal progress reports from all subcommittees and discuss as necessary. Chair Tucker reported the sites subcommittees for the Airport Area and West Newport Mesa have completed their reviews, and staff has posted the subcommittees' notes to the website. The site subcommittee for the remainder of the City is awaiting information from staff. The goal is to have the subcommittee's review complete and its notes posted prior to the next HEUAC meeting and the workshop. Senior Planner Ben Zdeba advised that the information should be available for the subcommittee the following week. Chair Tucker explained that the sites subcommittees graded each site as feasible, potentially feasible, or infeasible. Feasible sites have physical characteristics that may allow housing development. Infeasible sites appear not to have the ability to accommodate housing. Potentially feasible sites may accommodate housing, but the subcommittee could not make a determination based upon current information. After public input, the HEUAC will decide if a parcel is suitable for housing. Committee Member Sandland requested staff maintain a tabulation of the number of acres and potential units the sites could generate in each category. Deputy Community Development Director Jim Campbell advised that staff will maintain a tabulation of the acreage of the sites and could provide a range of densities or unit yields at different densities. In response to Deputy Community Development Director Campbell's query, Chair Tucker explained that the HEUAC should determine sites are suitable for housing prior to staff contacting the property owners. The subcommittees have no decision -making authority. Deputy Community Development Director Campbell expressed concern because the HEUAC would receive public input prior to making a decision, and public input would occur over a number of months. Staff should contact property owners sooner rather than later to learn of their interest in building housing on their properties. In addition, staff should probably contact more property owners than the HEUAC identifies in order to gather additional information about sites. Chair Tucker expected the workshops to provide public input regarding the sites that could accommodate housing. The October 20, 2020 workshop could provide input for the HEUAC to consider in its October 21 meeting. The HEUAC will review sites in the Airport Area and West Newport Mesa on October 21 and the rest of the City on November 4. By November 4, the HEUAC should have enough input for staff to begin contacting property owners. Deputy Community Development Director Campbell did not believe the October 20 workshop would consider specific sites; therefore, the HEUAC would not have public input regarding specific sites for its October 21 meeting. Jim Mosher requested a more logical numbering system for the parcels and suggested the HEUAC webpage contain a list of subcommittees, subcommittee members, and the task of each subcommittee. Chair Tucker related that the numbering system was provided to the subcommittee, and the subcommittee did not change it. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 3 of 8 Deputy Community Development Director Campbell indicated the webpage could be updated to include a list of subcommittees. Dorothy Kraus remarked that the lack of a response to Ms. Scarbrough's comments about the Circulation Element leaves an unsettling feeling. She inquired about the rationale for deeming the Road and Track building as infeasible when the underlying zoning for the parcel is residential. Chair Tucker explained that he made a recommendation to staff and the Mayor that the Planning Commission update the Circulation Element as it has experience with traffic matters and HEUAC members do not. He was not privy to how the decision occurred. Committee Member Selich advised that the subcommittee was informed that the Road and Track building is undergoing remodeling for a private school's educational offices. With the school's investment in the building, the subcommittee felt it was infeasible for housing. In addition, a major portion of the parking lot for the building is in the public right-of-way for the extension of 15th Street. Deputy Community Development Director Campbell reported several years ago the Hearing Officer granted an extension of the nonconforming office use for Kobe's project at the Road and Track site. Pacifica Christian School is making similar investments and extending that nonconforming privilege. Changing zoning on the site from residential to commercial would require a General Plan Amendment. Also, the shape and size of the parcel makes a residential development on the site challenging. In order to include the site in the Housing Element Update, the City needs reasonable evidence that the site could change land uses during the planning period. Chair Tucker appreciated Ms. Kraus' input as the type of input the HEUAC wants to receive. b. Strategy for Public Input on Sites Recommended Action: Discuss and provide direction on how to best seek public input on the housing opportunity sites inventory. Chair Tucker wanted to receive quality input regarding the suitability of sites listed in the subcommittees' notes. Following the October 20 workshop, the HEUAC will review feasible and potentially feasible sites, hear public input provided at the workshop, and determine sites suitable for housing. HEUAC review of sites in the Airport Area and West Newport Mesa will be scheduled for October 21, and sites in the remainder of the City will be scheduled for November 4. In response to Chair Tucker's question, David Barquist, Kimley-Horn and Associates, advised that the City has the right to adopt a Housing Element as it sees fit, but the City has to abide by State law. If the City adopts a Housing Element that does not comply with statutory requirements, the State will not certify the Housing Element. There are some challenges to self -certifying a Housing Element. In his opinion, the community's desires and statutory requirements should be considered equally. Chair Tucker understood penalty provisions contained in recent legislation apply pressure on cities to achieve their RHNA allocations. Mr. Barquist could provide the HEUAC with relevant legislation. Chair Tucker did not want the public to participate in the engagement process and then feel as though the HEUAC ignored its input. He read the Code section regarding public participation. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 4 of 8 C. Outreach Plan Update Recommended Action: Receive an overview of the outreach plan efforts, including information on the schedule moving forward and the upcoming October 20 virtual workshop and the November 96 virtual workshop for the Circulation Element Update. Mr. Barquist reviewed opportunities for community engagement, which include digital engagement, committee/advisory meetings, in -person or virtual workshops, online video presentations, and webinars. The first community workshop is scheduled for October 20, 2020, will be held online, and will be interactive without a presentation. Engagement opportunities will be available through the website and HEUAC meetings Senior Planner Zdeba related that 36 people have registered via Zoom for the October 20 workshop. The community was notified of the workshop through email blasts and Nextdoor posts. The community may register for the workshop on the website. A Circulation Element kickoff workshop is scheduled for November 16, 2020. In response to Committee Member DeSantis' inquiries, Mr. Barquist emphasized the interactive nature of the October 20 workshop. The workshop will include lessons learned from prior outreach efforts, the context for RHNA, a series of activities, and next steps. Scenario building or modeling with different densities will occur after the October workshop. Vehicle miles traveled (VMT) and circulation will be part of the analysis. Mitigation measures for VMT impacts and many other topics will be part of community education. In answer to Committee Member Stevens' question, Mr. Barquist stated the Lego exercise will not be repeated as staff has clearly directed the consultant team not to repeat activities. The workshop will focus on locations within areas of the City. Chair Tucker remarked that if the HEUAC cannot achieve the RHNA allocation during the update process, sites will be selected based on their ability to provide housing units, which is not a good planning method. Committee Member DeSantis referred to a letter from Olen Properties. Visioning is not reviewing individual sites but preparing a realistic model for an area based on available sites and the development community's input regarding feasibility. In reply to Committee Member Selich's query, Mr. Barquist explained that during the workshop, participants can respond to polls and share their ideas. Jim Mosher hoped the workshop will have some form. He expressed concern about having to provide information to Zoom in order to register for the workshop. He inquired whether workshops would be recorded and posted on the website. He requested clarification of the Circulation Element workshop and the center column of the chart for outreach opportunities. Charles Klobe commented that without State and Federal subsidies, the City will not find enough sites to accommodate 49,000 housing units, which will include the required number of affordable housing units. The HEUAC should decide it will submit an incomplete Housing Element. He suggested staff reach out to coastal cities in the same position as Newport Beach and develop a regional coalition to approach the State. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 5 of 8 Dorothy Kraus expressed confusion regarding the role of the outreach subcommittee in obtaining public input on sites. The HEUAC seems to be glossing over Committee Member DeSantis' comments regarding visioning. The Outreach Plan and the websites are confusing and do not relate to each other. Chair Tucker advised that Committee Members DeSantis and Stevens form the outreach subcommittee. They coordinate the outreach program with staff and consultants in order to obtain meaningful public input. The City can fight its RHNA allocation or update the Housing Element to achieve the allocation. if individuals feel the City should fight the allocation, they should address the City Council. Deputy Community Development Director Campbell indicated the workshops will be recorded and posted on the website. A detailed script or agenda of the workshop is not ready for publication. Zoom registration requires a name and email address. Staff will update the City Council on October 13, 2020, but currently no other meetings with the Planning Commission or City Council have been scheduled. Chair Tucker requested the workshop script be provided to the outreach subcommittee for comment. The affordable housing subcommittee is awaiting information from Principal Planner Jaime Murillo. Committee Member DeSantis noted Orange County has a housing trust fund, and cities may create a local fund to subsidize housing units. Senior Planner Zdeba explained that the Circulation Element webinar is listed at the top of the chart. In response to Committee Member Sandland's question, Deputy Community Development Director Campbell clarified that workshops and webinars will allow the community to participate through chat and polling features. Chair Tucker recommended the workshop include an announcement of the HEUAC's schedule for reviewing sites in the Airport Area, West Newport Mesa, and the remainder of the City. d. Affordable Housing Compliance Recommended Action: Receive an overview of what "affordable housing" means in the context of Orange County, as well as the new affordable housing requirements related to the housing opportunity sites inventory. Discuss strategies for compliance. Mr. Barquist defined affordability as the ability to pay based on income and housing cost. Affordability is based on median family income (MR), which is calculated by the Department of Housing and Urban Development (HUD) for each county. Orange County's MFI of $103,000 is high in comparison to many counties in the state. RHNA assumes a family of four individuals. The Housing Element is required to identify sites by income category. Affordability for a site is generally based upon the density allowed for the site. According to the State, 30 dwelling units per acre is the default density for affordable units. Sites can accommodate more than one income category. The Department of Housing and Community Development (HCD) recommends a 15-30 percent buffer for additional dwellings to cover no net loss. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 6 of 8 In reply to Committee Member Selich's questions, Mr. Barquist indicated the City would have to find sites to accommodate affordable housing that a developer does not build on a site designated for affordable housing. Staff will track affordable housing sites and construction of affordable housing. A subsidy could be a policy solution for construction of affordable housing. Chair Tucker advised that most sites in Newport Beach are non -vacant, which is required for housing in the lower -income range. Therefore, the substantial evidence rule will come into effect. In answer to Chair Tucker's query, Mr. Barquist explained that different strategies and methods can encourage property owners to redevelop their land. Committee Member Selich remarked that the City cannot provide enough incentives, fee reductions, or bonus programs to make up the deficit of constructing affordable housing. Committee Member Fruchbom related that coastal cities have the most difficulty providing affordable housing because their rents are higher than countywide rents, on which RHNA requirements are based. He calculated a developer's loss in constructing a hypothetical one - bedroom apartment unit at 50-60 percent AMI in Huntington Beach and in Newport Beach. According to his very rough estimation, a bond measure levying $6,000 on every man, woman, and child in Newport Beach could provide funding for affordable housing. Theoretically, it is possible for tax credits and cheap land to fill a developer's deficit, but the demand for tax credits is immense. The City could offer increased density in exchange for affordable units. In the past, he surveyed the City for sites that could accommodate a development with affordable housing and found only one site, City -owned land near the maintenance yard. Chair Tucker questioned whether the State would accept a Housing Element that utilizes strategies to achieve affordable housing allocations, regardless of the success of the strategies. Committee Member Selich expressed concern regarding the no net loss requirement. Chair Tucker suggested the no net loss requirement will have to be covered through an overlay that requires affordable housing as part of a residential development. In response to Committee Member DeSantis' inquiry, Mr. Barquist stated the City could use in -lieu fees to construct affordable housing in other cities. Committee Member DeSantis noted UCI has a fund for silent second mortgages on affordable housing. The City of Livermore and the County of Marin are subsidizing mortgages to attract residents. Chair Tucker added that UCI is subsidizing affordable housing located on UCI's property. He questioned whether the State would accept affordable housing built in another city. Mr. Barquist clarified that the Housing Element contains courses of actions that should achieve the RHNA allocation. The specific details of those actions do not have to be included in the Housing Element. To obtain affordable housing, the City could provide incentives or streamline permitting for accessory dwelling units (ADU), increase densities, create affordable overlay zones, promote the preservation of existing affordable units, or promote the conversion of market -rate units to affordable units. In reply to Committee Member Sandland's questions, Mr. Barquist explained the City's ability to count affordable units when their affordable covenants, which are set to expire, are renewed. Deputy Community Development Director Campbell reported the current Housing Element Housing Element Update Advisory Committee Meeting October 7, 2020 Page 7 of 8 contains a list of project sites subject to affordable covenants. Staff has registered with the State to receive notice prior to the expiration of covenants. Theoretically, the City could negotiate with property owners to pay for an extension of the covenants. Staff has contacted property owners where the covenants were about to expire, and all property owners have rejected offers to extend the covenants. Senior Planner Zdeba indicated covenants on 12 properties will expire during the 2021-2029 planning cycle. In answer to Committee Member Selich's query, Mr. Barquist related that the no net loss requirement applies to the entire RHNA allocation. Chair Tucker commented that staff and consultants will provide the HEUAC with alternatives for affordable units. The HEUAC will likely consider an inclusionary fee. Mr. Barquist indicated HCD considers whether the Housing Element meets the spirit and intent of the law and substantially complies with the law. Staff can discuss potential programs and strategies with HCD prior to completing the Housing Element. Committee Member ❑eSantis suggested salaries for Newport Beach jobs should be prominent in the workshop discussion so that the community can relate to residents of affordable housing Jim Mosher suggested staff clarify the statement that HCD considers a density of 30 units per acre as suitable for affordable housing and the application of that density to the Newport Airport Village project. Deputy Community Development Director Campbell reported a site identified for affordable housing must have a density of 30 units per acre. He recommended the Housing Element reflect the number of affordable units proposed for the Newport Airport Village project rather than the maximum number of units that could be built on the site. His recommendation would apply to the Newport Crossings project and any remaining development in the Uptown Newport project. e. RHNA Appeal Filing -Council Item for October 13 Recommended Action: Receive and file. Chair Tucker remarked that the appeal lists retail commercial and industrial properties without describing economic constraints on converting those properties to residential uses. He has submitted language addressing that issue to staff. In determining the number of housing units needed, the State did not consider the availability of land for housing. Jim Mosher stated other cities will appeal their allocations and make arguments similar to Newport Beach's arguments. Deputy Community Development Director Campbell advised that a draft letter has been included in the meeting packet and will be presented to the City Council on Tuesday along with a request to authorize an appeal. The Southern California Association of Governments (SCAG) will convene its litigation committee, which could mean SCAG is considering litigation regarding RHNA. In answer to Committee Member DeSantis' query, Principal Planner Murill❑ reported the deadline to submit an appeal is October 26, 2020, A 45-day comment period will follow the deadline. Once the comment period expires, SCAG will hold hearings, which are estimated to last four to six weeks. Housing Element Update Advisory Committee Meeting October 7, 2020 Page 8 of 8 The appeal process is expected to conclude in late January or early February 2021. At that time, cities will have their final RHNA allocations. VI. COMMITTEE ANNOUNCEMENTS OR MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT [NON -DISCUSSION ITEMy Chair Tucker requested a presentation by the Kennedy Commission and a discussion of the appropriate time for staff to contact property owners about building housing on their properties. Committee Member DeSantis' requested a presentation by Renaissance Housing, an affordable housing developer. Chair Tucker suggested that occur when the Affordable Housing Subcommittee has information to share. Committee Member Sandland requested Mr. Barquist provide an updated outreach schedule by October 21, 2020. VII. ADJOURNMENT — 8:23 p.m. Next Meeting: October 21, 2020, 6 p.m. in the City Council Chambers. CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES CITY COUNCIL CHAMBERS — 100 CIVIC CENTER DRIVE WEDNESDAY, OCTOBER 21, 2020 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 ❑eSantis, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Ed Selich, Debbie Stevens MEMBERS ABSENT: Paul Fruchbom, (Ex Officio Member) Will O'Neill (excused) Staff Present. Community Development Director Seimone Jurjis, Deputy Community Development Director Jim Campbell, Principal Planner Jaime Murillo, Senior Planner Ben Zdeba, City Traffic Engineer Tony Brine, Administrative Support Specialist Clarivel Rodriguez Ill. PUBLIC COMMENTS ON NON -AGENDA ITEMS Jim Mosher remarked that a loophole in the Housing Crisis Act allows people to merge lots and demolish multifamily housing if the new development is limited to a single unit, which seems contrary to the intent of the Housing Crisis Act. IV. CONSENT CALENDAR a. Minutes of the October 7, 2020 Meeting Recommended Action: Approve and file the minutes of October 7, 2020 Chair Tucker advised that Mr. Mosher has suggested some minor corrections to the October minutes. Chair Tucker moved, seconded by Committee Member Selich, to approve the minutes of the October 7, 2020, meeting with Mr. Mosher's revisions. AYE: Tucker, Bloom, DeSantis, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: Fruchbom V. CURRENT BUSINESS a. Presentation by The Kennedy Commission Recommended Action: Receive a presentation from Cesar Covarrubias of The Kennedy Commission followed by brief questions and answers. Chair Tucker indicated The Kennedy Commission is an affordable housing advocacy group that was founded in 2001. The Housing Element Update Advisory Committee (HEUAC) is interested Housing Element Update Advisory Committee Meeting October 21, 2020 Page 2of7 in hearing about strategies, policies, and incentives that will result in affordable housing development. Cesar Covarrubias shared information regarding median home price, household income, affordability, and Regional Housing Needs Assessment (RHNA) allocations for Orange County. Two cities in Orange County have specific policies for affordable housing and have met their RHNA allocations in the very -low-income and low-income categories. Overlays and specific plans can encourage housing as part of mixed -use developments. Institutional and church campuses are potential sites for mixed -use concepts. The Surplus Land Act, a mixed -income housing ordinance, an affordable housing strategic plan, housing opportunities zoning or an overlay, and an affordable housing land trust support affordable housing. The Veterans and Affordable Housing Bond Act, the No Place Like Home program, the Orange County Housing Finance Trust/JPA, the Orange County Housing Trust, the Orange County Housing Bond 2020, and the Mental Health Services Act can be used to fund affordable housing. Chair Tucker commented that there are areas in the City where property owners may be enticed to build housing on their properties. Policies that relax development standards and increase allowed density can encourage housing development, but at some point increased density makes construction costs infeasible. Mr. Covarrubias suggested incorporating the City's housing objectives into an overlay or zoning change. Changes to the State Density Bonus Law may result in more affordable housing. Office buildings can be redeveloped with a more intense and intentional use. Adopting policies and programs for affordable housing is essential to the development of affordable housing. In answer to Committee Member SandIand's question, Mr. Covarrubias advised that The Kennedy Commission is reviewing the potential for housing located in areas such as Banning Ranch and portions of the Airport Area located within the 65 dB CNEL contour. Planning growth around existing uses is challenging but doable. In reply to Committee Member DeSantis' query, Mr. Covarrubias indicated he is aware of cities discussing agreements to use funding from one city to build affordable housing in the other city. However, he did not anticipate such agreements would work well because of each city's need to fulfill its allocation for low and very -low-income housing. In response to Committee Member Stevens' comment, Mr. Covarrubias remarked that if amenities are located close to housing, residents will probably make fewer vehicle trips. b. Orange County Mayors' Letter to the Southern California Council of Governments (SCAG) Recommended Action: Receive and file. Chair Tucker felt the Mayors' letter could be more fruitful in reducing RHNA allocations than other approaches. The public should be aware of the letter. Jim Mosher inquired regarding the reasons for the Mayors of Dana Point and San Clemente not signing the letter. Housing Element Update Advisory Committee Meeting October 21, 2020 Page 3of7 C. Subcommittee Progress Reports Recommended Action: Receive verbal updates from each subcommittee, as appropriate. Chair Tucker reported that the subcommittee for opportunity sites in the remainder of Newport Beach met the prior day, and a report will be scheduled for the next HEUAC meeting. The affordable housing subcommittee will review different approaches to obtain affordable housing at different income levels and may craft an inclusionary plan. d. October 20, 2020 Virtual Housing Workshop Recap Recommended Action: Receive an overview of the first virtual housing workshop and discuss any takeaways. Provide feedback or direction to staff and the consultants on any changes or considerations for future workshops. David Barquist, Kimley-Horn and Associates, reported 72 people participated in the workshop. Analysis of feedback provided during the workshop is underway, and a report will be available via the Newport Together website. Engagement occurred during the workshop and will continue online. During the workshop, members of the public inquired about a no housing response to questions. In light of the draft RHNA allocation for Newport Beach, the consultant team does not believe a no housing response is practical. In subsequent stages of outreach, the team can explore the most appropriate locations for growth and development and different types of housing. The public can view the workshop and provide feedback on the Newport Together website. In reply to Committee Member Stevens' question, Mr. Barquist advised that the team will explore methods to obtain public input for individual opportunity sites during both in -person and virtual meetings. Committee Member Stevens remarked that the interactive portion of the workshop was easy and a good start to obtaining public feedback. Committee Member DeSantis suggested future virtual workshops include more opportunities for two-way communication. The presentations and polling were well done. The workshop could have been longer to allow more dialog with the community. She emphasized the importance of creating visions for opportunity areas while reviewing parcels in the areas. Mr. Barquist noted the difficulty of sustaining the public's attention for an extended period of time. Engagement will build and improve as the schedule progresses. The team is working with the City's Public Information Officer to distribute information to the community through different avenues. The public and committee members can assist by sharing links and posts to meetings and information. Deborah Allen, Harbor View Hills Community Association President, advised that she discussed the workshop with seniors at OASIS, a number of whom attended the workshop, and neither the seniors nor she felt the technology was easy to use or the workshop encouraged community input. The input may have been too structured for a community that is accustomed to voicing their opinions. Questions have to have a no project response. if the goal is to obtain community input, the public has to be allowed to express opinions. Nancy Scarbrough noted 18 of those present for the workshop were staff and committee members. The inability to converse was extremely frustrating. Future workshops need to be more interactive with the public. Jim Mosher concurred with comments regarding the lack of two-way communication. The workshop did not mention HEUAC meetings, and the website does not list all HEUAC meetings. Housing Element Update Advisory Committee Meeting October 21, 2020 Page 4 of 7 Adriana Fourcher felt the workshop was not collaborative. In -person meetings with small group discussions should be possible. She had some difficulty participating in the polling and did not believe her responses were counted. Input from the business community is needed. Melanie Schlotterbeck, representing Olen Properties, expressed disappointment with the repetition of information during the workshop. She supported the use of breakout rooms during virtual meetings to allow individuals to comment. There has been no mention of new and innovative housing types and mixed -use development. Housing options need to include a range of sizes, prices, and affordability. The City needs a vision for the Airport Area. Hoiyin Ip suggested community groups will help distribute information about meetings and workshops. One city in Orange County has been assessing in -lieu housing fees for many years. David Tanner hoped the City would work with The Kennedy Commission to learn about the effects of affordable housing on public services. Staff is intentionally misinforming the public regarding the scope of the Housing Element Update by discussing only RHNA information. Dorothy Kraus remarked that workshop participants were the usual group who attend or participate in public meetings. Staff and the consultants need to use more traditional means to notify the public about meetings. Chair Tucker advised that the State has disrupted the City's planning process and shortened the time for a planning process. Staff has not intentionally misled anyone. Public comments have included some valid criticisms of the outreach process. The HEUAC is charged with preparing a plan to comply with State requirements. Consequently, no development is not an option. Committee Member Stevens related that the City's Public Information Manager asked the outreach subcommittee to distribute information about the workshop, and the subcommittee sent emails to almost 1,000 people. The community may not be interested in planning efforts. e. Sites Rundown: Airport Area Recommended Action: Review the list of potential sites and discuss feasibility. Solicit input from the public on the list and the Committee's discussion. Chair Tucker directed staff to begin contacting the owners of properties identified as feasible or potentially feasible for housing. He assumed members of the public would agree with the subcommittee's designations for sites as the public has expressed interest in locating housing in the Airport Area. He reviewed the subcommittee's consideration of parcels 43, 113, 37, 69, 95, 87, 23, 70, 80, 81, 111, 9, 24, 131, 135, 38, and 79 and the Saunders site. Committee Member Sandland suggested the parcel numbers for the Saunders site should be provided. If the prohibition of housing in the 65 dB CNEL is relaxed, parcels 87 and 23 may be potentially feasible rather than infeasible. Chair Tucker indicated the subcommittee may reconsider designations for parcels located within the 65 dB CNEL if the prohibition is relaxed. Committee Member Bloom commented that abandoning streets s❑ that parcels may be combined would theoretically create more land and larger parcels. Parcels could be even more feasible for housing. Chair Tucker clarified the comment as abandoning private circulation rather than streets. Housing Element Update Advisory Committee Meeting October 21, 2020 Page 5of7 Jim Mosher did not recall the HEUAC agreeing with the subcommittee's approach of not considering parcels within the 65 dB CNEL. Based on the statement that the subcommittee is not considering parcels within the 65 dB CNEL at this time, he inquired when the subcommittee would consider those parcels. Chair Tucker suspected the subcommittee would consider those sites if all other sites do not provide sufficient housing to comply with the RHNA allocation or if someone proposes a project on a parcel within the 65 dB CNEL. In reply to Chair Tucker's inquiry, Deputy Community Development Director Jim Campbell related that a policy in the Noise Element of the General Plan states parcels within the 65 dB CNEL are not appropriate for housing development. The Airport Land Use Commission would find housing development incompatible with the 65 dB CNEL. Chair Tucker reviewed the subcommittee's consideration of parcels 51, 72, 88, 71, 91, 122, 52, 138, 77, 68, 106, 121, 19, 33, 117, 116, 119, and 120. Adriana Fourcher remarked that the dB rating pertains to jet traffic. Noise studies are needed for small plane traffic because the departure pattern for small planes is over the parcels being considered for housing. Deputy Community Development Director Campbell advised that the noise contours are based on a composite of both runways and represent a 24-hour average of all aircraft traffic. Chair Tucker reviewed the subcommittee's consideration of parcels 66, 67, 83, 61, 62, 63, 76, 16, 105, 47, 31, 13, 99, and 104. The subcommittee omitted parcels 39 and 89, which are located partially within the 65 dB CNEL. Parcel 39 is small, and the building on parcel 89 has been refurbished. Therefore, parcel 39 is infeasible and parcel 89 is feasible. Committee Member Stevens expressed concern that airplane noise was last studied and the CNEL contours determined in 1985. Deputy Community Development Director Campbell indicated an update of CNEL maps is not on the horizon. Staff could discuss the topic with Airport Land Use Commission staff and provide a report to the HEUAC. Chair Tucker reviewed the subcommittee's consideration of parcels 4, 1, 5, 6, 2, 3, 8, 9, 10, 11, 13- 16, 17, 12, 37-42, 43-69, 70, and 71-76. Adriana. Fourcher advised that helicopters from a helicopter school and the Orange County Sheriffs Office fly over the area and beneath the departure pattern for small planes. A noise study is needed. Chair Tucker reviewed the subcommittee's consideration of parcels 77, 78, 79, 80, 81, 82, 19, 20, 25-27, 31, 21-24, 28-30, 34-36, and 83. Adriana Fourcher noted many property owners oppose the residential project proposed for the parking lot of Koll Center Newport. Melanie Schlotterbeck, representing Olen Properties, indicated parcel 19 is an Olen Properties building and is not part of a residential project. The review of parcels focuses on site selection rather than the integration of sites with their surroundings. She questioned whether sites would be excluded if a property owner did not respond to a request for information. This is an opportunity for the City to partner with landowners and developers to enact a vision for the area. The focus on housing and not mixed uses is a lost opportunity to create a community. The Airport Area could Housing Element Update Advisory Committee Meeting October 21, 2020 Page 6of7 become a vibrant, walkable, bikeable, mixed -use, urban core that attracts a range of residents, incomes, and opportunities. She encouraged the HEUAC to create a vision for the Airport Area. f. Sites Rundown: West Newport -Mesa Recommended Action: Review the list of potential sites and discuss feasibility. Solicit input from the public on the list and the Committee's discussion. Committee Member Selich noted the West Newport Mesa area contains medical office uses, mobile home parks, various densities of residential uses, older single -story industrial/commercial buildings, and a series of institutional uses. The subcommittee has discussed the need to preserve opportunities for smaller -scale industrial and service businesses and recommends a zoning overlay concept as some but not all parcels may convert to residential uses. It is important not to convert everything to residential in order to have a well-balanced land use plan. He reviewed the subcommittee's consideration of parcel 56 (Newport Health Care); parcel 27 (Ebb Tide); parcels 62 and 64 (Road & Track Building); parcel 63 (Coastline College); the private school site north of parcel 50; the City Utilities Yard; the City General Services Yard; parcels 36, 116, 123, and 182 (four mobile home parks); the area bordered by Superior, 1511, and Monrovia; the area bordered by Hospital Road, Placentia, and Superior; and parcels 12, 41, 42, and 49. Commissioner Member Sandland suggested combining parcels 13 and 11 could result in a designation of potentially feasible. Perhaps staff could send a letter to the property owners inquiring about interest in building housing on the parcels. Committee Member Selich noted the demand for medical office buildings is high at the current time. Committee Member Kiley concurred with sending a letter as the owners can indicate no interest. Chair Tucker advised that parcels 14 and 44 will be designated infeasible and parcels 13 and 11 will be designated potentially feasible. Committee Member Selich reviewed the subcommittee's consideration of the small residential parcels between Dana and Flagship; parcels 3, 39, 48, 117, 124, and 228; parcels 74 and 122; parcels 24 and 40; parcels 17 and 51; parcels 2, 10, and 23; parcels 5-7, 9, 18-22, 26, 28, 29, 31- 34, 36, 37, 46, 47, 53, 55, 60, 61, and 227; parcels 4 and 16; and parcels 50 and 59. The HEUAC may wish to consider contacting Hoag Hospital regarding construction of workforce housing in the area. Deputy Community Development Director Campbell advised that the business located on parcel 47 has some air quality issues and has installed equipment to hopefully resolve the issues. Committee Member Stevens indicated the business has been reviewed for both ground and soil contamination. The cleanup requirements for industrial uses are different from the requirements for residential uses. The time and expense to clean up the site for residential uses may be prohibitive. An unidentified speaker appreciated the suggestion to contact Hoag Hospital. The small amount of land available for construction is dismaying. The Mayors' letter may be the best approach to seek a reduction in the RHNA allocation. Housing Element Update Advisory Committee Meeting October 21, 2020 Page 7of7 VI. COMMITTEE ANNOUNCEMENTS OR MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION. ACTION OR REPORT [NON -DISCUSSION ITEM} Chair Tucker noted the subcommittee for housing sites in the remainder of Newport Beach will report at the next meeting. He requested a discussion of inclusionary zoning and fees. Committee Member Sandland requested a discussion of large employers that could support housing. VII. ADJOURNMENT — 8:53 p.m. Next Meeting: November 4, 2020, 6 p.m. in the City Council Chambers. CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES CITY COUNCIL CHAMBERS — 100 CIVIC CENTER DRIVE WEDNESDAY, NOVEMBER 4, 2020 REGULAR MEETING — 6 P.M. I. CALL MEETING TO ORDER — 6 p.m. II. WELCOME AND ROLL CALL MEMBERS PRESENT: Chair Larry Tucker, Susan DeSantis, Paul Fruchbom, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Ed Selich, Debbie Stevens, (Ex Officio Member) Will O'Neill MEMBERS ABSENT: Jeffrey Bloom (excused) Staff Present: Community Development Director Seimone Jurjis, Deputy Community Development Director Jim Campbell, Senior Planner Ben Zdeba, Administrative Support Specialist Clarivel Rodriguez Ill. PUBLIC COMMENTS ON NON -AGENDA ITEMS Deputy Community Development Director Jim Campbell reported 47 of 197 jurisdictions located within the Southern California Association of Governments (SCAG) region have filed appeals of their Regional Housing Needs Assessment (RHNA) allocations. Eighteen agencies in Orange County filed appeals. Four agencies, including the City of Newport Beach, filed appeals against the City of Santa Ana. The City has sent a letter to SCAG trying to get sponsorship of legislation that will protect local jurisdictions subject to another agency's oversight. IV. CONSENT CALENDAR a. Minutes of the October 21, 2020 Meeting Recommended Action: Approve and file the minutes of October 21, 2020 Chair Tucker noted Mr. Mosher has submitted corrections to the October 21, 2020 minutes. Chair Tucker moved, seconded by Committee Member Selich, to approve the minutes of the October 21, 2020 meeting with Mr. Mosher's revisions. AYE: Tucker, DeSantis, Fruchbom, Kiley, LePlastrier, Sandland, Selich, Stevens NO: None ABSTAIN: None ABSENT: Bloom Housing Element Update Advisory Committee Meeting November 4, 2020 Page 2of5 V. CURRENT BUSINESS a. Subcommittee Progress Reports Recommended Action: Receive verbal updates from each subcommittee, as appropriate. Chair Tucker advised that the affordable housing subcommittee met to discuss methods for financing and developing affordable housing projects. The subcommittee will prepare a report of potential incentives to generate affordable housing. The Housing Element Update Advisory Committee (HEUAC) may discuss the subcommittee's report during its December 2, 2020 meeting, and the Council will determine which, if any, approach to pursue. b. Sites Rundown: Remainder of Town Recommended Action: Review the list of potential sites and discuss feasibility. Solicit input from the public on the fist and the Committee's discussion. Chair Tucker noted the report is in draft form and will be revised and attached to the agenda for the next HEUAC meeting. Before any parcel is approved for inclusion on the sites inventory list, the HEUAC will have to find that housing is a suitable use for the parcel. The intent of the review is to narrow the number of sites that staff will investigate and the HEUAC will consider after receiving public input. Sites that the subcommittee determines are infeasible or does not review may later be determined to be feasible or potentially feasible and may be evaluated for suitability. Sites may be brought to the subcommittee's attention and may be ultimately included in the sites inventory after public input. In reply to Committee Member ❑eSantis' questions, Chair Tucker related that defining feasible, potentially feasible, and infeasible is more art than science. Crafting definitions other than those previously stated is not possible. The feasibility determination for any site could change if the site is viewed in the context of a vision for the area. However, the State form requires a listing of sites by parcel number. Committee Member DeSantis believed a site inventory is a critical piece of the Housing Element Update, but neither the HEUAC nor the community can provide adequate input without a vision for the major opportunity areas. Seeking community input without providing a vision is meaningless. In response to Committee Member Fruchbom's query, Chair Tucker clarified Committee Member DeSantis's position as the HEUAC should be doing more than reviewing sites. In order to begin the planning process, the HEUAC needs to understand the source of traffic trips and where housing can be placed. Committee Member Stevens noted combining some sites could result in a designation of feasible. Listing more than one parcel number per site on the State's form is probably acceptable. Chair Tucker stated undeveloped sites listed in the sites inventory for the fifth cycle are considered feasible for the sixth cycle. He reviewed the designations for Parcels 1, 2, 3, 4, 6-9, 10, 12, 11, 13, 14-17, 18, 19, 20, and 21.1. Jim Mosher reiterated his request for staff to list the subcommittees and their members on the webslte. He questioned whether the feasibility of sites pertains to technical or economic feasibility; whether income level affects feasibility; the term "remainder of town" when the maps d❑ not show all of Newport Beach outside the Airport Area and West Newport Mesa; and the numbering system for parcels. Housing Element Update Advisory Committee Meeting November 4, 2020 Page 3of5 Chair Tucker explained that the term "remainder of town" resulted from the subcommittee's request for staff to prepare information for certain sites. The subcommittee may have inadvertently overlooked some sites. He reviewed the designations for the Dunes west of the lagoon and Parcels 22, 23, 24, 25, 36, 39, 40, 42, 43, 44, 35, 34, and 33. Mayor O'Neill related that he as Mayor will send a formal invitation for the Irvine Company to participate in the Housing Element Update process unless there are strong objections to doing so. Chair Tucker and Committee Members Kiley, Stevens, Sandland, and DeSantis encouraged Mayor O'Neill to send an invitation. Committee Member DeSantis proposed Mayor O'Neill send invitations to Hoag Hospital, major employers within Newport Center, and churches that own large parcels. Jim Mosher noted there is no analysis or conclusion for Parcel 37. Committee Member Kiley clarified that feasibility for the sites pertains to the ability to physically construct housing on a site. The property owners will determine whether housing is financially feasible. Chair Tucker reviewed the designations for Fashion Island and Parcels 30, 29, 27, 28, 31, 32, 114- 120, 122, 121, 105-109, 104, 110-113, 107 (the County bus depot), 98-102, 103, 91-97, 87-89, 77, 78, 80-86, 57-61, 63-76, 45, 47-56, and 52. Committee Member Sandland proposed revising the designation for Parcels 98-102 and 103 to feasible. The Irvine Company may be willing to discuss Parcels 46-54. Debra Allen, Harbor View Hills Community Association President, reported the sight plane ordinance applies to certain areas and limits building heights in those areas. Jim Mosher remarked that buildings on Parcels 45 and 47-56 should not obstruct views from Fashion Island Circle. Chair Tucker reviewed the designations for Parcels 123, 124, 125, 126, 127, and 128. Committee Member Sandland suggested the subcommittee explore the parcels across Pacific Coast Highway from Parcel 22, the City's Avon parking lot, and the parking lot for Mariner's Square. Committee Member Selich advised that Lower Castaways Park is deed restricted to parkland. Chair Tucker noted the parking lot for Mariner's Square is subject to a height limit and located in the Coastal Zone. In addition, the parking would have to be replaced. Committee Member Kiley indicated a number of lots along the Peninsula and Bay are included in the Housing Element for the fifth cycle and covered by paragraph 1 of the subcommittee's report. Jim Mosher requested the maps reflect the sites listed in the fifth cycle. One or two housing units could be built on a small lot; therefore, small lots should not be deemed infeasible based on size alone. Charles Klobe proposed contacting a developer that is constructing a residential project on a closed landfill to determine if housing can be built on Parcel 128. Housing Element Update Advisory Committee Meeting November 4, 2020 Page 4 of 5 Johnny advised that night lighting around the Library and the Orange County Transportation Authority bus depot needs to be brighter. Mary Ann Soden encouraged the HEUAC to consider projects that provide housing for very -low, low, and moderate -income households. Chair Tucker reported Parcels 45-54, 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. In answer to Committee Member DeSantis' query, Chair Tucker indicated the subcommittee will explore an exchange of zoning for land on which 100-percent affordable housing may be built. Committee Member DeSantis encouraged the affordable rousing subcommittee to explore those possibilities so that the bulk of affordable units is not provided through inclusionary zoning. Chair Tucker requested staff add the sites from the fifth cycle Housing Element to the map. In reply to Committee Member Sandland's inquiries, Chair Tucker related that staff may prepare a tabulation of acreage from sites designated feasible and potentially feasible after learning of property owners' interest in developing housing. Deputy Community Development Director Campbell advised that staff plans to send letters to property owners in the next few weeks and follow up with property owners in an effort to obtain their responses by the end of the year. C. Site Suitability Input and Community Engagement Recommended Action: Receive an overview of the outreach plan moving forward, including how the community will be engaged on the suitability of the sites that are identified as feasible or potentially feasible. Provide feedback and direction to staff and the consultant on the outreach plan. Senior Planner Ben Zdeba reviewed public engagement opportunities in October through HEUAC, City Council, and Planning Commission meetings and a virtual community workshop and in November through HEUAC, City Council, and Planning Commission meetings, two virtual housing suitability workshops, and a virtual Circulation Element workshop. The housing suitability workshops will begin to consider density, which has policy implications. The public will be able to comment verbally and through the chat box and to respond to polls during the housing and Circulation Element workshops. In answer to Committee Member DeSantis' questions, Senior Planner Zdeba advised that the public may provide feedback regarding parcels identified by the subcommittee and other parcels during the workshops. On the Newport Together website, community members may place pins on a GIS map to indicate their preferences for locations of housing types. If the HEUAC agrees with the plans for November workshops, staff will begin an extensive promotion of the workshops through social media and email blasts. Committee Member DeSantis suggested posts and emails contain a link to Newport Together and information about providing feedback through the website. Senior Planner Zdeba noted a potential social media campaign to drive more traffic to the website. The City's appeal of the RHNA allocation should be resolved in February 2021. If the City's appeal is successful, the City's allocation could theoretically be reduced by half. Committee Member DeSantis commented that focusing messaging on the needs of the community rather than a State mandate could generate more community interest and feedback. Housing Element Update Advisory Committee Meeting November 4, 2020 Page 5of5 In response to committee Member Stevens' inquiries, Senior Planner Zdeba indicated the potential housing sites will be divided between the two housing workshops. Activities utilized during the workshops will be available on the website for the public to provide feedback after the workshops. Staff has prepared a flyer promoting the workshops to distribute in the community. Chair Tucker remarked that "none of the above" will not be a response to questions about locations for housing because the City has to find enough sites to comply with the RHNA allocation. Jim Mosher inquired whether the workshops will extend for the full two hours. He suggested staff publish questions from the workshops ahead of the workshops so that community members have time to consider their responses. Community members are less likely to provide feedback if they feel it will not have a practical effect on HEUAC discussions and decisions. Debra Allen suggested information for the workshops include a list of sites to be discussed in each workshop and instructions for participating in polling and verbal and chat box comments. Senior Planner Zdeba clarified that flyers will include a list of areas to be discussed in each workshop. Discussion topics for the workshops will be published on the website prior to the workshops. The workshops will extend for two hours unless the public completes their questions and comments in less than two hours. Mary Ann Soden concurred with requests for publication of workshop information and suggested staff promote the workshop in print media and allow the community to participate in workshops from the Community Room. Chair Tucker advised that the HEUAC will not meet on November 18, 2020. VI. ADJOURNMENT — 8:04 p.m. Next Meeting: November 18, 2020, 6 p.m. in the City Council Chambers. CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES ZOOM WEDNESDAY, DECEMBER 2, 2020 REGULAR MEETING — 6 P.M. CALL MEETING TO ORDER — 6 p.m. 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 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 2of7 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. CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES ZOOM MEETING, NEWPORT BEACH, CA WEDNESDAY, JANUARY 20, 2021 REGULAR MEETING — 6 P.M. 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 151h 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 4of6 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 $200,0004300,000. 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. CITY OF NEWPORT BEACH HOUSING ELEMENT UPDATE ADVISORY COMMITTEE MINUTES ZOOM MEETING, NEWPORT BEACH, CA WEDNESDAY, FEBRUARY 3, 2021 REGULAR MEETING — 6 P.M. CALL MEETING TO ORDER — 6 p.m. II. WELCOME AND ROLL CALL MEMBERS PRESENT: Chair Larry Tucker, Jeffrey Bloom, Susan DeSantis, Paul Fruchbom, Elizabeth Kiley, Geoffrey LePlastrier, Stephen Sandland, Debbie Stevens Qoined at 6:06 p.m.), Will O'Neill (Ex Officio) (joined at 6:03 p.m.) MEMBERS ABSENT: None 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 Jim Mosher expressed surprise to learn of an unscheduled vacancy on the Housing Element Update Advisory Committee (Committee) and the qualifications for the position. The enabling resolution does not contain a position with the qualifications listed for the vacant position. Also, the enabling resolution designates the current Mayor as the Council's representative to the Committee, and Council Member O'Neill is no longer Mayor. IV. CONSENT CALENDAR a. Minutes of January 20, 2021 Meeting Recommended Action: Approve and file the minutes of January 20, 2021. Chair Tucker moved, seconded by Committee Member Bloom to approve the minutes of the January 20, 2021 meeting with revisions proposed by Jim Mosher, Hoiyin Ip, and Chair Tucker. AYE: Tucker, Bloom, DeSantis, Fruchbom, Kiley, LePlastrier, Sandland NO: None ABSTAIN: None ABSENT: Stevens V. CURRENT BUSINESS a. Subcommittee Progress Reports Recommended Action: Receive verbal updates from each subcommittee, as appropriate. Housing Element Update Advisory Committee Meeting February 3, 2021 Page 2 of 6 Chair Tucker reported he provides the affordable housing memorandum to parties who contact him about affordable housing. Based on comments submitted to him, he will revise the memorandum and circulate it to the Affordable Housing Subcommittee for approval. In addition, he received requested information for the memorandum pertaining to sites in the remainder of town after the agenda deadline for the current meeting. Updated memoranda will be placed on the agenda for the next Committee meeting. b. Feasibility of Housing in the 65 dB CNEL and Subcommittee Action Report Recommended Action: Receive an update from Committee Members Sandland and DeSantis on their exploration of properties as being "potentially feasible, " "feasible, " or "infeasible" within the 65 dB CNEL areas near the John Wayne Airport. Discuss the analysis prepared and receive and file. Committee Member Sandland advised that the subcommittee only considered parcels that were physically able to accommodate housing in place of or in addition to the current use of the parcels. Parcels were designated as feasible, potentially feasible, and infeasible. He provided the subcommittee's criteria for designating sites as feasible, potentially feasible, and infeasible. Parcels that are overlaid with a CNEL contour greater than 70 dB were deemed infeasible. The Airport Land Use Commission (ALUC) has established Site Safety Compatibility policies. Zones 1 and 2, Runway Protection Zones, prohibit residential uses within the zones. Zone 3 is the Inner Turning Zone. Zone 4 is the Outer Approach/Departure Zone, and the basic compatibility indicates residential uses should be limited to low density. Zone 5 contains properties immediately adjacent to the runway and prohibits residential uses. Zone 6 is called the Traffic Pattern Zone. The compatibility policies state that residential land uses shall be allowed in this area. The subcommittee considered these basic compatibility qualities and determined that Zones 1-5 would be infeasible, and Zone 6 could be considered feasible or potentially feasible. John Wayne Airport (JWA) and the City both utilize CNEL contours of 65 and 70 dB, and the subcommittee did not explore alternatives. The subcommittee does not have all the facts regarding the various parcels; therefore, the designations are subjective. Some of the parcels could be reclassified as feasible, potentially feasible, or infeasible. Staff will contact the owners of properties identified as feasible or potentially feasible. Before the Committee approves any parcel for the site inventory list and after public input, the Committee would have to find that housing is a suitable use. Additional deliberations regarding suitability will involve density and could involve development standards. The subcommittee does not endorse housing on any particular site but has narrowed the list of sites that staff will review and that the Committee will consider adding to the site inventory after receiving public input. Jim Mosher remarked that the 65 dB contour is very old. The actual contour changes with the flight patterns of aircraft departing JWA. The 65 dB contour has contracted such that almost all of Campus Drive is located outside the contour. Chair Tucker noted the Committee did not consider the 65 dB area initially but may have to if sites are needed. Deputy Community Development Director Jim Campbell agreed with Mr. Mosher in that noise contours change with traffic at JWA. For planning purposes, the adopted Airport Environs Land Use Plan is the determining factor. Staff anticipates a change over time but not a remarkable change. Some of these sites may be needed to fill a gap between required and identified sites. Sites within the 65 dB noise contour may be the last sites included on the list because of noise. Housing Element Update Advisory Committee Meeting February 3, 2021 Page 3 of 6 Chair Tucker added that there may be more opportunities for more affordable units at these sites. Brett Feuerstein, owner of a portion of the Newport Beach Golf Course, indicated the property is located within the 65 dB CNEL and split between Zones 6 and 4. If the City needs to utilize sites within the 65 dB contour, the property would be perfect for some type of residential use. Based on his interpretation of the Airport Safety Zones, a residential use located in Zone 4 should have a density equal to the average density of all surrounding uses. If needed, the property could provide up to 100 units Chair Tucker requested staff review the details of Zone 4 because the summary language for Zone 4 is confusing. In response to Committee Member Kiley's inquiry, Mr. Feuerstein felt a density that provided more than 100 units might be aggressive for Zone 4. The portion of his property located in Zone 6 could provide up to 50 units per acre. Committee Member Sandland reviewed the subcommittee's designations for Parcels 1, 1.5, 2, 3, 4, 6, 7, 8, 11, 48, 50, and 9. At the Committee's request, Committee Member Sandland only went over Parcels 17, 19, 21, 22, 29, 24, 41, 41.1, 114, 115, 119, 122, 123, 124, 125, 126, 128, 129, 142, 141, 146, 147-155, 158, 163, 165-169, 156, 157, 159, 160, 161, 189, 190, and 191, which the subcommittee designated as feasible or potentially feasible. Committee Member Bloom noted that constructing a parking structure on the portion of the Newport Beach Golf Course property located in Zone 4 and constructing residential uses on the portion in Zone 6 may be feasible. Committee Member Stevens concurred with Mr. Mosher's concern about relying on old data, equipment, and aircraft and with Deputy Community Development Director Campbell's comment that this is the data we are stuck with. The subcommittee handled the analyses well and found some potentially decent -sized parcels. Chair Tucker related that the Council will have to deal with the safety issue if units within the 65 dB CNEL contour are needed to meet the Regional Housing Needs Assessment (RHNA) number. Committee Member Sandland added that the subcommittee attempted to follow policies from the Basic Compatibility Qualities. Charles Klobe remarked that Mr. Feuerstein proposed low-income housing in the form of condominiums and questioned whether Mr. Feuerstein understands that the Committee is looking for low- to very -low-income units. Chair Tucker clarified that some of the property may be condominiums, but they would not be affordable housing. Nothing will be built if the burdens of affordability render projects infeasible. The State will have to confront the low-income issues when it reviews Housing Elements submitted by 197 jurisdictions. Deborah Allen felt a residential project at the Newport Beach Golf Course would be wildly popular with the Newport Beach community regardless of density and affordability because development would constrain John Wayne Airport's (JWA) expansion. Housing Element Update Advisory Committee Meeting February 3, 2021 Page 4of6 C. Approach for Accessory Dwelling Units (ADU) Recommended Action: Receive an overview of the possible approaches for using ADUs to count towards the RHNA requirement. Chair Tucker commented that ADUs as potential units are different from other housing types. Assumptions have to be made in estimating the number of units that will be built. The City will receive credit for ADUs at certain affordability levels that are quite attractive. The disadvantage to ADUs is they may be built next to neighbors who are not expecting them. The Council will have to set the policies. David Barquist, Kimley Horn and Associates, reported the memorandum describes the process and considerations for ADUs. Attached to the memo are the Southern California Association of Governments' (SCAG) methodology and excerpts from the Site Inventory Guidebook developed by the California Department of Housing and Community Development (HCD). ADUs are one strategy to accommodate growth needs, and single-family residences and multifamily developments will be needed to accommodate growth. HCD's approach to counting ADUs is called the Safe Harbor Approach and utilizes historical trends to project a yearly average of production over the course of the planning period. This approach eliminates the need to calculate affordability levels. Supplemental policies and programs may be needed to encourage development of ADUs. In response to Committee Member Fruchbom's query, Mr. Barquist indicated ADU production has been approximately 25 units per year, and projecting that over the planning period provides the City's Safe Harbor. Mr. Barquist continued the presentation, stating the ADU unit yield is 200 for the planning period. The City may take a more aggressive approach and adopt policies and programs that support a more aggressive approach. HCD will review these aggressive approaches on a case -by -case basis. The City is obligated to perform to the aggressive approach through the planning period and should balance its vision with a realistic projection to avoid no net loss implications. In answer to Chair Tucker's inquiries, Mr. Barquist explained that theoretically the City could accommodate 4,834 ADUs. The question is the realistic number of ADUs that can be built during the planning period because the City is obligated to produce that number of ADUs. The Council will have to balance the tensions among the policies it creates for each type of housing. In his experience, jurisdictions are utilizing the Safe Harbor Approach. Principal Planner Jaime Murillo advised that housing laws require the City to plan and zone for a variety of housing types and different densities. ADUs are viewed as an alternative to the sites inventory. HCD staff has stated clearly that the Safe Harbor Approach is acceptable, but they are open to an aggressive approach. Because the majority of ADU applications are pending in plan check, staff has to ensure the ADU projections for the Safe Harbor Approach are appropriate. A projection of 1,000 ADUs may be aggressive. While ADUs are allowed in any residential zone, there has to be a demand for ADUs. HCD will likely request a monitoring program for an aggressive approach. If the City does not meet its production targets, HCD will require the City to find alternative sites. In reply to Committee Member Stevens' queries, Principal Planner Murillo stated HCD will probably not require monitoring for a Safe Harbor Approach. However, recent conversations with HCD staff seem to indicate monitoring may be required for a Safe Harbor Approach. Mr. Barquist indicated Housing Element Update Advisory Committee Meeting February 3, 2021 Page 5 of 6 the City may adjust its zoning for other housing types if ADU production exceeds projections. Basically, the City has to show it can accommodate its unaccommodated need. In answer to Committee Member Sandland's question, Chair Tucker reiterated that the City would have to justify its ADU projections regardless of the method for calculating the projections. Committee Member LePlastrier indicated he is working with family members to plan an ADU. The cost for a freestanding ADU is approximately $300 per square foot. Committee Member Kiley believed a projection of 400 ADUs is realistic with the recent changes in housing laws. An amnesty program for existing illegal ADUs could capture additional units. Projecting the number of ADUs based on a percentage of single-family lots is reasonable. Committee Member DeSantis concurred with the feasibility of a projection for more than 200 ADUs. San Diego is exploring ways to provide financing and preapproved architectural drawings and site plans for ADUs. Using best practices from other Southern California cities, the City should be able to craft a program that will support an increase in the projections. Developing a program that makes sense for Newport Beach, is supported by the community, and facilitates this is reasonable. In response to Committee Member Kiley's inquiry, Committee Member DeSantis advised that staff has access to the Turner report and the website for best practices. Nancy Scarbrough supported an aggressive approach because there is no history for ADUs. With education, Newport Beach residents would probably strongly prefer 2,000 ADUs over tens of thousands of high -density units concentrated in the City. Once the City zones for high -density projects, it will be impossible to reduce that zoning. Charles Klobe supported an aggressive approach. The report indicates Newport Beach's historical rent for an ADU is approximately half that reported in other jurisdictions. That history of low rent should support an aggressive approach for low- and very -low-income ADUs. Achieving 2,000 ADUs over the next nine years is highly likely. Chair Tucker commented that affordable units have to happen on private property, and private developers are not going to lose money to build affordable housing. The construction of affordable units just is not going to happen as designed. VI. ADJOURNMENT — 7:42 p.m. Chair Tucker noted on March 17, 2021 the Committee is scheduled to make a recommendation for the Planning Commission and City Council to consider in April. The Committee will likely continue working on the sites inventory after it makes a recommendation. Deputy Community Development Director Campbell reported a first housing opportunities list will be presented at the next meeting. A public workshop regarding the policy framework and the first sites analysis is scheduled for February 241h. The process will repeat in March. The Council study session on February 9, 2021 will include the RHNA appeal, the Committee's progress, and ADUs. In answer to Committee Member DeSantis's question, Deputy Community Development Director Campbell related that a workshop for the Circulation Element will be held on February 10. Housing Element Update Advisory Committee Meeting February 3, 2021 Page 6of6 Next Meeting: February 17, 2021, 6 p.m. via Zoom. City of Newport Beach 2021-2029 HOUSING ELEMENT Public comments received regarding the Housing Element Update. Personal addresses and contact details have been redacted for piracy. A summary matrix of public comments to the Draft Housing Element is provided in this section. Appendix C: Summary of Community Outreach (September 2022 Final Housing Element) C-14 City of Newport Beach - 2021-2029 HOUSING ELEMENT Public Comments Matrix The following table provides a summary of comments received during the 30-day public review period of the draft Housing Element Update. The City has reviewed and considered these comments in the deve lopmentofthe revised Draft Housing Element. Responses to community comments, as appropriate, are included in the table. Public Review Draft Comments Response to Comments I have concerns regarding the low-income housing project. I picked Newport Beach to be my home for its The City is obligated by exquisite style and I pay a hefty tax fee to keep it this way. Adding low income housing will impact us negatively state law to identify sites by so please stop this project. various income categories throughout the community. I assumethe "inventory area" is acreage, I see Banning Ranch is listed at 46 acres. Is this net acres, not Net acreage is the assumed inclusive of sensitive habitat? If this has not been vetted, the assumed density may not be accurate or acreage used for calculating comparable if you have to cram more units on less footprint. unit yield and may be less It doesn't seem logical to me to include Banning Ranch as 1 of 3 major focus areas (ie. Airport Area - 2,022 than total acreage of the units, Newport Center- 1,814 units and Banning Ranch - 1,375). These are fairly comparable total net unit site. numbers, but the locations are vastly different. The Airport Area and Newport Center both clearly meet the SCAG/RHNA requirements for focusing 50% on transit -oriented locations and 50% on those with job Banning Ranch focus area is accessibility. The allocation of units between these 3 areas doesn't seem to be proportionate to the goals. identified in the current Beyond this, Banning Ranchseems to be a much more environmentally sensitive area. General Plan and is Lastly, it seems very aggressive and unfeasible to propose 1,375 units on Banning Ranch afterthe last plan that generally consistent with Coastal Commission voted down was based on a developer -proposed "reasonable" number of 895 units. the assumptions in the Increasing the proposed unit target over what has already been rejected seems like an exercise in futility. Housing Element Draft We need housing. The Banning Ranch site needs to be considered. But perhaps it is more practicalto target +/-895 units. City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments Please preserve our popular and irreplaceable community recreational asset that will be lost if you rezone the Recreation, infrastructure, Newport Beach Golf Course on Irvine Ave. nearthe airport. We love it and need it far more than more housing. safety are examples of the considerations when identifying future feasible housing opportunity. Please vote against the re -zoning of Newport Beach Golf Course! This course is a staple within our community! Comment Noted. It creates great value and beauty within our neighborhoods. It would be such a disservice to remove any part of the golf course! With having such a year of staying home due to the pandemic I know of countless Newport families who have enjoyed this [Golf] course and it's beautywhich helped tremendously with being able to be outside safely. What a terrible shameto take it away! Please reconsider by maintaining Newport Beach's open spaces and please don't bend to the pressure like other cities have succumbed to by jamming structures on top of one another. NO on rezoning golf course. Green space cannot be replaced. Our quality of life is at stake Comment Noted. Please do not rezone the Newport Beach golf course off of Mesa and Irvine. It will take awayfrom the Comment Noted. character of the community and city and we really don't have a lot of open space. I strongly oppose the low- income housing or any additional housing for that area. That golf course brings a lot of joy to the below average golfer who just wants to socialize and learn the game and that is a good thing for the sport as well. We do not need any more high/medium density housing made out of cheap materials that are popping up all Comment Noted. over Newport Beach. They look like units that are designed for affordable housing placed on prime real estate. Keep our green spaces exactlythat and create a park with recreational facilities for our families. We do not need any more housing in Newport Beach. This just adds to more crowded living, traffic congestion, and widening of streets. We are stronglyagainst the rezone of Newport Beach Golf Course and want to see it remain as -is. It is an Comment Noted. irreplaceable community recreational asset. Changing this for residential will set a bad precedent for development and elimination of othergolf courses, parks, sports fields, beaches, open space, Back Bay, etc. Housing without such extremely negative impacts can be done with free market incentives by higher density rezoning of existing residential/commercial but never on open space, a red line that cannot be crossed. City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments Please do not rezone the Newport Beach golf course off of Mesa and Irvine. It will take away from the Comment Noted. character of the community and city-- we really don't have a lot of open space. I stronglyoppose the low- income housing or any additional housing for that area. That golf course brings a lot of joy to the below average golfer who just wants to socialize and learn the game and that is a good thing for the sport as well. I've lived in Newport since 1975 and I'm saddened by all the changes - it's alreadytoo crowded and this would just add to it. As a resident and neighbor in close proximity to the proposed location for rezoning on Birch St in Newport Comment Noted. Beach, I'd like to let my voice be heard and vote NO to the proposed changes. This area is an extremely high traffic area. Cars can often be seen racing up and down the area. There is a lot of congestion in this area. It's not an ideal corner for walking or stopping for an entrance. The golf course keeps the lands beauty and allows for recreational ratherthan loading this high traffic area into an even bustier and more dangerous intersection. There have been several deaths at this intersection and countless accidents. Having small children and being so close we don't want to exacerbate the problem of high -density traffic when we are already challenged with so many break-ins. In addition to keeping this portion of Newport Beach recreational is ideal. It really makes the land desirable and beautiful considering we have enough traffic and pollution living next to the airport. Please keep the space green & for recreational purposes. Please DON'T rezone holes 3-8 on the Mesa Dr side. This is a popular and irreplaceable community recreational asset that will be lost if rezoning happens. For the good of the community please reconsider and vote no to rezoning this gem. I am reading the housing element, and I got to the bottom of page 72 here: The additional information https://www.newportbeachca.gov/PLN/Housing Element Update/March 10 2021 Draft/Section3 Ho has been added to this section and is provided in usingConstraintsandResources.pdfAt the bottom of the page, the last sentence says, "Other programs that affirmatively further fair housing and implement the Al's recommendations include:" But the next page is the the Draft submittal to HCD. next section. There is no list of programs. I am against the City of Newport Beach changing the land use of the Newport Beach Golf Course and possibly Comment Noted. the YMCAto make way for new housing in the Bayview Heights neighborhood. We do not want or need the zoning changed to make our area more dense. Our community is a small one already and now you want to over build it and make it more dense. The city has already approved rezoning for a multi storysenior care facility where Kitayama was on Bristol even though the neighborhood was against it. 3 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments Now you want to build 100's of houses on the others ide of our neighborhood on Mesa Dr. Where does it end? It's a total money grab for millions of dollars once the land is sold for development. Plus, residents enjoy the recreation facilities like the public golf course and the YMCA. The city is rezoning plenty around other parts of Newport Beach so please leave the Back Bay alone so we may enjoy the little open space we do have. I am not understanding "Element" I know the words land & housing. What is the proposal in plain language "Element" is a term used in that the city wants to do? state housing element law to describe the different Chapters of the General Plan. The General Plan is a policy document adopted by Resolution of the City Council. This is not going to happen...???? Howwhere and why? Can I build a 60 story 300 unit high rise oceanfront in Comment Noted. Com??? You get me the land I can get it built. ridiculous. Can you add me to the City's mailing list so that I can receive updates regarding the Housing Element Update? I Interested parties can am a resident of Newport Beach and I work for a residential and mixed -use develope r/homebuilder, so I'd like contact Citystaff or visit to be involved in the update process and be a resource for the City in meeting their RHNAallocation. www.NewportTogether.co m to register for regular updates. WE ARE EMPHATICALLY OPPOSED TO NEW CONSTRUCTION ATTHE NEWPORT BEACH GOLF COURSE (Birch Comment Noted. Street/Mesa). This type of development will negatively impact our neighborhood on many levels. Rezoning Newport Beach Golf Course, a popular and irreplaceable community recreational asset, for residential Comment Noted. will set precedent for development and elimination of other golf courses, parks, sports fields, beaches, open space, Back Bay, etc. Housing without such extremely negative impacts can be done with free market incentives by higher density rezoning of existing residential/commercial but never on open space, a red line that cannot be crossed. 4 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments My mother is an over 50-year resident of Newport Beach. She does not use a computer but is interested in Interested parties can following the General Plan Update. Could you please mail her hard copy updates? contact City staff if they require special accommodations. My property is identified as site #161. Please withdraw or remove from consideration. I do not want my By Council direction, property changed in use or zoning from high rise office. I am not interested in very low-income housing. Do I property owners who have need to have an attorneyaddress this to insure that my site is removed from this plan and appendix B? requested removal from consideration will be granted that request. I know the Cityhas alreadyappealed this arbitrary allocation of housing units and was denied, but I'm The Citywill continue to be encouraging you to continue to push back. actively involved efforts Please tell us how we can unify as a group to counter this overreach and intrusion into a city's right to plan its related to RHNA allocations future. and will proactively monitor Do we have any legal options, or does this have to be fought from a political angle? For now, please only local and state efforts submit the minimum number of units required by RHNA. The more we can reduce the number of units we have during and afterthe to build, at the same time stretching out the years over which they are built, the more we will have a chance to Housing Element Update eliminate, or mitigate, the impact this forced housing will have on our community. We have many acres of land process. that are either unsuitable, or unbuildable, without major grading and destruction of beautiful natural terrain - Coyote Canyon and Banning Ranch, to name two. If the number of availableacres is reduced due to inviability The City is concurrently (i.e. Coastal Commission or difficult terrain), does this reduce the number of units we're required to build? updating the Circulation Have we already counted all the affordable "over -the -garage" and "behind -the -house" units that may be un- Element and will include an permitted, but could be counted as housing units? Environmental Impact Report that will address the Traffic, water and Resources: potential impacts to traffic, We can't handle the traffic we have now: many residents rate traffic congestion as their biggest complaint. water and other resources. Traffic from 4800+ housing units will only exacerbate this problem. If there is another water shortage like the The Sites analysis, Appendix one a few years ago, there will probably need to be rationing to provide for these additional housing units. Has B, describes the intended 5 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments that been factored into the equation? Who is going to pay for the increased police, fire and emerge ncyservices location of potential rezone that we will be burdened with? sites Whereto put the initial housing: Since the majority of these new units are to be moderate, low and very low income housing, this means higher density and taller buildings. The area by the SNA Airport (where I live) would be the most logical and appropriate area to put the majority of this high -density housing: it would be compatible with the multi -story commercial buildings and hotels that exist there now. Also, this area's proximityto major freeways would lessen the traffic traveling through our city. Please do not touch the Newport Beach Golf Course in the Back Bay- our city needs these public recreational areas. Yachting,golf, tennis, hiking and outdoor activities are central to our community. Please keep this housing away from the coast -there is already enough traffic congestion there, as well as serious concerns and objections to higher buildings, increased density and incompatibility with existing neighborhoods. We stronglyoppose this [rezoning the NB Golf Course to build housing]! Irvine Ave has just recently been Comment noted. expanded from Bristol to Mesa and can not handle much more traffic during prime drive time. From Mesa to University, it is always backed up. The traffic and negative impact will be horrendous. I hereby voice my objection to the conversion of public land currently utilized as a golf course to multidwelling Comment noted. housing. This proposal is not in the best interests of the citizens of Newport Beach and any progress to move forward with the transaction will result in alienating your constituents. The congestion that is already significant along this stretch of Irvine Blvd, Bristol, 73 FWY and the other streets adjacent tothe Orange County Airport will only increase with this rezoning. Please do not approve the rezoning of this area. The Commission discussed among other things the Sight Plane Ordinance which is a protected view plane The Sight Plane Ordinance granted in 1971 by the Irvine Company to Harbor View Hills. It limits building heights in Corporate Plaza and has been discussed with the Corporate Plaza West to roughly 32 feet. The Planning Commission concluded the Sight Plane Ordinance states City Council and is a a long established City Policy that should be maintained and protected in the zoning or design standards for re- consideration in the development in the area it covers when the housing element is adopted. Please protect the Sight Plane identification of opportunity Ordinance. sites and future rezoning actions. City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments NBGC owner wants big property value increase by using State housing mandate to get otherwise impossible rezoning from golf course to high density residential but NBGC is more popular and profitable than ever with good return on investment Comment noted. Housing Element has many existing commercial and residential zone properties with free market incentives for high density housing without the many negative impacts, consequences, and ramifications of developing the golf course: 1. loss of golf course and open space 2. sets precedent for development on other golf courses, parks, sport fields, and open space. 3. consideration of new housing directly under flight path contradicts many years NB working for curfew, for noise reduction, against increased flights, against airport expansion, etc. andwill make opposition to future airport development less credible and effective. 4. new housing under flight path contradicts when airport impacts were used to justify eminent domain taking of many neighborhood homes for Birch St office development. 5. elimination of front 9 would reduce viability of existing 18-hole golf course and open the door for development and runway extension on driving range parcel and County owned back 9. 6. inappropriate use of recreational open space for residential will generate public opposition to entire Housing Element plan Please remove NBGC from Housing Element list before going to the next review level, maintain golf course protective zoning, keep one of the good reasons we enjoy living here, and save us all time energyand frustration dealing with this completely unacceptable proposal. One of the beauties of our area is the surrounding recreational/open space. This zoning is for the benefit of not The Housing Element only our neighborhood but for all Newport Beach residents, surrounding communities and visitors alike. If the identifies candidate sites for proposed rezoning is approved the impact would destroythe intent that was meant for the entire community potential rezones. State law to enjoy. I urge you NOT to consider the proposed rezoning. obligates the Cityto identify adequate sits to accommodate future project housing need. 7 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments The Newport Beach Golf Course is part of the community. A place where the community can come together Comment noted. amidst all the chaos and enjoy the outdoors. A place where families and residents alike can spend a day on the course with no worries. I stronglyoppose the rezoning efforts and hope CityCouncil rethinks this change. I live close to the proposed location [NPB golf course] and am extremely concerned about all of the problems Comment noted. resulting from the congestion that this proposal would cause. Please do NOT rezone this area and remove this proposal entirely from this location. It simply cannot supportthe increase in traffic and other related issues. Our specific concern and opposition relates tothe parcels located near and on the current public golf course on Comment noted. Irvine Avenue, Birch, and Mesa streets. 1. Our neighborhood already experiences speed and traffic issues, whetherfrom speeding neighbors or those businesses (delivery or adjacent) using our adjoining streets to bypass traffic on Irvine, Birch, or Bristol. More housing will only contribute tothose safety risks. It is unclear how related circulation and transportation plans would evolve as part of the drafted/planned developments. Our immediate community has witnessed at least a half dozen traffic -related deaths in the immediate area, including pedestrians, motorcyclists, and auto drivers. We've even witnessed a helicopter crash that killed three and plane crash that also killed three nearby. As you know, the proposed development is directly under the flight path of flights from J WA. 2. We live in a beautiful City whose residents value open space and the natural areas in, around, and through our neighborhoods. Replacing the open spaces with residential or commercial development will further impede into and degradethe City's natural habitats that make us unique, robbing our families of the public space experience we've come to enjoy and hold dear. 3. Significant environmental impact can be expected not just in the area currently defined by the golf course, but to the watershed feeding to and from the Back Bayand the natural preserve surrounding it. 4. While it is unclear how any of the development and infrastructure will be funded, we are concerned our families will bear some financial burden in supporting the potential developments. Development of any portion of the golf course is not a solution we can or are willing to support. Please help us in preserving the City we want to commit to in the long term. I do not support the near 100% buffer and the inclusion of almost 10,000 units in the Housing Element. I The Housing Element understand the need for a buffer, but not more than 15-20%. I would rather see us have to review/revise our identifies potential sites to w City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments Housing Element in a few years, as opposed to suggesting that an extensive amount of existing commercial accommodate future areas be converted to residential (or mixed uses). I would like to seethe path that other cities take, review projected growth and does comments from HCD, and see if there area ny changes instate law before the City makes this kind of drastic not represent actual move. Newport Beach is not alone in its concern with the RHNA allocations and requirements. I disagree with construction. Sites moving forward with the planning efforts to allow this many housing units. identified in the Housing Element mayor may not be utilized in future rezoning efforts. The buffer is used to protect the Cityfor the implications of no net loss provisions in state law. There is currently nothing to cap the number of housing units that could be constructed in the Housing The potential overlay zones Element to 4,845 units. Before the Housing Element is approved, those caps must be in place, e.g., zoning or other appropriate zoning overlays that limit the development in each study area of the city. I believe those overlay zones should tool will be adopted recognize existing ordinances. For example the City's Sight Plane Ordinance, (#1596) that limits the height of subsequent to the Housing all buildings and landscaping to a maximum of 32 feet which applies to the sites in Corporate Plaza, Corporate Element. Provisions related Plaza West, and CdM Plaza should be identified. to existing policies will be considered as these amendments are made in the future. I believe that we should be more aggressive in the use of ADUs and JADUs to help reach our RHNAgoals. While The accommodation of I don't think we can meet our entire RHNAgoals with ADUs, I believe the number should be at least double the RHNA need is identified in 334 units that are currently shown in the Housing Element. This topic has been discussed a number of times at the Housing Element by a the Housing Element Update Advisory Committee meetings and there appeared to be general support for an variety means including increase into the 700-800-unit range. The laws regarding ADUs have recently been implemented and are overlay zones, existing beginning to be used more widely throughout the City. I think we should take advantage of that in our Housing 0 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments Element and that 700-800 ADUs would be easily achievable. Inaddition, an active program toencourage and entitled projects, available look for unpermitted ADUs should be implemented to take credit for existing, unpermitted ADUs. Since ADUs vacant land and ADU's. are by definition 47% low-income, it's very helpful to our RHNA compliance without impacting any one area of The policy program contains the City. a policy addressing unpermitted ADU's. The goal of the State in developing the RHNA numbers has been to provide a better housing/jobs balance so As a built -out community that people do not need to drive large distances togetto work. The strategy inthe Housing Element has been with severelylimited vacant to find undeveloped space, primarily in commercial areas of the city, for development of low-income housing land, the majority of new (since the city is largely developed). If we rezone our vibrant commercial areas for residential development, development opportunity we potentially reduce the employment opportunities and further impactthe housing/jobs balance. I would like will occur on infill, existing to stress this point to the state. developed parcels. I remain concerned that more housing has been suggested inthe industrial portion of the City. Specifically, As a built -out community identifying a metal plating facility (Hixson) that is contaminated and undergoing remediation as a potential site with severelylimited vacant for housing and increasing housing near the site, is very poor planning and potentially dangerous. While the land, the majority of new site will likely be remediated, it is doubtful that it would be availablefor residential housing anytime soon. development opportunity will occur on infill, existing developed parcels. We have watched our neighborhood start to transition from an 'empty nester' community to now a 'family' Comment noted. community. Adding a large "low income" apartment complex where open green space is currently located makes no sense from the perspective of creating a family community atmosphere. The more recent families making up our neighborhood have kids that enjoy the 2 parks on Mesa Drive along with the horse trails adjacent to the canal that butts up to the apartment site. This is a disaster waiting to happen and we are totally against it. I am opposed building 100's of units where the golf course back nine is now. Keep our open space! Comment noted. The rezoning of the NBGC front 9 to low income housing is a seriously bad idea. This area is directly under the Comment noted. flight path of John Wayne Airport, falls within an upscale residential community and adds to the overall congestion we experience every day in the area. This is literally the opposite of progress. Why not purchase the property instead. Leave it a golf course or park. Contribute to the natural environment. We don't want to 10 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments see more cars, trash cans and congestion. This is Newport Beach. Not a place that really needs low income housing. Plenty of that exists in ruined communities already like Santa Ana, Anaheim and Garden Grove. Our area alreadysuffers from poor leadership associated with airport expansion. I am adamantly opposed to such a move [rezone part of the Newport Beach Golf Course]. I oppose a housing Comment noted. project there, and any rezoning of this area ... and urge you to take the housing item off the table at this location. I remember losing the Bayview Elementary School on the bluff to high density housing townhouses. And now many of our streets have been rezoned to office buildings. The Newport Beach Golf Course is not only an integral part of our community, but a welcomed breath of fresh air and open space for everyone to come enjoy. It's also one of the very few or only affordable golf facilities open to the public in this area for families to learn and enjoy the game. And it provides a much -needed attractive relief to the corner of Irvine Ave and Mesa Dr. I strongly urge you to leave the Newport Beach Golf Course as it is for all to enjoy, and to maintain the aesthetics of our community. It is hard to briefly summate why all the reasons that turning the golf course into a high -density low-income Comment noted. housing project is a bad idea. Some of the more apparent issues are CEQA related in terms of noise and traffic. Also, removing the only affordable public golf course in Newport Beach is sad to consider. I understandthere may be housing mandates but the folks at this end of town seem to take on an unreasonable burden for solving these types of issues. Please remove this property from consideration. I stronglyoppose the golf course housing project. We want to preserve this are as it is not expand it. Comment noted. Absolutely not! As a local resident and taxpayer, I am against this rezoning [of the Newport Beach Golf Course for high density, Comment noted. low income housing] and am highly concerned about the traffic issues that will compound to an already busy area. We witness at least 1 major accident a month that occurs on the corner of Mesa and Santa Ana and can't imagine how many more there are that we do not see while we are at work. This rezoning is not good for the overall local community, traffic, and safety. I DO NOT support this rezoning and truly encourage to reevaluate this decision. I am completely against the rezoning of the Newport Beach golf course!!! No more High -density housing!!! I Comment noted. live off of Mesa Dr. The traffic alone is unbearable, my son was hit by a car, due to excessive parked cars on 11 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments Mesa Dr. from overflow parking of high -density housing. I can't even pull out of my street without taking a chance of being hit. I'd like to voice my opposition to any plan to rezone the golf course and build high density housing to replace it. Comment noted. Please take this location off consideration. Bayview Heights has alreadygone through a lot of rezoning with office buildings all around us. We want to continue to enjoy and use the open space of the golf course. We like having open spacejust like other communities around Newport Beach. Please stop picking Bayview Heights to rezone. I am against any rezoning or development to any portion of the Newport Beach Golf Course. I stronglyoppose the rezoning of the Newport Beach Golf Course - holes 3-8 (lots 23,24,25,26) and the golf Comment noted. course project. Please take this housing item off the table at this location. Bayview Height is special and unique to all who live here. Living here, we put up with the airport noise and office buildings all around us. Now you want to get rid of our open space (NB Golf Course) and subject us to high density housing. Many people use the NB Golf coursefor great recreation. It will be a great loss to our community. We want to keep the golf course as open space so it can continue to be utilized as an affordable recreational area. Please rethinkthis. You are trying to develop too much in the airport area. We are a small neighborhood, please do not overcrowd us with high density housing. My wife and I are ADAMANTLY OPPOSED tothe potential rezone of the Newport Beach Golf Course to a Comment noted. development for low income housing. The Cityof Newport Beach would be better suited to re -developing this location to one that supports the existing population of the city and creates tax dollars and/or a location that will support further business growth. Low income housing developers will "Sell" cities on the needs of low income housing because it is a business for them to take government funds to build these projects that PAY THE DEVELOPER, but DO NOT SUPPORT A NEED for the Cityof Newport Beach. A low income housing project would do nothing for the actual economy of people who live here other than bring in a body of people who will further their political agenda with voting rights within the Cityof Newport Beach and the attorneys they bring with them. We are ADAMANTLY OPPOSED and will vote against this zone change as well as their supporters at every voting opportunity. 12 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments We know the issue of affordable housing is a big item in our State, and the State of California is imposing edicts Comment noted. on many Cities in regard to this. Please slow down this City-wide housing issue so as to gather more facts, more citizen input/ comments and studythe issue. In regard to our Bayview Heights/Santa Ana Heights Neighborhood, we have seen the details and the housing Comment noted. count of what could be planned and installed on the golf course area, i.e. holes 3 - 8 (lots 23, 24, 25, 26). This has the potential for hundreds of units to go up in the golf course area. We do not want this! We very strongly oppose this golf course housing project, oppose any rezoning of this area, and demand that you take the housing item off the table at this location. The golf course is currently zoned SP - 7. That means, "Open Space and Recreational District: SP-7 (OS/R) - Open Space and Recreational District is intended to establishthe long-term use and viability of the Newport Beach Golf Course." Our family opposes the re -zoning of the NB Golf Course area to build high density low-income housing on Mesa Comment noted. Drive. We've always focused on the Bayview Heights equestrian neighborhood for its open space and the neighborhood itself, the safetyfor our 2 year old and soon -to -be -born second child, the schools, the cleanliness, the community, the slower paced feel you don't quite get in the hustle bustle of the peninsula. This will absolutely affect our health and safety, it will increase traffic, impact the environment (the natural preservation of the Back-Bayarea), and it will affect our schools and my kids' education. I am by no means opposed to low-income housing. I understand the need and support the fact that Orange County should provide more of it. Please find an alternative location and remove this housing item off the table at this location. I am writing to you today to express my extreme opposition to turning the front seven holes of our golf course Comment noted. into public housing. It makes absolutely no sense to take away recreational and park areas from the public mainly becausethe population density in the surrounding areas are already increasing at an alarming rate and we will need all the open spaces we can get to make sure people have a place for relaxation and recreation. It is well known and well published that affordable housing should never be concentrated in one area as The Housing Element originally contemplated in the Airport area. Historytells us that this can lead to significant problems within responds to the communities. The concept of in -lieu fees appears to contribute to this problem. Have we conducted a study requirements of AB 686. by an affordable housing professional that tells us how to allocate low-income and market rate units Council direction has 13 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments intelligently throughout the City in a way that will address this concern? This high concentration will only indicated the desire for a serve to undercut present efforts underway to revitalize the area, undermine existing property values and, in more equitable distribution turn, result in an unfair and inequitable impact to area businesses and landowners. Please note that Assembly of units citywide. The sites Bill 686 (2018) establishes anew mandate to "affirmatively further fair housing." The California Department of analysis has considered Housing and Community Development has explained that this new law must "ensure that sites zoned to these factors. accommodate housing for lower -income households are not concentrated in areas .. . but rather dispersed throughout the community, including in areas with access togreater resources, amenities, and opportunity." The City has policies in place today that require developers to provide affordable housing as part of what would The policy program provides otherwise be a market rate apartment project. These deals are referred to as mixed -income projects. For- for a variety of methods to profit affordable housing developers prefer mixed -income projects and are financed through private capital achieve a balance of and a public subsidy, if needed. Nonprofit developers do not have access to private capital and build what the affordability levels to meet government is willing to subsidize. Today in California, that is Extremely Low affordable housing and housing existing and projected need. for the homeless. Have we studied the value of creating public policy to allocate affordable housing and The policy program also market rate units intelligently throughout the City in a way that will attract mixed -income, for -profit includes provisions to developers, and how arewe reflectingthat in our RHNAallocation? You would not have to look any further explore inclusionary policy than our One Uptown Newport property as a successful mixed income development providing affordable to further explore rental units (based on 50% of OC median proportional mix of income) for 20% of the property's residents in Orange County's most affluent city. Our recommendatio incomes. n is to create a fair and proportional mix of 60% market and 40% affordable (low and moderate incomes) ratio equally in high opportunity locations which have the capacityfor multifamily housing and are consistent with good urban land use planning. In our opinion those areas are the Airport, Newport Center, Coyote Canyon, and Banning Ranch. The proposed densities are not based on product that can actually be built from a development perspective. Future implementing Three storygarden product at most can achieve 30 units to an acre. Moving up the density scale is Type V revisions to the Zoning Code wrap product which jumps to approximately 55 units to an acre. Type II I wrap will provide approximately 75 will consider a varietyof units per acre (Newport Crossing). Type V podium (One Uptown) can achieve approximately 85 units per development regulations acre. Type III podium is about 100 units per acre. As you can see, densities at 40 units per acre (proposed and standards addressing Coyote Canyon) and 45 units per acre (proposed Newport Center) simply do not exist in a realistic feasibility, development 14 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments development. The reason is the cost of building a costly concrete garage in either a wrap or podium project incentives among other typically requires the higher density (in excess of 55 units per acre) to achieve a viable economic development considerations. given the high land prices in Newport Beach. Three storygarden apartment product (at 30 units per acre) which provide surface parking for its residents and is best suited to cities with an abundance of inexpensive land unlike Newport Beach, which is basically completely built out. Our suggestion is to take advantage of the high opportunity locations and create higher densities for the Airport Area, Newport Center, Coyote Canyon, and Banning Ranch. Coyote Canyon is public land and, in our opinion, should serve one of the most pressing public issues, The Coyote Canyon area has affordable housing. Density at 40 du per acre as stated above seems like an opportunity lostfor more environmental residential units given it is public land, not immediately surrounded by single family homes. One of the considerations that limit use Housing Element Update Advisory Committee members, Paul Fruchbom, suggested using part the landfill for of the entire site for parking for the 22 developable acres. Wethink that suggestion is creative and should not be dismissed without residential uses. The plan serious analysis of the possibility. Also note, the State Surplus Land Act (SB 1486 — 2019) requires local reflects the use of a net agencies disposing or leasing surplus land to provide preferential treatment to affordable housing area representing only a developers given the housing crisis in this State. small portion of the landfill property not subject to extreme constraints. Further, assumptions in the plan are approximations subject to change based upon actual feasibility. 100% Senior Affordable Housing is a great way for cities to meet their state affordable housing requirements as The Housing Element well as providing much needed housing for the local community. Creating a "Senior Overlay" zoning allowance provides for prioritization of would include specific design and operational requirements such as higher density, reduced size of units, senior housing through reduced parking, and senior oriented amenities. Senior Affordable projects are typically less than 100 units specific policy programs. providing many opportunities throughout the cityto find an appropriate development location. What was the methodology used to analyzethe potential ADU units? ADU's appearto be low hanging fruit to The methodology to utilize assist insatisfyingthe city's RHNA requirement, and we are sure there are many opportunities that existthat ADUs is provided in a new 15 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments were not counted. It was mentioned during the April 27th City Council Housing Element study session that the Appendix D, in support of City's target for ADU's should be 1,000. We concur. We believe the high opportunity locations should all the City's desire to enhance shoulder their share of the lower income affordable units. This results in a fair distribution and is good urban ADU construction to meet planning, which lays the foundation for the cityto create land use and zoning policies that maintain local its RHNA need. control. As a user of Newport Golf Course ("NGC"), I stronglyobject to the above proposal for the following reasons: a. Comment noted. It is a badly needed recreation facility which would be severelydamaged by the proposed development. b. It would severely impact the surrounding area and home values. I am opposed to the rezoning of the NB Golf Course for low income housing Per state requirements. The golf Comment noted. course is open to the public, the only one I believe in NB and enjoyed by many NB residents as well as everyone else. The golf course also provides a buffer from the airport and is under the flight path Which is another consideration. Since the State is requiring the housing project it only makes sense to me for the State to provide unused State land or empty State buildings that can be refurbished To meet their own requirements, instead of "forcing" cities to rezone public City Land or private land for that matter. How is this low income high density housing project going to impact our property values? Who do we see Comment noted. about that? Many of us in this NB neighborhood have worked hard for many years toacquire homes here and enjoy our quality of life here, again, who do we see about that potential impact to us? Note my opposition to Rezoning NB Golf Course. I OPPOSE the housing project of the Newport Beach Golf Course. I OPPOSE any rezoning of this area. Remove Comment noted. the project from the agenda. There is too much traffic alreadyon Irvine Ave. Increased traffic is not safe for pedestrians and cyclists. Environmentally it is not responsible to proceed with this residential proposition. As I drive in and out of my neighborhood I see people enjoying the golf course. Singles, families and I have Comment noted. seen an increase in young people playing golf at the golf course. Better to see young people on the golf course than on "the streets". I opposethe golf course housing project, I oppose any rezoning of this area. Please take 16 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments the housing item off the table at this location. Bayview Heights/Santa Ana Heights Neighborhood is a Newport Beach "gem". There is nothing like my neighborhood anywhere else in Newport Beach. Please don't destroy it. We love all neighborhood as is, and Santa Ana Heights has alreadyspiked with flowing traffic and crowds of Comment noted. people. We need to keep the Newport Beach Golf Course, it's part of where we live and we treasure our community as is. Meeting with our neighbors we couldn't find anyone who agrees with the rezoning, and we oppose this plan 100%. Please take the housing item off the table at this location. I am writing to express myconcern for the rezoning proposal of the Newport Beach Golf Course for residential Comment noted. housing. As a long time member of this community it is upsetting to see the cities of Newport Beach and Costa Mesa more focused on profit ratherthan the best interest of the community. This additional housing project would not only take away one of the few recreational areas we have left in the community but also create a traffic nightmare in the area. We have already seen pedestrians struckand killed in the cross walks at Irvine/Mesa as well as Irvine/University. How do you expect we could properly manage the traffic flow with this additional housing project? I strongly encourage you to oppose this awful idea to rezone a beautiful open space at the golf course into Comment noted. more high density housing that will only further clog and pollute a busy area around the airport. I further would encourageyou to oppose nitwit ideas and mandates coming from Sacramentothat only serve to destroyour once beautiful and safe city. Crime and drug addicts currently littering our once safe neighborhoods is a clear example of failed policies coming from Sacramento. Please do what's right for the constituents of your city and maintain what we have left. Residents seem totreasuretheir quality of life in Newport Beach. This includes a quiet airport, unobstructed Comment noted. views, and unclogged roadways. While this is not always possible, I believe that the city takes the necessary steps to ensure all the voices are heard and important input is considered. Understanding the pieces of this puzzle (building stock, roadways, utilities below grade, community risk, et al) at the ground level may prove to be beneficial if you chose to consider my thoughts. While I often hear about the city being "built -out" I do not entirely subscribe to the belief. The district/area that has the least sophisticated development if the Airport Area of the city. This area is surrounded on three sides by adjacent jurisdictions and heavily impacted by decisions of the other local governments. Additionally, 17 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments the school district in this section of Newport Beach is the Santa Ana Unified School district. I'm sure this is unknown tothe many new residents destined to move here who recognize that these cities are significantly different in many ways. Some have suggested that a change in district boundaries to address the issue, and while this may feel good to proffer, I don't see that happening anytime soon. It is safe to say that the Airport Area differs in many respects from the remainder of Newport Beach. Because of this a different vision statement maybe needed in this specific community to seriously address the new development that is likely to occur in that area in the future. When I look at the General Plan vision statement, I fail to see how that can be realistically represented in the Airport Area. This area will seethe Lion's share of the RHNAlow/moderate units and be more intensively developed. This is something that wiII take well considered vision and political leadership not before seen in Newport Beach to be done properly given the forces that will be aligned against new construction. We area damantlyopposed tothe rezoning of the Newport Beach Golf Course to high density, low-income Comment noted. housing. A high density low-income project negatively impacts every single homeowner in the area, while offering absolutely zero benefits to us and the community as a whole. We hope the City Council will seriously re- consider and ultimately deny the rezoning of the golf course. I strongly oppose building on one of the few open spaces left. I personally feel as do many others the the Comment noted. government keeps taking taking taking! Homeless population is out of control, druggies are all over the play and now this! Dothe right thing before we the people have to get more involved! As a resident and someone who grew up in the area, the Newport Beach Golf Course is part of the community, Comment noted. a place where my parents and I grew up playing, and it would be terrible to see housing built. I stronglyoppose the rezoning efforts and hope City Council rethinks this change. I am a resident of Newport Beach at Orchid Hill PI. I'm writing to you to express my opposition with the golf Comment noted. course housing project, opposing any rezoning of this area, and asking you to take the housing item off the table at this location. PLEASE stopthe discussions about building high density low income housing at the golf course off Irvine Ave/ Comment noted. Mesa Dr. That idea is pure insanity. The neighborhood simply cannot handle the additional population and ensuing traffic. Alreadywe are exploding thanks to Costa Mesa'sallowing multiple units being built on what 18 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments we're once single family home lots. In the 23 years living at my condo a few blocks away from proposed development, the development has resulted in 4x as many dwellings on a SINGLE BLOCK. Multiply that x2 easily for number of people/cars in a single block and you have insanity. The lack of parking, speeding, deteriorating roads... not to mention the smell of marijuana that permeates the neighborhood 24/7 has really already stretched the neighborhood beyond the limit. I beseechthe Cityor Newport Beach to PLEASE find another site for this development. If you are going to change zoning, the other side of the 73 is a much more appropriate location for high density housing. Section 1: Introduction State law requires and the While we understand the role of the Housing Element is to "identify ways in which housing needs of current City's overarching General and future residents can be met" (page 1-2), those needs should not supersedethe private property rights of Plan goal is to identify existing residents and businesses. We seek clarification of this item in the Introduction, considering the fact opportunities to address that several pending and prior housing projects have improperly impacted existing property rights, including existing and future housing parking and property rights afforded under Covenants, Conditions and Restrictions (CC&Rs). need in the community. Section 3: Housing Constraints& Resources Constraints and resources It is our understanding that the City of Newport Beach was allocated a total of 4,845 units, per Section 2 - include evaluation of a Profile. As identified on page 3-2, some constraints for the City establishing opportunity sites include "the variety of potential availability and cost of land for residential development." We believe an additional constraint excluded from constraints relatedto the list are CC&Rs. These documents often provide the governing rules for master planned areas, including governmental policy, site lands in the Airport Area. Since the City has no authority over CC&Rs those "Nongovernmental Constraints" conditions and otherfactors should be included in this section. that may influence the Further, the City should respect the private property rights of existing business owners (and residents) and- at a provisions of housing. minimum - acknowledge that collective rights in business parks are a constraint in the Housing Element Update. For example, no individual residential property is being targetedfor conversion from one use to The sites identification another, but areas that are considered "common area" business parks where owners bought into a share of the process considered many of interest aretargeted for new uses. The Cityshould respect CC&Rsas theystand or require proposed projects to these considerations prove that modification of the CC&Rs accurately allows a new/specific use. The City should require this as a through consultation w/ the 19 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments condition of approval for development entitlements priorto construction. Without this, the Housing Element HEUAC and consultation will not properly consider existing property rights and this omission will expose the Cityto unnecessary with property owners. entitlement challenges and delays. While we do not disagreethat housing could be added to certain areas of the Airport Area -adequate resident - based services and amenities must also be included with those developments. The Business Parks that cover the majority of the Airport Area were not originally intended to be residential areas and are therefore lacking in many of the standard amenities and services one would expect to find in a residential neighborhood (grocery stores, parks, restaurants, banks, child-care facilities, etc.)The Cityshould investthe time now to determine where these amenities, parks and services should be, or the Citywill be functionally promoting increased densification without properly planning for how this new housing density can alsobe high -quality, "livable communities." This exact conflict is referenced in Policy Action 4E: Airport Area Policy Exceptions for Affordable Housing in Section 4. Section 4: Housing Plan The overlay policy will be Any proposed overlay (as described on page 4-4) should include direct engagement by business owners and subsequently updated. Any tenants in the Airport Area. This is a unique, commercial and business focused area that if not properly planned rezoning action will provide for could force businesses to relocate and have unintended consequences including but not limited to revenue entitlements in addition to consequences for the City. Further, if businesses leave, the marketabilityof the Airport Area could diminish and those already provided to create unfavorable market and quality of life conditions for this important area within the City. current property owners. On page 4-3 the Update states: "Housing Goal#8- Effective and responsive housing programs and policies." Unfortunately, we could find no programs or policies that address the conversion of existing Class A Other policies in the Policy commercial office space into residential units. This is an area that should be carefully investigated further by Program respond to the City, as while it may be a potentially unique way to create housing and meet needs immediately where requirements subject to buildings and utilities have already been developed, it has a direct material impact on existing commercial state housing law. property rights and the current infrastructure does not support residential development. Policy Action 3A: Objective Design Standards (page4-10) and Policy Action 4B: Streamlined Project Review (page 4-16) should not create a by -right housing process that ignores impacts to adjacent businesses, existing 20 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments CC&Rs, Planned Development Standards, or Integrated Conceptual Development Plans. These limitations should be noted in the document or be required to be addressed in the planning process. Appendix B: Sites Analysis Appendix B has been After reviewing Figure B-1 Airport Area Environs - Sites Inventory, several Olen buildings were included as significantly updated to "Consideration Parcels" for housing. Because the Housing Element Update remains in Draft form at this time, modify sites and locations. we are not in a position to condone any such conversion of existing high performing commercial business parks Property owners not into residential, which potentially strips owners of valuable and protected property rights. To be clear, Olen interested in participating does not currently support conversion of existing commercial business parks to residential uses absent strict have been removed from protections of the existing rights of commercial property owners and specifically does not consent to consideration. conversion to residential of any of its Newport Beach portfolio. We appreciate the opportunity comment on the Housing Element Update, but remain concerned that the private property rights of existing businesses will be adversely impacted by the City's expansion of housing units unless additional considerations are evaluated by the City. We are also concerned that the City is inadequately planning for the types of parks, amenities and services that would create good quality of life for these new neighborhoods, and for the City's business and residents as a whole. This concept of livable communities should be a central focus of the current planning process in addition to the question of where to potentially place new housing units. This letter shall not be construed as a full recitation of all of Olen's positions related to this matter and shall not act as a waiver of any claims. Please note I oppose this change to a housing project [Golf Course]. Comment noted. The Housing Element should be harmonized with the LCP and Environmental Elements BEFORE SUBMISSION A program EIR will be TO BE CERTIFIED. The fact that Banning Ranch is mentioned as a housing option after the Coastal Commission prepared in conjunction denied building and development options is either an attempt to "allocate housing to a back hole that has not with the Housing Element potential, but looks good" and an attempt to undermine the Coastal Commission and set into play afight update. between twostate agencies. The Cityof Newport Beach should be honest and communicate clearly its intention. A past survey of residents clearlygave the city a clear dictate to preserve Banning Ranch and facilitate its acquisition for open space and public access. Banning Ranch should not be listed as a housing option. Comment noted. 21 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments This element does not do enough to level the playing field to allow residents to add an additional story to Comment noted. facilitate families living together. One of the challenges of the cost of housing is that families are being separated and longtime residents areforced to sell to access equity, while adding another story could allow more residents to provide housing for aging parents (on the ground floor) or house adult children with their families on upper floors. Currently many remodels and new construction in West Newport are able to achieve 3 story construction using expensive variances, lawyers and political influence. The city has created an exclusive club that contributes to the housing shortage. The fastest wayto more housing is to allow residents more freedom for "Mother/daughter" type construction. These would not be condos, but units with the ability of twofamilies living together. Eventually, this can lead to duplex or triplex rentals, but that process can be paced out by economics and zoning plans overtime. Homelessness is a mental health issue— any document produces by the cityshould recognize mental health as Comment noted. an issue. The main problem for those homeless wondering the streets of Newport Beach, they have addition and mental health issues that cannot be resolved without local mental health services. The city would be better served at add mental health counselors in the police department to go on calls relatedto those wondering the streets with mental health and addition issues. We could offer free housing, and the homeless issue would persist, because low cost housing is not the primary cause of the homeless populations wondering our neighborhoods, camping on public spaces and causing health and safety issues. Public transportation impacts housing prices. If we invested in mobility of having people easily move between The Circulation Element of Newport Beach and Riverside and make 24/hr per day access within 30 minutes then housing prices would not the General Plan is being be an issue. What drives the unfair housing issue is the time it takes to commute between work and home and updated concurrently with between home and public resources like the beach. Housing must be reconciled with a county and state the Housing Element, transportation plan. addressing transportation - related issues. Outreach has been lacking becausethe outreach has been unfairly biased to The Housing Element and the A summaryof all outreach General Plan is more than the Housing Element— it must be a harmonized plan and the city needs to conduct efforts is included in more outreachfor the other elements of the General Plan Update. Appendix C of the Housing Element. 22 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments The parcel identified as ID 47 in the Housing Element Study is correct (APN 445-131-31, 2.58 acres). Two Appendix B has been additional parcels owned by KCN A Management, LLC should be included as well. The two additional parcels updated to consider a are APN 445-131-30 totaling 23.74 acres and APN 445-122-19 totaling 16.67 acres. Both of these additional variety of site parcels have a combined usable development area of approximately 11 acres. All three parcels would provide a considerations related to development area of approximately 13.6 acres providing the opportunity for 700 housing units based on a the distribution of standard 50:1 ratio. In addition, the draft study indicates that all parcels in the specified area of our properties affordability throughout the are to be rezoned as Low and Very Low housing categories. While we agree that some affordable housing City. should be provided in this area, we do not believe that the area should be exclusively Low and Very Low housing categories. Agood balance of both market rate and affordable housing would be best suited for the Airport Area. The Newport Beach Golf Course is a part of our community, a place where my family and friends get together Comment noted. for events, and it would be absolutely terrible for you to build housing on a cornerstone area of my community. I STRONGLY oppose the rezoning efforts and hope the City council rethinks the impact this will have on its citizens. This is not acceptable to build homes that will impact our neighborhood and community. The problems that Comment noted. comes with crowding to many people in an area, the quality of people your wanting to attract will cause the same problems with parking and theft that is currently across Irvine Ave on Mesa Dr. the homes on riverside drive and Redlands have had issue after issue with people of poor character, theft, disorderly conduct and there street is covered in cars that do not live in the neighborhood. We love our hidden community, it is safe, family oriented and a hidden gem. We do not want this to change. We truly hope you can understand. I oppose the golf course housing project, oppose any rezoning of this area, and would askthat you take the Comment noted. housing item off the table at this location. I respectfully request that you NOT approve any rezoning of the Newport Beach Golf Course area as outlined in Comment noted. the Draft of the General Plan Housing Element Update (PA2017-141), presented during the Study Session on 4/27/2021. As you know, the Golf Course area is currently zoned SP-7, "Open Space and Recreational District". I and many of my Neighbors in Bayview/Santa Ana Heights want to preserve the open space and the Golf Course area for 23 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments recreation and use as previously & currently designated. I believe many other residents in Newport Beach and the surrounding area enjoy using the Golf Course and do not want to see it or any portion thereof changed out for a Housing project. This project would have a Negative impact on our Bayview/ Santa Ana Heights Neighborhood. In regard to traffic in the area, Irvine Ave. is already incredibly congested at various hours of the day and adding more volume will only make it worse and we will see an increase in accidents. Please vote no on rezoning the Newport Beach Golf Course to a high density, low-income housing zone. Comment noted. As long as the golf course chooses to remain open to the public for golf, they should be permittedto keep their 18 holes. I am not a golfer, but I enjoy seeing people enjoy their sport. While I recognizethat low cost housing is in great need, this location is hardly a great location for low cost housing. It places it in the middle of a community, with few closejob opportunities/career paths that don't require a commute. Things like local grocery, diverse public transportation, and local medical should all be considerations for a high density low cost housing complex. I don't see that kind of infrastructure in this area. Meanwhile you will be removing one of the few public golf courses Newport Beach can lay claim too. This is a notice of strong objection to the proposed Newport Housing Element zoning changes for the Newport Comment noted. Golf Club LLC ("Unique ID Parcels 23 to 26). The effects of this proposal will negatively impact the areas immediately adjacent to the proposed development densification by overloading the Mesa Drive/ Birch and Irvine Avenue roadways. Morning and evening peak wait times at intersections currently approach 5 minutes and queue from Irvine Avenue to Orchard Drive. A number of years agothe circulation element was modified along with the County's Master Plan of Arterial Highways (MPAH)to eliminate the University Drive Extension to Jamboree Road and to remove the Mesa Drive connection on assurances that development and densities would not be increased. This proposal would violate those assurances and previous planning efforts. Additionally, during the creation of the specific area plan for the Santa Ana Heights neighborhood and the LAFCO discussions for its annexation to the City of Newport Beach, the City agreed to retain and preserve the residential rural equestrian zoning (and character) of the neighboring areas in exchange for some limited commercial rezoning along Birch and Irvine Avenues. The proposal under consideration conflicts with those previous planning efforts and commitments from the City, the County (and the previous Redevelopment Agency). 24 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments I am writing to oppose the rezoning of the Newport Beach golf course into high density housing. We don't need Comment noted. any more traffic, noise, or people flooding the back Bay Area by Mesa drive. What we could use is some walkable retail shopping or commercial not dedicated to plastic surgery. Given this is also in the wake of Buck Johns paying off politicians to buy cheap land in Newport, I would hope extra diligence is being put into how land is being sold/zoned/used with an emphasis on benefitting existing residents. Accessory Dwelling Units A new Appendix D has been We are concerned about the City's calculation of ADU production and the lack of support for the numbers that provided supporting the have been included in the Drafts thus far. With the direction of the City Council to increase the ADU numbers assumptions for increasing even further, to potentially 1000 units, we have even greater concerns that such production is unrealistic. ADU potential. Additionally, However, we are encouraged by the fact that City Staff intends to survey the community and studythis further. programs supporting ADU We hope that the City's ultimate determination regarding ADU production will be supported by reliable construction and evidence and specific incentives to ensure a realistic probability that the Citywill meet its ADU production. monitoring of progress have Additionally, the City's ADU program should include some form of regular data collection, evaluation, and site been included. inventory update. For example, the City should evaluate annually the number of ADUs produced and the rental rates at which they are available to the general population, if at all. Based on a review of data, the Cityshould reevaluate its ADU predictions and in the event of a shortfall in production, revise its ADU program and incentives to boost production or ultimately identify additional sites toaccommodate the shortfall. The City should also consider incentives that encourage residents toagree to affordability covenants for their ADUs. With the City's aggressive approachtoADU production, the specific details of its ADU program as well as its robust and regular evaluation of ADU production are essential. No Net Loss Requirements The assumption for a RHNA Government Code section65863 ensures that jurisdictions accommodate their RHNAthroughout the planning buffer has been increased period. To accomplish this, HCD recommends that a jurisdiction create a buffer in the housing element per Council directive. inventory of at least 15 to 30 percent more capacitythan required. The City Council's direction to reduce the buffer of sites in its inventory to 5% is alarming, especially considering the potential need for a citywide vote to rezone newly identified sites within 180 days of approval of any development that results in a shortfall in the City's site inventory. This is also problematic considering that nearly 50%of the City's RHNA is allocated to housing for households with very low and low incomes. Unless the City is donating land or providing significant 25 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments funding toward affordable housing, it is unlikely that the market will support the development of housing complexes where 50% or more of the units are affordable to very -low- and low-income families. Further, the Cityis planning on the percentages of units affordable to low- and very -low-income households to be 45% in the airport area, 65% in West Newport Mesa, 30%in both Dover-Westcliffand Newport Center, 35% in Coyote Canyon, and 20 % in Banning Ranch. However, the Cityis planning on adopting an inclusionary zoning ordinance requiring only 15% of the units be affordable to very -low-, low-, and moderate -income. With the development of just a few of the housing element sites, the City may quickly run out of inventory to cover its RHNAwith only a 5%buffer. We encourage the Cityto reconsider its 5% buffer and adopt a buffer in line with staffs recommendation in Table B-1 on page SS3-4 of the Staff Report for the April 27 Study Session. Site Inventory Banning Ranch and Coyote Banning Ranch: We are concerned with the City's reliance on Banning Ranch as a suitable sitefor the Canyon are two of the six development of housing, including affordable housing, during the 6th Cycle. As the City's Draft recognizes, opportunity areas in Banning Ranch was identified in prior planning periods and the City previously approved a development at that addition to existing location, however, the development was denied by the California Coastal Commission. I n its findings, the entitlements and AD California Coastal Commission indicated that approximately 19.7 acres were suitable for development, of assumptions. Constraints which only 11 of those acres could be developed for residential housing structures. Considering this history, and other factors have been without additional programs or supporting information determining the development potential of 46 acres at considered and will be this site, it is unrealisticfor the Cityto consider more than the 11 acres developable within the planning period. considered as part of the Coyote Canyon: Considering the landfill in the vicinity of this location and the correspondence the City received implementation of the from State and Federal Fish & Wildlife agencies opposing development at the site, we are concerned about the rezone programs described viability of the site for housing development during the planning period without additional programs or in the Policy Program. supporting information to show the reliability of the site's development potential during the planning period. We also agree with comments made during the Study Session that locating 100% affordable developments at the site raises environmentaIjustice concerns. Via Lido Plaza: We support the City's decision to include all sites in its inventory where property owners have affirmatively expressed interest in redeveloping their property for residential use and in being included in the site inventory, especially if a property owner has indicated a willingness to include affordable units in any 26 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments development. Including such sites will help the City meet the increased require me ntthatjurisdictions demonstrate realistic development potential for nonvaca nt sites. Affirmatively Furthering Fair Housing AB 686 considerations have With HCD's release of its Affirmatively Furthering Fair Housing: Guidance for All Public Entities and for Housing been included in Sections 3 Elements (April 2021 Update), we encourage the City to reviewthe HCD's Guidance and revise its analysis and and 4, as well as Appendix B programs as they relate to the duty to affirmatively further fair housing. While we address a few concerns of the Housing Element specifically, the Guidance is an exceptional resource that the City should thoroughly review and follow when revising its Draft Housing Element. We also encouragethe City to take advantage of HCD's AFFH Data and Mapping Resources to incorporate additional data into its analysis. Outreach and Key Stakeholders Outreach efforts through We encourage the City to ensure that its outreach includes a diverse group of organizations and individuals, the process have been particularlywith its assessment of fair housing and in its selection of sites and development of programs that transparent and seek to affirmatively further fair housing. Some key stakeholders the City should reach out to include: community- engage a diverse audience. based and other organizations that represent protected class members, public housing authorities, housing and A summaryof efforts is community development providers, lower income community members and households that include persons provided in Appendix C of in protected classes, fair housing agencies, independent living centers, regional centers, homeless services the Housing Element. agencies, churches and community service organizations that serve ethnic and linguistic minorities, etc.6 While we applaud the sometimes thankless and often tiresome work that the Housing Element Update Advisory Committee has committed to the Draft Housing Element over the last eight months, we are concerned that there has been a lack of diverse stakeholders included in the City's outreach efforts. Among the stakeholders listed above, the Cityshould make particular efforts to engage renters, members of protected classes, individuals that rely on affordable housing, and local workers, who may not be Newport Beach residents, but would choose to live closerto their employment if affordable housing were available. Additional Analysis AB 686 requirements have The City's "analysis must address patterns at a regional and local level and trends in been included in Section 4 patterns over time." The City is also "expected to use local data and knowledge to analyze local fair housing of the Housing Element. issues, including information obtained through community participation or consultation, such as narrative descriptions of people's lived experiences." Other relevant factors the Cityshould analyze include barriers in 27 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments zoning and land use, such as "[p]redominance of single family uses and larger lot sizes in racially concentrated areas of affluence" or "[v]oter initiatives that restrict multifamily developments, rezoning to higher densities, height limits or similar measures that limit housing choices," etc. The Drafts hould also include an analysis of racially concentrated areas of affluence when analyzing patterns and trends of segregation and integration. Site Inventoryand AFFH AB 686 requirements have While we applaud the City's efforts to redistribute affordable housing throughout its focus areas and reduce been included and the concentration of affordable housing in the airport area, we are concerned that limiting affordable housing considered in Secitons 3 and to the focus areas still creates or exacerbates patterns of segregation. Even though the City as a whole is 4, as well asAppendix B of predominately White and affluent, especially when compared with the region and state, simplyviewing Figures the Housing Element. 3-7, 3-8, and 3-9 still demonstrates that the City is focusing its affordable housing in areas of the Citywith higher percentages of Hispanic/Latinx, Non -White, and Low/Moderate Income populations than may exist elsewhere in the City. When evaluating its Site Inventory, the City needs to "discuss how the sites are identified in a manner that better integrates the community," explain how the identified sites impact "existing patterns of segregation and number of units relative to the magnitude of the RH NA by income group," and evaluate "whetherthe RHNAby income group is concentrated in areas of the community." Goals, Policies, and Actions AB 686 requirements have As part of the AFFH component of the Draft Housing Element, the City needs to identify and prioritize been included in Sections 3 contributing factors to fair housing issues then identify goals, policies and a schedule of actions with specific and 4 of the Housing timelines, discrete steps, and measurable outcomes that will have a beneficial impact during the planning Element. period. "Goals and policies must be created with the intention to have a significant impact, well beyond a continuation of past actions, and to provide direction and guidance for meaningful action." The City's Policy Action 4A fails to meet the requirements of the necessary program to affirmatively further fair housing. Essentially, the City's program is to collaborate with other organizations and to review fair housing complaints simply to referthem to the appropriate government agency and to collaborate with other stakeholders to address potential constraints to fair housing, which may include analysis of barriers, review of historic policies, and "specific actions" that contribute to an inclusive community. First, the analysis of barriers to housing and a review of historic policies and restrictions that prevented protected classes from locating in Newport Beach should already have been done and included in the Housing Element as a part of the City's 28 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments required analysis of Fair Housing. Essentially, the City has set a goal to do the analysis in the future that is should have already incorporated into its Draft Housing Element. And while the City states that it may take "specific actions," to foster inclusivity, there are no details about these "specific actions." "Programs in the element must have specific commitments to deliverables, measurable metrics or objectives, definitive deadlines, dates, or benchmarks for implementation. Deliverables should occur early in the planning period to ensure actual housing outcomes. For example, programs to 'explore' or 'consider' on an 'ongoing' basis are inadequate to demonstrate a beneficial impact in the planning period." The City's AFFH Policy Action is exactly what HCD has deemed to be inadequate. We encouragethe Cityto rework its fair housing analysis, identify barriers to fair housing, and develop specific programs and policy actions in line with HCD's guidanceto affirmatively further fair housing and actuallyachieve beneficial impacts during the planning period. Site Inventory Appendix B has been Based on the April 27, 2021 City Council Study Session, we understand that the City is taking additional time to revised to include a variety review and revise its Draft, including the Site Inventory to increasethe reliance on ADU production, which we of these considerations. interpret to mean a decrease in the list of sites identified or in the density of those sites. As we have requested before, when the Cityupdates its Site Inventory, we would appreciate receiving a copy for review. Some concerns that we have previously identified and encourage City Staff to consider when revising the Site Inventory include: • Ensurethat the Site Inventory correctly identifies whether a site was previously identified in the 5th Cycle; • Specifically identify the sites to be rezoned in any rezoning policy action; • Ensurethat the appropriate densities, orgreater, and appropriate percentages of affordability, or greater, are designated to sites in accordance with housing element laws; • Provide the required analysis for sites less than 0.5 acres or greaterthan 10 acres todemonstrate that sites of that size were successfully developed during the prior planning period; • Develop a policy action to identify City -owned nonvacant sites as surplus land, in accordance with the Surplus Land Act, during the planning period; and • Identify the current uses of nonvacant sites and how such uses do not constitute an impediment to additional residential development during the planning period. 29 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments We continue to be encouraged by the City's diligent efforts to comply with state housing element laws and Comment noted. meaningfully contemplate the housing needs of its community and how to meet the needs. While we are concerned with some of the recent direction City Staff has received related to the Draft Housing Element, as described above, we await the City's thorough review and investigation of those matters to determine the realistic development potential during the planning period ofADUs and identified sites. We are also excited by the new HCD Guidance and Data and Mapping Resources to assist the Cityin complying with its duty to affirmatively further fair housing. We look forward to continuing to work withthe City through this process and if we can provide any additional assistance, please do not hesitate to contact us. As a resident who has lived here for the past decade, this golf course is part of the community, and it would be terrible to lose that! l l I strongly urge you to reconsider zoning and truly consider the affect it will have on our beloved community. I am adamantly opposed to any rezoning as residential land. The golf course is a beautiful natural quiet area Comment noted. and adding residential buildings will destroyany sense of peace and will add hundreds of automobiles, pollution and noise to this quiet east side location. Property values will plummet, traffic will increase 100-fold and noise will substantially increase. The Golf course is the only reason I purchased in this area. Please do not continue this horrible project of rezoning the golf course. I highly oppose this decision [to build high density housing on a portion of the golf course]. We believe that this Comment noted. is a very poor decision and will greatlyaffect the community by removing something that is constantly used by our residents as well as visitors from around the world. It will also cause an increase in trafficthat is alreadyan issue in this area. Please reconsiderthis decision as it will be a detrimental move to our city. I adamantlyoppose the rezoning of the golf course for low income housing. That is a terrible place to put high Comment noted. density housing directly under the flight path and we do not need moretraffic. The golf course should not get smaller because thousands of golfers enjoy both the front and back 9 every week. That is really the only affordable public golf course in Newport Beach, andyou want to downsize it? Gentlemen, this message is to express myopposition to any plan to convert the Newport Beach Tennis Club Comment noted. property into any kind of "low, moderate, or above -moderate income" housing units. Doing sowould become an environmental disastertothe surrounding community in my opinion. Bear in mind there aretwo schools within walking distance of this site, the closest being a grammar school. The added traffic resulting from additional housing would greatly increase the likelihood of tragic pedestrian accidents involving children. 30 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments I have lived in my home in Newport Beach for overt hirty years and have seen careful planning and good Comment noted. progress made in the city. In my opinion, converting the the Newport Beach Tennis Club property into additional housing is a very bad idea and detrimental to the surrounding community. I believe there are more appropriate sites on the list and therefore I would like to see the tennis club property removed from the list permanently. Thank you very much for serving our local community of which I have been a resident of for nearly 60 years. Comment noted. Regarding APN: 440-281-02 1 highly objection to the aforementioned Parcel and its re -zoning to provide over 250 high density residences to the Eastbluff area —Highertraffic plus a high carbon footprint vs recreation and health? Additionally to hide this behind the veil of 125 low income housing is intolerable. Please don't tell me that the citywill receive and increase in property tax — With good management from your team the city has more than enough money. But more importantly to take away recreation which is so badly needed in just wrong! Ifyou haven't notice the second biggest contributing factor to deaths from COVI D is obesity or high BMI. This property serves many times more people each year than the proposed 125 low income units will ever provide. Besides the membership the property serves several tennis tournaments and provides hundreds of children swimming lessons and races each year! If you would like to discuss further do not hesitate to contact me —and I do look forward to seeing each of in person to reinforce my concerns about this project! Thank you again for your service and with your good leadership we can make this city even better. I am hereto help if needed! As a 30-year resident of Newport Beach I urge you to reject the efforts being proposed to replace the NB Comment noted. Tennis Club with housing units. NB Tennis Club has been a fixture in our community and serves as a gathering spot for residents toexercise and enjoy each other's camaraderie. The population density in Newport is already too great and the traffic and crowds is excessive. Please protect NB Tennis Club! 31 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments As you can see from below, we've been fighting the re -districting of Newport Beach Tennis Club for years, Comment noted. always assured that a general plan amendment and a long process with multiple hurdles would be required to change NBTCto a residential site. It looks like more and more of those hurdles arefalling and the threat is real. I STRONGLY oppose both the destruction of the tennis club and the building of condos. As to the former it's a longstanding recreational landmark and a very active, well -used club. As to the latter if we wanted to live somewhere dominated by condos and a bunch of cookie cutter housing developments with a horrible traffic flow we would move to Irvine. PLEASE stop the "development" that is ruining the character and individuality of Newport Beach. I understandthere is a mandate from the stateto identify areas for affordable housing but taking away one of the longest standing and supported recreational areas in a city that is exploding with condos and traffic cannot be the right answer. I wanted to takethis time to offer my opinion on the upcoming decisions facing you regarding site selections Comment noted. for the 2021-2029 Housing Element addressing future low/very low, moderate and above moderate income housing specifically involving APN:440-281-02... the Newport Beach Tennis Club. I am completely against including this property in the designated Cityof Newport Beach 2021-2029 Housing Element for the following reasons: 1. Traffic.... Not onlywill ingress and egress of the proposed development not likely be easilysolved but Eastbluff Drive will be severely overtaxed causing major traffic issues along with increased traffic accidents also resulting in increased danger to bicyclists who use this route. 2. Infrastructure....ln addition to impacting the roadways, the local shopping centerwill not be able to handle either the increased volume nor supply adequate parking. The Ralph's grocerystore is one of the smaller footprints in their chain and likely could in no way handle the increased volume from the additional dwelling units. This area truly is built out relative to the amenities it was designed for. 3. Recreation.....Adding more dwelling units in this neighborhood removes more acres of recreation this city cannot afford. We can only look at our country's increased obesity rate to understand reducing land devoted to recreation only contributes to this national emergency.... please don't add to this problem. 4. Tennis Community..... The only other tennis club in the city (Palisades Tennis Club) would be completely unable to absorb the 500+ members Newport Beach Tennis club has which would lead to citizens leaving the sport or flooding city courts well beyond their capacity. I urge you to NOT include APN: 440-281-02 in the City of Newport Beach 2021-2029 Housing Element and select a more suitable site. 32 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments Asa homeowner with a property inclose proximity to Planning Site #145 -currently the Newport Beach Tennis Comment noted. Club - I would like to express my strong opinion that apartment development on this site is ill-considered. There has been copious apartment development in Newport Beach and surrounding cities over the past 5 years. Plenty of inventory has been added that strains an already overburdened traffic, amenity and educational infrastructure. Carpeting the neighborhoods of NB, Costa Mesa and Irvine with apartment dwellings will ultimately seriously undermine the quality of life that was the very reason most of us moved here in the first place. We do not want to create another West Los Angeles. Please remove Site #145 for the city's "Site Analysis List". It has come to my attentionthat the Newport Beach Tennis Club (APN: 440-281-02) site being considered for Comment noted. re -zoning to accommodate future low income housing. Please remove this site from your Site Analysis List- the location is in the heart of Newport Beach and would significantly alter home values and the look/feel of our city. It has come to my attention that the Newport Beach Tennis Club (APN: 440-281-02) site being consideredfor Comment noted. re -zoning to accommodate future low income housing. Please remove this site from your Site Analysis List - the location is in the heart of Newport Beach and would significantly alter home values and the look/feel of our city. Please keep our beloved tennis club zoned recreational ! ! it is a quality of LIFE issue for multi generational Comment noted. families H look elsewhere for more housing sites H Comment noted. I have lived at for 46 years since 1975! Our house is DI RECTLYacross the street from the tennis club. My sons went to Lincoln and Corona del Mar schools and have grown up here. The possibility of having a 379 unit development across the street and in this area is abhorrent and difficult to envision. I have been active in various neighborhood and city affairs and have seen many changes in this area. I cannot believe the city is even considering the development of the building 379 units in this area! Along with thousands of others, I earnestly implore the planning committee to remove this property from the 2021-2019 Housing Element now, to prevent any housing accommodations to be considered now or in the future. If this property is to be razed there are other developments that could be considered. Something that would benefit the people who live in Newport Beach and this close-knit area. 33 City of Newport Beach 2021-2029 HOUSING ELEMENT Public Review Draft Comments Response to Comments The thought of at least 600 plus more cars on East Bluff Drive, Jamboree, etc. along with other factors, is outside the realm of credibility and not worthy of any of you able to make this critically important decision. I, along with many others will follow this issue closely and do whatever we canto prevent it. 34 City of Newport Beach 2021-2029 HOUSING ELEMENT Background and Purpose ADU Purpose Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs) are additional independent living facilities, for one or more persons, which are located on the same parcel as a single -unit or multi- unit residential dwelling. The concept of ADUs has existed for decades but has recently come to the forefront of the California housing discussion due to legislation passed starting in 2018. This legislation, discussed in more detail in the following section, makes it easier to develop ADUs by increasing the development zones where ADUs can be built, broadening the definition of an ADU, and removing previous restrictions such as requiring replacement parking. In areas such as Newport Beach where land values are high and there is a large amount of single -unit detached housing, ADUs present a potentially more naturally affordable housing option for renters. ADUs are often smaller in size than typical apartments or rental housing, ranging from 300 to 600 square feet in size. They are also attractive to property owners who can gain rental income. The City of Newport Beach (City) believes that ADUs present a viable option as part of the overall strategy to develop housing at all income levels during the 2021-2029 61" Cycle Housing Element planning period. Appendix D describes: • Recent ADU legislation and regional actions; • Local factors that may increase ADU development over the next eight years; and • Actions Newport Beach will take through housing programs to incentivizing ADU development. Background on Legislation and Statutory Requirements Currently in Newport Beach, ADUs and JADUs are primarily regulated through Section 20.48.200 (Accessory Dwelling Units) of Title 20 (Planning and Zoning) of the Newport Beach Municipal Code (NBMC). Within the Coastal Zone, ADUs and JADUs are primarily regulated through Section 21.48.200 (Accessory Dwelling Units) of Title 21 (Local Coastal Program Implementation Plan) of the NBMC. ADU legislation is addressed in Government Code Section 65852.150; it establishes that ADUs are valuable and viable form of housing which can support the varying needs of California residents. In recent years, ADU legislation has been revised to increase opportunity and improved effectiveness in creating more housing in California. Recent changes in law have increased the feasibility and streamlined the ADU process to encourage development; below is a summary of recent legislation that has amended ADU law. SB 106.9 SB 1069 made legislative changes to address barriers to the development of ADUs and expanded capacity for ADU development. The bill reduces parking requirements per unit, restricts local agencies' ability to require ADU applicants to install new or separate utility connects or impose related fees, and requires local governments to ministerially approve applications for one ADU within single -unit residential so long as it meets specific requirements. Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-1 City of Newport Beach 2021-2029 HOUSING ELEMENT Z AB 2299 AB 2299 requires local governments to ministerially approve ADUs if the proposed unit meets all parking requirements, maximum allowable size of an attached unit and specific setback requirements. Additionally, the bill states that any existing ADU ordinances do not meet the bill's requirements is null and void and that the jurisdiction must approve accessory dwelling units based on Government Code Section 65852.2 until the jurisdiction adopts a compliant ordinance. ' R 9Af)R AB 2406 creates more flexibility by authorizing local governments to permit junior accessory dwelling units (JADU) through an ordinance. The bill defines JADUs to be a unit that cannot exceed 500 square feet and must be completely contained within the space of an existing residential structure. In addition, the bill requires specified components for a local JADU ordinance. AB 3182 AB 1382 further addresses barriers to the development and use of ADUs and JADUs in local jurisdictions. The legislation streamlines approvals of ADU and JADUs using ministerial approval processes, including a requirement that complete applications for a compliant ADU/JADU which have not been acted upon within 60 days are deemed approved. A6 dd, A5 681, SB 13 AB 68, 881 and SB 13 prohibits a number development standards and design regulations a local government may impose in ADU/JADUs, decreased the allowable time for an ADU review and permitting process, reduces the allowable associated fees for ADUs and provided additional regulatory clarifications and guidelines pursuant to Government Code Sections 65852.2, 65852.22. Q Ic AB 587 permits an ADU to be sold or conveyed as a deed restricted affordable unit separately from the primary dwelling residence. Additional, regulations are outlined in Government Code Section 65852.26, including the provision that the primary and accessory unit must be built by a qualified nonprofit. AB 670 AB 670 states that all covenants or provisions that unreasonably restrict or prohibit the development of ADU/JADUs on a lot zoned for single -unit residential use is void and unenforceable. AB 671 AB 671 requires jurisdictions to include a plan and programs in the Housing Element which incentivizes and promotes the development of ADUs for very low, low- and moderate -income households. HCD/SCAG Policies and Programs In August 2020, the State Department of Housing and Community Development (HCD) and the Southern California Association of Governments (SCAG) completed an analysis of accessory dwelling unit affordability to establish approved assumptions for use in the sites analysis for the 2021-2029 Housing Element Cycle. The analysis surveyed rents for ADUs through different online real estate platforms between April and June 2020 and focused on specific geographic regions to determine differences in Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-2 City of Newport Beach 2021-2029 HOUSING ELEMENT x.Si �:.. affordability. The final affordability assumptions resulting from SCAG and HCD's analysis for jurisdictions within Orange County are as follows:' • Extremely Low — 15.0% • Very Low — 10.0% • Low — 43.0 • Moderate — 30.0% • Above Moderate — 2.0% The City of Newport Beach applied the above approved affordability breakdown to the anticipated ADU development within the 6t' Cycle planning period. Opportunities for ADUs in Newport Beach Influences Supporting Affordable Housing in Newport Beach Opportunities to develop affordable housing on vacant land in the City are extremely limited with only three parcels qualifying based on the SCAG Housing Element Parcel Tool (HELPR) (see Figure 1). The City, however, has substantial opportunity to develop affordable housing through ADUs based on the following key factors: • High land values in the City incentivize ADU development - Because of the high land values in Newport Beach and the propensity to have viable, financially performing properties, infill opportunities on existing residential sites via ADU development represents the greatest opportunity for affordable housing construction and to integrate such development within established neighborhoods. According to SCAG's HELPR, there are numerous parcels that could qualify for by -right detached ADUs, with little to no restrictions. In addition, every single -unit in the City has the potential to convert existing space, including garage area, into an ADU or JADU by -right, resulting in approximately 19,000 eligible properties (see Figure D-2). Therefore, the City contends this provides the most significant opportunity to generate affordable housing in the community. • Site availability for ADUs is significant - Almost 8,000 existing parcels have the physical space to accommodate detached ADUs and provide for ample opportunity to add to the housing stock. Whereas the City may lose economic potential, jobs and tax base with infill redevelopment of existing commercial uses, encouraging ADU development on existing residential properties does not deteriorate economic, job and tax base considerations. Rather, it will likely enhance availability of diverse housing opportunities, promote economic stability and further the City's tax base. • Positive Historical Trends in ADU Development - The City's history of ADU/JADU development within multifamily developments demonstrates opportunity to develop attached ADUs as an affordable component of larger housing projects. These positive trends are directly correlated with the City's current efforts to provide supportive policies, outreach and information dissemination to its residents. The City has experienced year over year increase in ADU activity 1 SCAG Regional Accessory Dwelling Unit Affordability Analysis, 2020 Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-3 City of Newport Beach 2021-2029 HOUSING ELEMENT in the City and will continue to see these trends increase and exponentially expand throughout the 2021-2029 planning period through intensified public outreach and development incentives. • Demonstrated Commitment to ADU Development through Policies/Programs —The City Council has recently adopted policies that support ADU development and has developed an ADU Ordinance that strongly encourages ADU development. In addition, that City will adopt additional ADU policies the further support ADU development citywide. Providing strong support through policies, community outreach and monitoring of ADU construction. • Council Policy K-4 (Reducing the Barriers to the Creation of Housing) — On March 9, 2021, the City Council adopted Council Policy K-4, which includes a stated goal of increasing the production of ADUs and JADUs. The policy recognizes that further encouraging development of ADUs beyond State law minimums is an important strategy to accommodate future growth. To further encourage and incentive the development of ADUs, the policy set forth the following directives: 1. Interpret ambiguities in code provisions regulating ADUs in a manner that accommodates and maximizes production. 2. Direct staff and the Planning Commission to review and recommend code changes that reduce regulatory barriers, streamline the approval process, and expand potential capacity of ADUs beyond minimum State law requirements 3. Publicize incentives for construction of ADUs with a systematic approach utilizing all forms of media and outreach. 4. Prepare and maintain a user-friendly website committed to information related to codes, processes, and incentives pertaining to the development of ADUs and JADUs in the City. 5. Develop and administer a program that includes waiving all permit and City fees for property owners of unpermitted units when they agree to bring units into compliance with current building and fire codes to ensure the safety of occupants and structures. 6. Develop permit -ready standard plans to permit new ADU construction to minimize design costs, expedite permit processing, and provide development certainty for property owners. • Temporary 2-Year Fee Waiver Program for ADU and JADU Development — On April 27, 2021, the City Council adopted Resolution No. 2021-37 waiving City building plan check, building construction permit, and other related City fees required for plan check, permits, inspections, re - inspections and other related activities, for the design and construction of ADUs and JADUs on existing residential developments and the legalization of exiting unpermitted ADUs and JADUs. Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-4 City of Newport Beach - _ ._ 2021-2029 HOUSING ELEMENT Figure D-1: Vacant Land Availability ect aAu _ City or County(Urli—ir aiatedi s cF — Newport Beach Show Population and Housing Stats Standard Filters r Vacant parcels of appropriate size ai O 0 4 Lowervaluedcommercial/retail Q < P 7 Public -owned land (D r 4 Inside priority growth area, outside constraint area Q Number of Selected Parcels 3 Download Parcels (CSV) Download Parcels (SHP) 3 km Download Land Use Layer File (LYRX; m. ry ne Costa Mesa s air\ r Ha— �ZN M art. San Joaquin Hills of Irvi , Cove Beach, Cooney of Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-5 S City of Newport Beach HOUSING ELEMENT Figure D-2: ADU Eligible Lots Single -Family Zoning Areas Planned Communities 7,480 Go nve nti a nal Zoning 11,350 16, Overall Total 18,830 Vf i Single -Family Residenlial Zoned Lois Eligible for Accessory Dwelling Unit Conversion Planned Commu5ims - Singe -Family Equivalent Lots C—ninnal Zoning - R-A; R-1; R-18WO; R-1-1200; R-1-100DO; SP-7(Singl.-F—ily Lots) o Figure D-3: ADU Opportunity Areas Map COSTA U MINC MESA 14 t, CSC 22 UNINC. 25 53 ❑ Assumed ADU Units N A0 0.5 imi Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) F M. City of Newport Beach 2021-2029 HOUSING ELEMENT i ocai ADU Trends and 2021 2029 Projections There are several indicators of strong growth in ADU development since 2018 within Newport Beach. Table D-1 shows the City's number of ADUs that were issued building permits (permitted) since 2018. Initial interest in development of ADUs in the City, like other cities in the State, was slow due lack of public awareness of the new opportunities and complexity of the laws. Additionally, the City's initial ADU regulations adopted in 2018 were intended to comply with State law be as restrictive as possible. However, in 2019, the City amended its ADU regulations to comply with updates in State law but also included additional design flexibility for ADUs and adopted incentives. Due in large part to increased education of property owners, City Council support of ADU development, and additional local policies promoting the development of ADUs, the City of Newport Beach is experiencing exponential growth in ADU interest and development. The largest increase came in 2021 when the City issued building permits for 40 ADUs with an additional 29 ADU permits pending. This represents a 1325% increase in total permits issued from 2018 through 2021. Table D-1: Newport Beach ADU Development (2018-2021) ADU STATUS 2018 2019 2020 20211 Total Permitted 4 5 8 48 57 140 ADUs permits have been issued as of October 28, 2021, which prorated monthly represents 48 for the year. Final year totals anticipated to be higher given there are an additional 29 permits are pending. 60 50 40 30 20 10 0 Figure D-4: Permit Issuance in Newport Beach City of Newport Beach 2018 2019 2020 2021 --*--Permits Issued This exponential growth is not unique to the City of Newport Beach, but is similarly occurring in all other cities throughout the State. Table D-2 below illustrates the number of ADUs permitted from 2018-2020 in the various council of governments within the Southern California Council of Governments region. The data is based on HCD Annual Progress Report (APR) analysis and only includes data from the available reported years of 2018-2020. Similar to what is being experienced in Newport Beach, it is anticipated that Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-7 City of Newport Beach 2021-2029 WOt.15ING ELEMENT reported ADU permits for 2021 will have exponentially grown due to the increased public awareness and outreach efforts of the various jurisdictions. Table D-2: ADU Development in SCAG COGs (2018-2020) 900 800 700 600 500 400 300 200 100 0 ADU STATUS 2018 2019 2020 Gateway Cities Council of 129 368 619 Governments (GCCOG) Orange County Council of 282 419 827 Governments (OCCOG) Westside Cities Council of 72 96 96 Governments (WSCCOG) San Gabriel Valley Council of 199 395 509 Governments (SGVCOG) Ventura Council of 126 109 224 Governments (VCOG) Source: SCAG ADU APR Permit Reporting Data Analysis Figure D-5: Council of Governments in the SCAG Region Council Of Governments in SCAG Region 2018 2019 2020 tGCCOG tOCCOG tWSCCOG --*—SGVCOG tVCOG Newport Beach 2021-2029 ADU Projections Based on the data in Table D-1, the citywide availability of land for ADU development and the existing and future policies supporting more aggressive ADU development, Newport Beach is reasonably and justifiably projecting future growth beyond the safe harbor methodology provide in HCD's published guidance. Table D-3: 2021-2029 ADU Annual Average Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-8 City of Newport Beach 2021-2029 HOUSING ELEMENT Year Conservative Approach 2018 - 2021 Prorated Annual Average 19 Annual Average x 1.5 30 (rounded) Planning Period Total 240 Table D-3 shows the City's ADU assumptions as described in Appendix B of the Housing Element. As noted, the City anticipates that growth in ADU development will continue to occur year over year; however, the City is assuming a conservative approach by anticipating a growth factor of approximately 1.5 times the past four-year average of 19 ADUs (approximately 30 ADUs per year anticipated), resulting in a total anticipated production of 240 ADUs for the 2021-2029 Planning Period. A 1.5 factor for growth is reasonable given the development trends illustrated in Tables D-1 and D-3, extensive local policy emphasis on ADU development, and proposed housing programs described in Section 4. In addition, the City is committed to enhanced monitoring to ensure actual production is on pace with projections. The City of Newport Beach is well positioned, both from an availability of potential development areas within existing single -unit neighborhoods and from a political will standpoint, to realize a large increase in ADU development significantly exceeding the conservative estimate of 240 ADUs during the 2021-2029 planning period. Housing Element Policy Frame wort The City of Newport Beach has identified programs to maintain and encourage ADUs during the 2021- 2029 planning period. The matrix below identified existing policies contain in Section 4 of this document as well as policies the City will review for feasibility to implement in order to increase affordable housing. Table D-3: ADU/JADU Policies and Policy Considerations ADU Policy Type/Name Description Consideration Housing Element Policies Policy Action 1H: Accessory Support and encourage Explore feasibility of incentives for ADUs, including Dwelling Unit Construction the development of developing educational campaigns and minimizing ADUs in Newport Beach development costs through permit ready plans. Policy Action 11: Accessory ADU development To identify progress and make appropriate Dwelling Units Monitoring Tracking Program program adjustments, the City will monitor ADU Program applications and approvals. Policy Action 1J: Accessory Legalizing unpermitted Providing education, incentives and low -risk Dwelling Units Amnesty ADUs avenues to encourage property owners to legalize Program unpermitted ADUs and bring them up to necessary fire and life safety codes. ADU Policies for Consideration ADU Development Permit Ready Program Developing and offering of pre -approved ADU Streamlining building plans to help to reduce cost burden on applicant side. JADU Incentive Production Junior ADU Program Evaluate additional incentives for JADU production above those currently offered. Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-9 City of Newport Beach 2021-2029 HOUSING ELEMENT ADU Policy Type/Name Description Consideration Public Outreach and ADU ADU Outreach Program Formal development of public outreach and Education Program dissemination of materials for ADU and JADU (both electronically and in print). ADU/JADU Subsidy Program Subsidy incentives to Provide grants or low interest loans to interested construct ADUs property owners in exchange for deed restricted ADU/JADUs. Production/Incentives Incentives to create long Granting fee waivers, additional development term affordability of standards waivers, or square footage bonuses in ADU/JADU exchange for affordability covenants. ADU and JADU Incentive Various development • Fee Waiver/Deferral Programs standards and • Over the Counter Approvals entitlement streamlining • ADU One Stop Permit actions • Subsidies for Affordability Summary of Newport Beach ADU Approach Anticipated ADU Growth (Planning Period 2021-2029) Newport Beach anticipates that the City will continue to see year after year growth in ADU development which matches or exceeds the growth in ADU activity shown from 2019 to 2020. The City has over 21,000 single -unit dwelling units, all of which are eligible to develop one ADU and one JADU. Additionally, multi- unit apartment complexes can also develop ADUs if the requirements of State law and the City's local ordinances are met. While the City anticipates hundreds of ADUs to be developed within the 2021-2029 planning period based on increased production of ADUs year over year as demonstrated in Table D-2, for the purposes of the Housing Element, the City is conservatively estimating 240 ADUs. In accordance with HCD/SCAG guidance on affordability assumptions within the Housing Element Update process, the City anticipates that 151 of these units will be affordable to residents within the very low and low-income categories, 84 will be affordable to residents within the moderate income category, and 48 will be affordable to residents within the above moderate -income category. Supportive Policies and Programs Newport Beach has proposed programs within the 2021-2029 Housing Element to take meaningful steps towards promoting and incentivizing ADU growth during the planning period. The City will explore incentives beyond what has been established to date, including the potential for permit -ready plans or a streamlined process if certain requirements are met. Table D-3 outlines a list of further ADU incentives that the City may explore during implementation of Policy Action 1H. The City also plans to continue its ADU amnesty program to bring existing non -conforming accessory units up to code so that the City can realize RHNA credit for these existing housing units within the community. Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-10 City of Newport Beach 2021-2029 HOUSING ELEMENT Monitoring Requirements The City of Newport Beach is required to report all development within the City, including ADU development, to the State Department of Housing and Community Development (HCD) annually through their Annual Progress Reports (APRs). As part of this reporting, the City must show adequate progress in meeting their identified ADU growth assumptions as described above. To address HCD's ADU monitoring and reporting requirements, the City has included Program 11 within the Housing Plan (Section 4). This states that the City will conduct an assessment of ADU growth within two years of adoption of the Housing Element. If ADU assumptions are not keeping pace with the assumptions made within the Housing Element, the City will implement fall back actions to accommodate the shortfall, if necessary. Appendix D: Accessory Dwelling Units (September 2022 Final Housing Element) D-11 i Exhibit E April 27, 1992, City Council Meeting Minutes and Ordinance No. 92-13 https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=21921 &dbid =0&repo=CNB https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=36004&dbid=0&repo=CNB Exhibit F April 27, 2004, City Council Agenda Item No. 3 Adopting Ordinance No. 2004-6 and Supporting Material https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=68969&dbid=0&repo=CNB https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=36708&dbid=0&repo=CNB Exhibit G June 23, 2020, City Council Agenda Item No. 19 Adopting Ordinance No. 2020-15 and Supporting Material https://ecros. newportbeachca.gov/WEB/DocView.aspx?id=2538440&dbid=0&repo=CNB Correspondence https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2538635&dbid=0&repo=CNB Ad Hoc Committee Recommendations PowerPoint htt s://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2538700&dbid=0&repo=CNB Corona del Mar Residents Association Short -Term Lodging Survey PowerPoint https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2538702&dbid=0&repo=CN B Newport Island Community Association Survey Highlights PowerPoint https://ecros. newportbeachca.gov/WEB/DocView.aspx?id=2538703&dbid=0&repo=CN B Ordinance No. 2020-15 https://ecros. newportbeachca.gov/WEB/DocView.aspx?id=2544635&dbid=0&repo=CN B Exhibit H October 13, 2020, City Council Agenda Item No. 18 Adopting Ordinance No. 2020-26 and Supporting Material https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2605151 &dbid=0&repo=CNB Correspondence https://ecros.newportbeachca.qov/WEB/DocView.aspx?id=2605188&dbid=0&repo=CNB Notice of Public Hearing https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2605206&dbid=0&repo=CNB Ordinance No. 2020-26 https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2609797&dbid=0&repo=CNB Exhibit I November 30, 2021, City Council Agenda Item No. 26 Adopting Ordinance No. 2021-28 and Supporting Material https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2797314&dbid=0&repo=CNB Correspondence https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2797686&dbid=0&repo=CNB Short Term Lodging LCP Amendments PowerPoint https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2797391 &dbid=0&repo=CNB Notice of Public Hearing https://ecros. newportbeachca.gov/WEB/DocView.aspx?id=2797689&dbid=0&repo=CN B Ordinance No. 2021-28 https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2800356&dbid=0&repo=CN B Exhibit J Sage Crest Planning + Environmental Report FRACTIONAL HOMEOWNERSHIP Prepared For: City of Newport Beach OFOft Community Development Department August 29, 2022 U111111H111 11111111011 I1MMM a Ilk Table of Contents EXECUTIVE SUMMARY..................................................................................................................................1 BACKGROUND...............................................................................................................................................1 Known/Suspected Properties in Newport Beach..................................................................................... 1 BENEFITS AND IMPACTS OF FRACTIONAL HOUSING.................................................................................... 2 Fractional Housing Benefits...................................................................................................................... 2 FractionalHousing Impacts....................................................................................................................... 3 COMMUNITY SURVEY...................................................................................................................................4 Cityof Beverly Hills, CA............................................................................................................................. 5 Cityof Carlsbad, CA................................................................................................................................... 5 Cityof Carmel by the Sea, CA.................................................................................................................... 5 Cityof Encinitas, CA..................................................................................................................................5 Cityof Fort Lauderdale, FL........................................................................................................................ 6 Cityof Hermosa Beach, CA....................................................................................................................... 6 Cityof Indian Wells, CA............................................................................................................................. 6 Countyof Monterey, CA........................................................................................................................... 6 Cityof Napa, CA........................................................................................................................................6 Villageof North Haven, NY....................................................................................................................... 7 Cityof Oceanside, CA................................................................................................................................7 Cityof Pacific Grove, CA............................................................................................................................ 7 Cityof Palm Desert, CA............................................................................................................................. 7 Cityof Palm Springs, CA............................................................................................................................ 7 Cityof Park City, UT.................................................................................................................................. 8 Cityof Santa Barbara, CA.......................................................................................................................... 8 Cityof Santa Cruz, CA................................................................................................................................8 Cityof South Lake Tahoe, CA.................................................................................................................... 8 Cityof Sonoma, CA.................................................................................................................................... 9 Cityof St. Helena, CA................................................................................................................................ 9 Townof Truckee, CA................................................................................................................................. 9 Cityof Vail, CO........................................................................................................................................10 FRACTIONAL HOUSING -i- SS2-5 APPENDICES................................................................................................................................................10 Appendix A— Pacaso Economic Impact Analysis, prepared by EBP........................................................A1 Appendix B — City of Beverly Hills Urgency Ordinance........................................................................... 131 Appendix C— City of Carlsbad Timeshare ordinance.............................................................................. C1 Appendix D — City of Carmel by the Sea Cease and Desist Order...........................................................D1 Appendix E — City of Hermosa Beach Planning Commission Resolution ................................................ E1 Appendix F — County of Monterey Cease and Desist Order................................................................... F1 Appendix G —Village of North Haven Code Amendment...................................................................... G1 Appendix H — City of Palm Desert Ordinance........................................................................................ H1 Appendix I — City of Palm Springs Cease and Desist Order...................................................................... 11 Appendix J — Park City Notice of Amendment.........................................................................................J1 Appendix K — City of Santa Cruz Ballot Initiative..................................................................................... K1 Appendix L — City of South Lake Tahoe Cease and Desist Order............................................................ L1 Appendix M — City of Sonoma Ordinance..............................................................................................M1 Appendix N — City of St. Helena Ordinance........................................................................................... N1 Appendix 0 — Pacaso Inc. v. City of St. Helena....................................................................................... 01 Appendix P—Town of Truckee Ordinance.............................................................................................. P1 Cover Photo by Dex Ezekiel on Unsplash FRACTIONAL HOUSING -ii- SS2-6 EXECUTIVE SUMMARY The City of Newport Beach (City) is beginning to see the rise of fractional homeownership of single-family houses. Fractional homeownership is when multiple owners purchase a property and split the allowed time at the property through a formal arrangement, as compared to multiple owners who occupy the residence full-time or have no formal arrangement for occupancy. In the fractional model, the allotted time for each owner is based on their percentage of ownership. In reviewing available data on fractional homeownership, there appears to be at least ten such properties within the City but there could be more. The City is receiving complaints from residents that these properties function similarly to short-term rental vacation homes and result in significant noise, traffic, and other impacts to residential neighborhoods. As a result of these concerns, the City asked Sagecrest Planning+Environmental (Sagecrest) to investigate how other jurisdictions are dealing with fractional housing and the companies that promote them. Based on this investigation, it appears that other communities are adopting moratoriums and pursuing operators of fractional housing companies through code enforcement actions. BACKGROUND Fractional homeownership (sometimes called co -ownership) is an emerging trend in real estate where ownership of properties is equally shared among multiple owners (typically between four and 12 owners). The amount of time the owner may spend at the property correlates to the fraction of ownership (e.g., a 1/8 share owner would be allotted 45 days per year). This time allotment is not typically used consecutively, but rather one or two weeks at a time. In addition to the cost to purchase their share of the home, the owners are responsible for their share of the maintenance, property management fees, HOA fees, cleaning costs, utilities, taxes, insurance, and payment into a reserve fund to cover long-term repairs, such as replacement of the roof. Fractional owners maintain an ownership interest, benefit from a change in property value due to appreciation and have the potential to generate income through short- term rentals, although the City would maintain authority on short-term rentals. It should also be noted that some fractional homeownership companies prohibit short-term rentals in their management agreement. Companies such as Pacaso, Sharetini, Ember, Equity Estates, and others facilitate the purchase of properties and provide the necessary maintenance, furnishments, property management, and cleaning services in exchange for a monthly fee. Many of these companies utilize ownership models that purchase and hold the properties under entities, such as limited liability companies, to avoid the need for a real estate transaction each time an owner sells their share. Alternatively, an ownership group could forego using a management company and self -govern the access to fractional housing. Known/Suspected Properties in Newport Beach Sagecrest reviewed the listings on various sites to identify properties in Newport Beach. Additionally, Sagecrest reviewed the City's database to find properties with mailing addresses that match the fractional home ownership companies. The following table lists the properties that are either known or suspected to be fractional ownership properties. A CLL" I 11167 VGIUM. [001110 [e] -1- SS2-7 117 25" Street Listed on Pacaso 121 Emerald Avenue Listed on Pacaso 305 Grand Canal Listed on Pacaso 315 East Bay Avenue Listed on Ember 506 West Oceanfront Listed on Pacaso 1703 Plaza del Sur I Listed on www.compass.com 2137 Miramar Drive _ Listed on Ember 2628 Ocean Boulevard City database mailing address match to Pacaso 3803 Marcus Avenue City database mailing address match to Pacaso 4106 River Avenue Listed on Pacaso BENEFITS AND IMPACTS OF FRACTIONAL HOUSING Fractional Housing Benefits The primary benefit of fractional homeownership is to own a second home at a more affordable price. According to county records, the home at 506 W Oceanfront sold on March 14, 2022, for $6,800,000. A V8 share of this house is currently being offered on Pacaso for $1,098,000. According to Equity Estates, a vacation home investment firm, the benefits of fractional housing are: 1 • It's more affordable - Perhaps a $4M home is out of reach, but $1M is right in your wheelhouse. Fractional ownership lets you get the home you want in the most desirable location at the price you can afford. This goes for home upkeep and maintenance, too. By sharing the costs of upkeep, fractional ownership makes long-term ownership a much more realistic possibility. • The home will get some love - No home should sit vacant 48 weeks out of the year. By sharing the ownership, the home will be opened up at regular intervals. Opening and closing windows and doors, running the water, turning on the AC and heater, and using amenities like the hot tub and pool —all of these are essential to maintaining the home. It provides an opportunity to identify issues early on and preserve the home's long-term value. • Peace of Mind - Fractional ownership also means sharing the burden of homeownership. Rather than a single point of failure (i.e., you), you essentially have a group that shares accountability, schedules maintenance, checks on the home, and divides the work and chores that would otherwise be left to a single owner. Another fractional housing company, Pacaso, claims that its model reduces demand in the housing market. Specifically, they state, "This demand on top of short supply has driven up home prices to unprecedented levels. Instead of eight second home buyers buying eight separate median -priced homes, which drives up prices even further, Pacaso consolidates those eight buyers into just one luxury home, which alleviates pressure at the median -priced tier."' To address concerns that they do not provide a benefit, Pacaso commissioned an economic impact analysis (Appendix A), which found that the average fractional ownership house generates an average of $48,390 in annual spending compared with the 1 https://eguityestatesfund.com/the-pros-and-cons-of-fractional-ownership, retrieved August 16, 2022 https://www.pacaso,com/blog/economic-impact-study, retrieved August 16, 2022 FRACTIONAL HOUSING -2- SS2-8 average second home. The study further found that fractional housing generates an average of $3,780 additional revenue in local and state tax dollars over the average second home. Fractional Housing Impacts Notwithstanding the aforementioned benefits, many communities have received complaints from their residents that fractional housing creates adverse impacts on the neighborhoods in which they are located and the City as a whole. Jurisdictions that have taken a proactive approach to preventing fractional housing in their communities all have expressed concerns about the following: • Fractional housing adversely impacts the affordability of full-time homes in the community. As more homes are taken out of the primary housing market and converted to vacation homes, the available housing stock is reduced. Even though the fractional housing companies focus on the high -end market, any loss in available housing supply results in increase costs across the entire market. • Due to the high turn -over of occupants, fractional housing could adversely impact long-term residents in the surrounding neighborhood. Given that vacations typically last for short periods of time, these properties would have similar impacts as short-term rentals, such as noise, loss of privacy, loss of community buy -in, and decline in property values. • The operation of the fractional homeownership companies within residential areas would result in the commercialization of residential neighborhoods. Several communities that Sagecrest spoke with noted that the operations of these companies would require a business license as they are establishing a commercial use. Sagecrest discussed concerns with fractional housing with a major opponent to fractional housing, Stop Pacaso Now3. This organization consists of volunteers who provide resources to residents to oppose fractional housing from being established in their community. This includes providing sample yard signs, sample letters, and volunteer coordination guidance. In discussing the effectiveness of their outreach, Stop Pacaso Now stated that they have had great success in communities in which residents have organized. Stop Pacaso Now has sponsored four petitions on change.org (Sonoma 4, Dry Creek Valley', St. Helena', and a nationwide petition') against fractional housing with a total of 7,411 signatures. The Mitchell Hamline Law Journal of Public Policy and Practice published a journal article' that found that "The increasing commodification of single-family homes has had cascading effects on housing and on communities in general." Fractional housing is shared among various owners, as a result, an increase in 3 https://stoppacasonow.com/ https://www.change.org/p/sonoma-county-planning-commission-pacaso-time-shares-don-t-belong-in-sonoma- neighborhoods, retrieved August 16, 2022 ' https://www.change.org/p/pacaso-time-shares-don-t-belong-in-dry-creek-valley-s-agricultural-zoning-and- farmlands, retrieved August 16, 2022 ' https://www.change.org/p/mderosa-cityofsthelena-org-gellsworth-cityofsthelena-org-stop-pacaso-from- commercializing-our-residential-neighborhoods, retrieved August 16, 2022 ' https://www.change.org/p/pacaso-stop-pacaso-s-tal<eover-of-housing, retrieved August 16, 2022 $ Markuson, Christopher (2022) "A Timeshare By Any Other Name: Fractional Homeownership and the Challenges and Effects of Commodified Single -Family Homes," Mitchell Hamline Law Journal of Public Policy and Practice: Vol. 43: Iss. 2, Article 1. Available at: https://open.mitchellhamline.edu/policypractice/vol43/iss2/1 FRACTIONAL HOUSING -3- I SS2-9 the number of units could decrease the demand for hotel rooms. This would likely result in a reduction in the amount of transient occupancy tax accrued by the City. COMMUNITY SURVEY Sagecrest researched other communities that have fractional ownership properties to determine if there is a concern with these properties and how the community is addressing these concerns. A summary of the actions is contained in the table below, followed by a description of each community. Notes (a) Code Amendment in Process (b) City Council is split on whether or not fractional housing is a timeshare FRACTIONAL HOUSING -4- SS2-10 City of Beverly Hills, CA On July 15, 2021, the City of Beverly Hills adopted an urgency ordinance establishing a 45-day moratorium on fractional ownerships of residential and commercial properties. In the staff report, the City expressed concerns that the properties would impact the residents in the surrounding neighborhood since they would operate as vacation rental homes. The City noted these properties would likely "experience high turnover rates of occupants, and result in impacts related to their operation such as noise, loss of privacy, loss of community buy -in, and decline in property values." In addition to these impacts, the City expressed concerns that converting homes to fractional housing would remove permanent housing from the housing market. Notwithstanding this prohibition, the moratorium does allow the City Council to approve a fractional ownership dwelling if they adopt a finding that "the fractional ownership of a property will not disturb the stability of a residential neighborhood or residential building and will not adversely impact future development, redevelopment, safety, and proper maintenance of the property" during a duly noticed public hearing. The moratorium was extended for ten months and 15 days on August 17, 2021 and extended again for a second year on June 14, 2022. The moratorium is now set to expire on July 14, 2023. The moratorium intends to allow the City staff time to study the issue and any potential impacts fractional housing may have on the health, safety, and welfare of those who live in surrounding homes and on the City as a whole. A copy of the urgency ordinance and staff report is included in Appendix B. City of Carlsbad, CA The City of Carlsbad noted that the use of fractional properties constitutes a timeshare. They have an existing timeshare ordinance (Appendix C), which they would enforce if they received a complaint. The City has not had an issue with operation of the fractional homes. City of Carmel by the Sea, CA The City is aware of fractional ownership companies and their assertation that they sell and manage properties, not timeshares. The City disagrees with this position and is of the opinion that any fractional housing has the same impacts on surrounding residential areas as short-term vacation rentals. Not only is it unlawful for any fractional ownership company to commence or carry on any kind of business in the City without first procuring a business license and pay the applicable business license tax, but any such business would be in violation of the City's prohibition of timeshares. The City noted that their regulations on transient commercial use of residential property have been previously adjudicated.' Carmel by the Sea has issued a cease -and -desist order (Appendix D), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance. City of Encinitas, CA The City is aware of the fractional ownership model and that other communities are working on regulations. Since Encinitas has not had any issues with fractional homeownership, they are not working on any code updates or taking enforcement actions. 9 Ewing v. City of Carmel -by -the -Sea (1991) 234 Cal.App.3d 1579 FRACTIONAL HOUSING -5 SS2-11 City of Fort Lauderdale, FL The City of Fort Lauderdale does not regulate fractional housing since they are considered transient lodging. Within the State of Florida, transient lodging is regulated by the State. Provided the fractional housing is within any zone which permits transient lodging, it would be allowed. City of Hermosa Beach, CA The City of Hermosa Beach classifies fractional housing as a timeshare. They are concerned that the operation of the fractional housing and timeshares could change the character of residential neighborhoods as the guest of the units may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Currently, the Hermosa Beach Municipal Code does not regulate timeshares, but the City is processing a code amendment to prohibit timeshares in residential zones. If approved, the code amendment would allow timeshares in commercial zones with approval of a Conditional Use Permit. The Planning Commission conducted a public hearing on the code amendment on April 19, 2022, at which the Commission adopted a resolution (Appendix E) to recommend the City Council approve the code amendment. This amendment is currently scheduled for a public hearing before the Council on September 27, 2022. City of Indian Wells, CA The City of Indian wells does not currently regulate fractional housing but has received complaints from residents regarding impacts being created. The City Council discussed the matter on May 19, 2022, at which time the City Council was split if fractional housing constituents a timeshare or not. They expressed concerns about taking legal action on the fractional ownership companies due to the ongoing litigation in other jurisdictions. The City Council directed the City Attorney to return with options for them to consider on how to proceed. At this time, it is not known when this discussion will be taken back to the City Council. County of Monterey, CA Within areas of Monterey County that fall under the County's zoning jurisdiction, fractional ownerships are classified as timeshares. Pursuant to the Monterey County Municipal Code, timeshare projects are only allowed in zones where a hotel, motel, or similar visitor accommodation use would be permitted, and in such cases a Use Permit or a Coastal Development Permit would be required. Monterey County is aware of certain homes advertised as fractional housing that are located in the Carmel Highlands and the Del Monte Forest. Both areas are within the County's zoning jurisdiction and are within residential zones. Monterey County has issued a cease -and -desist order (Appendix F), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within these areas and will proceed through its code enforcement authority to obtain compliance. City of Napa, CA The City of Napa does not have an ordinance regulating fractional ownership citywide but does have a Master Development Plan (MDP) for the Stanly Ranch area. This MDP requires fractional ownership properties to pay a transient oriented tax for stays more than 14 days, but research indicates that no fractional ownership property has paid the TOT. In 2021, the City Council conducted a hearing to discuss the matter, during which residents complained of not wanting their neighborhoods to turn into a business venture for the wealthy. There has been no further discussion regarding fractional ownership. FRACTIONAL HOUSING -67 SS2-12 Village of North Haven, NY The Board of Trustees of the Village of North Haven enacted a prohibition on fractional ownership, timesharing, and interval uses in single-family homes in January 2022 (Appendix G). The Board found that the needs of transients are adverse to the interest that protect and preserve single-family homes. Furthermore, the prohibition was deemed necessary to prevent the unwarranted commercialization of residential areas. In a discussion with the Town staff, the ordinance would be enforced through code enforcement if they receive a complaint, but they were unable to confirm if action had been taken on any existing units. City of Oceanside, CA The City of Oceanside is not aware of any specific issues surrounding single-family homes used as fractional ownerships. The City does allow fractional ownership in their Downtown District as it pertains to traditional timeshare listings, provided a Conditional Use Permit is approved for the use. Given that most of these fractional ownership listings resemble short-term rental models, staff would consider fractional housing has short-term rentals in single-family homes, which would require the issuance of a short-term rental permit. City of Pacific Grove, CA Currently the City of Pacific Grove prohibits timeshares throughout the City. The City Council accepted public comment on fractional housing and timeshares on May 18, 2022, at the conclusion of which the Council directed staff to review the City's current timeshare ordinance and recommend changes to better effectuate the City's prohibition of timeshare projects, including fractional housing. The City anticipates having the draft ordinance to their Planning Commission in October 2022 and to the City Council by the end of year. City of Palm Desert, CA In November 2021, the City Council discussed the emergence of fractional ownership businesses within the City. In the Staff Report, the City Attorney opined that the fractional homeownership "model fits within that definition of "time- share plan" as co -owners receive ownership rights to use a property for less than a year on a recurring basis" (Appendix H). The City only allows timeshares in the Planned Residential, General Commercial, and Planned Commercial Resort zones. On May 12, 2022, the City Council adopted an ordinance updating the timeshare provisions of the Palm Desert Municipal Code. The updates include expanding the definition of timeshare that includes the shared use of any property, where the owners have the right of occupancy for less than full year during any given year. The ordinance also established enforcement procedures for violations of the timeshare ordinance. City of Palm Springs, CA The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Timeshares are only permitted in zoning districts where hotel uses are permitted and with approval of a Conditional Use Permit. Notably, timeshares are not permitted in single-family zones. Furthermore, the City's business license ordinance requires any party that is transacting any business within the City to first procure a business license and pay the applicable business license tax. Although the fractional ownership companies claim that they only purchase and sell luxury homes, and therefore they do not impact the availability of affordable housing. However, the City believes the basic laws of supply and demand dictate that every home that is made unavailable to a full-time resident, FRACTIONAL HOUSING -7 SS2-13 whether "luxury" or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City. In addition to the loss of housing, fractional ownership companies who involve multiple investors will result in their guests rotating the occupancy of the dwelling throughout the year. Although the fractional owners are not technically renters, the City believes the neighbors can expect the property to have many of the same secondary impacts that are caused by vacation rentals. The City of Palm Springs has issued a cease -and -desist order (Appendix 1), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance. City of Park City, UT Park City, Utah allows fractional ownership in single-family homes provided the ownership obtains approval of a Conditional Use Permit. The areas in which the City allows fractional ownership are identified in the City's General Plan and consists of areas that support the resort economy. These are the same areas that allow timeshares and private residential clubs. The fractional ownership properties must comply with specific prohibitions such as on -street parking, nightly rentals, the outdoor display of goods and merchandise, and signage. Additionally, the fractional housing must obtain approval of a management plan that outlines a satisfactory level of management and maintenance of the fractional housing. The City is currently preparing a code amendment which would prohibit fractional ownership in most single-family zones. The amendments would allow fractional housing in zones where timeshares and private residential clubs are currently permitted. The amendment would also require a business license for fractional ownerships, submittal of a management plan, and prohibition of nightly rentals, on -street parking, outdoor display of goods, signs, and commercial uses (Appendix J). On August 30, 2022, the Planning Commission and City Council are scheduled to conduct a joint work session on the proposed amendments. City of Santa Barbara, CA The City of Santa Barbara does not have any regulation for fractional ownership. The City has received complaints regarding fractional housing in single-family residential area. The Planning Commission and City Council have conducted hearings on the matter but have not given staff direction for future research to regulate these ownerships. City of Santa Cruz, CA Even with fractional homes being offered within city limits, City staff was not aware of this type of ownership model. The City does not currently regulate fractional ownership or timeshares. Notwithstanding this, the City Council has placed a ballot initiative on the November election to establish a tax on residential properties that are occupied less than 120-days a year (Appendix K). City of South Lake Tahoe, CA The City stated that a property sale or deed that results ownership rights in or the right to use accommodations for a period of time less than full year during any given year is considered timeshare. Even though timeshares ten or fewer units are not subject to the Vacation Ownership and Timeshare Act of 20041", they are still subject to local authority. In fact, Section 11280(b) of the Business and Professions L0 California Business and Professions Code §§1121-11288 FRACTIONAL HOUSING -8- SS2-14 Code expressly preserves the authority of local jurisdictions to regulate timeshares through "zoning, subdivision, or building code or other real estate use law, ordinance, or regulation." South Lake Tahoe has issued a cease -and -desist order (Appendix L), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City until such time they comply with the City's timeshare ordinance. City of Sonoma, CA On January 19th, 2022, the Sonoma City Council voted unanimously to adopt an urgency ordinance to prohibit timeshares and fractional housing. The Council adopted the urgency ordinance due to concerns that these uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City. Furthermore, there are concerns that timeshare and fractional housing interest uses increase traffic and noise impacts as they have the same character as commercial hotels, motels, and other transient occupancy uses making them inappropriate for residential zones. On June 15, 2022, the Sonoma City Council adopted an ordinance (Appendix M) to amend the code to prohibit all timeshares and fractional housing in the City. City of St. Helena, CA Within St. Helena, timeshares are only permitted in Service Commercial District and Central Business District. The City Council recently updated the timeshare ordinance to specifically prohibit co -ownership of residential properties (Appendix N). The ordinance updated the definition of a timeshare to broaden its applicability to incorporate fractional housing and limits timeshares uses to their Service Commercial and Central Business District zone. The ordinance also bolsters the City's enforcement authority by including a specific prohibition on timeshare uses in most zones, but also outlines the enforcement process and mechanisms. The enforcement provision was modeled after the City's short-term rental ordinance to which they note has been very effective. It is important to note that Pacaso filed a lawsuit against the City in federal court11 (Appendix O). Pacaso seeks to stop the City from enforcing their timeshare ordinance against Pacaso and other fractional ownership properties because they feel the timeshare ordinance is invalid and enforcement of said ordinance violates the fractional homeowners and Pacaso's due process protection afforded by the 14`h amendment to the U.S. Constitution. Pacaso had also claimed that the City's enforcement actions constituted an intentional interference with prospective economic advantage; however, the Court rejected this portion of the claim. The lawsuit remains pending. Town of Truckee, CA In May 2022 the Town of Truckee adopted a general zoning code cleanup ordinance (Appendix P). Among the various amendments included in the ordinance, the Town Council approved changes to the Town's timeshare uses. This includes outlining the application process, development standards and enforcement and violation protocols for time-share uses; as well as clarifying that timeshare properties are only allowed within existing legal nonconforming single-family residences in the CG (General Commercial) and CN (Neighborhood Commercial) zones. 11 Pacaso Inc. v. City of St. Helena, 21-cv-02493-WHO (N.D. Cal. Jul. 15, 2021) FRACTIONAL HOUSING -9- SS2-15 City of Vail, CO The City does not have regulations regarding fractional ownership. Explaining the concerns of the business model, the City Attorney would agree it resembles a timeshare model but does not see how any City ordinance would be able to regulate it since it is the ownership of a property rather than a use in a portion of a building. APPENDICES FRACTIONAL HOUSING -10- SS2-16 Appendix A — Pacaso Economic Impact Analysis, prepared by EBP FRACTIONAL HOUSING -Al- Exhibit K City of Carmel -by -the Sea Time Share Ordinance and Supporting Evidence 4/27/23, 9:01 AM Coversheet a, I- THE SF9 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL Staff Report February 7, 2023 PUBLIC HEARINGS TO: Honorable Mayor and City Council Members SUBMITTED BY: Brandon Swanson, Community Planning & Building Director APPROVED BY: Chip Rerig, City Administrator Consider Ordinance No. 2022-007 (first reading) amending Carmel Municipal Code (CMC) Sections SUBJECT: 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA Section 30510) - Continued from December 6, 2022, and January 10, 2023 RECOMMENDATION: 1. Request the City Attorney to read the title of Ordinance 2022-007. 2. Waive further reading and introduce draft ordinance 2022-007 amending Carmel municipal code (CMC) sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA section 30510). BACKGROUND/SUMMARY: EXECUTIVE SUMMARY The Carmel -by -the -Sea Municipal Code prohibits timeshares. The proposed ordinance confirms the existing prohibition of time shares, and adds new prohibitions with respect to advertisement and sale of timeshares and fractional interest ownerships. The City's Planning Commission has recommended adoption of these amendments, with an additional recommendation for Council to have a policy level discussion in the future about whether or not timeshares should continue to be prohibited in the Village. BACKGROUND Existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and are defined in Section 17.28.010 to include any land use that is a "timeshare project", "time share program," or "time share occupancy." These are defined in Section 17.70.020 as follows: Time -Share Occupancy. An occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s) or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times. Time -Share Program. Any arrangement for a project whereby the use, occupancy, or possession of real property has been made subject to a time-share estate, use, or occupancy, whereby such use, occupancy, or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year, but not necessarily for consecutive years. Time -Share Project. A project in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted for the use or occupancy periods into which the project has been divided. As a result of recent enforcement efforts related to timeshares, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code. On October 12th, 2022, the Planning Commission was presented these draft amendments, and received testimony from the public. Following discussion, the Commission approved a resolution recommending that the City Council adopt the ordinance as drafted by staff. The Commission also crafted an additional recital recommending that Council have a policy discussion in the near future to explore whether or not timeshares should still be prohibited in the City of Carmel -by -the -Sea. This additional recommendation arose from deliberations during the hearing, in which the Commissioners discussed the number of vacant homes in the Village and whether https://carmel.novusagenda.com/agendapub]ic/CoverSheet.aspx?ItemID=4958&MeetingID=1340 1 /2 4/27/23, 9:01 AM Coversheet a form of timeshare use could present a solution to filling them. The Commission's additional recommendation is for Council to hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. STAFF ANALYSIS The changes proposed by the ordinance include: Section 17.70.020 is modified to simplify the City's existing definitions with respect to timeshares. The City's existing definitions include definitions of time-share estate, time-share use, time-share occupancy, and time-share property, which are based on similar definitions in state law (the Vacation Ownership and Time -Share Act of 2004, as set forth in Business and Professions Code section 11210 et seq.). However, the existing definitions with respect to timeshares in 17.70.020 are multiple and reference each other, and introduce unnecessary complexity into the City's zoning regulations. While not a substantive change in the scope of the City's regulations, the proposed ordinance would simplify definitions to prohibit the use of real property under a "time-share plan." The definition of "time-share plan" would mean "any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years." The code would specify that a time share plan exists "whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan." The code would be revised to make clear that a prohibited timeshare is created whenever any right is established for exclusive use of the property that is periodic on a recurring basis, regardless of the form. The definition of "timeshare plan" would now specifically mention that fractional ownership is one way a timeshare can be created, which is also not a substantive change. "Time-share use" and "fractional interest use" are defined to mean exactly same thing, so that it is clear to all potential violators that there is no difference between a fractional interest use and a timeshare use. • 17.14.040, prohibiting timeshares in commercial zones, is modified to use the updated definitions. • 17.28.010.A, prohibiting timeshares in all city zoning districts, is updated to use the updated definitions. Additional subsections are added to this section to make advertisement of timeshares subject to criminal penalties as well as the City's administrative civil penalty process. The code also specifies that each day a violation occurs is a separate offense, for purposes of deterring violations by increasing the visibility of potential consequences. While the existing municipal code prohibits fractionalized interest ownership, as a timeshare is created based on the allocation of exclusive rights of use to real property, the proposed code amendments would clarify the prohibition and strengthen enforcement efforts. Additionally, the proposed ordinance would expressly prohibit the advertisement and sale of timeshares and fractional interest uses; this would allow for proactive enforcement by the City against those involved in the creation, advertisement, and sale of such prohibited land uses, rather than just the purchaser or owner of a timeshare or fractional interest use. FISCAL IMP-. T. The staff time associated with processing this ordinance amendment is captured in the FY2022/2023 Community Planning and Building Budget PRIOR CITY COUNCIL ACTION: None. ATTACHMENTS: Attachment 1) PC Resolution 2022-036-PC Recommending Approval Attachment 2) Draft Ord. 2022-007 REDLINE Attachment 3) Draft Ord. 2022.007 CLEAN https://carmel.novusagenda.com/agendapublic/Coversheet.aspx?ItemID=4958&MeetingID=1340 212 CITY OF CARMEL-BY-THE-SEA PLANNING COMMISSION RESOLUTION NO. 2022-036-PC A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA RECOMMENDING CITY COUNCIL ADOPT ORDINANCE AMENDING MUNICIPAL CODE SECTIONS 17.14.040, 17.28.010, AND 17.70.020, TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF WHEREAS, existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and regulated by Sections 17.28.010, 17.70.020 and 17.14.040; and WHEREAS, as a result of enforcement efforts, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code; and WHEREAS, notice of a public hearing of the Planning Commission was published on September 301h, 2022 in compliance with State law (California Government Code 65091); and WHEREAS, on October 12, 2022, the Planning Commission held a public hearing to consider draft Ordinance 2022-007 amending regulations pertaining to timeshares and receive public testimony, including without limitation, information provided to the Planning Commission by City staff and through public testimony; and WHEREAS, the Planning Commission found that the draft Ordinance 2022-007 was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations. WHEREAS, the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA"), together with State Guidelines (14 California Code Regulations §§ 15000, et seq., the "CEQA Guidelines") and City Environmental Regulations (CIVIC 17.60) require the review of certain projects for environmental impacts and preparation of environmental documents; and WHEREAS, the Planning Commission finds that pursuant to CEQA regulations, the project will have no impact on the environment and is not considered a project requiring compliance with the California Environmental Quality Act (Section 21065 of the California Public Resources Code); and WHEREAS, the facts set forth in the recitals are true and correct and are incorporated herein by reference. NOW, THEREFORE, BE IT RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY recommend the City Council amend municipal code sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof and adopt the Update in a manner fully in conformity with the Coastal Act (CA Section 30510). BE IT FURTHER RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL- BY-THE-SEA DOES ALSO recommend the City Council hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. PASSED, APPROVED, AND ADOPTED BY THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA this 12th day of October, 2022, by the following vote: AYES: Delves, Allen, Bolton, LePage, Locke NOES: ABSENT: ABSTAIN: APPROVED: ATTEST: Michael LePage, Chair Leah Young, Planning Commission Secretary CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (GA PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G34 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance and on October 12, 2022, determined the ordinance was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations, and havina reviewed the Planning Commission's recommendations and the relevant City's General Plan; and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the a public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2023, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony; and OAK #4875-3304-4012 v2 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (GA Public Resources Code Section 30510 et seq. ) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be OAK 94875-3304-4012 v2 objectionable to persons residing or working in the vicinity by reason of odor, fumes, noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are OAK 44575-3304-4012 v2 a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK #437�-3304-4012 v2 CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance, and on October 12, 2022, determined the ordinance was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations, and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan, the City Council finds that the ordinance is consistent with the City's General Plan; and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2023, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony; and OAK 44875-3304-401? v2 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (Public Resources Code Section 30510 et seq.) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be objectionable to persons residing or working in the vicinity by reason of odor, fumes, OAK 41375-3304-4012 v2 noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights OAK 94575-3304-4012 v2 pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK #437�-3304-4012 v? 4/27/23, 9:03 AM Coversheet CITY OF CARMEL-BY-THE-SEA CITY COUNCIL Staff Report March 7, 2023 ORDERS OF BUSINESS TO: Honorable Mayor and City Council Members SUBMITTED BY: Brandon Swanson, Community Planning & Building Director APPROVED BY: Chip Rerig, City Administrator Second Reading and Adoption of Ordinance No. 2022-007 -Amending Carmel Municipal Code (CMC) SUBJECT: Sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA Section 30510) RECOMMENDATION: 1. Request the City Attorney to read the title of Ordinance 2022-007. 2. Waive further reading and ADOPT ordinance 2022-007 amending Carmel municipal code (CMC) sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof, in a manner fully in conformity with the California Coastal Act (CA section 30510). 3ACKGROUNDi'SUMMAR`(: EXECUTIVE SUMMARY The Carmel -by -the -Sea Municipal Code prohibits timeshares. The proposed ordinance confirms the existing prohibition of time shares, and adds new prohibitions with respect to advertisement and sale of timeshares and fractional interest ownerships. The City's Planning Commission has recommended adoption of these amendments, with an additional recommendation for Council to have a policy level discussion in the future about whether or not timeshares should continue to be prohibited in the Village. BACKGROUND Existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and are defined in Section 17.28.010 to include any land use that is a "timeshare project", "time share program," or "time share occupancy." These are defined in Section 17.70.020 as follows: Time -Share Occupancy. An occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s) or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times. Time -Share Program. Any arrangement for a project whereby the use, occupancy, or possession of real property has been made subject to a time-share estate, use, or occupancy, whereby such use, occupancy, or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year, but not necessarily for consecutive years. Time -Share Project. A project in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted for the use or occupancy periods into which the project has been divided. As a result of recent enforcement efforts related to timeshares, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code. On October 12th, 2022, the Planning Commission was presented these draft amendments, and received testimony from the public. Following discussion, the Commission approved a resolution recommending that the City Council adopt the ordinance as drafted by staff. The Commission also crafted an additional recital recommending that Council have a policy discussion in the near future to explore whether or not timeshares should still be prohibited in the City of Carmel -by -the -Sea. This additional recommendation arose from deliberations during the hearing, in which the Commissioners discussed the number of vacant homes in the Village and whether https://carmel.novusagenda.com/agendapublic/CoverSheet.aspx?ItemID=5020&MeetingID=1341 1/2 4/27/23, 9:03 AM Coversheet a form of timeshare use could present a solution to filling them. The Commission's additional recommendation is for Council to hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. STAFF ANALYSIS The changes proposed by the ordinance include: • Section 17.70.020 is modified to simplify the City's existing definitions with respect to timeshares. The City's existing definitions include definitions of time-share estate, time-share use, time-share occupancy, and time-share property, which are based on similar definitions in state law (the Vacation Ownership and Time -Share Act of 2004, as set forth in Business and Professions Code section 11210 et seq.). However, the existing definitions with respect to timeshares in 17.70.020 are multiple and reference each other, and introduce unnecessary complexity into the City's zoning regulations. While not a substantive change in the scope of the City's regulations, the proposed ordinance would simplify definitions to prohibit the use of real property under a "time-share plan." • The definition of "time-share plan" would mean "any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years." • The code would specify that a time share plan exists "whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan." • The code -would be revised to make clear that a prohibited timeshare is created whenever any right is established for exclusive use of the property that is periodic on a recurring basis, regardless of the form. The definition of "timeshare plan" would now specifically mention that fractional ownership is one way a timeshare can be created, which is also not a substantive change. "Time-share use" and "fractional interest use" are defined to mean exactly same thing, so that it is clear to all potential violators that there is no difference between a fractional interest use and a timeshare use. • 17.14.040, prohibiting timeshares in commercial zones, is modified to use the updated definitions. • 17.28.010.A, prohibiting timeshares in all city zoning districts, is updated to use the updated definitions. Additional subsections are added to this section to make advertisement of timeshares subject to criminal penalties as well as the City's administrative civil penalty process. The code also specifies that each day a violation occurs is a separate offense, for purposes of deterring violations by increasing the visibility of potential consequences. While the existing municipal code prohibits fractionalized interest ownership, as a timeshare is created based on the allocation of exclusive rights of use to real property, the proposed code amendments would clarify the prohibition and strengthen enforcement efforts. Additionally, the proposed ordinance would expressly prohibit the advertisement and sale of timeshares and fractional interest uses; this would allow for proactive enforcement by the City against those involved in the creation, advertisement, and sale of such prohibited land uses, rather than just the purchaser or owner of a timeshare or fractional interest use. During the February 7, 2023 discussion on this item, the City Council directed staff to inquire with appropriate Monterey County offices about the tax implications of a Limited Liability Corporation (LLC) owning and disposing of fractional ownership interests. Monterey County Counsel advised that reassessment of fractional ownership real property interests in an LLC does not occur until transfer of 50 percent or more of said interests occurs. Reporting of such is incumbent on the LLC filing appropriate documentation with the Internal Revenue Service which, in turn, relays such information to a state's real property taxing authority (a County in the case of the State of California). FISC.= The staff time associated with processing this ordinance amendment is captured in the FY2022/2023 Community Planning and Building Budget. e 1'.Tl0N' Ordinance 2022-007 was introduced (first reading) on February 7, 2023 at a Regular City Council Meeting ATTACHMENTS: Attachment 1) PC Resolution 2022-036-PC Recommending Approval Attachment 2) Draft Ord. 2022-007 REDLINE Attachment 3) Draft Ord. 2022.007 CLEAN https://carmel.novusagenda.com/agendapublic/Coversheet.aspx?ItemID=5020&MeetingID=1341 2/2 CITY OF CARM E L-BY-THE-SEA PLANNING COMMISSION RESOLUTION NO. 2022-036-PC A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA RECOMMENDING CITY COUNCIL ADOPT ORDINANCE AMENDING MUNICIPAL CODE SECTIONS 17.14.040, 17.28.010, AND 17.70.020, TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF WHEREAS, existing provisions of the Carmel -by -the -Sea Municipal Code prohibit timeshare uses. Specifically, timeshares are prohibited in all zoning districts of the City, and regulated by Sections 17.28.010, 17.70.020 and 17.14.040; and WHEREAS, as a result of enforcement efforts, City staff have reviewed the existing city code provisions and recommend that they be revised to confirm the existing prohibition, and additionally, that new prohibitions be added with respect to advertisement and sale of timeshares and fractional interest ownerships, which are treated identically under the existing City code; and WHEREAS, notice of a public hearing of the Planning Commission was published on September 30th, 2022 in compliance with State law (California Government Code 65091); and WHEREAS, on October 12, 2022, the Planning Commission held a public hearing to consider draft Ordinance 2022-007 amending regulations pertaining to timeshares and receive public testimony, including without limitation, information provided to the Planning Commission by City staff and through public testimony; and WHEREAS, the Planning Commission found that the draft Ordinance 2022-007 was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations. WHEREAS, the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA"), together with State Guidelines (14 California Code Regulations §§ 15000, et seq., the "CEQA Guidelines") and City Environmental Regulations (CIVIC 17.60) require the review of certain projects for environmental impacts and preparation of environmental documents; and WHEREAS, the Planning Commission finds that pursuant to CEQA regulations, the project will have no impact on the environment and is not considered a project requiring compliance with the California Environmental Quality Act (Section 21065 of the California Public Resources Code); and WHEREAS, the facts set forth in the recitals are true and correct and are incorporated herein by reference. NOW, THEREFORE, BE IT RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY recommend the City Council amend municipal code sections 17.14.040, 17.28.010, and 17.70.020, to prohibit timeshare and fractional interest uses, as well as advertising and sale thereof and adopt the Update in a manner fully in conformity with the Coastal Act (CA Section 30510). BE IT FURTHER RESOLVED, THAT THE PLANNING COMMISSION OF THE CITY OF CARMEL- BY-THE-SEA DOES ALSO recommend the City Council hold a separate hearing in the near future to have a policy level discussion and decide whether or not to refer an item back to the Planning Commission to remove or modify the prohibition on timeshares in Carmel -by -the -Sea. PASSED, APPROVED, AND ADOPTED BY THE PLANNING COMMISSION OF THE CITY OF CARMEL-BY-THE-SEA this 12th day of October, 2022, by the following vote: AYES: Delves, Allen, Bolton, LePage, Locke NOES: ABSENT: ABSTAIN: APPROVED: ATTEST: Michael LePage, Chair Leah Young, Planning Commission Secretary CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (GA PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the CitV of Carmel -by -the -Sea reviewed the ordinance, and on October 12, 2022 determined the ordinance was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations, and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan, the CitV Council finds that the ordinance is consistent with the City's General Plan; and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the a public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2023, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony; and OAK 94875-3304-4012 v2 WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (GA Public Resources Code Section 30510 et seq. ) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC. 1. Subsection A of Section 17.14.040 is amended and restated as follows: 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be OAK 9487-5-3304-4012 v? objectionable to persons residing or working in the vicinity by reason of odor, fumes, noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are OAK 9487�-3304-4012 v, a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK #4375-3304-4012 Q CITY OF CARMEL-BY-THE-SEA CITY COUNCIL ORDINANCE NO. 2022-007 AN ORDINANCE AMENDING THE CARMEL-BY-THE-SEA MUNICIPAL CODE TO PROHIBIT TIMESHARE AND FRACTIONAL INTEREST USES, AS WELL AS ADVERTISING AND SALE THEREOF IN A MANNER FULLY IN CONFORMITY WITH THE COASTAL ACT (PUBLIC RESOURCES CODE SECTION 30510 ET SEQ.) WHEREAS, timeshares involve the division of the exclusive rights to use, possess, and occupy any real property between multiple persons, pursuant to a fixed or floating time schedule; and WHEREAS, since at least 1988, the City of Carmel -by -the -Sea has prohibited the establishment of timeshares within the City; and WHEREAS, the Housing Element of the City's General Plan specifically recognizes that the City seeks to protect the stability of residential neighborhoods by promoting year-round occupancy, and to avoid depletion of residents and associated impacts on the community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings; and WHEREAS, the Planning Commission of the City of Carmel -by -the -Sea reviewed the ordinance, and on October 12, 2022, determined the ordinance was consistent with the City's General Plan, Local Coastal Plan, and all other relevant City and State codes and regulations, and having reviewed the Planning Commission's recommendations and the relevant provisions of the General Plan, the City Council finds that the ordinance is consistent with the City's General Plan; and WHEREAS, recent increases in the development and sale of fractional interest ownerships have made it appropriate for the City to revisit its municipal code to clarify that fractional interest ownerships are prohibited timeshares and to also expressly prohibit the advertising and sale of prohibited timeshares and fractional interest uses. WHEREAS, notice of the public hearing was published on November 25, 2022 in compliance with State law (California Government Code 65091), indicating the date and time of the public hearing; and WHEREAS, on December 6, 2022, the City Council opened the public hearing to receive public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony, and continued the hearing to a date certain of January 10, 2023; and WHEREAS, on January 10, 2023, the City Council re -convened the public hearing to receive further public testimony regarding the draft ordinance, including without limitation, information provided by City staff and public testimony; and OAK 4,4375-3304-4012 Q WHEREAS, this decision is made based upon evidence presented to the City Council at its December 6, 2022 and January 10, 2023 hearings including, without limitation, the staff report submitted by the Community Planning and Building Department and public testimony; and WHEREAS, the City Council did hear and consider all said reports, recommendations, attachments and testimony herein above set forth and used their independent judgement to evaluate the ordinance; and WHEREAS, the proposed amendments are in full conformity with the City's Local Coastal Plan and the California Coastal Act (Public Resources Code Section 30510 et seq.) NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS: SECTION 1. CEQA Review. The City Council exercises its independent judgment and finds that this ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, Sections. 15060(c)(2), because the proposed ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; 15061(b)(3) because the proposed ordinance is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and 15308 because the proposed ordinance involves regulatory actions to assure protection of the environment. Therefore, the adoption of this ordinance is exempt from CEQA and no further environmental review is necessary. SECTION 2. Amendment to the CIVIC 1. Subsection A of Section 17.14.040 is amended and restated as follows 17.14.040 Additional Use Regulations. A. All Uses. 1. No new structure or modification to an existing structure shall be permitted nor shall any business license be issued that would allow the creation of publicly accessible retail space occupying fewer than 200 square feet or more than 5,000 square feet unless approved through a use permit and pursuant to the adoption of findings per CIVIC 17.64.200, Retail Space of Less Than 200 Square Feet or Greater Than 5,000 Square Feet. 2. No timeshare uses or fractional interest uses shall be established or permitted in any zone. 3. Except in restaurants, not more than five persons in any one individually licensed business shall be engaged in the production, repair or manufacturing of goods. 4. No use shall be permitted and no process, equipment, or materials shall be employed which is found by the Planning Director or by the Planning Commission to be objectionable to persons residing or working in the vicinity by reason of odor, fumes, OAK 44875-3304-4012 v2 noise, vibration, illumination, glare, unsightliness, dust, cinders, dirt, refuse, water - carried wastes or heavy truck traffic, or involve any hazard of fire or explosion. 2. Section 17.28.010 is amended and restated as follows: 17.28.010 Timeshare and Fractional Interest Uses. A. Timeshare uses and fractional interest uses are prohibited uses within all of the zoning districts within the City. B. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.16 (General Penalty). C. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised, or disseminated in any way and through any medium, the availability for sale or use of real property in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 18.04 (Municipal Code and Ordinance Enforcement). D. Each day a violation of this section occurs shall constitute a separate offense, and the remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 3. "Time -Share Definitions" of Section 17.70.020 is amended to repeal the definitions of "Time -Share Estate," "Time -Share Occupancy," "Time -Share Program," "Time -Share Project," and "Vacation -Time Sharing Project," and restated to enact the definitions of "Time -Share Plan," "Time -Share Use" and "Fractional Interest Use" to read as follows: 17.70.020 Definitions. The words, terms, and phrases defined in this chapter shall, for all purposes connected with this title, be construed as having the meanings respectively set forth in this chapter. Time -Share Definitions. "Time -Share Plan" means any arrangement, plan, scheme, or similar device, whether established by membership agreement, sale, lease, deed, license, right -to -use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property or portion thereof, according to a fixed or floating time schedule, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A timeshare plan shall be deemed to exist whenever such recurring rights of exclusive use to real property are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights OAK 94375-3304-4012 v2 pursuant to contract, or ownership of a fractional interest or share in real property, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time-share plan. "Time -Share Use" and "Fractional Interest Use" means the use of real property or any part thereof, pursuant to a timeshare plan. SECTION 3. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such a decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional. SECTION 4. Publication. The City Clerk shall publish or post this ordinance in the manner required by law. SECTION 5. Effective Date. This ordinance shall be effective 30 days after its adoption and after approval by the California Coastal Commission. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE- SEA this XX day of XX 2022, by the following vote: AYES: NOES: ABSENT: ABSTAIN: APPROVE: ATTEST: Dave Potter, Mayor Nova Romero, MMC, City Clerk OAK 44875-33o4-4012 Exhibit L City of Hermosa Beach Time Share Ordinance and Supporting Evidence 4/27/23, 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 Sign In CITY OF HERMOSA BEACH Legislation Calendar City Council Departments People LL ©Share ;(®RSS (wAlerts, Details PDF Staff Report File #: REPORT 22-0586 Version: 1 Name: Type: Action Item Status: Public Hearing File created: 9/19/2022 In control: City Council On agenda: 9/28/2022 Final action: INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND Title: AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Attachments: 1. 1. SUPPLEMENTAL Draft Ordinance, 2. 2. Resolution P.C. 22-07. 3. 3. Link to April 19, 2022 Planning Commission Staff Report, 4. SUPPLEMENTAL Email from Scott Hayes Re Item 13. c., 5. SUPPLEMENTAL eComments for Item 13. c Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of September 28, 2022 Title INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Body Recommended Action: Recommendation Staff recommends City Council consider waiving full reading and introduce by title only an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit and determining that the project is exempt from the California Environmental Quality Act (Attachment 1). Body Executive Summary_ The City of Hermosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership' of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. The proposed draft ordinance (Attachment 1) would permit timeshare uses in the C-1 and G 2 commercial zones within the City pursuant to a Conditional Use Permit (CUP), and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones, ineluding the G 4 and G 2 eemmefeial zones, that provide for uses that serve both visitors and the local community. These commercial uses include: restaurants; retail shops; and visitor -serving hotels and motels. The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live in the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2). Past Planning Commission Actions https://hermosabeach.legistar.com/LegislationDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48D0-8735-DD895DF161 B5 1/3 4/27/23, 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 Meeting Date IDescription April 18, 2022 Planning Commission reviewed the proposed ordinance and adopted Resolution P.C. 22-07 City Housing The most recent U.S. Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the 2015-2019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past year In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702. and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000. The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the Citv's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing projects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -most likely for vacation or leisure, increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, so they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Beach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare -like uses organized and run by third parties for a fee. The proposed ordinance (Attachment 1) does not target or single out any business or ownership structure. The proposed ordinance allows for these types of timeshare uses in the City's C-1 ^zones, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts, the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use' subject to a "timeshare plan." Timeshare plan is defined as: https://hermosabeach.legistar.com/LegislationDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48D0-8735-DD895DF161 B5 2/3 4/27/23, 9:17 AM City of Hermosa Beach - File #: REPORT 22-0586 "Any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. " At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance by adopting Resolution P.C. 22-07 (Attachment 2). Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-1 819dG2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan. Relevant Policies are listed below: Land Use and Design Element Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact: There is no fiscal impact associated with the recommended action. Attachments: 1. Draft Ordinance 2. Resolution P.C. 22-07 3. Link to April 19, 2022 Planning Commission Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur: Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager Staff Report Updated on 9/27/2022 - See Track Changes https:/Ihermosabeach.legistar.com/LegislationDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48DO-8735-DD895DF161 B5 3/3 ORDINANCE NO. AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The City of Council of the City of Hermosa Beach does hereby ordain as follows: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C-1 commercial zone within the City, pursuant to a conditional use permit. N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance. Q. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Other Permit Standards) of Title 17 (Zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and Findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-1 Commercial Zone. Timeshare uses are conditional uses within the City's C-1 Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-1 Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40. In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: 1. Timeshare uses developed in the C-1 Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C-1 Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Los Angeles County Superior Court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (C1, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES I C1 C2 C3 See Section Timeshares U 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-1 commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this 28th day of September, 2022. VOTE: AYES: NOES: ABSTAIN: ABSENT: Michael Detoy, Mayor PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM: Myra Maravilla Michael Jenkins City Clerk City Attorney RESOLUTION P.C. 22-07 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF HERMOSA BEACH RECOMMENDING CITY COUNCIL APPROVAL OF TEXT AMENDMENTS TO THE CITY OF HERMOSA BEACH MUNICIPAL CODE AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The Planning Commission of the City of Hermosa Beach does hereby resolve as follows: SECTION 1. Findings. A. The Planning Commission held a duly noticed public hearing on April 19, 2022 to consider a text amendments to the City of Hermosa Beach Municipal Code, Title 17 (Zoning), as described in the proposed ordinance attached as Exhibit A. B. The City of Hermosa Beach .("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its downtown area and Pier Avenue. C. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. D. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. F. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. G. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. H. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. I. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. J. This high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short- term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. K. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. L. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. M. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. N. Pursuant to and in accordance with this authority, the Planning Commission desires to prohibit timeshare uses in residential areas, and certain commercial zones and to update the language of the Zoning Code to provide consistency with the terminology used to define timeshare uses in State law. Further, the City desires to provide greater clarity as to the zones which timeshare uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zones. O. On April 19, 2022, the Planning Commission held a duly -noticed public hearing and considered the staff report, recommendations by staff, and public testimony concerning the proposed ordinance. SECTION 2. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 3. The Planning Commission finds that the proposed amendments to the Municipal Code to permit timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. SECTION 4. Based on the entire record before the Planning Commission, and all written and oral evidence presented, the Planning Commission hereby finds that the proposed ordinance is consistent with the City's adopted General Plan and does not conflict with any of the General Plan's goals or policies. SECTION 5. The Planning Commission hereby recommends that the City Council adopt the attached proposed ordinance entitled, "AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. I HEREBY CERTIFY that the foregoing recommendation to the City Council was duly and regularly approved by the Planning Commission of the City of Hermosa Beach at a regular meeting of said Planning Commission held on April 19, 2022, by the following roll call vote: VOTE: AYES: 5 - Chair Pedersen, Vice Chair Izant, Commissioner Saemann, Commissioner Hoffman, and Commissioner Rice NOES: None ABSTAIN: None ABSENT: None CERTIFICATION I hereby certify that the foregoing Resolution P.C. 22-07 is a true and complete record of the action taken by the Planning Commission of the City of Hermosa Beach, California, at its regular meeting of April 19, 2022. Dave Pedersen, Chairperson -7/;k15/2 Date Ang a Crespi, Secretary 4/27/23, 9:22 AM City of Hermosa Beach - File #: REPORT 22-0249 Sign In CITY OF HERMOSA BEACH Legislation Calendar City Council Departments People I® i0 !©Share I®RSS It%Alerts Details PD Staff Report File #: REPORT 22-0249 Version: 1 Name: Type: Action Item Status: Passed File created: 4/14/2022 In control: Planning Commission On agenda: 4/19/2022 Final action: 4/19/2022 TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND Title: AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Attachments: 1. 1. Draft Resolution 22-07 Timeshare Ordinance, 2. 2. Hermosa Beach Draft Ordinance Staff Report Text Honorable Chairman and Members of the Hermosa Beach Planning Commission Regular Meeting of April 19, 2022 TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Recommendation Recommended Action: Staff recommends the Planning Commission adopt Resolution No. 22-07 (Attachment 1) recommending that the City Council approve Zone Text Amendment TA 22-01, thereby amending Chapter 17.40 to add section 17.40.230 and amend section 17.26.030 to permit timeshare uses in specified commercial zones and determine that the project is exempt from the California Environmental Quality Act (CEQA). Body Background: The City of Hermosa Beach ("City") does not currently have regulations in place governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. These types of uses in the City's residential zone could limit the City's existing housing stock for use as a long-term residency and impair the character of the City's residential zones. At its March 15, 2022 meeting, the Planning Commission directed staff to bring forward a zone text amendment addressing these types of uses. Analysis: The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers, and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones including the C-1 and C-2 commercial zones that provide for uses that serve both visitors and the local community such as: restaurants; retail shops; and visitor serving hotels. The City also has residential zones that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. City Housing The most recent census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the period of 2015- 2019, while the Zillow Home Value Index estimates medial home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, homes values in the City have gone up 10.1 percent over the past year. In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702, and the median income for a four -person household in Los Angeles County for 2021 is approximately $80,000. The cost of homes currently in Hermosa Beach are more than what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. https:Hhermosabeach.legistar.com/LegislationDetail.aspx?I D=5557241 &GU I D=80A64ASC-E51 A-4C26-B2D2-3046537C93D5 1 /3 4/27/23, 9:22 AM City of Hermosa Beach - File #: REPORT 22-0249 The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in timesharing projects. This use is better suited in commercial or quasi -commercial zones and is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests or parties, but these timeshare homes are used exclusively by people who are coming to the City on a short-term basis - most likely for vacation or leisure. As a result, those users may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because it would ensure that the time share users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering into contracts to purchase homes in tourist destinations in desirable locations like the City. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co - owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. Time Share Ordinance As mentioned above, the City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long term residency and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, any ordinance should be geared toward the specific impacts of the at -issue uses - timeshare like uses organized and ran by third parties for a fee. The proposed ordinance (Attachment 2) does not target or single out any business or ownership structure. Environmental Determination: The proposed ordinance is not subject to CEQA because the adoptions of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-1 and C-2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan and is consistent with the following Goals and Policies of Plan Hermosa: Land Use and Design Element Goal 1 Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2 Neighborhoods provide for diverse needs of residents of all ages and abilities, and are organized to support healthy and active lifestyles. Policies: 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods https://hermosabeach.legistar.com/LegislationDetail.aspx?ID=5557241 &GUID=8OA64A8G-E51A-4C26-B2D2-3046537C93D5 2/3 4127/23. 9:22 AM City of Hermosa Beach - File #: REPORT 22-0249 • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Attachments: 1. Draft Resolution 22-07 Timeshare Ordinance 2. Hermosa Beach Draft Ordinance Respectfully Submitted by: Carlos Luis, Senior Planner Legal Review: Patrick Donegan, Deputy City Attorney Approved: Angela Crespi, Interim Community Development Director https://hermosabeach.leg istar.com/LegislationDetail.aspx?I D=5557241 &G U I D=80A64A8C-E51 A-4C26-B2D2-3046537C93D5 3/3 From: Scott Hayes Sent: Tuesday, September 27, 2022 3:19 PM To: City Council <citycouncil@hermosabeach.gov>; Suja Lowenthal <suja@hermosabeach.gov>; Ann Yang <anny@hermosabeach.gov> Cc: Jeannie Naughton <jaughton@hermosabeach.gov>; DG_PlanningCommission <DG_PlanningCommission@hermosabeach.gov>; Patrick Donegan <Patrick.Donegan@bbklaw.com> <Patrick.Donegan@bbklaw.com>; rachelsaccount@hotmail.com Subject: Agenda Item XIII, c (Report 22-0586) -Timeshares Mayor, Mayor Pro Tem, and Councilmembers. I am writing to express my strong opposition Council Agenda Item XIII, c (Report 22-0586). Inadequate Noticing First, I believe that the residents adjacent to C-1 Zones should have been directly noticed about this potential change to the zoning code. As stated in the staff report, timesharing projects have increased "likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates." Since staff acknowledges that there will be neighborhood impacts as a result of the proposed timeshare projects, I feel that the City should have gone over and above the minimum legal public noticing requirements. I respectfully request that this item be continued until such time that the neighbors are properly noticed. If this item is not continued please consider the following argument against the proposed zoning changes. Section 17.40.230, A of the proposed ordinance states `Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short- term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities." What the ordinance fails to recognize is that those exact same concerns also make timeshares unsuitable for the C-1 Neighborhood Commercial Zone. Timeshares are Hotels Timeshares are almost always vacation properties. As such, they are essentially hotels which is a disruptive use when adjacent to a residential neighborhood. Our municipal code does not allow hotels in the C-1 zone and timeshares should be excluded as well. Municipal Code Section 17.26.020, B, 1 specifically states that the purpose of the C-1 Neighborhood Commercial Zone is "to provide sites for a mix of small local businesses appropriate for, and serving the daily needs of nearby residential neighborhoods; while establishing land use regulations that prevent significant adverse effects on abutting residential uses." I do not see how a timeshare serves the daily needs of nearby residential neighborhoods but I can easily see how these neighborhoods would suffer significant adverse effects from timeshares. Timeshares are STVRs People generally stay at timeshares for 1-2 weeks. As a result, they have nearly the same impact on neighborhoods as short term vacation rentals. Hermosa Beach only allows STVRs on commercially zoned parcels with non -conforming residential uses. Why are timeshares being treated any differently? Timeshares will have the same traffic and noise impacts as STVRs so they should be restricted to the same areas. Additionally, there is no language in the ordinance to prohibit utilizing the timeshare as a short term vacation rental. If timeshares are approved, it will only be a matter of time before we start seeing the timeshare units showing up on Airbnb and VRBO. Timeshares Take Potential Housing Stock The ordinance states that timeshares must be built above commercial space as part of a mixed use project. Why wouldn't we require that the upper floors of mixed use developments be residential space to help the City meet its housing goals? Allowing this space to be used as timeshare vacation homes makes no sense. I would much prefer to have new neighbors contributing to the community that having to deal with new transient residents every week or 2. Enforcement Challenges The City is currently unable to do anything about the quality of life issues brought about by the MANY illegal short term vacation rentals in Hermosa Beach. I am concerned that timeshares will just add to the number of quality of life issues that the City will not be able to enforce. I happen to live nearby some of these illegal STVRs and no matter how frequently I report them to the City, new renters keep showing up. A quick search of Airbnb shows that there are dozens of STVRs that are advertising for stays of less than 30 days. If the stay is increased to 30 days the number grows to over 100. The City is just not able to do anything to contain these issues and I am worried that the City will not be able to do anything about the potential problems with timeshares. Potential Solutions I believe that there are a few different ways that Council should deal with this issue: 1. Allow timeshares in locations where hotels are permitted. If timeshares are strictly considered a residential use this may not be possible until the zoning code is changed to allow residential in mixed use projects in C-2 and C-3. The Beach House is a form of timeshare but nobody minds it because it is in the C-2 zone. I think that it is worth waiting for the zoning code update to properly deal with the timeshare issue. 2. Define timeshares in the municipal code as hotels or motels. This would allow them in zones where hotel use is allowed. 3. Allow timeshares at commercially zoned parcels with non -conforming residential uses similar to legal STVRs. 4. Prohibit timeshares anywhere in Hermosa Beach. Please do not allow timeshares to further degrade our neighborhoods the way that STVRs already have. Thank you for your consideration. Scott Hayes N. = Hermosa Beach, CA 90254 City Council Adjourned Regular Hybrid Meeting (Closed Session - 5:00 PM Open Session - 6:00 PM 09-28-22 17:00 Agenda Name c) REPORT 22-0586 INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Comments Suppo Sentiments for All Agenda Items The following graphs display sentiments for comments that have location data. Only locations of users who have commented will be shown. Overall Sentiment Support(o%) Oppase(100%) Neutral�0°o) _ No Response(01/.) Agenda Item: eComments for c) REPORT 22-0586 INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Overall Sentiment 7 Support(0%) ® oppose(100%) Neulral(0%) No Responso(M) Scott Hayes Location: Submitted At: 3:30pm 09-27-22 1 am writing to express my strong opposition to Agenda Item XIII, c First, I believe that the residents adjacent to C-1 Zones should have been directly noticed about this potential change to the zoning code. As stated in the staff report, timesharing projects have increased "likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates" Since staff acknowledges that there will be neighborhood impacts as a result of the proposed timeshare projects, I feel that the City should have gone over and above the minimum legal public noticing requirements. I respectfully request that this item be continued until such time that the neighbors are properly noticed. If this item is not continued please consider the following argument against the proposed zoning changes. Section 17.40.230, A of the proposed ordinance states "Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities" What the ordinance fails to recognize is that those exact same concerns also make timeshares unsuitable for the C-1 Neighborhood Commercial Zone. Timeshares are almost always vacation properties. As such, they are essentially hotels which is a disruptive use when adjacent to a residential neighborhood. Our municipal code does not allow hotels in the C-1 zone and timeshares should be excluded as well. Municipal Code Section 17.26.020, B, 1 specifically states that the purpose of the C-1 Neighborhood Commercial Zone is "to provide sites for a mix of small local businesses appropriate for, and serving the daily needs of nearby residential neighborhoods; while establishing land use regulations that prevent significant adverse effects on abutting residential uses" I do not see how a timeshare serves the daily needs of nearby residential neighborhoods but I can easily see how these neighborhoods would suffer significant adverse effects from timeshares. People generally stay at timeshares for 1-2 weeks. As a result, they have nearly the same impact on neighborhoods as short term vacation rentals. Hermosa Beach only allows STVRs on commercially zoned parcels with non -conforming residential uses. Why are timeshares being treated any differently? Timeshares will have the same traffic and noise impacts as STVRs so they should be restricted to the same areas. Additionally, there is no language in the ordinance to prohibit utilizing the timeshare as a short term vacation rental. If timeshares are approved, it will only be a matter of time before we start seeing the timeshare units showing up on Airbnb and VRBO. The ordinance states that timeshares must be built above commercial space as part of a mixed use project. Why wouldn't we require that the upper floors of mixed use developments be residential space to help the City meet its housing goals? Allowing this space to be used as timeshare vacation homes makes no sense. I would much prefer to have new neighbors contributing to the community that having to deal with new transient residents every week or 2. The City is currently unable to do anything about the quality of life issues brought about by the MANY illegal short term vacation rentals in Hermosa Beach. I am concerned that timeshares will just add to the number of quality of life issues that the City will not be able to enforce. I happen to live nearby some of these illegal STVRs and no matter how frequently I report them to the City, new renters keep showing up. A quick search of Airbnb shows that there are dozens of STVRs that are advertising for stays of less than 30 days. If the stay is increased to 30 days the number grows to over 100. The City is just not able to do anything to contain these issues and I am worried that the City will not be able to do anything about the potential problems with timeshares. I believe that there are a few different ways that Council should deal with this issue: 1. Allow timeshares in locations where hotels are permitted. If timeshares are strictly considered a residential use this may not be possible until the zoning code is changed to allow residential in mixed use projects in C-2 and C- 3. 1 think that it is worth waiting for the zoning code update to properly deal with the timeshare issue. 2. Define timeshares in the municipal code as hotels or motels. This would allow them in zones where hotel use is allowed. 3. Allow timeshares at commercially zoned parcels with non -conforming residential uses similar to legal STVRs. 4. Prohibit timeshares anywhere in Hermosa Beach. Please do not allow timeshares to further degrade our neighborhoods the way that STVRs already have. Rachel Hayes Location: 90254-5103, Hermosa Beach Submitted At: 8:55am 09-27-22 While I am glad to see that the city is being proactive to prevent timeshare ownership of properties in the residential areas, I am not happy with the request to change the use of properties in zone C1 which is directly adjacent to residential properties. For the same reason that you don't want one in your neighborhood, we don't want one in our neighborhood. Please note that timeshares do not operate the way it was sold to the planning commission. Timeshare salesmen are very good sales people, and they have sold you a pack of lies. Think about what they are selling you. Eight families sharing one house. Eight families would get one week every other month. Who do you know who has six weeks of vacation time? And how many people want to use all six of those weeks to go to the same location? The eight families they are selling you on are "investors" in a property who will get their money back by renting the unit through the timeshare system. The way timeshares work is owners either buy a designated week at one resort/location or they buy points which they can use to book a week at any of the timeshare's properties (owned or negotiated). People who own the same week can trade that week into the timeshare pool of units for a week at any other of the timeshare's properties. The timeshare companies pool their resources with other timeshare companies in order to offer more flexibility, as it helps generate more sales. So, what you think will be the same eight families using the unit, will end up becoming a short term rental with new tenants every single week. I belong to a timeshare and they use AirBnB as a selling point — seems they are getting into the business of subleasing out AirBnB's to their owners for points. The sales people will actually say "You don't have to stay at one of our resorts, we have contracts with AirBnBs all over. You can use your points to book one of those properties". Avoidance of Taxes: Because allegedly only `time share owners' will be using the unit, there will be no short term tax paid to the city for this unit. Timeshare fees are called maintenance fees (not rent), so technically they would not be subject to the short term tax like hotels or even AirBnBs. Short Term Rentals kill neighborhoods. There is an illegal short term rental across the street from us. Every single new tenant drives the wrong way down the one-way alley. Every single one.... They don't care about our neighborhood. Sometimes they park a car in the alley blocking access to our garage. When I call the city, I am told the city will not tow. So the city is protecting the short term renters at the expense of the residents? If the city cannot help us now, imagine what it will be like when there are several places with new tenants every single week (unmanaged tenants). C1 zone: I live next to a bar. I have no problems with the bar. They have a CUP and they follow their CUP, so we have lived in harmony. The bar has a paid staff member on site to manage the property. This timeshare (just another name for short term rental) will not have a staff member present to manage the property. I would rather have a pot dispensary next to me than another short term rental. At least the pot dispensary will have staff on site, and it will have specific hours of operation. And the City will have the ability to correct any unwanted behaviors with the pot dispensary operators. How can the city correct behavior of tenants who change over every single week. With a timeshare owned property, once you open pandora's box, you will not be able to fix it. Please say no to timeshare properties in our city. Please say no to timeshare properties in Zone C1 as it is too close to residential properties. For the same reason that you don't want one in your neighborhood, we don't want one in our neighborhood. Rachel Hayes, resident 122 1st Street, Hermosa Beach, CA 4127/23, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 Sign In CITY OF HERMOSA BEACH Legislation Calendar City Council Departments People ldI© I© Share. 1®RSS i� Alerts Details PDF Staff Report File #: REPORT 22-0643 Version: 1 Name: Type: Action Item Status: Consent Calendar File created: 10/4/2022 In control: City Council On agenda: 10/11/2022 Final action: ADOPTION OF AN ORDINANCE OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT Title: AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT (Community Development Director Jeannie Naughton) Attachments: 1. 1. Draft Ordinance, 2. 2. PC Resolution 22-07, 3. 3. Link to April 19, 2022 Planning Commission Staff Report, 4. 4. Link to September 28,. 2022 City Council Staff Report Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of October 11, 2022 Title ADOPTION OF AN ORDINANCE OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT (Community Development Director Jeannie Naughton) Body Recommended Action: Recommendation Staff recommends City Council: 1. Waive full second reading and adopt by title an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit (Attachment 1); and 2. Direct staff to print and publish the summary ordinance in a newspaper of general circulation within 15 days following adoption and post it on the City's bulletin for 30 days. Body Executive Summary_ The City of Hermosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. At its September 28, 2022 meeting, City Council held a public hearing and introduced and waived first reading of the ordinance with amendments to modify the authorized zone from the originally proposed C-1 (Neighborhood Commercial Zone) to the C-2 (Downtown Commercial Zone). Council further directed staff to incorporate the discussion into future Housing Element and Zoning Code update processes. The revised ordinance (Attachment 1) would permit timeshare uses in the C-2 Downtown Commercial Zone within the City pursuant to a Conditional Use Permit (CUP) and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones, that provide for uses that serve both visitors and the local community. These commercial uses include: restaurants; retail shops; and visitor -serving hotels and motels. The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live in the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. At its April 18, 2022 meeting, the Planning Commission reviewed and recommended https://hermosabeach.legistar.com/LegislationDetail.aspx?ID=5866947&GUID=1 F32BD8F-48D8-4AE4-BC2A-F6EDOABI146B 1/4 4/27/23, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2). At its September 28, 2022 meeting, City Council received a staff presentation of the draft ordinance. Following the public hearing, City Council introduced and waived first reading of the ordinance with the following amendments: Section 2 was revised to replace all references of C-1 (Neighborhood Commercial Zone) with C-2 (Downtown Commercial Zone); and Section 3 was revised to shift the "U" from the C-1 column, to the C-2 column, indicating that timeshare uses would be permitted pursuant to a Conditional Use Permit in the C- 2 (Downtown Commercial Zone) and prohibit the use in the C-1 (Neighborhood Commercial Zone). City Council further directed staff to incorporate this discussion into future Housing Element and Zoning Code update processes. Past Planning Commission and City Council Actions Date rprll its, LULL rlanning uommisslon revlewea the proposes orainance ana adoDted Resolution P.C. 22-07 zjeptemoer zts, zuzz uity uouncll Introaucea ana walvea rlrst reaaing or an Ordinance with amendments to replace all references of C-1 (Neighborhood Commercial Zone) with C-2 (Downtown Commercial Zone) in Section 2; and Section 3 was amended o shift the "U" from the C-1 column, to the C-2 column, indicating that timeshare uses would be permitted with a Conditional Use Permit in the C-2 (Downtown Commercial one) and not permitted in the C-1 (Neighborhood Commercial Zone). City Council further directed staff to incorporate this discussion into future Housing Element and Zoning Code update processes. Cit Housing The most recent U.S. Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,9000) for the 2015-2019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879I21 as of January 31, 2022. According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past yeart3l. In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702I41, and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000(5). The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing projects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -most likely for vacation or leisure, increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. httos-/lwww.census.gov/auickfacts/fact/table/hermosabeachcitvcalifornia/HSD410219. ' httos //www.zillow.com/hermosa-beach-ca/home-values/. ' httos://www.zlllow.com/hermosa-beach-ca/home-values/. ° httos://www.census.gov/auickfacts/fact/table/hermosabeachcitycalifornia/HSD410219. s httos-//vmw.hcd-ca.gov/grants-funding/income-limits/state-and-federal-income-limits/dots/income-limits-2021.odf Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use. https:llhermosabeach.legistar.com/LegislationDetail.aspx?ID=5866947&GUID=1 F32BD8F-48D8-4AE4-BC2A-F6EDOAB1146B 2/4 4/27/23, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, so they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property(6). These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Beach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. 6 These types of businesses are merely used as an example. The Ordinance Is not directed at any Individual business or businesses; but rather regulate the specific use. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare like uses organized and run by third parties for a fee. The proposed ordinance (Attachment 1) does not target or single out any business or ownership structure. As revised, the ordinance allows for these types of timeshare uses in the City's C-2 Downtown Commercial zone, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts, the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use" subject to a "timeshare plan." Timeshare plan is defined as: "Any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years." Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ https://hermosabeach.legistar.com/LegislationDetail.aspx?ID=5866947&GUID=1 F32BD8F-48D8-4AE4-BC2A-F6EDOAB1146B 3/4 4/27/23, 9:29 AM City of Hermosa Beach - File #: REPORT 22-0643 This report and associated recommendation have been evaluated for their consistency with the City's General Plan. Relevant Policies are listed below: Land Use and Design Element Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact. There is no fiscal impact associated with the recommended action. Attachments: 1. Draft Ordinance 2. PC Resolution 22-07 3. Link to April 19, 2022 Planning Commission Staff Report 4. Link to September 28, 2022 City Council Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur: Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager https://hermosabeach.legistar.com/Leg islationDetail.aspx?ID=5866947&GUID=1 F32BD8F-48D8-4AE4-BC2A-F6EDOA81146B 4/4 CITY OF HERMOSA BEACH ORDINANCE NO. XX AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. I. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C- 2 commercial zone within the City, pursuant to a conditional use permit. N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance and adopted on first reading the Ordinance. Q. On October 11, 2022, the Ordinance was brought back for a second reading and adopted by the City Council. R. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Other Permit Standards) of Title 17 (Zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and Findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-2 Downtown Commercial Zone. Timeshare uses are conditional uses within the City's C-2 Downtown Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-2 Downtown Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40. In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: 1. Timeshare uses developed in the C-2 Downtown Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C-2 Downtown Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Los Angeles County Superior Court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (C 1, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES C1 C2 C3 See Section Timeshares I U 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c) (2) and 15060(c) (3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b) (3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Section S. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this 11 th day of October, 2022. Michael Detoy, Mayor PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: Myra Maravilla City Clerk APPROVED AS TO FORM: Michael Jenkins City Attorney RESOLUTION P.C. 22-07 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF HERMOSA BEACH RECOMMENDING CITY COUNCIL APPROVAL OF TEXT AMENDMENTS TO THE CITY OF HERMOSA BEACH MUNICIPAL CODE AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. The Planning Commission of the City of Hermosa Beach does hereby resolve as follows: SECTION 1. Findings. A. The Planning Commission held a duly noticed public hearing on April 19, 2022 to consider a text amendments to the City of Hermosa Beach Municipal Code, Title 17 (Zoning), as described in the proposed ordinance attached as Exhibit A. B. The City of Hermosa Beach .("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its downtown area and Pier Avenue. C. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. D. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. F. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. G. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. H. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. I. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. J. This high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short- term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. K. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. L. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. M. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. N. Pursuant to and in accordance with this authority, the Planning Commission desires to prohibit timeshare uses in residential areas, and certain commercial zones and to update the language of the Zoning Code to provide consistency with the terminology used to define timeshare uses in State law. Further, the City desires to provide greater clarity as to the zones which timeshare uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zones. O. On April 19, 2022, the Planning Commission held a duly -noticed public hearing and considered the staff report, recommendations by staff, and public testimony concerning the proposed ordinance. SECTION 2. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 3. The Planning Commission finds that the proposed amendments to the Municipal Code to permit timeshares in specified zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. SECTION 4. Based on the entire record before the Planning Commission, and all written and oral evidence presented, the Planning Commission hereby finds that the proposed ordinance is consistent with the City's adopted General Plan and does not conflict with any of the General Plan's goals or policies. SECTION 5. The Planning Commission hereby recommends that the City Council adopt the attached proposed ordinance entitled, "AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. I HEREBY CERTIFY that the foregoing recommendation to the City Council was duly and regularly approved by the Planning Commission of the City of Hermosa Beach at a regular meeting of said Planning Commission held on April 19, 2022, by the following roll call vote: VOTE: AYES: 5 - Chair Pedersen, Vice Chair Izant, Commissioner Saemann, Commissioner Hoffman, and Commissioner Rice NOES: None ABSTAIN: None ABSENT: None CERTIFICATION I hereby certify that the foregoing Resolution P.C. 22-07 is a true and complete record of the action taken by the Planning Commission of the City of Hermosa Beach, California, at its regular meeting of April 19, 2022. Dave Pedersen, Chairperson -7/),I>/2- Date v *Angapi, Secretary 4/27/23, 9:30 AM City of Hermosa Beach - File #: REPORT 22-0249 Sign In CITY OF HERMOSA BEACH Legislation Calendar City Council Departments People ® '© i© Share i®RSS !v Alerts Details PDF Staff Report File #: REPORT 22-0249 Version: 1 Name: Type: Action Item Status: Passed File created: 4/14/2022 In control: Planning Commission On agenda: 4/19/2022 Final action: 4/19/2022 TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND Title: AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS D(EMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Attachments: 1. 1. Draft Resolution 22-07 Timeshare Ordinance. 2. 2. Hermosa Beach Draft Ordinance Staff Report Text Honorable Chairman and Members of the Hermosa Beach Planning Commission Regular Meeting of April 19, 2022 .� TA 22-01 ZONE TEXT AMENDMENT TO AMEND THE HERMOSA BEACH MUNICIPAL CODE CHAPTER 17.40 TO ADD SECTION 17.40.230 AND AMEND SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES AND DETERMINE THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRINMENTAL QUALITY ACT (CEQA) Recommendation Recommended Action: Staff recommends the Planning Commission adopt Resolution No. 22-07 (Attachment 1) recommending that the City Council approve Zone Text Amendment TA 22-01, thereby amending Chapter 17.40 to add section 17.40.230 and amend section 17.26.030 to permit timeshare uses in specified commercial zones and determine that the project is exempt from the California Environmental Quality Act (CEQA). Body Background: The City of Hermosa Beach ("City") does not currently have regulations in place governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. These types of uses in the City's residential zone could limit the City's existing housing stock for use as a long-term residency and impair the character of the City's residential zones. At its March 15, 2022 meeting, the Planning Commission directed staff to bring forward a zone text amendment addressing these types of uses. Analysis: The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers, and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones including the C-1 and C-2 commercial zones that provide for uses that serve both visitors and the local community such as: restaurants; retail shops; and visitor serving hotels. The City also has residential zones that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. City Housing The most recent census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the period of 2015- 2019, while the Zillow Home Value Index estimates medial home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, homes values in the City have gone up 10.1 percent over the past year. In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702, and the median income for a four -person household in Los Angeles County for 2021 is approximately $80,000. The cost of homes currently in Hermosa Beach are more than what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. https:Hhermosabeach.legistar.com/LegislationDetail.aspx?I D=5557241 &GU I D=8OA64A8C-E51 A-4C26-B2D2-3046537C93D5 1 /3 4/27/23, 9:30 AM City of Hermosa Beach - File #: REPORT 22-0249 The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in timesharing projects. This use is better suited in commercial or quasi -commercial zones and is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests or parties, but these timeshare homes are used exclusively by people who are coming to the City on a short-term basis - most likely for vacation or leisure. As a result, those users may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because it would ensure that the time share users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering into contracts to purchase homes in tourist destinations in desirable locations like the City. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co - owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. Time Share Ordinance As mentioned above, the City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that it the City is able to maintain its existing and limited housing stock for use in long term residency and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, any ordinance should be geared toward the specific impacts of the at -issue uses - timeshare like uses organized and ran by third parties for a fee. The proposed ordinance (Attachment 2) does not target or single out any business or ownership structure. Environmental Determination: The proposed ordinance is not subject to CEQA because the adoptions of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in C-1 and C-2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan and is consistent with the following Goals and Policies of Plan Hermosa: Land Use and Design Element Goal 1 Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2 Neighborhoods provide for diverse needs of residents of all ages and abilities, and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods https://hermosabeach.legistar.com/Leg islationDetail.aspx?I D=5557241 &GU I D=8QA64A8C-E51 A-4C26-B2D2-3046537C93D5 2/3 4/27/23, 9:30 AM City of Hermosa Beach - File #: REPORT 22-0249 • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Attachments: 1. Draft Resolution 22-07 Timeshare Ordinance 2. Hermosa Beach Draft Ordinance Respectfully Submitted by: Carlos Luis, Senior Planner Legal Review: Patrick Donegan, Deputy City Attorney Approved: Angela Crespi, Interim Community Development Director https://hermosabeach.legistar.com/Leg islationDetaii.aspx?I D=5557241 &GU ID=8OA64A8C-E51 A-4C26-B2D2-3046537C93D5 3/3 4/27/23, 9:31 AM City of Hermosa Beach - File #: REPORT 22-0586 Sign In CITY OF HERMOSA BEACH Legislation Calendar City Council Departments People I11111 Ell 10Share:(614SS (iiAlerts, Details PDF Staff Report File #: REPORT 22-0586 Version: 1 Name: Type: Action Item Status: Public Hearing File created: 9/19/2022 - In control: City Council On agenda: 9/28/2022 Final action: INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND Title: AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Attachments: 1. 1. SUPPLEMENTAL Draft Ordinance, 2. 2. Resolution P.C. 22-07, 3. 3. Link to April 19, 2022 Planning Commission Staff Report 4. SUPPLEMENTAL Email from Scott Hayes Re Item 13. c., 5. SUPPLEMENTAL eComments for Item 13. c Staff Report Text Honorable Mayor and Members of the Hermosa Beach City Council Regular Meeting of September 28, 2022 Title INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH, CALIFORNIA AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (Community Development Director Jeannie Naughton) Body Recommended Action: Recommendation Staff recommends City Council consider waiving full reading and introduce by title only an Ordinance of the City of Hermosa Beach, California, amending Chapter 17.40 (Conditional Use Permit and Other Permit Standards) to add Section 17.40.230 (Timeshare Uses) to Title 17 (Zoning) and amending Section 17.26.030 to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit and determining that the project is exempt from the California Environmental Quality Act (Attachment 1). Body Executive Summary_ The City of Hermosa Beach Municipal Code (HBMC) does not currently include regulations governing the use of timeshares within the City, nor any regulations that would explicitly address these emerging businesses offering "fractional ownership" of a property in a way that operates like a timeshare. If left unregulated, these types of uses in the residential zones could limit the City's existing housing stock for use as long-term residency and impair the overall character of the City's residential areas. The proposed draft ordinance (Attachment 1) would permit timeshare uses in the C-1 and G 2commercial zones within the City pursuant to a Conditional Use Permit (CUP), and prohibit the use in all other zones within the City. Background: The City of Hermosa Beach is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents, those who work in the City, and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial zones, ineluding the G 1 and G 2 eemmeFeial Penes, that provide for uses that serve both visitors and the local community. These commercial uses include: restaurants; retail shops; and visitor -serving hotels and motels. The City also has residential zones, at varying densities, that provide a diversity of housing types for those who live in the community. The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance to permit timeshare uses in specified commercial zones pursuant to a Conditional Use Permit by adopting Resolution P.C. 22-07 (Attachment 2). Past Planning Commission Actions https:/Ihermosabeach.legistar.com/LegislationDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48DO-8735-DD895DF161 B5 1/3 4/27/23, 9:31 AM City of Hermosa Beach - File #: REPORT 22-0586 Meeting Date Description April 18, 2022 Planning Commission reviewed the proposed ordinance and adopted Resolution P.C. 22-07 C� Housing The most recent U.S. Census data lists the median value of owner -occupied homes in Hermosa Beach as $1,542,900 for the 2015-2019 period, while the Zillow Home Value Index estimates median home values in Hermosa Beach to be approximately $2,174,879 as of January 31, 2022. According to the Zillow Home Value Index, home values in the City have gone up 10.1 percent over the past year In contrast, the median household income in Hermosa Beach from 2015-2019 was $136,702, and the median income for a four -person household in Los Angeles County for 2021 was approximately $80,000. The cost of homes currently in Hermosa Beach are in excess of what median income residents of Hermosa Beach can afford, and certainly over the median income residents of Los Angeles County generally. The conversion of homes in the City's residential neighborhoods to these timeshare -like uses would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. A home that is used for timeshare purposes would no longer be available for households to use as their long-term residence. Impacts to Character of the City's Residential Districts Timesharing projects have the same character as commercial hotels, motels, and other transient occupancy uses due to the multiple short- term occupancies by those participating in timesharing projects. For this reason, the activity is better suited in commercial or quasi - commercial zones. The use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. The intensity of the activity is a significant reason why these uses can change the character of a residential neighborhood. Long-term residents, whether owners or renters, occasionally have guests and parties, but timeshare homes are used exclusively by people who are coming to the City on a short-term basis -most likely for vacation or leisure, increasing the likelihood of frequent gatherings and parties generating noise in excess of what the neighborhood normally generates. Timeshare owners and visitors will most likely stay out later, entertain more, and gather in larger numbers while on vacation. Timeshare uses can change the character of a residential neighborhood by having it serve not only as a residential area, but also a visitor lodging area and subjecting the neighborhood to the impacts that come with the more intense land use. Further, the nature of the timeshare use itself can impact the residential character of the City's residential zones because they ensure that the timeshare users can only use their property for a limited amount of time each year. Each co-owner is in the unit on a short-term basis, so they do not have the time to participate in activities or build the relationships that create the fabric of a community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents. Emerging Businesses Recently, certain businesses have emerged which purport to sell "co -ownership" shares in residential property. These businesses, as staff understands the business model, start by purchasing homes or entering contracts to purchase homes in tourist destinations in desirable locations like Hermosa Beach. These businesses then form a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, the business continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The Ordinance The City does not currently have regulations in place governing the use of timeshares within the City or other businesses/arrangements that are identical or similar to a timeshare use. The purpose of any ordinance should be to ensure that the City is able to maintain its existing and limited housing stock for use in long-term residency, and to maintain the character of its residential zones. Completely banning "fractional ownership," joint tenancies, or ownership by business entities such as LLC is not advisable. There are numerous properties in the City's residential zones currently owned by numerous owners or by LLCs. Thus, the ordinance is geared toward the specific impacts of the at -issue uses -timeshare -like uses organized and run by third parties for a fee. The proposed ordinance (Attachment 1) does not target or single out any business or ownership structure. The proposed ordinance allows for these types of timeshare uses in the City's C-1 afA-G-2 zones, subject to a Conditions Use Permit. Timeshare uses would be prohibited in all other zones. In order to avoid an over -inclusive ordinance that prohibits joint tenancies or other type of ownership structure that do not have the same deleterious impacts, the proposed ordinance focuses on the actual use of the property, as compared to the ownership structure, and in pertinent regulates this "timeshare use" subject to a "timeshare plan." Timeshare plan is defined as: https://hermosabeach.legistar.com/LegislationDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48DO-8735-DD895DF161 B5 2/3 4/27/23, 9:31 AM City of Hermosa Beach - File #: REPORT 22-0586 "Any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. " At its April 18, 2022 meeting, the Planning Commission reviewed and recommended approval of the proposed ordinance by adopting Resolution P.C. 22-07 (Attachment 2). Environmental Determination: The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-1 and —G-2 commercial zones within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. General Plan Consistency_ The proposed text amendment has been evaluated for consistency with the City's General Plan. Relevant Policies are listed below: Land Use and Design Element Goal 1. Create a sustainable urban form and land use patterns that support a robust economy and high quality of life for residents. Policies: • 1.5 Balance resident and visitor needs. Ensure land uses and business provide for the needs of residents as well as visitors. • 1.7 Compatibility of uses. Ensure the placements of new uses does not create or exacerbate nuisances between different types of land uses. Goal 2. Neighborhoods provide for diverse needs of residents of all ages and abilities and are organized to support healthy and active lifestyles. Policies: • 2.4 Single density neighborhoods. Preserve and maintain the Hermosa Hills, Eastside, Valley, North End and Hermosa View neighborhoods as predominantly single-family residential neighborhoods • 2.5 Neighborhood preservation. Preserve and enhance the quality of residential neighborhoods by avoiding or abating the intrusion of disruptive, nonconforming buildings and uses. Fiscal Impact: There is no fiscal impact associated with the recommended action. Attachments: 1. Draft Ordinance 2. Resolution P.C. 22-07 3. Link to April 19, 2022 Planning Commission Staff Report Respectfully Submitted by: Patrick Donegan, Assistant City Attorney Concur: Jeannie Naughton, Community Development Director Noted for Fiscal Impact: Viki Copeland, Finance Director Legal Review: Patrick Donegan, Assistant City Attorney Approved: Suja Lowenthal, City Manager Staff Report Updated on 9/27/2022 - See Track Changes https://hermosabeach.legistar.com/LegislationDetail.aspx?ID=5850234&GUID=EEC63C4B-88FE-48D0-8735-DD895DF161 B5 3/3 Docu Sign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E CITY OF HERMOSA BEACH ORDINANCE NO. 22-1453 AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. THE CITY COUNCIL OF THE CITY OF HERMOSA BEACH DOES HEREBY ORDAIN AS FOLLOWS: Section 1. Findings. A. The City of Hermosa Beach ("City") is a scenic beachfront city, known for its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. B. Preserving the City's costal resource and the quality and character of the City has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's current General Plan. C. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. D. The City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses. E. The City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City. Page 1 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E F. According to the U.S. Census Bureau, the current median household income in the City is $136,702, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,542,900 with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City. G. The conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community. H. The City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses. The high impact use associated with timeshares, combined with the frequent turnover and commercial management involved in timeshare properties is not consistent with the purpose and nature of residential districts in the City. Rather, they are commercial in nature, in that these timeshare uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of properties as timeshares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City. J. The use of residential properties for timeshare uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for timeshare uses of residential properties. K. This encroachment of tourist oriented, visitor serving uses in residential neighborhoods is likely to compromise the character of residential areas within the City, and further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City. L. The City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad Page 2 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E authority to regulate the development and use of real property within its jurisdiction to promote the public welfare. M. Pursuant to and in accordance with this authority, the City Council desires to prohibit timeshare uses in residential areas, and only allow them in the C- 2 commercial zone within the City, pursuant to a conditional use permit. N. The City's Planning Commission held a duly noticed public hearing on April 19, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting. O. On April 19, 2022, the City's Planning Commission recommended that the City Council adopt this Ordinance amending the City's Municipal Code as described herein. P. On September 28, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance and adopted on first reading the Ordinance. Q. On October 11, 2022, the Ordinance was brought back for a second reading and adopted by the City Council. R. The proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the character of the City; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply. Section 2. The above recitals are hereby incorporated as though set forth in this section. Section 3. Section 17.40.230 (Time Share Uses) is hereby added to Chapter 17.40 (Conditional Use Permit and Other Permit Standards) of Title 17 (Zoning) of the City of Hermosa Beach Municipal Code, to read as follows: Section 17.40.230 Timeshare Uses A. Purpose and Findings. There is a critical shortage of permanent, long-term housing in the City of Hermosa Beach ("City"). A limited supply of suitable vacant land, land values, Page 3 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E and market demand for land for other uses, have limited the construction of additional housing in the City. The City is a popular tourist destination known for its scenic beachfront location, its many diverse restaurants, local retailers and popular commercial areas like its Downtown area and Pier Avenue. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. Timeshare uses are not an appropriate land use in the City's residential zones due to the multiple occupancy of timeshare properties, the short-term, tourist oriented use of such property and commercial management of timeshare facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the timeshare facilities, and therefore are appropriately confined to commercial zones. Conversion of permanent housing to timeshare facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. It is therefore in the public interest to prohibit conversions of existing housing units into timeshare facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. B. Definitions. For purposes of this Section, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.040. "Building" shall have the meaning ascribed to it by Section 17.04.040. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.040. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a timeshare plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. Page 4 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E "Timeshare instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a timeshare plan and includes the declaration dedicating accommodations to the timeshare plan. "Timeshare interest" means the right to exclusively occupy a timeshare property for a period of time on a recurring basis pursuant to a timeshare plan, regardless of whether or not such right is coupled with a property interest in the timeshare property or a specified portion thereof. "Timeshare plan" means any arrangement, plan, scheme, or similar device, facilitated, offered, or organized by a third -party non -purchaser, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby purchasers, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Timeshare property" means one or more accommodations subject to the same timeshare instrument, together with any other property or rights to property appurtenant to those accommodations. "Timeshare use" means the use of one or more accommodations or any part thereof, as a timeshare property pursuant to a timeshare plan. C. Timeshare Uses Restricted to C-2 Downtown Commercial Zone. Timeshare uses are conditional uses within the City's C-2 Downtown Commercial Zone, subject to approval of a conditional use permit applied for and approved in conformance with this Section. Timeshare uses are not permitted in any other Zones in the City. D. Application Process and Development Standards. A. Application Process. Approval of a conditional use permit for timeshare uses in the C-2 Downtown Commercial Zone within the City shall be required in accordance with the requirements of Chapter 17.40. In addition to the requirements contained in Chapter 17.40, an application for a timeshare use shall be accompanied by the following documents which shall be subject to the approval of the Community Development Director: l . Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and Page 5 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a timeshare use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the timeshare property, if applicable. C. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, City staff or commission deems reasonably necessary to the consideration of the timeshare use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this Section, the following conditions must be met by any timeshare use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the timeshare use meets the intent of this Section: 1. Timeshare uses developed in the C-2 Downtown Commercial Zone within the City shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the C-2 Downtown Commercial Zone within the City shall be converted to a timeshare use. 3. Development Standards. The timeshare use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: Page 6 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED8558E a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The Planning Commission may modify or waive one or more of the regulations contained in this Section if it determines that strict compliance is not necessary to achieve the purpose and intent of this Section. E. Violations, Enforcement and Civil Penalties. 1. Any responsible person, including but not limited to an owner of a timeshare interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in anyway and through any medium, the availability for sale or use of an accommodation in violation of this Section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this Section. Such violation shall be punishable pursuant to Section 1.04.020 of the City of Hermosa Beach Municipal Code. 2. Timeshare use, and/or advertisement for timeshare use, of an accommodation in violation of this Section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense 3. Any responsible person who violates this Section shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The City may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the City, including without limitation the City's staff time, investigation expenses and attorney's fees. a. Where the City proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this Section to prevent and deter violations and whether the reduction Page 7 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this Section. In any such civil action the City also may abate and/or enjoin any violation of this Section. b. Where the City proceeds by administrative citation, the City shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the City clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. ii. The City Manager is hereby authorized to designate a hearing officer to hear such appeal. The City hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. iii. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this Section to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this Section. iv. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition forwrit of mandate with the Los Angeles County Page 8 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E Superior Court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. v. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 8.28. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes 4. Any violation of this Section may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 8.28 except that the civil penalty under Chapter 8.28 for a violation shall be one thousand dollars ($1,000.00). Each day the violation of this Section occurs shall constitute a separate offense. The remedies under this Section are cumulative and in addition to any and all other remedies available at law and equity. Section 3. Section 17.26.030 of Chapter 17.26 (C 1, C2 and C3 Commercial Zones) of Title 17 (Zoning) is amended to add the following entry to the chart of land use regulations USES I C 1 C2 C3 See Section Timeshares I U 17.40.230 Section 4. CEQA. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c) (2) and 15060(c) (3) of Title 14 of the California Code of Regulations. Specifically, this ordinance permits timeshares in the C-2 Downtown Commercial zone within the City pursuant to a conditional use permit, and prohibits them in all other zones within the City, and authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b) (3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Page 9 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81 BED8558E Section 5. Effective Date. Pursuant to California Government Code section 36937, this Ordinance shall take effect thirty (30) days after its final passage. Section 6. Certification. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. PASSED, APPROVED and ADOPTED this 11 th day of October, 2022. AYES: Councilmembers Campbell, Massey, Mayor Pro Tem Jackson, and Mayor Detoy NOES: None. ABSTAIN: None. ABSENT: None Mayor Raymond A. Jackson PRESIDENT of the City Council and MAYOR of the City of Hermosa Beach, CA ATTEST: APPROVED AS TO FORM: Pam& V61n.c VAA, Myra Maravilla Patrick Donegan City Clerk City Attorney Page 10 of 10 #22-1453 DocuSign Envelope ID: A34F7110-E406-434D-A977-DC81BED8558E State of California ) County of Los Angeles ) ss City of Hermosa Beach ) December 27, 2022 Certification of Council Action ORDINANCE NO. 22-1453 AN ORDINANCE OF THE CITY OF HERMOSA BEACH. AMENDING CHAPTER 17.40 (CONDITIONAL USE PERMIT AND OTHER PERMIT STANDARDS) TO ADD SECTION 17.40.230 (TIMESHARE USES) TO TITLE 17 (ZONING), AND AMENDING SECTION 17.26.030 TO PERMIT TIMESHARE USES IN SPECIFIED COMMERCIAL ZONES PURSUANT TO A CONDITIONAL USE PERMIT AND DETERMINING THAT THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. I, Myra Maravilla, City Clerk of the City of Hermosa Beach, California, do hereby certify that the above and foregoing Ordinance No. 22-1453 was duly approved and adopted by the City Council of said City at its adjourned regular meeting thereof held via hybrid on the 11th day of October 2022 and passed by the following vote: AYES: Mayor Detoy, Mayor Pro Tem Jackson, Councilmembers Campbell, Armato, and Massey NOES: None ABSTAIN: None ABSENT: None Myra Maravilla, MPA, CMC City Clerk Exhibit M City of Palm Desert Time Share Ordinance and Supporting Evidence CITY OF PALM DESERT DEPARTMENT OF DEVELOPMENT SERVICES CITY COUNCIL STAFF REPORT MEETING DATE: April 28, 2022 PREPARED BY: Rosie Lua, Principal Planner REQUEST: Consideration of approval to the City Council for Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Recommendation Waive further reading and pass to second reading City Council Ordinance No. approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Plannina Commission Recommendation On January 18, 2022, the Planning Commission considered the Zoning Ordinance Amendment (ZOA) 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Planning Commission approved Resolution No. 2805 recommending to the City Council approval by vote 5-0. City Council Meetings On February 24, 2022, the City Council opened the public hearing and approved a request from staff to continue to the meeting of March 24, 2022. On March 24, 2022, another continuance of the public hearing was granted to April 28, 2022, allowing staff to meet with the City's Short Term Rental (STR) Subcommittee and time for staff to make appropriate changes to the zoning ordinance. Strategic Plan Land Use, Housing & Open Space — Priority 5: "Utilize progressive land use policies and standards to support ongoing and future needs." Background Analysis On November 18, 2021, the City Attorney presented a memo to City Council addressing the Pacaso business model purchasing property in tourist destinations like the City of Palm Desert targeting the second or vacation home market. Founded in 2020, the Pacaso owns title to the residential home by forming a limited liability company ("LLC"), then markets "co - ownership" interests in the homes to up to eight individuals for a certain number of days per April 28, 2022 —Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 2 of 4 year as specified in their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved through a mobile application, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, a Pacaso manages the homes, providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners of the LLC. The City Attorney opined that the Pacaso business formation is a "timeshare" as defined in the Business and Profession Code Section 11212(z) and regulated by Section 25.34.060 (Time -Share Projects) of the Palm Desert Municipal Code (PDMC). The Pacaso's are not regulated by the state law since there are less than ten co -owners, the minimum number of co -owners required to be regulated by state law. The PDMC permits timeshare projects in planned residential zones, general commercial zone, or the planned commercial resort zone and includes a requirement for a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of the code. The Pacaso type of business formation would not be permitted to operate in a single-family residential property and operate as a timeshare use since the use does not meet all the criteria of the PDMC. The purpose of this ordinance is to ensure that the City is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zones. The conversion of homes in the city to timesharing projects would eliminate residential dwelling units that would otherwise be available for long-term residential use, thereby further exacerbating the lack of long-term available housing in the City. To Staff's knowledge, Pacaso has facilitated the purchase of and management of at least one (1) single family home and currently advertising three (3) homes for one -eighth purchase within the City of Palm Desert. No other Pacaso type entities are known to have ownership of homes within the City. Discussion Staff has studied the timeshare ordinance amendment and its intended regulations including a consultation with the Short -Term Rental (STR) subcommittee to discuss the proposed amendment and the Pacaso type business formations. The Pacaso's are not regulated by the Short -Term Rental Ordinance of the city since the business operations do not allow short term rentals as part of their structure. In addition, the subcommittee discussed the City's intent to regulate arrangements of multiple parties and its direct impact on the housing stock. In the formation of this ordinance, it is not the City's intent to regulate arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. For example, the city is not regulating ownership between family or friends who chose to purchase a property, form an LLC, and the manage the rental or upkeep through a management company so long as a fractional ownership structure is not formed. April 28, 2022 —Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 3 of 4 The proposed ordinance amendment to Section 25.34.060 (Time -Share Project) includes a more robust definition, to refer to current California law, and to provide a broader scope to include Pacaso types of business formations. In addition, it includes a section for violations, enforcement, and civil penalties to regulate such proposed business operations. It should be noted that the ordinance in this staff report differs from the Planning Commission's recommendation, Resolution No. 2805 which was revised to provide further clarifications on the intent of the ordinance as stated in the discussion above. General Plan The General Plan promotes goals and policies to protect and enhance community value in neighborhoods and its surroundings. Land Use and Community Character Policy 1.1 (Scale of development) promotes the City's corridors to use design techniques to a moderate height and use and ensure compatible fit with surrounding development. Therefore, the proposed amendment to the timeshare ordinance supports the City's goal in meeting the intent of the General Plan. Public Input Public noticing was conducted in accordance with State law. A public hearing notice was published on February 11, 2022, in The Desert Sun. The public hearing was opened on February 11, 2022, continued to March 24, 2022, and further continued to April 28, 2022. Staff has received a half dozen phone calls from the public concerning Pacaso co - ownership within their neighborhoods and inquiring if Short-term Rental Ordinances would apply. On March 10, staff received a phone call from Marcus Schwab, a resident that lives on Bel Air Road expressing concern of business formations functioning like timeshares that affects the character of his neighborhood. Not knowing who their neighbors are was expressed as a real concern. Mr. Schwab identified the property as 72870 Bel Air Rd which is being advertised on eXp Realty's website, a home selling in his neighborhood that he says is priced high which can result in pricing out qualified homebuyers. Other residents have expressed concerned of properties on 72694 Skyward Way and 72985 Somera Rd being advertised as timeshare ownership. These particular properties are listed in the Pacaso website as well as other realtor websites including Trulia, Zillow, Redfin, etc. The properties mentioned above have all been confirmed to be associated with Pacaso. However, since the ownership of these properties includes eight owners (1/8 ownership), it is difficult to track if any property has been sold full or partial ownership. Environmental Review The adoption of this ordinance has been analyzed for compliance with the California Environmental Quality Act (CEQA) pursuant to CEQA (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) it has been determined that the amendments do not meet the definition of a project because the amendments do not have the potential to cause either a direct physical change or a April 28, 2022 —Staff Report Case No. ZOA 22-0001 Time -Share Uses - Pacaso Page 4 of 4 reasonably foreseeable indirect physical change in the environment. The proposed amendments are consistent with the General Plan goals of ensuring the quality of life for the community. Because the amendment is not a project under CEQA, they are not subject to further environmental review. Findings of Approval Findings can be made in support of the amendment and in accordance with the City's Municipal Code. Findings in support of this ZOA are contained in the Ordinance No. attached to this staff report. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER Ma-fi, ALv-ar&z N/A -Alict-y Firedine Robert W. Hargreaves Martin Alvarez, Dir. of Veronica Chavez Andy Firestine City Attorney Development Services Director of Finance Assistant City Manager City Manager L. Todd Hileman: L. TOG(G( HiLewt,Rvi, ATTACHMENTS: 1. Draft City Council Ordinance No. 2. Exhibit A — Ordinance 3. Planning Commission Resolution No. 2805 4. Planning Commission Draft Minutes of January 18, 2022 5. City Council Public Hearing Notice 6. City Council Memo dated November 18, 2021 7. Public Comments ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staff's request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any C�IN01MAI014*Kell part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. SECTION 4. Publication. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 28th day of April 2022, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: ANTHONY J. MEJIA, CITY CLERK CITY OF PALM DESERT, CALIFORNIA JAN C. HARNIK, MAYOR N "EXHIBIT A" ZONING ORDINANCE AMENDMENT SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows: "25.34.060 Time -Share Preje Uses A. Purpose. The purpose of the special use regulations for time-share prejeGts uses is to establish special location and site development standards. B. Definitions. 1. "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. 2._ _ "Developer" means person, who at any point in time, owns, or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: (i) A "time-share estate," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. A "time-share use." which is the riaht to exclusivelv occuov a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right t is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Timeshare Plan" does not include arrangements whereby multiple parties loin in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" means the use of one or more accommodations or anv oart thereof, as a time-share property pursuant to a time-share plan. C. Permitted zones. A time-share PFejeGt use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share pFeject use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code. G- D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time- share prajeEt use shall submit in the application at least the following information: 1. Copies of documents and information required pursuant to Article 12.2 of the California d_minic+r;;tOye Code of Regulations, Sections 2819 2809.1, 2809.2, and 2809.3 wherein the requirements for a "substaRtially properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share PFGjest use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail. 3. In the case of a new mixed project (i.e., time-sharing condom inium/rental),_ a description of the means proposed to be employed to disclose the number and location of all time-share is accommodations within the pFeject time-share use shall be submitted. 4. Description of time periods, types of uPA-s accommodations, and which units accommodations are in the time-share program (if less than all), and the length of time each of the up#6 accommodations are committed to the time-share program plan shall be submitted. ID. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share deVelnnrren+ use in any permitted zone: 1. The time-share pre}est use must be composed of -"time-share tat interests as Refined in Galifernia B iciness and PYefess1 a Y1s cede CeGtinn 11093.5. 2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share use interest exclusive occupancy period shall be for one week (seven days). 4. RF9je^+�penseT Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the pFeteGt time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time- share property PFE)jeGt which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the pFejeGt time-share plan. 5. With respect to a time-share ^,eject use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share pr-eje6t use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the speRseT developer of a time-share ^meet plan to an individual consumer (excluding bulk sales from one speRse developer to another, in which case the successor Spenser developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a Spenser developer of a time-share ^ plan shall also submit a written report to the City which specifies the number of week shares in the time-share PFejec-t Ip an which have been sold and conveyed in the preceding calendar month. F. Minimum number of units. The minimum number of units in a time-share project shall be 50. G. Development standards. Time-share PrOjefts uses shall be designed to conform to the standards for hotel developments in the event the time-share project use is located in a planned commercial resort or general commercial zone. The time-share prejeEt use must comply with all development standards of the zone in which it is located. With respect to time-share prejests uses developed within a planned residential zone, the density of the time-share ^pit uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share PrGjeGt& uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share prsject uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share prejest use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share prejeet use. H. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent or broker who uses, or allows the use of, or advertises or causes to be printed published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,000). Time-share use. and/or advertisement for time-share accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Resoonses to Loud or Unrulv Parties. Gatherinas or Other Similar Events.) 4. Each day the violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity." PLANNING COMMISSION RESOLUTION NO. 2805 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF PALM DESERT, CALIFORNIA, RECOMMENDING APPROVAL OF A ZONING ORDINANCE AMENDMENT TO MODIFY PALM DESERT MUNICIPAL CODE SECTION 25.34.60 REGARDING TIMESHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Timeshare Projects) to update the ordinance to clarify definitions and add enforcement options; and WHEREAS, the Planning Commission of the City of Palm Desert, in reviewing all the facts and any testimony given, adopts the following as its Findings in recommended approval of the ZOA to the City Council: SECTION 1. Findings. The Planning Commission of the City of Palm Desert hereby finds that: A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The Planning Commission of the City of Palm Desert recommends that the City Council of the City of Palm Desert, California, approve and adopt the PDMC amendment to Section 25.34.60 (Timeshare Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The Planning Commission hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. SECTION 4. CEQA. The City Council finds that adoption of this ordinance is not a "project," as defined in the California Environmental Quality Act (CEQA) because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making. PLANNING COMMISSION RESOLUTION NO. 2805 PASSED, APPROVED, AND ADOPTED by the Planning Commission of the City of Palm Desert, California, at its regular meeting held on the 18th day of January 2022, by the following vote, to wit: AYES: DE LUNA, GREENWOOD, GREGORY, HOLT, and PRADETTO NOES: NONE ABSENT: NONE ABSTAIN: NONE ( - I (-- -- �L J HN G EEN OD CHAIR ATTEST: MARTIN ALVAREZ, SECRETARY PALM DESERT PLANNING COMMISSION 1 1 bA� m i �alFvi9 S3Ho•� f". I. CALL TO ORDER CITY OF PALM DESERT PALM DESERT PLANNING COMMISSION MINUTES TUESDAY, JANUARY 18, 2022 — 6:00 P.M. ZOOM VIRTUAL MEETING Chair John Greenwood called the meeting to order at 6:01 p.m. II. ROLL CALL Present: Chair John Greenwood Vice -Chair Nancy DeLuna Commissioner Ron Gregory Commissioner Lindsay Holt Commissioner Joseph Pradetto Also Present: Craig Hayes, Assistant City Attorney Martin Alvarez, Director of Development Services Eric Ceja, Deputy Director of Development Services/Economic Development Rosie Lua, Principal Planner Jessica Gonzales, Senior Management Analyst Monica O'Reilly, Management Specialist II III. PLEDGE OF ALLEGIANCE Vice -Chair Nancy DeLuna led the Pledge of Allegiance. IV. SUMMARY OF COUNCIL ACTIONS Director of Development Services Martin Alvarez summarized pertinent City Council actions from the meeting of January 13, 2022. V. ORAL COMMUNICATIONS None MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 VI. CONSENT CALENDAR A. MINUTES of the Regular Planning Commission meeting of December 21, 2021. Rec: Approve as presented. Upon a motion by Vice -Chair DeLuna, seconded by Commissioner Holt, and a 5-0 vote of the Planning Commission, the Consent Calendar was approved as presented (AYES: DeLuna, Greenwood, Gregory, Holt, and Pradetto; NOES: None), VII. CONSENT ITEMS HELD OVER None VIII. NEW BUSINESS None IX. CONTINUED BUSINESS None X. PUBLIC HEARINGS A. REQUEST FOR CONSIDERATION to adopt a Notice of Exemption in accordance with the California Environmental Quality Act (CEQA) and approval of a Precise Plan (PP) and a Conditional Use Permit (CUP) to demolish the former Pizza Hut building and construct a new 7,500-square-foot retail and restaurant building located at 72310 Highway 111. Case No. PP/CUP 20-0002 (Nadel Architects, Inc, Los Angeles, California, Applicant). Note, the staff report(s) and Zoom video of the meeting are available on the City's website. Click on the following link to access: www.planning-commission- information-center. Vice -Chair DeLuna disclosed that she works for a company that is involved with a property in the Housing Element; therefore, she recused herself. Ms. Nicole Criste, Terra Nova Planning, the City's consultant, Palm Desert, California, presented a PowerPoint presentation regarding the Housing Element update. She recommended that the Planning Commission continue this item to February 1, 2022, to allow staff to work with the Department of Housing and Community Development to finalize details of the Housing Element. She also recommended opening the public hearing, taking public testimony, and leaving the public hearing open to the February 1 meeting. Chair Greenwood declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. 2 1 MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 Ms. Liliana Figueroa and Mr. Mark Stein, with CPMC Realty, Palm Desert, California, voiced their concern with the designation for affordable housing units on their client's site. Commissioner Pradetto moved to, by Minute Motion, leaving the public hearing open and continuing Case No. GPA 21-0002 to February 1, 2022. The motion was seconded by Commissioner Gregory and carried by a 4-0 vote (AYES: Greenwood, Gregory, Holt, and Pradetto; NOES: None; ABSENT: DeLuna. B. REQUEST FOR CONSIDERATION of a recommendation to the City Council for approval of a Zoning Ordinance Amendment to modify Palm Desert Municipal Code Section 25.34.060 regarding Timeshare Projects. Case No. ZOA 22-0001 (City of Palm Desert, Palm Desert California, Applicant). Principle Planner Rosie Lua gave a PowerPoint presentation reviewing the staff report in detail and recommended approval to the City Council. At this point, staff and the City Attorney responded to questions asked by the Planning Commission. Chair Greenwood declared the public hearing open and invited public testimony FAVORING or OPPOSING this matter. With no testimony offered, Chair Greenwood declared the public hearing closed. The Planning Commission concurred with the direction that the City is taking regarding timeshare projects. Commissioner Pradetto moved to waive further reading and adopt Planning Commission Resolution No. 2805, recommending approval to the City Council for Case No. ZOA 22-0001. The motion was seconded by Vice -Chair DeLuna and carried by a 5-0 vote (AYES: DeLuna, Greenwood, Gregory, Holt, and Pradetto; NOES: None). XI. MISCELLANEOUS None XII. COMMITTEE MEETING UPDATES A. CULTURAL ARTS COMMITTEE Commissioner Holt mentioned that she shared the San Pablo Corridor Art Plan and the details for the meeting scheduled on Monday, January 24 at 11:30 a.m. to discuss the plan. 3 MINUTES PALM DESERT PLANNING COMMISSION JANUARY 18, 2021 B. PARKS & RECREATION COMMISSION Mr. Alvarez stated that the Planning staff presented a concept plan for a park on Gerald Ford Drive and near Interstate 10. Staff hoped that the City would develop the park in two to three years. Chair Greenwood asked for the status of the Portola Avenue interchange. Mr. Alvarez responded that currently, the project is not feasible due to needing additional funding. Staff would discuss funding during the budget process and the City Council. XIII. REPORTS AND REMARKS None XIV. ADJOURNMENT With the Planning Commission concurrence, Chair Greenwood adjourned the meeting at 7:19 p.m. HN REEN O D, CH ATTEST: MARTIN ALVAREZ, SECRETARY MONK 'REILLY, RECO�DING SECRETARY 1 ill CITY OF P 0 1 0 1 S I R I 73-5 io FRRD WARING DRNR PALM DESERT, CALIFORNIA 92260-2578 TEL: 76o 346-o6ix InfoOO c1ryofpalmdcacrt.org CITY OF PALM DESERT LEGAL NOTICE NOTICE OF A PUBLIC HEARING BEFORE THE CITY COUNCIL OF THE CITY OF PALM DESERT TO CONSIDER APPROVAL FOR A ZONING ORDINANCE AMENDMENT TO MODIFY THE PALM DESERT MUNICIPAL CODE SECTION 25.34.060 (TIME-SHARE PROJECTS) The City of Palm Desert City Council (City), in its capacity as the Lead Agency, finds that this Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; it prevents changes in the environment pending the completion of the contemplated study of impacts. Project Location/Description: Project Location: City wide Project Description: Zoning Ordinance Amendment to update the Time Share Project ordinance (Chapter 25.34.60) to consider a regulatory response to the Pacaso type businesses related to "co -ownership" shares in residential properties operating within the City. Recommendation: City Council to approve the first reading of the Time -Share uses and its regulations and pass to second reading in accordance to CEQA Guidelines. Public Hearing: The public hearing will be held before the City Council on February 24, 2022, at 4:00 p.m. via Zoom. The hearing will be conducted in accordance with the City's emergency protocols for social distancing. Options for remote participation will be listed on the Posted Agenda for the meeting at: https://www.cityofpalmdesert.org/our-city/mayor-and-city-council- /city-counci I-m eeti ng-i nformation-center. Comment Period: The public comment period for this project is from February 14, 2022 to February 24, 2022. Public Review: The plans and related documents are available for public review Monday through Thursday from 8:00 a.m. to 5:00 p.m. by contacting the project planner, Rosie Lua, Principal Planner. Please submit written comments to the Planning/Land Development Division. If any group challenges the action in court, issues raised may be limited to only those issues raised at the public hearing described in this notice or in written correspondence at, or prior to the City Council hearing. All comments and any questions should be directed to: Rosie Lua, Principal Planner City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 (760) 346-0611, Extension 480 rlua@cityofpalmdesert.org PUBLISH: DESERT SUN NIAMH M. ORTEGA, DEPUTY CITY CLERK FEBRUARY 10, 2022 PALM DESERT CITY COUNCIL STAFF REPORT CITY OF PALM DESERT MEETING DATE: November 18, 2021 PREPARED BY: Robert Hargreaves, City Attorney, Best Best & Krieger LLP REQUEST: Update on Timeshare Ordinance Recommendation By Minute Motion, request the Planning Commission to review of the timeshare ordinance and provide City Council with any recommended amendments. Background Analysis INTRODUCTION Recently, the City has become aware that a new business model, "Pacaso", that features "co -ownership" shares in residential properties, has begun operating within the City. Given the nature of its use of residential property, it is my opinion that it is a timeshare use, as defined by California law and regulated by Section 25.34.060 of the Municipal Code. The Palm Desert timeshare ordinance (Municipal Code Section 25.34.060) has not been updated since 2013. As a preliminary matter in considering regulatory responses to the Pacaso-type businesses, we are recommending that Section 25.34.060 be updated to provide a more robust definition, to refer to current California law, and to provide a broader scope of potential regulation, should the city decide to pursue it. DISCUSSION Pacaso is a corporation that sells "co -ownership" shares in residential property. The company started by purchasing homes in tourist destinations in California, though they are rapidly expanding throughout the United States and internationally. Pacaso's business model is as follows: Pacaso will purchase or enter into a contract to purchase single family homes, then markets "co -ownership" interests in the homes to up to eight individuals. Pacaso then forms a limited liability company ("LLC"), which owns title to the residential home. The "co -owners" each purchase a one -eighth share, and are entitled to use the residential property for a certain number of days per year according to their share of ownership in the LLC. The one -eighth interest entitles the purchaser to stay at the property for up to 45 days per year in increments of 2-14 days, including one "special November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 2 of 4 day" (Fourth of July, Thanksgiving, Christmas, etc.). The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. Once shares in an LLC are sold, Pacaso continues to manage the homes, including providing landscaping and pool maintenance, furnishing the homes, and paying all expenses, which are then passed through to the co -owners. It is our understanding that there is currently at least one property in Palm Desert that is being marketed by Pacaso. Section 11212(z) of the Business and Profession Code defines the following significant terms: "Time-share plan" means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives ownership rights in or the right to use accommodations for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A time-share plan may be either of the following: (1) A "single site time-share plan" that is the right to use accommodations at a single time-share property. (2) A "multisite time-share plan" that includes either of the following: (A) A "specific timeshare interest" that is the right to use accommodations at a specific time-share property together with use rights in accommodations at one or more other component sites created by or acquired through the time-share plan's reservation system. (B) A "nonspecific time-share interest" that is the right to use accommodations at more than one component site created by or acquired through the time-share plan's reservation system, but including no specific right to use any particular accommodations. It is clear that the Pacaso model fits within that definition of "time-share plan" as co -owners receive ownership rights to use a property for less than a year on a recurring basis. Pacaso is not currently regulated by the State, as it does not meet the State's ten -share threshold for regulation. Palm Desert Section 25.34.060 does not dwell on the definition of "time-share" and provides: "The time-share project must be composed of "time-share estates" as defined in California Business and Professions Code Section 11003.5 [now section 1121 ]." Nor does the ordinance provide any specific enforcement provisions. November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 3 of 4 In the attached draft ordinance, the definition of time-share is more elaborate, and is consistent with current California statutes. It also provides enforcement options against persons that own, manage, or market illegal time-shares. At this point, the draft ordinance is before the council for discussion and direction. If the council directs that the update proceed, the ordinance will be put before the planning commission for consideration and recommendation, before it is brought back to the city council for adoption. November 18, 2021 - Staff Report Update of Timeshare Ordinance Page 4 of 4 Fiscal Analysis There is no direct fiscal impact associated with this item. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER RWH N/A N/A q,"d-Y Firestbie Robert W. Hargreaves Janet M. Moore Andy Firestine City Attorney Director of Finance Assistant City Manager City Manager L. Todd Hileman: t_. T©G{Lt H�Lemavt. ATTACHMENTS: Draft ordinance ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE SECTION 25.34.060 REGARDING TIME-SHARE PROJECTS THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES ORDAIN AS FOLLOWS: SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25.34.060 is hereby amended as follows: "25.34.060 Time -Share -Prejee-ts-Uses A. Purpose. The purpose of the special use regulations for time-share pfOjeetS uses is to establish special location and site development standards. B. Definitions. 1. "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. 2. "Developer" means person, who at any point in time, owns, or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entily, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: (i) A "time-share estate," which is the right to exclusively occupy a time-share property for a period of time on a recurringbasis asis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. GO A "time-share use," which is the right to exclusively occupy a time-share property for a period of time on a recurringbasis to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during and given year, on a recurring basis for more than one year, but not necessarily for consecutive years. 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with an,, other or rights to property appurtenant to those accommodations. 9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. C. Permitted zones. A time-share p use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share prejeet use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code. Q D. Application submittal requirements. In addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time-share prej€et use shall submit in the application at least the following information: 1. Copies of documents and information required pursuant to Article 12.2 of the California ^ ay inis,-,.ativo Code of Regulations, Sections 2S4-0 2809.1, 2809.2, and 2809.3 wherein the requirements for a "substantially properly_ completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share prejeet use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail. 3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time-share units accommodations within the project time-share use shall be submitted. 4. Description of time periods, types of units accommodations, and which u*4-s accommodations are in the time-share program (if less than all), and the length of time each of the units accommodations are committed to the time-share pregfann plan shall be submitted. D. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share develepment use in any permitted zone: 1. The time-share prejeet use must be composed of --`time-share estates" interests -as defined i G lire..ai Business and Pfef ssien G de Seel e 11003.5. 2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share use interest exclusive occupancy_period shall be for one week (seven days). 4. Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the prejeet time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time-share property prejee-t which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the prejeet time-share plan. 5. With respect to a time-share prej€et use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share prejee-t-use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the spencer developer of a time-share project plan to an individual consumer (excluding bulk sales from one Spenser developer to another, in which case the successor sponsor developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a sponsef developer of a time- share prejeet plan shall also submit a written report to the City which specifies the number of week shares in the time-share prejeet plan which have been sold and conveyed in the preceding calendar month. E.- F. Minimum number of units. The minimum number of units in a time-share project shall be 50. 1= G. Development standards. Time-share prej€ets uses shall be designed to conform to the standards for hotel developments in the event the time-share prejee-t use is located in a planned commercial resort or general commercial zone. The time-share prej€e-t use must comply with all development standards of the zone in which it is located. With respect to time-share projeets uses developed within a planned residential zone, the density of the time-share prejeet uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share prejeets uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share prejeet uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share prejeet use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share prejeet use. H. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000,) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,000). 3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events.) 4. Each day the violation of this chapter occurs shall constitute a separate offense. The remedies under this section are cumulative and in addition to anv and all other remedies available at law and eauitv." SECTION 2. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof, is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional. If for any reason any portion of this Ordinance is found to be invalid by a court of competent jurisdiction, the balance of this Ordinance shall not be affected. SECTION 3. Certification and Publication. The City Clerk of the City of Palm Desert shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted under California Government Code Section 36933. SECTION 4. CEQA. The City Council finds that adoption of this Ordinance is not a "project," as defined in the California Environmental Quality Act because it does not have a potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment and concerns general policy and procedure making. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Palm Desert on the day of , 2021, by the following vote. AYES: NOES: ABSTAIN: ABSENT: Kathleen Kelly, Mayor ATTEST: Norma Alley, City Clerk APPROVED AS TO FORM: Robert Hargreaves, City Attorney From: Kevin Swartz To: Rosie Lua Subject: FW: Latest Pacaso Report Date: Monday, April 11, 2022 7:56:25 AM FYI. Kevin Swartz Associate Planner Ph:760.346.0611 Direct:760.776.6485 kswartz@cityofpalmdesert.org From: Kathleen Kelly <kkelly@cityofpalmdesert.org> Sent: Friday, April 8, 2022 7:04 AM To: Robert Hargreaves <Robert.Hargreaves@bbklaw.com>; Kevin Swartz <kswartz@cityofpalmdesert.org> Subject: Latest Pacaso Report From Ellen Kane: Looks like Picasso bought the house at the corner of Somera and Alamo. If you google the address with Picasso after it is on their webpage and is showing as "available now". Think it just closed escrow because the for sale sign is down. That makes three Picasso's in my immediate area now (Bel Air, Skyward & Somera). Would really love neighbors not 1/8 ownerships (timeshares?) 73-5I0 FRFD WARING DRIVE PALM DESERT, CALIFORNIA 92260-25 78 TEL: 760 346-o6z i info a cit}ofpalmdesert org NOTICE OF CONTINUED PUBLIC HEARING NOTICE IS HEREBY GIVEN that the following Public Hearing was continued from the City Council meeting of March 24, 2022 to the City Council meeting of April 28, 2022: Ordinance No. 1378 to approve Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding the Time - Share Projects (Continued from February 24, 2022i NOTICE IS FURTHER GIVEN that the City Council meeting of April 28, 2022 will take place virtually at 3:00 p.m. at cityofpalmdesert.org/zoom. All interested persons are invited to attend said Public Hearing. DATED this 28th day of March, 2022. NIAMH M. ORTE ! y Deputy City Clerk ,� STAFF REPORT CITY OF PALM DESERT MEETING DATE: May 12, 2022 PREPARED BY: Niamh Ortega, Deputy City Clerk APPROVING AUTHORITY: City Council REQUEST: Second reading and adoption of Ordinance No. 1378 to approve Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.060 regarding Time -Share Projects. Recommendation: Waive the second reading of the ordinance text in its entirety and read by title only; and adopt Ordinance No. 1378 entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS, CASE NO. ZOA 22- 0001." Background/Analysis: On April 28, 2022, the City Council introduced Ordinance No. 1378 for first reading, as noted below: Motion by Councilmember Kelly, second by Councilmember Quintanilla, carried 3-1-1 (with Mayor Pro Tern Jonathan voting no and Councilmember Nestande recused), to waive further reading and pass to second reading Ordinance No. 1378 approving Zoning Ordinance Amendment 22-0001 to modify Palm Desert Municipal Code Section 25.34.60 regarding Time - Share Projects. This report provides for the City Council to waive further reading and adopt the ordinance. The ordinance shall be effective 30 days from adoption. Financial Impact: There is no direct financial impact associated with this item. Attachments: 1. Ordinance No. 1378 MEETING DATE0 ❑ ccotmNUED TO hh P PASSES TO 2ND READING. e � Atip ORDINANCE NO.1378 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staff's request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 281h of April 2022. On the 281h of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severabillity. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be ORDINANCE NO.1378 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AMENDING PALM DESERT MUNICIPAL CODE, CHAPTER 25, MODIFYING SECTION 25.34.60 REGARDING TIME-SHARE PROJECTS CASE NO: ZOA 22-0001 WHEREAS, the Planning Commission of the City of Palm Desert, California, did on the 18th day of January 2022, hold a duly noticed public hearing to consider the request by the City of Palm Desert for approval of the above -noted, and adopted Resolution No. 2805, recommending that the City Council adopt the Zoning Ordinance Amendment (ZOA) for said projects regulating the time-share projects; and WHEREAS, the Zoning Ordinance Amendment (ZOA) modifies the Palm Desert Municipal Code (PDMC) Section 25.34.60 (Time -Share Projects) and implements a requirement for time share uses; and WHEREAS, the City Council of the City of Palm Desert, did on the 24th day of February 2022, hold a duly noticed public hearing to, the City Council opened the public hearing and approved staffs request to continue to the 24th of March 2022. On the 24th of March 2022, another continuance of the public hearing was granted to the 28th of April 2022. On the 28th of April 222, the City Council considered the request by the City of Palm Desert for approval of a ZOA determined that the time-share process is consistent with the City's General Plan; and WHEREAS, at said public hearing, upon hearing and considering all testimony and arguments, if any, of all interested persons desiring to be heard, said City Council did find the following facts and reasons exist to approve said request: SECTION 1. Adoption of Recitals. The City Council hereby adopts the foregoing recitals as its findings in support of the following regulations and further finds that the following regulations are beneficial and appropriate to protect the health, safety, and welfare of the residents and businesses of Palm Desert within the City limits. A. The City of Palm Desert, California ("City") is a municipal corporation, duly organized under the constitution and laws of the State of California; and B. The Planning and Zoning Law authorizes cities to establish by ordinance the regulations for land use and development. SECTION 2. Amendment. The City Council of the City of Palm Desert, California, approve, and adopt the PDMC amendment to Section 25.34.60 (Time -Share Projects) as shown in Exhibit A, which is attached hereto and incorporated herewith. SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase in this ordinance or any part thereof is for any reason held to be ORDINANCE NO. 1378 unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof irrespective of the fact that one (1) or more subsections, subdivisions, paragraphs, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective. SECTION 4. Publication. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in The Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and in effect thirty (30) days after its adoption. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Palm Desert, California, at its regular meeting held on the 12th day of May 2022, by the following vote, to wit: AYES: KELLY, QUINTANILLA AND HARNIK NOES: JONATHAN ABSENT: NESTANDE ABSTAIN: NONE �C. HA IK,'MAYOR ATT IONY J. M I-F� CLE K OF PALM[DESERT) CALIFORNIA 1 2 �' Palms Desert ORDINANCE NO. 1378 "EXHIBIT A" ' ZONING ORDINANCE AMENDMENT SECTION 1. Amendment to Palm Desert Municipal Code. Palm Desert Municipal Code section 25,34.060 is hereby amended as follows: 25.34.060 Time -Share Uses A. Purpose. The purpose of the special use regulations for time-share uses is to establish special location and site development standards. B. Definitions. 1. "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. 2. "Developer" means person, who at any point in time, owns, or has an option or contract to acquire eleven or more time-share interests for purposes of sale in the ordinary course of business if the time-share interests were acquired or are to be acquired from the original recipient of a public report for the time-share plan, or from a person who succeeded to the interest of the original recipient in eleven or more time-share interests in a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument' means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest' means and includes either of the following: (i) A "time-share estate," which is the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. (ii) A "time-share use," which is the, right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or gl ( .cki ? Na t ORDINANCE NO. 1378 by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Timeshare Plan" does not include arrangements whereby multiple parties join in directly purchasing full ownership of an accommodation and thereafter agree upon arrangements for their shared use. 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. C. Permitted zones. A time-share use shall be permitted only in a planned residential zone, a general commercial zone, or a planned commercial resort zone. Any time- share use shall be developed in conjunction with a resort hotel having 500 or more rooms and an 18-hole golf course of not less than 6,400 yards, and then only if and when a conditional use permit has been obtained from the Commission in accordance with Section 25.72.050 (Conditional Use Permit) of this code. D. Application submittal requirements. in addition to standard application submittal requirements, an applicant for a conditional use permit approval involving a time- share use shall submit in the application at least the following information: 1. Copies of documents and information required pursuant to Article 12.2 of the California Code of Regulations, Sections 2809.1, 2809.2, and 2809.3 wherein the requirements for a "properly completed" application for a final subdivision public report are enumerated, excluding those documents so enumerated which are subject to the approval of the City and therefore otherwise available to the City. In the event such documents and information have not been filed with the California Department of Real Estate at the time an applicant applies for a conditional use permit, the applicant shall furnish such documents and information upon the submission of such documents and information to the Department of Real Estate, but in no event later than the issuance of the conditional use permit. 2. In the event an existing condominium project is proposed to be converted to a whole or partial time-share use, a verified description or statement of the number and percentage of the current condominium owners desiring or consenting to the proposed conversion of some or all of the units to a time-share basis shall be submitted. Also, in such instance there shall be submitted to the Commission prior to or during the hearing process, a verified statement of the number and percentage of owners who have received notification, either personally or by receipted certified US mail. 3. In the case of a new mixed project (i.e., time-sharing condominium/rental), a description of the means proposed to be employed to disclose the number and location of all time-share accommodations within the time-share use shall be submitted. } I li, r ���:, P! `-� °*, F�i, L �M ref �. tp e �1 1 r i 1 t, yr k r .. .. .,. M ,e.1. :,Y ,t ORDINANCE NO. 1378 4. Description of time periods, types of accommodations, and which accommodations are in the time-share program (if less than all), and the length of time each of the accommodations are committed to the time-share plan shall be submitted. E. Requirements. Notwithstanding any other provisions of this chapter, the following requirements must be met by any time-share use in any permitted zone: The time-share use must be composed of time-share interests. 2. All maintenance agreements and conditions, covenants, and restrictions must be approved by the City. 3. The minimum time-share interest exclusive occupancy period shall be for one week (seven days). 4. Developer of the time-share plan shall post a maintenance bond, letter of credit, or cash deposit to ensure the maintenance of any landscaping along the perimeter of the time-share use abutting any public right-of-way. The amount of the bond, letter of credit, or cash deposit shall be equal to 25 percent of the annual budget of the time-share use owner's association having the duty to maintain the exterior of the time-share property which is for such landscaping expenses. The bond, letter of credit, or cash deposit shall run to the City and shall remain in place for life of the time-share plan. 5. With respect to a time-share use, all interests created therein shall be subject to a public facilities impact mitigation fee of $150 per week share. With respect to each week share in a time-share use, a public facilities impact fee payable under this section shall be paid on the first day of the first calendar month following the sale and conveyance of such week share by the developer of a time-share plan to an individual consumer (excluding bulk sales from one developer to another, in which case the successor developer shall have the obligation to pay the public facilities impact fee described herein upon the sale and conveyance of a week share to a consumer). On the first day of each calendar month, or less frequently if required by the Council, a developer of a time-share plan shall also submit a written report to the City which specifies the number of week shares in the time-share plan which have been sold and conveyed in the preceding calendar month. F. Minimum number of units. The minimum number of units in a time-share project shall be 50. G. Development standards. Time-share uses shall be designed to conform to the standards for hotel developments in the event the time-share use is located in a planned commercial resort or general commercial zone. The time-share use must comply with all development standards of the zone in which it is located. With respect to time-share uses developed within a planned residential zone, the density of the time-share uses shall not exceed the density permitted in such zone for residential projects; with respect to time-share uses developed in a general commercial zone or a planned commercial resort zone, the density of the time-share uses shall not exceed the density permitted in such zone for general commercial or planned commercial projects. In determining the density of a time-share use, upon the request of an applicant, the Director shall have the authority to transfer the density permitted in other similarly zoned property owned by an applicant to the time-share use. ry �kl._e v� 4:. ':a A.m :, s [ h S } 1. LZ e k t- 3 ORDINANCE NO. 1378 H. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines as set forth in Chapter 8.81 (Administrative Citations). Any person issued an administrative citation pursuant to this section shall for each separate violation be subject to: (1) an administrative fine in an amount not to exceed one thousand dollars ($1,000) for the first citation; (2) an administrative fine in an amount not to exceed three thousand dollars ($3,000) for a second citation issued for the same offense within a twelve-month period of the date of the first offense; and (3) a fine in an amount not to exceed five thousand dollars ($5,000). 3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 8.20 (Public Nuisances), Chapter 9.24 (Noise Control), and Chapter 9.25 (Multiple Responses to Loud or Unruly Parties, Gatherings or Other Similar Events). 4. Each day the violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 1 Exhibit N City of Sonoma Time Share Ordinance and Supporting Evidence I r Y r? . 00ry of SO110111a I'r Agenda Item Summary Meeting: City Council - 01 Jun 2022 Department Planning and Community Services Agenda Item Title Staff Contact David A. Storer, AICP, Director Kristina Tierney, Associate Planner Discussion, Consideration, and Possible Action to Introduce an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable Land Uses and Permit Requirements) and Adding Title 19, Section 19.50.140 (Time-shares) to the City of Sonoma Municipal Code and Finding this Action Exempt from Further Environmental Review Under the General Rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) That CEQA Only Applies to Projects that Have the Potential for Causing a Significant Effect on the Environment Summary On January 19, 2022, the Sonoma City Council unanimously adopted an Urgency Ordinance governing the use of properties as time-shares. Previously, the Municipal Code did not contain any regulation governing the use of properties as time-shares which meant that as a non - enumerated use, time-shares were prohibited throughout the City. However, due to the rise in fractional home ownership, the City Council directed staff to address potential ambiguity regarding whether fractional home ownership uses constitutes a prohibited time-share or an allowed residential use. The Urgency Ordinance was presented to the Planning Commission on January 13th, 2022, for comment and direction to staff, and the Planning Commission unanimously recommended approval to City Council. The Urgency Ordinance added Section 19.50.140 — Timeshares into Title 19 and was effective on January 19, 2022. On February 10, 2022, staff presented a draft Regular Ordinance to the Planning Commission for review. The Planning Commission unanimously recommended that the City Council introduce and adopt the attached ordinance. The ordinance is tentatively scheduled to be introduced on June 1, 2022, and could be adopted on June 15, 2022, to supersede the Urgency Ordinance; however, the Urgency Ordinance would be in effect until a regular ordinance becomes effective. The regular ordinance would go into effect 30 days after adoption - July 15, 2022. Recommended Council Action Introduce an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable land uses and permit requirements) and Adding Title 19, Section 19.50.140 (Time- shares) to the City of Sonoma Municipal Code. Alternative Actions Council discretion. Financial Impact None. Environmental Review Status L. Environmental Impact Report , Approved/Certified I___I Negative Declaration I No Action Required lv�'' Exempt I Action Requested C Not Applicable Attachments PUBLIC COMMENT ATTACHMENT Timeshare Regular Ordinance CITY0 O 2 4 Z: 'DFU \LIF0 PUBLIC COMMENT TO THE CITY COUNCIL OR ONE OF THE CITY'S COMMISSIONS Any Public Correspondence Received by the City Regarding an Item that Will be Considered at a Public Meeting by the City Council or One of Its Commissions Can be Found on the City's CivicWeb Portal at the Following Link. It is Updated as New Correspondence is Received. https://sonomacity.civicweb.net/filepro/documents STAFF CONTACTS: City Council City Clerk (707) 933-2216 Planning, DRHP, CSEC Planning (707) 933-2204 City of *0110111a ORDINANCE # - 2022 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19, SECTION 19.10.050 (ALLOWABLE LAND USES AND PERMIT REQUIREMENTS) AND AMENDING TITLE 19, SECTION 19.50.140 (TIME-SHARES) TO THE CITY OF SONOMA MUNICIPAL CODE WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5th and 6th Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6th Cycle Housing Element; and WHEREAS, on January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3 WHEREAS, the City Council desires to adopt a non -urgency ordinance to supersede the urgency ordinance to ensure the City's municipal code addresses the impact that time-share and fractional ownership uses have and could have on the City's housing supply; and WHEREAS, on February 10, 2022, the Planning Commission reviewed and discussed potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the item be continued to March 10, 2022; and WHEREAS, on March 10, 2022, the Planning Commission held a public hearing to review and discuss potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the City Council introduce the attached ordinance; and WHEREAS, the City Council found this action to be exempt from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) pursuant to CEQA Guidelines section 15061(b) (3) prior to taking action; and WHEREAS, on June 1, 2022, the City Council considered amendments to the Sonoma Municipal Code, consistent with the applicable policies of the Sonoma General Plan, at a public hearing; and WHEREAS, the proposed amendments to the Sonoma Municipal Code are consistent with State Law. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS: SECTION 1. RECITALS. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full. SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS. Pursuant to Section 19.86.070(B) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance: A. Are consistent with the goals, policies, and actions of the General Plan because the amendments the amendments promote and preserve the use of property for vital housing; B. Would not be detrimental to the public interest, health, safety, convenience, or welfare of the city for the reasons described in the recitals above; C. Comply with the provisions of the California Environmental Quality Act (CEQA) as described in Section 4 below; and D. Are internally consistent with other applicable provisions of this development code because the amendments merely codify the existing prohibition on time-share and fractional ownership uses under the City's permissive zoning regime. 1 763-49.3 ECTION 3. MUNICIPAL CODE AMENDMENTS. A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A". B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows: 19.50.140 Time -Shares. This section sets forth requirements for the establishment and operation of time-share uses. A. Definitions. 1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals. 2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. 276349.3 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma C. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 1.28 (Administrative Citations). 3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time 4. Each day a violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. SECTION 4. CEQA. This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The 276349.3 proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. SECTION 5. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. SECTION 6. EFFECTIVE DATE. This ordinance shall take effect thirty (30) days after passage thereof. SECTION 7. PUBLICATION. This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1). SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT. To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. = W:Zom11: 17 Jack Ding, Mayor ATTEST: Rebekah Barr, MMC, City Clerk ?763d93 I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Rebekah Barr, MMC, City Clerk '_76319.3 0:1T�- 00of'Sonoma 1 Agenda Item Summary Meeting: City Council - 15 Jun 2022 Department Staff Contact Planning and Community Services Kristina Tierney, Associate Planner David A. Storer, AICP, Director Agenda Item Title Discussion, Consideration, and Possible Action to Adopt an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable Land Uses and Permit Requirements) and Adding Title 19, Section 19.50.140 (Time-shares) to the City of Sonoma Municipal Code and Finding this Action Exempt from Further Environmental Review Under the General Rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) That CEQA Only Applies to Projects that Have the Potential for Causing a Significant Effect on the Environment Summary The attached regular ordinance prohibits timeshares and fractional interest uses in the City of Sonoma and was introduced unanimously on June 1, 2022. Upon its effective date on July 15, 2022, it repeals and replaces the Urgency Ordinance currently in place. Recommended Council Action Adopt an Ordinance Amending the Sonoma Municipal Code Title 19, Section 19.10.050 (Allowable land uses and permit requirements) and Adding Title 19, Section 19.50.140 (Time- shares) to the City of Sonoma Municipal Code. Alternative Actions Council discretion. Financial Impact None. Environmental Review Status 1-- Environmental Impact Report C Approved/Certified !_ Negative Declaration ® No Action Required Cv ' Exempt ® Action Requested 17 Not Applicable Attachments PUBLIC COMMENT ATTACHMENT Timeshare Regular Ordinance Exhibit A Alignment with Council Goals: Not Applicable Compliance with Climate Action 2020 Target Goals: CC: n/a PUBLIC COMMENT TO THE CITY COUNCIL OR ONE OF THE CITY'S COMMISSIONS Any Public Correspondence Received by the City Regarding an Item that Will be Considered at a Public Meeting by the City Council or One of Its Commissions Can be Found on the City's CivicWeb Portal at the Following Link. It is Updated as New Correspondence is Received. https://sonomacity.civicweb.net/filepro/documents STAFF CONTACTS: City Council City Clerk (707) 933-2216 Planning, DRHP, CSEC Planning (707) 933-2204 &tv Of oi�)0110111a AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA AMENDING SONOMA MUNICIPAL CODE TITLE 19, SECTION 19.10.050 (ALLOWABLE LAND USES AND PERMIT REQUIREMENTS) AND AMENDING TITLE 19, SECTION 19.50.140 (TIME-SHARES) TO THE CITY OF SONOMA MUNICIPAL CODE WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and WHEREAS, a severe housing crisis exists in the state with the demand for housing outpacing the supply; and WHEREAS, the City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; and WHEREAS, time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; and WHEREAS, time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; and WHEREAS, the development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; and WHEREAS, by allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; and WHEREAS, allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 511 and 6th Cycles; and WHEREAS, by allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6th Cycle Housing Element; and WHEREAS, on January 19, 2022 the City Council adopted an Urgency Ordinance pursuant to Government Code Sections 36934 and 36937 to make express the City's existing prohibition on time-share and fractional ownership uses in all zones in the City; and 276349.3 WHEREAS, the City Council desires to adopt a non -urgency ordinance to supersede the urgency ordinance to ensure the City's municipal code addresses the impact that time-share and fractional ownership uses have and could have on the City's housing supply; and WHEREAS, on February 10, 2022, the Planning Commission reviewed and discussed potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the item be continued to March 10, 2022; and WHEREAS, on March 10, 2022, the Planning Commission held a public hearing to review and discuss potential changes to the Sonoma Municipal Code to address time-share and fractional ownership uses and unanimously recommended that the City Council introduce the attached ordinance; and WHEREAS, the City Council found this action to be exempt from the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) ("CEQA") and the State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) pursuant to CEQA Guidelines section 15061(b) (3) prior to taking action; and WHEREAS, on June 1, 2022, the City Council considered amendments to the Sonoma Municipal Code, consistent with the applicable policies of the Sonoma General Plan, at a public hearing; and WHEREAS, the proposed amendments to the Sonoma Municipal Code are consistent with State Law. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS: SECTION 1. RECITALS. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full. SECTION 2. FINDINGS FOR DEVELOPMENT CODE AMENDMENTS. Pursuant to Section 19.86.070(B) of the Sonoma Municipal Code, the proposed amendments of the development code under this ordinance: A. Are consistent with the goals, policies, and actions of the General Plan because the amendments the amendments promote and preserve the use of property for vital housing; B. Would not be detrimental to the public interest, health, safety, convenience, or welfare of the city for the reasons described in the recitals above; C. Comply with the provisions of the California Environmental Quality Act (CEQA) as described in Section 4 below; and D. Are internally consistent with other applicable provisions of this development code because the amendments merely codify the existing prohibition on time-share and fractional ownership uses under the City's permissive zoning regime. 76349.3 SECTION 3. MUNICIPAL CODE AMENDMENTS. A. Tables 2-1, 2-2, 2-3 and 2-4 set forth in Sonoma Municipal Code section 19.10.050 are amended to read as set forth in Exhibit "A". B. Section 19.50.140 of the Sonoma Municipal Code is amended to read as follows: 19.50.140 Time -Shares. This section sets forth requirements for the establishment and operation of time-share uses. A. Definitions. 1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals. 2. "Management entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan. 3. "Owner" means owner of a time-share interest. 4. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 5. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 6. "Time-share interest" means and includes either of the following: a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof. 7. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. ?76349.3 8. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 9. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. B. Permitted zones. None. Time share uses and fractional interest uses are prohibited throughout the City of Sonoma C. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 1.28 (Administrative Citations). 3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time 4. Each day a violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. SECTION 4. CEQA. This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The ?763=49-3 proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. SECTION 5. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. SECTION 6. EFFECTIVE DATE. This ordinance shall take effect thirty (30) days after passage thereof. SECTION 7. PUBLICATION. This ordinance shall be published in accordance with the provisions of Government Code section 36933, subdivision (c)(1). SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT. To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. APPROVED: Jack Ding, Mayor ATTEST: Rebekah Barr, MMC, City Clerk 276349.3 I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Rebekah Barr, MMC, City Clerk 17634Q 3 EXHIBIT A Amendments to "Zones and Allowable Uses" (Title 19, Section 19.10.050) of the Sonoma Municipal Code. A. Table 2-1 (Residential Uses and Permit Requirements) is hereby amended as follows: Allowed Uses and Permit Permit Required by District P Use permitted Requirements for Residential (2) UP Use Permit Districts (1) required L License required — Use not allowed Land Use (1) R- R-R R-L R-S R-M R-H R-O R-P Specific HS Use Regulation s AGRICULTURE, RESOURCE AND OPEN SPACE USES Animal Keeping P P UP — — — — — Chapter 8.08 SMC Crop Production P P UP — — — — and Horticulture Produce Stands P P UP — — — — — SMC for On -Site 19.50.070 Production MANUFACTURING AND PROCESSING USES Existing Uses — — — — — — — — SMC 19.82.020 RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES Equestrian UP UP — — — — — — Facilities Parks and P P P P P P P — Playgrounds Religious — — UP UP UP UP — — Facilities Schools — Public — — UP UP UP UP — and Private RESIDENTIAL USES (2) Ord. Title 19 SMC 2022 Page 1 of 14 Duplex — — UP P P UP UP — Emergency — — — — UP UP UP — SMC Shelters 19.50.033 Home P P P P P P P P SMC Occupation 19.50.035 Live/Work — — — — UP — — — Facilities Mobile Home — — — — — — — UP SMC Park 19.50.035 Multi -family — — — UP P P P — Dwelling (Four or fewer units) Multi -family — — — UP UP UP P — Dwelling (Five or more units) Personal Indoor P P P P P P P P SMC Cannabis 19.50.032. Cultivation (4) A Personal Outdoor P P P P P P P P SMC Cannabis 19.50.032. Cultivation (4) B (Prohibited if multifamily dwelling or mobile home) Residential P P P P P P P P Accessory Structures Residential Care — — P P P — — — Homes, Six or fewer clients Residential Care — — — — UP — — — Homes, Seven or more clients Single -Family P P P P P UP — — SMC Dwellings 19.50.035 Accessory P P P P P P P P SMC Dwelling Units 19.50.090 Accessory P P P P P P P P SMC Dwelling Units, 19.50.090 Junior Ord. Title 19 SMC 2022 Page 2 of 14 Supportive P P P/UP P/UP P/UP P/UP — — Housing (3) Transitional P P P/UP P/UP P/UP P/UP — — Housing (3) RETAIL TRADE AND SERVICES Art, Antique, — — — UP — — — — Collectible and Gift Sales Artisan Shops — — — UP — — — — Bed and UP UP UP — — — — — SMC Breakfast Inns 19.50.030 (B&Bs) Child Day Care — UP UP UP UP UP UP — Center Child Day Care: — UP UP UP UP UP — — Small Family Day Care Home Child Day Care: — — UP UP UP UP UP — Large Family Day Care Home General Retail — — — UP — — — — Governmental — UP UP UP UP UP UP and Public Facilities Libraries and — — — UP — — — — Museums Medical Services — — — UP UP — — - - Extended Care Offices, — — — UP — — — — Professional and Administrative Personal — — — UP — — — — Services Restaurant — — — UP — — — — Senior — — — — UP — — — Residential Care Facilities Telecommunicati See Chapter 5.32 SMC, Telecommunications Facility and Antenna ons Facilities, Criteria Commercial Time-shares - - - - _ _ _ _ SMC Ord. Title 19 SMC 2022 Page 3 of 14 19.50.14 0 SPECIAL PURPOSE USES Public Utility — — — — — — — — Facilities Public Utility P P P P P P P P Equipment Notes: 1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94). 3. Supportive and Transitional Housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. For example, such housing structured as single-family is permitted in the R-HS, R-R, RL and RS residential zones, whereas Supportive and Transitional housing structured as multi -family is limited to the RM and RH residential zones and the Mixed -Use Zone. 4. Personal cultivation of cannabis (Indoor and Outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. Table 2-2 (Commercial Uses and Permit Requirements) is amended as follows: Allowed Uses and Permit Permit Required by District P Use permitted Requirements for Commercial (2) UP Use Permit required Zoning Districts (1) L License required — Use not allowed Land Use C CG Specific Use Regulations MANUFACTURING AND PROCESSING USES Artisans/Craft Product UP UP Manufacturing Food and Beverage UP UP Manufacturing Furniture/Fixtures UP UP Manufacturing, Cabinet Shops Recycling Facilities — Reverse UP P Vending Machines Recycling Facilities — Small UP UP Collection Facilities Research and Development UP — (R&D) Ord. Title 19 SMC 2022 Page 4 of 14 Warehousing, Wholesaling and Distribution UP RECREATION, EDUCATION, and PUBLIC ASSEMBLY USES Clubs, Lodges and Private Meeting Halls — UP Community Centers UP UP Health/Fitness Facilities P UP Indoor Amusement/Entertainment Facilities UP UP Libraries and Museums P P Nightclubs and Bars UP UP Outdoor Commercial Recreation UP UP Religious Facilities P — Schools — Specialized Education and Training UP UP Studios for Art, Dance, Music, Photography, Etc. P UP Theaters and Auditoriums UP UP RESIDENTIAL USES (4) Emergency Shelters UP UP SMC 19.50.033 Live/Work Facilities UP UP SMC 19.50.050 Multi -family Dwelling (Four or fewer units) UP UP Multi -family Dwelling (Five or more units) UP UP Personal Indoor Cannabis Cultivation (7) P P SMC 19.50.032.A Personal Outdoor Cannabis Cultivation (7) P P SMC 19.50.032.13 (Prohibited if multifamily dwelling or mobile home) Single Room Occupancy Housing UP — Supportive Housing UP UP Transitional Housing UP UP RETAIL TRADE (3) Accessory Retail Uses P P Adult Business UP — Ord. Title 19 SMC 2022 Page 5 of 14 Art, Antique, Collectible and Gift Sales P P Artisan Shops P UP Auto and Vehicle Sales/Rental UP — Building Material Stores UP UP Commercial Cannabis Activities (8): SMC Chapter 5.36 Manufacturing UP — Non -store front retail UP — Store -front retail UP — Testing laboratory UP — Drive -In and Drive Through Sales UP — Furniture, Furnishings and Equipment Stores P P General Retail P P Grocery Store P P Music Venue L L SMC Chapter 5.34 Outdoor Retail Sales and Activities UP UP Plant Nurseries and Garden Supply Stores P P Restaurant UP UP Second Hand Stores P P Shopping Center UP UP Special Event Venue (6) UP UP Wine Tasting Facilities/Wine Bars WTUP WTUP SMC 19.50.120 Tap Rooms UP UP SMC 19.50.130 SERVICES Banks and Financial Services P P Bed and Breakfast Inns (B&Bs) UP UP SMC 19.50.030 Business Support Services P UP Child Day Care Facilities P P Drive -In and Drive -Through Services UP — Equipment Rental UP — Governmental and Public Facilities P P Ord. Title 19 SMC 2022 Page 6of14 Hotel or Motel UP UP Medical Services - Clinics, Offices, Laboratories UP UP Medical Services - Hospitals UP UP Mortuaries and Funeral Homes UP — Offices, Professional and Administrative P UP Personal Services P P Storage - Outdoor UP — Storage - Personal Storage Facility (Mini -Storage) UP — Telecommunications Facilities, Commercial See Chapter 5.32 SMC, Telecommunications Facility and Antenna Criteria Time-shares — — SMC 19.50.140 Auto Parts Sales P — Vacation Rental — — SMC 19.50.110 Vehicle Services, Car Washes UP — Vehicle Services, Repair and Maintenance UP — Vehicle Services, Service Station UP — SMC 19.50.100 Repair Services, for Consumer Products P UP SPECIAL CIRCUMSTANCES COMMERCIAL DEVELOPMENT Commercial Development, Large UP UP Chapter 5.34 SMC Development Adjacent to a Residential Zone (4) UP UP Formula Business, Small P/UP (5) P SMC 19.50.035 Formula Business, Large UP UP SMC 19.50.035 Formula Restaurant, Large UP/- (6) UP SMC 19.50.035 Shopping Center, Reconfiguration UP UP SPECIAL PURPOSE USES Public Utility Facilities — — Public Utility Equipment P P Notes: Ord. Title 19 SMC 2022 Page 7 of 14 1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94). 3. Supportive and Transitional Housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. For example, such housing structured as single-family is permitted in the R-HS, R-R, RL and IRS residential zones, whereas Supportive and Transitional housing structured as multi -family is limited to the RM and RH residential zones and the Mixed -Use Zone. 4. Defined as new commercial construction or an addition to an existing commercial building, having an area of 1,000 square feet or greater. 5. Use Permit required within the historic overlay zone 6. Prohibited in /P Plaza Retail District. See SMC 19.50.035. 7. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. 8. No commercial cannabis activity may occur in these zoninq districts unless and until a commercial cannabis business permit has been issued for that activity under Chapter 5.36. C. Table 2-3 (Mixed Uses and Permit Requirements) is amended as follows: Allowed Uses and Permit Permit Required by District P Use permitted Requirements for Mixed Use (2) UP Use Permit required Zoning Districts (1) L License required — Use not allowed Land Use MX Specific Use Regulations MANUFACTURING AND PROCESSING USES (3) Artisans/Craft Product UP Manufacturing Food and Beverage UP Manufacturing Furniture/Fixtures UP Manufacturing, Cabinet Shops Change in Existing UP SMC 19.82.020 Nonconforming Uses Recycling Facilities — Small — Collection Facilities Research and Development UP (R&D) Warehousing, Wholesaling and Distribution RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES (3) Clubs, Lodges, and Private UP Meeting Halls Community Centers UP Ord. Title 19 SMC 2022 Page 8 of 14 Health/Fitness Facilities UP Indoor Amusement/Entertainment Facilities UP Libraries and Museums UP Outdoor Commercial Recreation — Religious Facilities UP Schools — Specialized Education and Training UP Studios for Art, Dance, Music, Photography, Etc. UP Theaters and Auditoriums UP RESIDENTIAL USES (4) Emergency Shelters UP SMC 19.50.033 LiveANork Facilities UP SMC 19.50.050 Multi -family Dwelling (Four or fewer units) P Multi -family Dwelling (Five or more units) UP Personal Indoor Cannabis Cultivation (7) P SMC 19.50.032.A Personal Outdoor Cannabis Cultivation (7) P SMC 19.50.032.E (Prohibited if multifamily dwelling or mobile home) Residential Care Homes, Seven or more clients UP Single -Family Dwellings P (5) Supportive Housing, four or fewer units P Supportive Housing, five or more units UP Transitional Housing, four or fewer units P Transitional Housing, five or more units UP RETAIL TRADE (3) Accessory Retail Uses UP Art, Antique, Collectible and Gift Sales UP Artisan Shops UP Ord. Title 19 SMC 2022 Page 9 of 14 Auto and Vehicle Sales/Rental — Building Material Stores — Commercial Cannabis Activities (8): Manufacturing UP SMC Chapter 5.36 Non -store front retail UP SMC Chapter 5.36 Testing laboratory UP SMC Chapter 5.36 Drive -In and Drive -Through Sales UP Farmers Market UP Fueling Station UP Furniture, Furnishings and Equipment Stores UP General Retail UP Grocery Store UP Music Venue L Chapter 5.34 SMC Outdoor Retail Sales and Activities UP Plant Nurseries and Garden Supply Stores UP Restaurant UP Second Hand Stores UP Shopping Center UP Special Event Venue (6) UP Wine Tasting Facilities/Wine Bars WTUP SMC 19.50.120 Tap Rooms UP SMC 19.50.130 SERVICES (3). Auto Parts Sales UP Banks and Financial Services UP Bed and Breakfast Inns (B&Bs) UP Business Support Services UP Child Day Care Facilities UP Drive -In and Drive -Through Facilities UP Equipment Rental UP Governmental and Public Facilities UP 10 Ord. Title 19 SMC 2022 Page 10 of 14 Hotel or Motel UP Medical Services — Clinics, UP Offices, Laboratories Medical Services — Hospitals — Mortuaries and Funeral UP Homes Offices, Professional and UP Administrative Personal Services UP Storage — Outdoor — SMC 19.40.100(D) Storage — Personal Storage — Facility (Mini -Storage) Telecommunications See Chapter 5.32 SMC, Telecommunications Facility and Facilities, Commercial Antenna Criteria SMC Time-shares _ 19.50.140 Vacation Rental — SMC 19.50.110 Vehicle Services, Repair and UP Maintenance Vehicle Services, Service — SMC 19.50.100 Stations Repair Services for UP Consumer Products SPECIAL CIRCUMSTANCES COMMERCIAL DEVELOPMENT Formula Business, Small UP SMC 19.50.035 Formula Business, Large UP SMC 19.50.035 Formula Restaurant, Large UP SMC 19.50.035 SPECIAL PURPOSE USES Public Utility Facilities — Public Utility Equipment P Notes: 1. See SMC 19.10.050(C) regarding uses not listed. See Division VIII for definitions of the listed land uses. 2. New development in the Mixed -Use zone shall include a residential component unless waived by the planning commission through use permit review (see SMC 19.10.020(C)). 3. Uses within these categories are allowed only if the planning commission finds that the use will not result in the encroachment of incompatible commercial uses within an established residential area. 4. New residential developments subject to the city's growth management ordinance. 5. Limited to a single residence on an existing lot of record; otherwise, use permit approval is required. 6. On sites of one acre in size or larger. 7. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. 11 Ord. Title 19 SMC 2022 Page 11 of 14 8. No commercial cannabis activity may occur in these zoning districts unless and until a commercial cannabis business permit has been issued for that activity under Chapter 5.36. D. Table 2-4 (Special Purpose Uses and Permit Requirements) is hereby amended as follows: Allowed Uses and Permit Requirements for Special Purpose Zoning Districts Permit Required by District P Use permitted UP Use Permit required L License required — Use not allowed Land Use (1) A Pk P W Specific Use Regulations AGRICULTURAL AND OPEN SPACE USES Crop Production and Horticulture P — — P Livestock Raising P — — — SMC 19.50.020 Prescribed Grazing — UP — — Produce Stands for On -Site Production P — — — SMC 19.50.070 Trails, Hiking and Bicycling P P P — MANUFACTURING AND PROCESSING USES Agricultural or Food Processing — — — UP Wineries — — — UP Winery Accessory Uses — — — UP SMC 19.50.020 RECREATION, EDUCATION AND PUBLIC ASSEMBLY USES Community Centers — — UP — Community Garden — UP UP — Equestrian Facilities UP UP — — SMC 19.50.020 Libraries and Museums — UP UP — Parks and Playgrounds — P P — Recreational Facilities — UP P — 12 Ord. Title 19 SMC 2022 Page 12 of 14 Schools, Public and Private — — P — Theaters and Auditoriums — UP P — RESIDENTIAL USES (2) Agricultural Employee Housing P — — — Caretaker and Employee Housing UP UP UP UP Emergency Shelters, 15 or fewer beds — — P — SMC 19.50.035 Emergency Shelters, 16 or more beds — — UP — Personal Indoor Cannabis Cultivation (3) P P P P SMC 19.50.032.A Personal Outdoor Cannabis Cultivation (3) P P P P SMC 19.50.032.B (Prohibited if multifamily dwelling or mobile home) Residential Accessory Structures and Uses P — — — SMC 19.50.035 Single -Family Dwellings P — — — SMC 19.50.035 Supportive Housing (4) — — UP — Transitional Housing (4) — — UP — Vacation Rental — UP — — SMC 19.50.110 SERVICES Offices — Administrative — UP UP — Cemeteries — — P — Child Day Care Facilities — — P — Corporation Yard — — P — Farmers Market P P P — Governmental and Public Facilities — UP UP — Kennel — — UP — Medical Services — Hospitals — — UP I - Telecommunications Facilities, Commercial See Chapter 5.32 SMC, Telecommunications Facility and Antenna Criteria Timeshares — — — — — — SMC 19.50.140 SPECIAL PURPOSE USES Public Utility Facilities — — UP — Public Utility Equipment P P P P 13 Ord. Title 19 SMC 2022 Page 13 of 14 Notes: 1. See Section 19.10.050.0 regarding uses not listed. See Division VIII for definitions of the listed land uses. 2. New residential developments subject to the City's Growth Management Ordinance (SMC 19.94). 3. Personal cultivation of cannabis (indoor and outdoor) only allowable in conjunction with residential use subject to SMC 19.50.032. 4. Supportive and transitional housing shall be subject to those restrictions that apply to other residential dwellings of the same type in the same zone. 14 Ord. Title 19 SMC 2022 Page 14 of 14 Exhibit O City of St. Helena Time Share Ordinance and Supporting Evidence ivy Agenda Section: Report to the City Council Regular City Council - 22 Mar 2022 PUBLIC HEARINGS Subject: Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning of the St. Helena Municipal Code, amending sections 17.48.030 (Central Business) and 17.52.030 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code CEQA Exempt Determination: Prepared By: Ethan Walsh, City Attorney Reviewed By: April Mitts, Administrative Services Director Approved By: James C. McCann, Interim City Manager BACKGROUND Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were notjust fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing. When reviewing the Time Share Ordinance in this context, the City Attorney's office found that the substance of the Time Share Ordinance has not been updated since its adoption in 1982. The City Attorney's office concluded that the Time Share Ordinance would benefit from an update to refine the definitions to more directly address the impacts of time-share uses, to clarify the means used by the City to enforce the restrictions on time share uses, and to clarify how time share uses are treated in non-residential districts. City staff initially delayed initiating any changes to the Time Share Ordinance while the litigation was ongoing. However, due to the continued marketing of time share uses within the City, staff has decided to move forward with recommending the proposed updates to the City's ordinance. On March 1, 2022, the Planning Commission voted unanimously to recommend the City Council approve the proposed ordinance. DISCUSSION The Discussion section of the Staff Report is organized as follows: First, the section provides a brief explanation for the City's conclusion that the homes that have been marketed by Pacaso constitute time share projects. While the City's conclusion does not directly affect the changes to the Zoning Code set forth in the proposed ordinance, it is helpful to understand that the Time Share Ordinance, both in its original form and as proposed to be amended, is intended to protect against the impacts that these homes and similar uses could have on the City's housing supply and the character of the City's residential districts. Second, this section discusses the legal basis for the City's Time Share Ordinance, the reasons why the City prohibited time share uses in residential properties, and why those reasons continue to apply today. Third, this section outlines the changes made in the proposed ordinance and the reasons for the proposed changes. A.Current Time Share Ordinance and Application to Pacaso Homes Section 17.112.130 of the Zoning Code prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple family dwelling or apartment house within the City. A time-share project is defined in that section as any real property that is subject to a time-share program. A time-share program is in turn defined in part as an arrangement whereby the use, occupancy or possession of the property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year. Pacaso provides a significant amount of information on its website regarding the manner in which its homes are used by the purchasers of a Pacaso home. According to Pacaso's website, the single family residences marketed by Pacaso are held by a property -specific limited liability company ("LLC"), and each co-owner purchases a 1/8 share in the LLC. (Pacaso.com/learn) Each 1/8 share entitles the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 1/8 share. Back-toback stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare) The Pacaso model grants each 1/8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for a specific period of time each year. This use structure fits squarely in the City's definition of a time-share program, and the properties operated by Pacaso in this manner would therefore be timeshare projects under the existing Time Share Ordinance. B.Reasons for the Time Share Ordin 1. The City's General Plan The City of St. Helena has long been defined by its rural, small town quality and agricultural character. In adopting the St. Helena General Plan Update 2040, the City noted that the defining, unifying goal of all the elements of the 1993 General Plan was: To protect the rural, small town quality and agricultural character of St. Helena. It is the General Plan's intent that the preservation of this small town character be the unifying philosophy that overlays all other stated goals and policies. (General Plan 2040, p. 1-2.) While the 2040 General Plan acknowledges that this is no longer the sole, overriding focus of the General Plan, retaining the small town character of St. Helena remains a primary focus of the City's land use planning. (Id.) A key component of retaining the City's small town character is maintaining a balance between the economic benefits that arise from visitors who come to St. Helena for its wineries, restaurants and historic downtown, and maintaining its authentic small town quality of life for the City's residents. This theme is consistent throughout the City's General Plan, and maintaining this balance is key to the City's long term viability. The General Plan notes in its Introduction that "[tjhe community stands out in the Valley for its unique, historic character and its ability to attract visitors while also supporting the needs of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. 2. Use of Zoning to Preserve Residential Areas The use of zoning to preserve the character of the residential districts of a City has been common for over a century. In the seminal case of Euclid v. Ambler the United States Supreme Court upheld the validity of comprehensive zoning that would set aside residential districts "from which business and trade of every sort, including hotels and apartment houses, are excluded." (Euclid v. Ambler Co. 272 U.S. 365, 390.) The U.S. Supreme Court upheld the Village of Euclid's zoning ordinance in that instance, noting that the inclusion of non-residential uses in residential districts may have an increasingly deleterious impact on the residential area "until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed." (Id. at 394.) The California Court of Appeals followed Euclid and subsequent cases in upholding the City of Carmel-by-the-Sea's zoning restriction on short-term rentals. (Ewing v. City of Carmel -By -The -Sea (1991) 234 Cal.App.3d 1579.) In that case, the Court noted that the City's chief purpose in adopting the short-term rental restriction was "to provide an appropriately zoned land area within the City for permanently single-family residential uses and structures and to enhance and maintain the residential character of the City." (Id. at 1579.) In upholding Carmel's short-term rental restriction, the Court found that short-term rentals "undoubtedly affect the essential character of a neighborhood and the stability of a community. Short-term tenants have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally, they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." (Id. at 1591.) 3.Impacts of Time Share Uses on Residential Districts Like Carmel, the City of St. Helena strives to maintain the character of its residential areas in the face of intense demand for accommodations to serve visitors to St. Helena. The Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City. Those findings were as follows: 1. There is a critical shortage of affordable housing in the city for long-term occupancies (more than six months annually), and the availability of additional residential dwelling units is substantially restricted by the growth management system. 2. The conversion of residential dwelling units within the city to time-sharing projects eliminates residential dwelling units otherwise available for long-term occupancies (more than six months annually) in the city. 3. Time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple shortterm (less than six months annually) occupancies by those participating in timesharing projects. 4. Such commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. 5. The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city. As discussed in more detail below, these findings continue to hold true in St. Helena, and continue to support the City's decision to restrict time-share uses in residential districts. i. Housing Shortages and Impacts of Time -Share Uses on Existing Housing Stock In adopting the current Time Share Ordinance, the City Council found that there was a critical shortage of affordable housing in the City for long-term occupancies. That continues to be the case, and is undoubtedly worse than was the case at the time the Time Share Ordinance was originally adopted. The most recent census data lists the median value of owner occupied homes in St. Helena at $1,112,100 for the period of 2015-2019, while the Zillow Home Value Index estimates medial home values in St. Helena to be approximately $1,870,000 as of February 2022. www.census.gov/quickfacts/sthelenacitycalifornia; zillow.com/home-values/.) In contrast, the median household income in St. Helena from 2015-2019 was $90,031, and the median income for a four person household in Napa County for 2021 is approximately $109,200. (www.census.gov/quickfacts/sthelenacitycalifornia; www.hcd.ca.gov/grantfund ing/income-limits/state-and-federal-income- limits/docs/income-limits-2021.pdf.) At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new non-residential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse. The findings in the original Time Share Ordinance also note that the conversion of homes to time sharing projects would eliminate residential dwelling units that would otherwise be available for long term residential use. This continues to be true, as a home that is used for time share purposes will no longer be available for households to use as their long term residence. This threat to the City's existing housing stock is not insignificant. The publicity regarding Pacaso's rise as a company speaks to a pent up demand for homes that could be converted to time share use, reducing available housing stock for long term use. Pacaso's co-founder has indicated that "[t]here are tens of millions of families that aspire to own second homes but are unable to, due to reasons of cost." (Just Five Months Old, Zillow Co -founder's Pacaso Claims It's Already A Unicorn" Noah Kirsch, March 24, 2021 (www.forbes.com/sites/noahkirsch/2021 /03/24/just-five-month s-old- zillowcofounders-pacaso-claims-its-alread-a-unicorn/.)) In discussing Pacaso's model, Dan Wenhold of the venture capital firm Fifth Wall said "[t]hey were taking a previously illiquid asset, which was a timeshare, and making it affordable for the masses, also making it attainable for folks who wanted to own a second home but previously weren't able to." ("Pacaso, the Proptech Startup Founds by Zillow Alums, Raises $125M Series C" Sophia Kunthara (September 14, 2021) (news.crunchbase.com/news/proptech- startup-pacasoraises-125m-series-c.)) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further ratchet up housing costs, exacerbating the already significant housing shortage in the City. ii. Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in time-sharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended. The complaints that have been made by some local residents regarding the Pacaso homes are illustrative of the distinctions between time share uses and long term residential uses. A sampling of the email complaints received by the City are included in Attachment No. 2 to this Staff Report. The complaints received center on concerns over more intense traffic and parking issues, outdoor parties and conversations going late into the evening, sometimes as late as 2 A.M. One neighbor complained of outdoor lighting shining into her daughter's room at night. They complained of traffic and inadequate parking for the visitors to these homes. Further, neighbors have noted that with each turnover from one stay to another, cleaning and landscaping crews come to clean the unit and prepare it for the next user. While this level of maintenance is appropriate for a commercial vacation property, it impacts the residential character of the surrounding area by adding parking and noise burdens in the neighborhood. Living next door to a home where the residents turnover every 2-14 days, and professional cleaning and landscaping crews come to the property between each visit is much more akin to living by a commercial lodging project than a residential home. This is not at all surprising, given that these time share homes are used by people who are on vacation. While long term residents may have an occasional party at their home, the time share model means that these residences are constantly being used by people who are on vacation, hosting parties or celebrating special occasions. These activities by their nature are more intense than typical residential use of property. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long term residents, whether owners or renters, will occasionally have guests, and will occasionally have parties, but these time-share homes are used exclusively by people who are coming to the City on a short term basis for vacation or leisure. People will naturally stay out later, entertain more and gather in larger numbers while on vacation. That is the reason that these uses are more appropriate in non-residential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. In their marketing materials, Pacaso cites this intensity of use as a benefit, indicating that having these units filled with visitors seven days a week will benefit the local economy, since these visitors will patronize local businesses. (pacaso.com/communities) However, as noted above, the City strives through its General Plan to achieve a balance between benefits to the local economy and maintaining the character of the City. The City seeks to achieve this balance by promoting "sustainable tourist practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic smalltown quality of life, (General Plan p. 3-9) and striving to achieve a local economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors." (General Plan p. 1-15.) Bringing more visitors into residential neighborhoods to improve the local economy does not help to achieve that balance. It instead tips the scales in favor of the local economy, at the expense of the residential character of these neighborhoods. The nature of the timeshare use itself can impact the residential character of the City's residential districts because it will ensure that the time share users can only use their property for a limited amount of time each year. In the case of Pacaso owners, each stay is limited to 2-14 days. As discussed above, in the Ewing v. City of Carmel -by -the -Sea case, the California Court of Appeal found that short term rentals would affect the essential character of a neighborhood and the stability of a community. The Court noted that "[s]hort term rentals have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a Scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." This same problem is present with time-share uses. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. At the April 28, 2021 council meeting several Pacaso co -owners spoke of their experiences in St. Helena. All of them spoke of their affection for the community and the traditions they had established, but these were centered on attending local events and visiting shops, restaurants and wineries. These types of transactional activities are all beneficial to the City's local economy and are what the City hopes to see from visitors to the City, but it is not the type of community involvement described in the Ewing case that binds and strengthens a residential community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its small town character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents who will engage in the community in the manner described by the Court in Ewing, to the betterment of the entire community. C.Proposed Amendments to the Time Share Ordinance The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below. 1.Findings and Establishment of New Chapter The proposed Ordinance includes detailed recitals and findings describing the policy bases for the City's regulation of time share uses. The findings are consistent with the findings made as part of the original Time Share Ordinance, but more detail has been added. The policy bases for the proposed Ordinance are discussed in the sections above, and further discussion is not necessary here. The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter 17.112, General Site Design and Development Standards. City staff believes that with the added level of detail in the Proposed Ordinance, these provisions merit being located in a separate chapter, and has changed the location of the Timeshare Ordinance accordingly. 2.Definitions The Proposed Ordinance amends the definitions that are used to define time share uses, with the new definitions set forth in Section 17.138.020. The new definitions are modeled on the definitions utilized by the state to regulate time-shares in the Vacation Ownership and Time -Share Act of 2004 (Bus. & Prof. Code §§11210-11288), but are modified somewhat to better apply in the land use regulation context. The new ordinance includes a number of definitions that work in concert to define a timeshare use. The ordinance defines a "time-share use" as the use of one or more accommodations, or any part thereof, as part of a time-share property pursuant to a timeshare plan. An "accommodation" is defined in this Chapter to include a range of residential units that could potentially be used for time-share purposes. The types of residential units that can be accommodations are listed at the beginning of Section 17.138.020 in the proposed ordinance. A "time-share plan" is defined in the ordinance, and generally includes any arrangement, plan, scheme or similar device whereby a purchase receives the right to exclusive use of the accommodation, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year. A "time-share property", in turn is defined as one or more accommodations that are subject to the same time-share plan together with any property rights that are appurtenant to the accommodations. A "time-share instrument", is the document or documents that create or govern the operation of the time-share plan. Therefore a time-share use is the use of a residential property that fits within the definition of an "accommodation" under the ordinance, pursuant to a "time-share plan", which grants each owner of the time-share property exclusive use of the property for a certain period of time each year, but not the full year. It is important to note that not all properties with multiple owners or owned by business entities (such as LLCs) would constitute a time-share use under these definitions. The definitions focus on the manner in which the accommodation is used, not how it is owned. A time-share plan allows each owner exclusive use of the property for a specific period of time. This manner of use prevents the property from being used for long term residency, and leads to the continual cycling of visitors through the property and the more intense, constant vacation oriented use that the ordinance seeks to limit in residential districts of the City. A property that is owned by a group of friends or extended family members, whether through a separate business entity or otherwise, will not necessarily mandate that only one owner will be able to use the property at a time. The more formal arrangement found in time-share uses increases the intensity of use, in that each individual time-share owner cycles through the property, whereas families or friends are more likely to use the property together or in groups leading to less transition in the residential neighborhood. The more formal relationship, use of professional property managers and rights to exclusive use found in timeshare uses contributes to the commercial character of the property, with added traffic due to the more frequent turnover of visitors and more frequent cleaning and inspection between each user, which is common for a commercial vacation property, but not for a home owned by family or friends. 3.Enforcement The new ordinance additionally adopts a new enforcement structure for the City timeshare restrictions, modeled on the City's short-term rental ordinance. The ordinance prohibits both the use of accommodations for time-share use, and the advertisement of accommodations for time-share uses. This will better allow the City to prevent time-share uses in residential neighborhoods before they occur. The proposed Ordinance also outlines the process that will be used to enforce this new Chapter, again based on the City's existing short-term rental regulations. This approach has proved to be effective in enforcing the City's short-term rental regulations, and will help the City to take a more preventative approach to enforcing its time-share regulations as well. 4.Time Share Uses in Service Commercial and Central Business Districts Finally, while the City's existing Time Share Ordinance did prohibit time-share projects within certain types of residential dwelling units within the City, it does not make distinctions based on the various zoning districts of the City. Given that the primary concerns and impacts of this use arise from the high intensity use of property that negatively impacts the residential character of residential districts within the City, this use may not have the same impacts in commercial districts where visitors can be closer to the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these districts. Consistent with this change, the proposed ordinance updates the list of conditional uses in both the Service Commercial and Central Business Districts to include time share uses as regulated by the new Chapter 17.138. The Planning Commission held a public hearing to consider the proposed ordinance at its regular meeting of March 1, 2022. Following the public hearing, the Planning Commission unanimously recommended that the City Council adopt the proposed ordinance. City staff has made minor, non -substantive edits to the proposed ordinance that went to the Planning Commission to correct typographical errors, and to add the sections amending the list of conditional uses in the Service Commercial and Central Business Districts. FISCAL IMPACT None RECOMMENDED ACTION Staff recommends that the City Council introduce by title only and waive further reading of an Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010- 17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, amending sections 17.48 (Central Business) and 17.52 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code. ATTACHMENTS Attachment 1-St. Helena Time Share Ordinance -Final Attachment 2-Community email comments CITY OF ST. HELENA ORDINANCE NO. ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into -1- St. Helena, many because there is no local housing that is affordable at the incomes that they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time-sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one - eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time- share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and -4- Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIME-SHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist oriented use of such property and commercial management of time-share facilities, all of which - 5 - create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given "I year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. -7- f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. 3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.20. B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1..12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty- five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ -9- of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17.48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section 17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 6: CEQA 9"1 This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the day of 2022, and was adopted at a regular meeting of the St. Helena City Council on the day of 2022, by the following vote: Mayor Ellsworth: Vice Mayor Dohring: Councilmember Chouteau: Councilmember Hardy: Councilmember Hall: APPROVED: Geoff Ellsworth, Mayor ATTEST: CITY OF ST. HELENA Cindy Tzafopoulos, City Clerk From: Mari Jansdotter <mjansdotter@yahoo.com> To: Anna Chouteau Sent: 6/8/2021 7:25:45 AM Subject: Re: [External] 1242 Madrona pictures Re: Pacaso Thank you, Am1a, for your kind reply. I'm sorry you all have to go through this lawsuit by Pacaso and hope the judge find in your favor. I have a follow-up question. Do you know who I should address it to'? The Pacas house building on Kearney across the street from us has installed lights under the roofline that are on all night and installed in such a way they shine straight into our house, especially my daughter's bedroom. Are there any ordinances that I could refer to that help me ask them to please cover / redirect those lights or at least turn them off after 10 p.m? Thank you! Best Mari h qq 3 • �f. )) � J it i by i) , b1 � -[. ARE lxAK. zza �s de it T ■F.l1tiH d rf . S p ][ it -I i �;}� f 1 T 1t p� P� F x •o■ snxr - s k3yy-�y.dt � t t 1: RSSPr�ryi� �.; 1 Jl I I r T t4 Ir F: Sent from Yahoo Mail on Android On Tue, Jun 8, 2021 at 7:12 AM, Anna Chouteau <AChouteau@cityofsthelena.org> wrote: Hi Mari, Thank you for your email. I forwarded your email to City staff about the specific permitting questions. Our planning director is out of the office this week. We are defending ourselves in the lawsuit. Our City Attorney tiled an anti-SLAPP motion that is now public information and the hearing will be coming up this summer. All my best, Anna Sent from my iPad On Jun 7, 2021, at 6:01 PM, Mari Jansdotter <mjansdotter@yahoo.com> wrote: To clarify, do they have permit allowing the new structure going up at 1242 Madrona? The rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on unit close to (and taller than) the Oak neighbour' fence is being built. See pictures from today <20210607_175202jpg> <20210607_175219jpg> Sent from Yahoo Mail on Android On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter <mjansdotter@yahoo.com> wrote: Thank you for doing all you can to stop Pacaso! I am not o.k. with Pacaso's violation of city ordinance and I support the city's legal fight. In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we on the conurrunity do to help, please? I finally afforded my dream home after moving several times the last 10 years, only to a year later have 4! of these Pacaso 'time share' like vacation LLC/conunercially owned houses popping up in my neighborhood. I'm devastated - this is supposed to be a residential area!! I am very worried about my family's safe & peaceful living situation, now that I'll be impacted by 4 of these houses (one across the street) - each with 8 groups of owners and/or their guests circulating in and out all year round. Many Pacaso have 4 bedrooms that easily accommodate 8+ people, and pool in the backyards with outdoor areas for gatherings/parties. It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thier token time of vacation / partying. Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom). Specifically would you mind looking into building code the one at 1242 Madrona / Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor. Is that an approved building? Maybe they're getting around that by making it a partial garage? Add to that, the 4 Pacaso houses are all in close proximity of RLS with kids walking / biking to and from school. What are the safety concerns that this is imposing with new people circulating in and out all year round and increased car traffic? Worst case scenario there will be a liability situation that will put a stop to Pacaso. Please, please stop Pacaso before we even get close to that. Respectfully, Mari Jansdotter Sent from Yahoo Mail on Android PACASO = PARTY HOUSES! Debbie Polverino 5/11/2021 To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 1/8 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from "1/8 Timeshare Ownership to 1/8 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare. Living next door to a Pacaso home has been living next door to a full-time party house! The constant music with speakers blaring, loud conversations until 2 am and later, noise violations along with excessive vehicles parked on the street or in front of our homes. The additional noise of gardeners blowing dirt and leaves into our yard, Pool service, catering trucks, housekeeping scheduled more frequently. Open houses are held with statements made with, "this is a great place for pool parties and entertaining, it's a perfect place to bring friends and extended family." This home on Valley View Street was a weekend getaway home for the previous owners who had loud weekend parties. It was a constant nightmare and all the homes nearby complained. Now the property has been split up to 8 owners. The Saint Helena P.D. has already been to this home at least 3 times for noise violations after 10pm. There must be a way to stop these repeated violations and offenders. Pacaso's has written policies for its owners on their website that they must adhere to. No parking on the street, no parties, no noise after 9pm to 7am, no dogs over 80 pounds. Policies have been broken several times already from each group including the Pacaso's owners. According to Mr. Allison, Saint Helena is running a dishonest campaign against Pacaso. Pacaso claims discrimination of outside ownership which is not the case. As we all know we welcome all people the opportunity to live in our quiet small town. Pacaso selling an 1,100 square foot home which is smallest of any home on our street for $1.7M is dishonest in my opinion. This is what he says is affordable housing for second home buyers who are paying in full, plus maintenance fees? When commercial companies buy a dozen homes in Napa Valley and plans additional purchases to be split up to 8 shares it is not committed to the community or our quiet neighborhoods. Zoning is in place for a reason. Commercial companies operating in full time residential streets should adhere to the rules that are in place and only buy up in areas where other vacation homes are abundant and not a disruption. What happens should we decide to sell our home? How will people feel about buying next door to a home owned by 8 owners who don't know each other and all come at different time slots for as little as 2 days at a time? We will have to disclose this information. This put a negative mark on our property. This is something I want you to think about! Say NO to Pacaso! Thank you. From: Amy Caldarola <amycal@comcast.net> To: Paul Dohring CC: Anna Chouteau; Lester Hardy; Eric Hall Sent: 5/23/2021 1:04:24 PM Subject: [External] Picaso Dear Council Members, This is Amy Caldarola here. I am very concerned about Picaso buying property in our residential neighborhoods under the guise of democratizing home ownership. This is not affordable housing. Picaso properties are time-shares and short-term rentals which violate municipal code provisions. The presence of these properties in residential neighborhoods is inappropriate and will degrade the quality of life. It has already done so with Picaso's property on Valley View; those neighbors are suffering with loud noise, music, and parties that go on to after midnight; even calling the police does not seem to stop them. I support the city in doing everything possible to defeat them. I also support a counter law suit against them if it makes legal sense. With that said, we are fighting for the soul of our community and this needs to be a number one priority. Picaso is in Napa, Sonoma, Healdsburg, and probably will move into Calistoga and Yountville. This is a fight worth fighting. It might be helpful for the affected counties and municipalities to join their resources together to oppose them. Please outline for me what the cit, is doing and what the plan is. Thank you. I really appreciate you taking the time to keep me informed on this very important and pressing issue. We must act now! Sincerely, Amy Caldarola May 11, 2021 Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes. listened carefully to the public comments of Pacaso Share owners made at our last City Council meeting. They sounded sincere in their desire to be a part of the St. Helena community. The problem is they have bought into a business model that will make that nearly impossible. To be a part of a real community means forming bonds with neighbors. How can that come about with a home next door that has possibly dozens of strangers coming and going, with visits no longer than 14 days at a time, a few times a year? And with the likelihood of visits gifted by other share owners, and a cleaning crew who appears before each arrival, the number swells. With the result that a Pacaso share owner, is viewed by their neighbors as only one in a sea of unfamiliar faces. And though the intentions of some of the share buyers might be good, can we say the same for all 7 of the remaining shareowners? One of whom might gift a weekend to his brother for a blowout bachelor party? Or as was the case in Napa, a single shareowner who conducted retreats in which close to a dozen visitors would come and go within one stay. That particular shareowner was charging her guests, which is a complication on an entirely different level. Pacaso would have us believe that their sharebuyers are families who simply want a quiet, lovely getaway. But in actuality, a Pacaso home is built for partying. Their own website says of one offering "This home takes entertaining to new heights". And yet another listing says that a particular home "has been completely re -imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure". Now, none of us resent the visitor who wants to have fun. Indeed, our beautiful valley is an ideal place for celebration. And we all do that on occasion. But when you realize that every single visitor owning a Pacaso share has been wooed with the promise of "fun and adventure" within a house "built for entertaining", then you have the possibility of major partying with each and every visitor, all crammed into stays that last from 2-14 days. This is transient occupancy in our residential neighborhoods that cannot possibly be regulated under the Pacaso system. There is a reason why we have ordinances in place that designate where tourists and visitors can stay. It allows us to appreciate our visitors, giving them the space and accommodations in which to party and celebrate, while we ourselves can conduct our daily lives in the sanctuary of our residential neighborhoods. Which in turn, are places where we know our neighbors so well that we trust them with our keys, our pets, and even our children. With whom we share joy and sometimes sorrow, and whom are quick to lend a hand in times of crisis. And if we have learned anything in the last few years, it is that the ability to know and rely on our neighbors is the very thing that sustains our community through thick and thin. A vacation home with a parade of visitors coming and going, does not belong in our residential neighborhoods. Please Say No to Pacaso. Clare Barr St. Helena From: Beth Gray <bgray14@gmail.com> To: Geoff Ellsworth Sent: 5/22/2021 3:01:13 PM Subject: [External] Pacaso Dear Mr. Mayor, I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a full-time resident here in the city (and as your neighbor), I find it atrocious that the city has not been able to stop the infiltration of this community destroying business model. This business will do nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed from a home purchased by Pacaso right on the corner of Sylvaner/Reisling as they began to redevelop the home and expect to list it as fractional ownership. Illegal dumping of the pool water with disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso home on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud music being played at all hours. One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautiful outdoors - not to listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares. I understand the city is being sued. I hope that we can collectively put the necessary resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena. Respectfully, Beth Gray Report to the City Council Regular City Council - 12 Apr 2022 Agenda Section: CONSENT ITEMS Subject: Consideration of Second Reading and Proposed Adoption of a Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning of the St. Helena Municipal Code, amending sections 17.48.030 (Central Business) and 17.52.030 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code CEQA Exempt Determination: Prepared By: Ethan Walsh, City Attorney Reviewed By: April Mitts, Administrative Services Director Approved By: James C. McCann, Interim City Manager BACKGROUND The City Council held a public hearing on the proposed ordinance on March 22, 2022, and introduced the ordinance by title only and waived reading by a unanimous vote of the City Council. Staff recommends that the Council waive second reading and adopt the ordinance. The report below mirrors that provided to the Council at the March 22, 2022 meeting. Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were notjust fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing. When reviewing the Time Share Ordinance in this context, the City Attorney's office found that the substance of the Time Share Ordinance has not been updated since its adoption in 1982. The City Attorney's office concluded that the Time Share Ordinance would benefit from an update to refine the definitions to more directly address the impacts of time-share uses, to clarify the means used by the City to enforce the restrictions on time share uses, and to clarify how time share uses are treated in non-residential districts. City staff initially delayed initiating any changes to the Time Share Ordinance while the litigation was ongoing. However, due to the continued marketing of time share uses within the City, staff has decided to move forward with recommending the proposed updates to the City's ordinance. On March 1, 2022, the Planning Commission voted unanimously to recommend the City Council approve the proposed ordinance. DISCUSSION The Discussion section of the Staff Report is organized as follows: First, the section provides a brief explanation for the City's conclusion that the homes that have been marketed by Pacaso constitute time share projects. While the City's conclusion does not directly affect the changes to the Zoning Code set forth in the proposed ordinance, it is helpful to understand that the Time Share Ordinance, both in its original form and as proposed to be amended, is intended to protect against the impacts that these homes and similar uses could have on the City's housing supply and the character of the City's residential districts. Second, this section discusses the legal basis for the City's Time Share Ordinance, the reasons why the City prohibited time share uses in residential properties, and why those reasons continue to apply today. Third, this section outlines the changes made in the proposed ordinance and the reasons for the proposed changes. A.Current Time Share Ordinance and Application to Pacaso Homes Section 17.112.130 of the Zoning Code prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple family dwelling or apartment house within the City. A time-share project is defined in that section as any real property that is subject to a time-share program. A time-share program is in turn defined in part as an arrangement whereby the use, occupancy or possession of the property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year. Pacaso provides a significant amount of information on its website regarding the manner in which its homes are used by the purchasers of a Pacaso home. According to Pacaso's website, the single family residences marketed by Pacaso are held by a property -specific limited liability company ("LLC"), and each co-owner purchases a 1/8 share in the LLC. (Pacaso.com/learn) Each 1/8 share entitles the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 1/8 share. Back-toback stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare) The Pacaso model grants each 1/8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for a specific period of time each year. This use structure fits squarely in the City's definition of a time-share program, and the properties operated by Pacaso in this manner would therefore be timeshare projects under the existing Time Share Ordinance. B.Reasons for the Time Share Ordinance 1. The City's General Plan The City of St. Helena has long been defined by its rural, small town quality and agricultural character. In adopting the St. Helena General Plan Update 2040, the City noted that the defining, unifying goal of all the elements of the 1993 General Plan was: To protect the rural, small town quality and agricultural character of St. Helena. It is the General Plan's intent that the preservation of this small town character be the unifying philosophy that overlays all other stated goals and policies. (General Plan 2040, p. 1-2.) While the 2040 General Plan acknowledges that this is no longer the sole, overriding focus of the General Plan, retaining the small town character of St. Helena remains a primary focus of the City's land use planning. (Id.) A key component of retaining the City's small town character is maintaining a balance between the economic benefits that arise from visitors who come to St. Helena for its wineries, restaurants and historic downtown, and maintaining its authentic small town quality of life for the City's residents. This theme is consistent throughout the City's General Plan, and maintaining this balance is key to the City's long term viability. The General Plan notes in its Introduction that "[t]he community stands out in the Valley for its unique, historic character and its ability to attract visitors while also supporting the needs of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. 2. Use of Zoning to Preserve Residential Areas The use of zoning to preserve the character of the residential districts of a City has been common for over a century. In the seminal case of Euclid v. Ambler the United States Supreme Court upheld the validity of comprehensive zoning that would set aside residential districts "from which business and trade of every sort, including hotels and apartment houses, are excluded." (Euclid v. Ambler Co. 272 U.S. 365, 390.) The U.S. Supreme Court upheld the Village of Euclid's zoning ordinance in that instance, noting that the inclusion of non-residential uses in residential districts may have an increasingly deleterious impact on the residential area "until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed." (Id. at 394.) The California Court of Appeals followed Euclid and subsequent cases in upholding the City of Carmel-by-the-Sea's zoning restriction on short-term rentals. (Ewing v. City of Carmel -By -The -Sea (1991) 234 Cal.App.3d 1579.) In that case, the Court noted that the City's chief purpose in adopting the short-term rental restriction was "to provide an appropriately zoned land area within the City for permanently single-family residential uses and structures and to enhance and maintain the residential character of the City." (Id. at 1579.) In upholding Carmel's short-term rental restriction, the Court found that short-term rentals "undoubtedly affect the essential character of a neighborhood and the stability of a community. Short-term tenants have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, orjoin the hospital guild. They do not lead a scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally, they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." (Id. at 1591.) 3.Impacts of Time Share Uses on Residential Districts Like Carmel, the City of St. Helena strives to maintain the character of its residential areas in the face of intense demand for accommodations to serve visitors to St. Helena. The Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City. Those findings were as follows: 1. There is a critical shortage of affordable housing in the city for long-term occupancies (more than six months annually), and the availability of additional residential dwelling units is substantially restricted by the growth management system. 2. The conversion of residential dwelling units within the city to time-sharing projects eliminates residential dwelling units otherwise available for long-term occupancies (more than six months annually) in the city. 3. Time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple shortterm (less than six months annually) occupancies by those participating in timesharing projects. 4. Such commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. 5. The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city. As discussed in more detail below, these findings continue to hold true in St. Helena, and continue to support the City's decision to restrict time-share uses in residential districts. i. Housing Shortages and Impacts of Time -Share Uses on Existing Housing Stock In adopting the current Time Share Ordinance, the City Council found that there was a critical shortage of affordable housing in the City for long-term occupancies. That continues to be the case, and is undoubtedly worse than was the case at the time the Time Share Ordinance was originally adopted. The most recent census data lists the median value of owner occupied homes in St. Helena at $1,112,100 for the period of 2015-2019, while the Zillow Home Value Index estimates medial home values in St. Helena to be approximately $1,870,000 as of February 2022. www.census.gov/quickfacts/sthelenacitycalifornia; zillow.com/home-values/.) In contrast, the median household income in St. Helena from 2015-2019 was $90,031, and the median income for a four person household in Napa County for 2021 is approximately $109,200. (www.census.gov/quickfacts/sthelenacitycaIifornia; www. hcd.ca._qov/qrantfundinq/income-limits/state-and-federal-income- limits/docs/income-limits-2021. pdf.) At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new non-residential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse. The findings in the original Time Share Ordinance also note that the conversion of homes to time sharing projects would eliminate residential dwelling units that would otherwise be available for long term residential use. This continues to be true, as a home that is used for time share purposes will no longer be available for households to use as their long term residence. This threat to the City's existing housing stock is not insignificant. The publicity regarding Pacaso's rise as a company speaks to a pent up demand for homes that could be converted to time share use, reducing available housing stock for long term use. Pacaso's co-founder has indicated that "[t]here are tens of millions of families that aspire to own second homes but are unable to, due to reasons of cost." (Just Five Months Old, Zillow Co -founder's Pacaso Claims It's Already A Unicorn" Noah Kirsch, March 24, 2021 (www.forbes.com/sites/noahkirsch/2021 /03/24/just-five-month s-old- zillowcofounders-pacaso-claims-its-alread-a-unicorn/.)) In discussing Pacaso's model, Dan Wenhold of the venture capital firm Fifth Wall said "[t]hey were taking a previously illiquid asset, which was a timeshare, and making it affordable for the masses, also making it attainable for folks who wanted to own a second home but previously weren't able to." ("Pacaso, the Proptech Startup Founds by Zillow Alums, Raises $125M Series C" Sophia Kunthara (September 14, 2021) (news.crunchbase.com/news/proptech- startup-pacasoraises-125m-series-c.)) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further ratchet up housing costs, exacerbating the already significant housing shortage in the City. ii. Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in time-sharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended. The complaints that have been made by some local residents regarding the Pacaso homes are illustrative of the distinctions between time share uses and long term residential uses. A sampling of the email complaints received by the City are included in Attachment No. 2 to this Staff Report. The complaints received center on concerns over more intense traffic and parking issues, outdoor parties and conversations going late into the evening, sometimes as late as 2 A.M. One neighbor complained of outdoor lighting shining into her daughter's room at night. They complained of traffic and inadequate parking for the visitors to these homes. Further, neighbors have noted that with each turnover from one stay to another, cleaning and landscaping crews come to clean the unit and prepare it for the next user. While this level of maintenance is appropriate for a commercial vacation property, it impacts the residential character of the surrounding area by adding parking and noise burdens in the neighborhood. Living next door to a home where the residents turnover every 2-14 days, and professional cleaning and landscaping crews come to the property between each visit is much more akin to living by a commercial lodging project than a residential home. This is not at all surprising, given that these time share homes are used by people who are on vacation. While long term residents may have an occasional party at their home, the time share model means that these residences are constantly being used by people who are on vacation, hosting parties or celebrating special occasions. These activities by their nature are more intense than typical residential use of property. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long term residents, whether owners or renters, will occasionally have guests, and will occasionally have parties, but these time-share homes are used exclusively by people who are coming to the City on a short term basis for vacation or leisure. People will naturally stay out later, entertain more and gather in larger numbers while on vacation. That is the reason that these uses are more appropriate in non-residential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. In their marketing materials, Pacaso cites this intensity of use as a benefit, indicating that having these units filled with visitors seven days a week will benefit the local economy, since these visitors will patronize local businesses. (pacaso.com/communities) However, as noted above, the City strives through its General Plan to achieve a balance between benefits to the local economy and maintaining the character of the City. The City seeks to achieve this balance by promoting "sustainable tourist practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic smalltown quality of life, (General Plan p. 3-9) and striving to achieve a local economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors." (General Plan p. 1-15.) Bringing more visitors into residential neighborhoods to improve the local economy does not help to achieve that balance. It instead tips the scales in favor of the local economy, at the expense of the residential character of these neighborhoods. The nature of the timeshare use itself can impact the residential character of the City's residential districts because it will ensure that the time share users can only use their property for a limited amount of time each year. In the case of Pacaso owners, each stay is limited to 2-14 days. As discussed above, in the Ewing v. City of Carmel -by -the -Sea case, the California Court of Appeal found that short term rentals would affect the essential character of a neighborhood and the stability of a community. The Court noted that "[s]hort term rentals have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a Scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." This same problem is present with time-share uses. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. At the April 28, 2021 council meeting several Pacaso co -owners spoke of their experiences in St. Helena. All of them spoke of their affection for the community and the traditions they had established, but these were centered on attending local events and visiting shops, restaurants and wineries. These types of transactional activities are all beneficial to the City's local economy and are what the City hopes to see from visitors to the City, but it is not the type of community involvement described in the Ewing case that binds and strengthens a residential community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its small town character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents who will engage in the community in the manner described by the Court in Ewing, to the betterment of the entire community. C.Proposed Amendments to the Time Share Ordinance The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below. 1.Findings and Establishment of New Chapter The proposed Ordinance includes detailed recitals and findings describing the policy bases for the City's regulation of time share uses. The findings are consistent with the findings made as part of the original Time Share Ordinance, but more detail has been added. The policy bases for the proposed Ordinance are discussed in the sections above, and further discussion is not necessary here. The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter 17.112, General Site Design and Development Standards. City staff believes that with the added level of detail in the Proposed Ordinance, these provisions merit being located in a separate chapter, and has changed the location of the Timeshare Ordinance accordingly. 2.Definitions The Proposed Ordinance amends the definitions that are used to define time share uses, with the new definitions set forth in Section 17.138.020. The new definitions are modeled on the definitions utilized by the state to regulate time-shares in the Vacation Ownership and Time -Share Act of 2004 (Bus. & Prof. Code §§11210-11288), but are modified somewhat to better apply in the land use regulation context. The new ordinance includes a number of definitions that work in concert to define a timeshare use. The ordinance defines a "time-share use" as the use of one or more accommodations, or any part thereof, as part of a time-share property pursuant to a timeshare plan. An "accommodation" is defined in this Chapter to include a range of residential units that could potentially be used for time-share purposes. The types of residential units that can be accommodations are listed at the beginning of Section 17.138.020 in the proposed ordinance. A "time-share plan" is defined in the ordinance, and generally includes any arrangement, plan, scheme or similar device whereby a purchase receives the right to exclusive use of the accommodation, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year. A "time-share property", in turn is defined as one or more accommodations that are subject to the same time-share plan together with any property rights that are appurtenant to the accommodations. A "time-share instrument", is the document or documents that create or govern the operation of the time-share plan. Therefore a time-share use is the use of a residential property that fits within the definition of an "accommodation" under the ordinance, pursuant to a "time-share plan", which grants each owner of the time-share property exclusive use of the property for a certain period of time each year, but not the full year. It is important to note that not all properties with multiple owners or owned by business entities (such as LLCs) would constitute a time-share use under these definitions. The definitions focus on the manner in which the accommodation is used, not how it is owned. A time-share plan allows each owner exclusive use of the property for a specific period of time. This manner of use prevents the property from being used for long term residency, and leads to the continual cycling of visitors through the property and the more intense, constant vacation oriented use that the ordinance seeks to limit in residential districts of the City. A property that is owned by a group of friends or extended family members, whether through a separate business entity or otherwise, will not necessarily mandate that only one owner will be able to use the property at a time. The more formal arrangement found in time-share uses increases the intensity of use, in that each individual time-share owner cycles through the property, whereas families or friends are more likely to use the property together or in groups leading to less transition in the residential neighborhood. The more formal relationship, use of professional property managers and rights to exclusive use found in timeshare uses contributes to the commercial character of the property, with added traffic due to the more frequent turnover of visitors and more frequent cleaning and inspection between each user, which is common for a commercial vacation property, but not for a home owned by family or friends. 3.Enforcement The new ordinance additionally adopts a new enforcement structure for the City timeshare restrictions, modeled on the City's short-term rental ordinance. The ordinance prohibits both the use of accommodations for time-share use, and the advertisement of accommodations for time-share uses. This will better allow the City to prevent time-share uses in residential neighborhoods before they occur. The proposed Ordinance also outlines the process that will be used to enforce this new Chapter, again based on the City's existing short-term rental regulations. This approach has proved to be effective in enforcing the City's short-term rental regulations, and will help the City to take a more preventative approach to enforcing its time-share regulations as well. 4.Time Share Uses in Service Commercial and Central Business Districts Finally, while the City's existing Time Share Ordinance did prohibit time-share projects within certain types of residential dwelling units within the City, it does not make distinctions based on the various zoning districts of the City. Given that the primary concerns and impacts of this use arise from the high intensity use of property that negatively impacts the residential character of residential districts within the City, this use may not have the same impacts in commercial districts where visitors can be closer to the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these districts. Consistent with this change, the proposed ordinance updates the list of conditional uses in both the Service Commercial and Central Business Districts to include time share uses as regulated by the new Chapter 17.138. The Planning Commission held a public hearing to consider the proposed ordinance at its regular meeting of March 1, 2022. Following the public hearing, the Planning Commission unanimously recommended that the City Council adopt the proposed ordinance. City staff has made minor, non -substantive edits to the proposed ordinance that went to the Planning Commission to correct typographical errors, and to add the sections amending the list of conditional uses in the Service Commercial and Central Business Districts. FISCAL IMPACT None RECOMMENDED ACTION Staff recommends that the City Council conduct the second reading by title only and waive further reading and adopt the Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010-17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, amending sections 17.48 (Central Business) and 17.52 (Service Commercial) and Deleting Section 17.112.130 of the St. Helena Municipal Code. ATTACHMENTS Attachment 1-St. Helena Time Share Ordinance -Final Attachment 2-Community email comments CITY OF ST. HELENA ORDINANCE NO. ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and -2- WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time-sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one - eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time- share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and -4- Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIME-SHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist oriented use of such property and commercial management of time-share facilities, all of which - 5 - create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160 "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given -6- year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. -7- f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. 3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.20. B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.1.2, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. - 8 - C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty- five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ -9- of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17.48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section 17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 6: CEQA 1 This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the day of 2022, and was adopted at a regular meeting of the St. Helena City Council on the day of 2022, by the following vote: Mayor Ellsworth: Vice Mayor Dohring: Councilmember Chouteau: Councilmember Hardy: Councilmember Hall: WAV0=216-30"I Geoff Ellsworth, Mayor ATTEST: CITY OF ST. HELENA Cindy Tzafopoulos, City Clerk From: Mari Jansdotter <mjansdotter@yahoo.com> To: Anna Chouteau Sent: 6/8/2021 7:25:45 AM Subject: Re: [External] 1242 Madrona pictures Re: Pacaso Thank you, Anna, for your kind reply. I'm sorry you all have to go through this lawsuit by Pacaso and hope the judge find in your favor. I have a follow-up question. Do you know who I should address it to? The Pacas house building on Kearney across the street from us has installed lights under the roofline that are on all night and installed in such a way they shine straight into our house, especially my daughter's bedroom. Are there any ordinances that I could refer to that help me ask them to please cover / redirect those lights or at least turn them off after 10 p.m? Thank you! Best Mari t� j 7.a r 4 JAV Sent from Yahoo Mail on Android On Tue, Jun 8, 2021 at 7:12 AM, Anna Chouteau <AChouteau@cityofsthelena.org> wrote: Hi Mari, Thank you for your email. I forwarded your email to City staff about the specific permitting questions. Our planning director is out of the office this week. We are defending ourselves in the lawsuit. Our City Attorney filed an anti-SLAPP motion that is now public information and the hearing will be coming up this summer. All my best, Anna Sent from my iPad On Jun 7, 2021, at 6:01 PM, Mari Jansdotter <lnjansdotter@yahoo.cotn> wrote: To clarify, do they have permit allowing the new stricture going up at 1242 Madrona? The rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on unit close to (and taller than) the Oak neighbour' fence is being built. See pictures from today <20210607_175202.jpg> <20210607_175219jpg> Sent from Yahoo Mail on Android On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter <mjansdotter@yahoo.com> wrote: Thank you for doing all you can to stop Pacaso! I am not o.k. with Pacaso's violation of city ordinance and I support the city's legal tight. In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we on the community do to help, please? I finally afforded my dream home after moving several times the last 10 years, only to a year later have 4! of these Pacaso 'time share' like vacation LLC/conunercially owned houses popping up in my neighborhood. I'm devastated - this is supposed to be a residential area!! I an very worried about my family's safe & peaceful living situation, now that I'll be impacted by 4 of these houses (one across the street) - each with 8 groups of owners and/or their guests circulating in and out all year round. Many Pacaso have 4 bedrooms that easily accommodate 8+ people, and pool in the backyards with outdoor areas for gatherings/parties. It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thier token tune of vacation / partying. Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom). Specifically would you mind looking into building code the one at 1242 Madrona / Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor. Is that an approved building? Maybe they're getting around that by making it a partial garage? Add to that, the 4 Pacaso houses are all in close proximity of RLS with kids walking / biking to and from school. What are the safety concerns that this is imposing with new people circulating in and out all year round and increased car traffic? Worst case scenario there will be a liability situation that will put a stop to Pacaso. Please, please stop Pacaso before we even get close to that. Respectfully, Mari Jansdotter Sent from Yahoo Mail on Android PACASO = PARTY HOUSES! Debbie Polverino 5/11/2021 To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 1/8 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from "1/8 Timeshare Ownership to 1/8 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare. Living next door to a Pacaso home has been living next door to a full-time party house! The constant music with speakers blaring, loud conversations until 2 am and later, noise violations along with excessive vehicles parked on the street or in front of our homes. The additional noise of gardeners blowing dirt and leaves into our yard, Pool service, catering trucks, housekeeping scheduled more frequently. Open houses are held with statements made with, "this is a great place for pool parties and entertaining, it's a perfect place to bring friends and extended family." This home on Valley View Street was a weekend getaway home for the previous owners who had loud weekend parties. It was a constant nightmare and all the homes nearby complained. Now the property has been split up to 8 owners. The Saint Helena P.D. has already been to this home at least 3 times for noise violations after 10pm. There must be a way to stop these repeated violations and offenders. Pacaso's has written policies for its owners on their website that they must adhere to. No parking on the street, no parties, no noise after 9pm to 7am, no dogs over 80 pounds. Policies have been broken several times already from each group including the Pacaso's owners. According to Mr. Allison, Saint Helena is running a dishonest campaign against Pacaso. Pacaso claims discrimination of outside ownership which is not the case. As we all know we welcome all people the opportunity to live in our quiet small town. Pacaso selling an 1,100 square foot home which is smallest of any home on our street for $1.7M is dishonest in my opinion. This is what he says is affordable housing for second home buyers who are paying in full, plus maintenance fees? When commercial companies buy a dozen homes in Napa Valley and plans additional purchases to be split up to 8 shares it is not committed to the community or our quiet neighborhoods. Zoning is in place for a reason. Commercial companies operating in full time residential streets should adhere to the rules that are in place and only buy up in areas where other vacation homes are abundant and not a disruption. What happens should we decide to sell our home? How will people feel about buying next door to a home owned by 8 owners who don't know each other and all come at different time slots for as little as 2 days at a time? We will have to disclose this information. This put a negative mark on our property. This is something I want you to think about! Say NO to Pacaso! Thank you. From: Amy Caldarola <amycal@comcast.net> To: Paul Dohring CC: Anna Chouteau; Lester Hardy; Eric Hall Sent: 5/23/2021 1:04:24 PM Subject: [External] Picaso Dear Council Members, This is Amy Caldarola here. I am very concerned about Picaso buying property in our residential neighborhoods under the guise of democratizing home ownership. This is not affordable housing. Picaso properties are time-shares and short-term rentals which violate municipal code provisions. The presence of these properties in residential neighborhoods is inappropriate and will degrade the quality of life. It has already done so with Picaso's property on Valley View; those neighbors are suffering with loud noise, music, and parties that go on to after midnight; even calling the police does not seem to stop them. I support the city in doing everything possible to defeat them. I also support a counter law suit against them if it makes legal sense. With that said, we are fighting for the soul of our community and this needs to be a number one priority. Picaso is in Napa, Sonoma, Healdsburg, and probably will move into Calistoga and Yountville. This is a fight worth fighting. It might be helpful for the affected counties and municipalities to join their resources together to oppose them. Please outline for me what the city is doing and what the plan is. Thank you. I really appreciate you taking the time to keep me informed on this very important and pressing issue. We must act now! Sincerely, Amy Caldarola May 11, 2021 Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes. I listened carefully to the public comments of Pacaso Share owners made at our last City Council meeting. They sounded sincere in their desire to be a part of the St. Helena community. The problem is they have bought into a business model that will make that nearly impossible. To be a part of a real community means forming bonds with neighbors. How can that come about with a home next door that has possibly dozens of strangers coming and going, with visits no longer than 14 days at a time, a few times a year? And with the likelihood of visits gifted by other share owners, and a cleaning crew who appears before each arrival, the number swells. With the result that a Pacaso share owner, is viewed by their neighbors as only one in a sea of unfamiliar faces. And though the intentions of some of the share buyers might be good, can we say the same for all 7 of the remaining shareowners? One of whom might gift a weekend to his brother for a blowout bachelor party? Or as was the case in Napa, a single shareowner who conducted retreats in which close to a dozen visitors would come and go within one stay. That particular shareowner was charging her guests, which is a complication on an entirely different level. Pacaso would have us believe that their sharebuyers are families who simply want a quiet, lovely getaway. But in actuality, a Pacaso home is built for partying. Their own website says of one offering "This home takes entertaining to new heights". And yet another listing says that a particular home "has been completely re -imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure". Now, none of us resent the visitor who wants to have fun. Indeed, our beautiful valley is an ideal place for celebration. And we all do that on occasion. But when you realize that every single visitor owning a Pacaso share has been wooed with the promise of "fun and adventure" within a house "built for entertaining", then you have the possibility of major partying with each and every visitor, all crammed into stays that last from 2-14 days. This is transient occupancy in our residential neighborhoods that cannot possibly be regulated under the Pacaso system. There is a reason why we have ordinances in place that designate where tourists and visitors can stay. It allows us to appreciate our visitors, giving them the space and accommodations in which to party and celebrate, while we ourselves can conduct our daily lives in the sanctuary of our residential neighborhoods. Which in turn, are places where we know our neighbors so well that we trust them with our keys, our pets, and even our children. With whom we share joy and sometimes sorrow, and whom are quick to lend a hand in times of crisis. And if we have learned anything in the last few years, it is that the ability to know and rely on our neighbors is the very thing that sustains our community through thick and thin. A vacation home with a parade of visitors coming and going, does not belong in our residential neighborhoods. Please Say No to Pacaso. Clare Barr St. Helena From: Beth Gray <bgray14@gmail.com> To: Geoff Ellsworth Sent: 5/22/2021 3:01:13 PM Subject: [External] Pacaso Dear Mr. Mayor, I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a full-time resident here in the city (and as your neighbor), I find it atrocious that the city has not been able to stop the infiltration of this community destroying business model. This business will do nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed from a home purchased by Pacaso right on the corner of Sylvaner/Reisling as they began to redevelop the home and expect to list it as fractional ownership. Illegal dumping of the pool water with disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso home on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud music being played at all hours. One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautiful outdoors - not to listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares. I understand the city is being sued. I hope that we can collectively put the necessary resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena. Respectfully, Beth Gray CITY OF ST. HELENA ORDINANCE NO. 2022-5 ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AMENDING SECTIONS 17.48.030 AND 17.52.030 AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small-town agricultural character; and WHEREAS, preserving the rural, small-town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. Thirty six percent (36%) of St. Helena households cannot afford market rents while seventy percent (70%) of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute one million dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low-income households, and an additional two million two hundred thousand dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time- sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in. 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one -eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time-share uses provide a short-term, high impact vacation -oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist -oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2022, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on March 1, 2022, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein by a 5-0 vote; and WHEREAS, on March 22, 2022, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIME-SHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B, A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small-town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist -oriented use of such property and commercial management of time-share facilities, all of which create increased traffic generation, excessive noise, disruption to residential communities through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single-family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. 3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 4. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.20. B. Time-share use, and/or advertisement for time-share use, of an acc4nmodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty-five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: Amendment of Section 17.48.030 Section 17.48.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 5: Amendment of Section 17.52.030 Section 17.52.030 is hereby amended to add the following text as a separate line immediately following "Theaters, movie and legitimate;", and immediately prior to "Tobacco/smoke shop, including the sale of tobacco, tobacco and/or nicotine products and equipment for smoking;": "Time share uses, pursuant to Sections 17.138.030 and 17.138.040;" SECTION 6: CEQA This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 6: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. THE FOREGOING ORDINANCE was introduced at a regular meeting of the St. Helena City Council on the 22nd day of March 2022, and was adopted at a regular meeting of the St. Helena City Council on the 121h day of April 2022, by the following vote: Mayor Geoff Ellsworth: Yes Vice Mayor Paul Dohring: Yes Council Member Anna Chouteau: Yes Council Member Lester Hardy: Yes Council Member Eric Hall: Yes APPROVED: V\� Geoff Ellsworth, Mayor I, CINDY TZAFOPOULOS, CITY CLERK of the City of St. Helena, California, do hereby certify that the foregoing Ordinance was regularly introduced and placed upon its first reading at a regular meeting of the City Council on the 22nd day of March 2022. That thereafter said Ordinance was duly adopted and passed at a regular meeting of the City Council on the 12' day of April 2022, by the following vote: Mayor Geoff Ellsworth: Yes Vice Mayor Paul Dohring: Yes Council Member Anna Chouteau: Yes Council Member Lester Hardy: Yes Council Member Eric Hall: Yes ATTEST: Cindy Tzafo$oulos, C y Clerk G� ST. f i ,a March 9 AQr,Wed NI -al OY OF Ct,, Exhibit P Ordinance Proposed by Pacaso Adding Chapter 5.98 DRAFT ORDINANCE Chapter 5.98 CO -OWNERSHIP PROPERTY MANAGEMENT 5.98.005 Purpose and Findings. The City Council of the City of Newport Beach finds and declares as follows: A. The City has a long and storied history of being a vacation destination welcoming families and visitors from all over the world to second homes within our shared community. B. Unlike short term lodging units that are primarily used during the summer months when parking and other demands for City services are at their highest, second homes are utilized by their owners throughout the year. C. An increasing trend in second home ownership in the City and other communities throughout the nation is co -ownership whereby a number of persons jointly contribute towards the purchase and shared use of a second home. D. A portion of these co -owned homes are managed by third -party management companies. E. The restrictions of this chapter are necessary to ensure the growth of co -ownership homes that are managed by a third -party management company is done in an orderly fashion that does not negatively impact the surrounding community. 5.98.010 Definitions. For the purpose of this chapter, the following definitions shall apply: A. "Authorized Guests" shall mean any guests of an owner of a Co -owned Housing Unit who have not provided compensation to an owner for dwelling, lodging, and sleeping purposes and are present in the Co -owned Housing unit while the owner is on -site and in the home. B. "City" shall mean the City of Newport Beach. C. "Community Development Department" or "Department" shall mean the Community Development Department of the City. D. "Community Development Director" or "Director" shall mean the Community Development Director of the City or his or her designee. 1 Y6,f� c, h a. urly Of N111111811 I -A 92-7 E. "Co -owned Housing Unit" shall mean a residential dwelling unit, managed by a Co - owned Property Manager, and utilized for occupancy for dwelling, lodging, or sleeping purposes by up to eight (8) Owners or eight (8) members of a Limited Liability Company, that owns the residential dwelling unit, along with authorized guests. The term "Co -owned Housing Unit" is not a time-share project, as defined in this Code, and usage of a Co - owned Housing Unit is not a time-share use. F. "Co -owned Housing Unit Permit" shall mean a permit granted by the City to a Co - owned Property Manager for each Co -owned Housing Unit under management. G. "Co -owned Property Manager" shall mean a person or Limited Liability Company that manages a Co -owned Housing Unit, on behalf of the Owners of the Co -Owned Housing Unit. H. "Co -owned Property Management Permit' shall mean the annual permit issued by the City allowing a Co -owned Property Manager to manage a Co -owned Housing Unit(s). I. "Good Neighbor Policy" shall mean a written policy that governs the operation of a Co -owned Housing Unit and summarizes general rules of conduct, occupancy limits, consideration, and respect for neighbors and the community, including without limitation provisions of this Chapter applicable to the Owner and guests. J. "Limited Liability Company" shall mean a limited liability company or other form of business entity, including, but not limited to, all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, business or common law trusts, or societies. K. "Local Contact Person" shall mean an individual(s) who is available twenty-four (24) hours per day, seven (7) days per week for the purpose of responding within twenty- four (24) hours to complaints regarding the condition, operation, or conduct of occupants of the Co -owned Housing Unit, or any agent of an owner authorized by the owner to take remedial action and who responds to any violation of this Code. L. "Owner" shall mean the person(s) that hold legal and/or equitable title to the Co - owned Housing Unit. M. "R-1 Zoning District' shall have the same meaning provided in Section 20.18.010(B) and Section 21.18.010(B), or any successor sections. 5.98.015 Co -owned Property Management Permit Required. A. A Co -owned Property Manager shall not manage a Co -owned Housing Unit without obtaining a Co -owned Property Management Permit from the City. 2 mv/10- 1 0 cn� ��A' -YE 12-8 B. A Co -owned Property Manager shall obtain a permit by submitting an application to the Community Development Director, in a form provided by the Department, signed by the applicant. An application for a new permit, renewal permit, the reinstatement of a permit or the transfer of a permit shall contain the following information: 1. The name, address, and telephone number of the applicant; 2. The name, address, and telephone number of the Local Contact for the Co - owned Property Manager; 3. A current list of every property that the applicant manages in the City; 4. Evidence of a valid business license issued by the City for the separate business of operating Co -owned Housing Units or submission of evidence or information indicating that the Owner is exempt or otherwise not covered by Chapter 5.04 for such activity. 5. A copy of the Good Neighbor Policy that governs each Co -owned Housing Unit. C. The Co -owned Property Management Permit shall be renewed annually pursuant to procedures provided by the Community Development Department. D. An application for the renewal of a Co -owned Property Management Permit shall be filed within thirty (30) calendar days of the Co -owned Property Management Permit expiration, or the Co -owned Property Management Permit shall be deemed abandoned. E. An application for the reinstatement of a Co -owned Property Management Permit closed by the Director pursuant to Section 5.98.070 shall be filed within thirty (30) calendar days of the date the permit was closed by the Director, or the Co -owned Property Management Permit shall be deemed abandoned. F. An application for the reinstatement of a previously suspended Co -owned Property Management Permit shall be filed within thirty (30) calendar days of the end of the suspension period, or the Co -awned Property Management Permit shall be deemed abandoned. G. If any application is deemed incomplete, which shall be determined in the sole discretion of the Director, the application shall be completed within thirty (30) calendar days of the service of notice that the application is incomplete, which shall be served in accordance with Section 1.08.080, or the application and any associated permit shall be deemed abandoned. 3 12-9 H. If good causes exist, as determined in the sole discretion of the Director, the Director may extend the deadlines set forth in this section. 5.98.020 Co -owned Housing Unit Permit Required. A. A Co -owned Property Manager shall obtain a permit for each Co -owned Housing Unit in the City prior to the unit's use as a Co -owned Housing Unit. B. A Co -owned Property Manager shall obtain a permit by submitting an application to the Community Development Director, in a form provided by the Department, signed by the applicant. An application for a new permit, renewal permit, the reinstatement of a permit or the transfer of a permit shall contain the following information: 1. The address of the Co -owned Housing Unit; 2. The name, address, and telephone number of the applicant; 3. The name, address, and telephone number of the local contact for the Co - owned Housing Unit; 4. A copy of the Good Neighbor Policy that governs the operation of the Co - owned Housing Unit; 5. If applicable, evidence that a Co -owned Housing Unit would not violate the permissible use for housing within a Homeowners Association in accordance with the Homeowners Association's Declaration of Covenants, Conditions, and Restrictions. C. The Co -owned Housing Unit Permit shall be renewed annually pursuant to procedures provided by the Community Development Department. D. An application for the renewal of a Co -owned Housing Unit Permit shall be filed within thirty (30) calendar days of the Co -owned Housing Unit Permit's expiration, or the Co -owned Housing Unit Permit shall be deemed abandoned. E. An application for the reinstatement of a Co -owned Housing Unit Permit closed by the Director pursuant to Section 5.98.070 shall be filed within thirty (30) calendar days of the date the permit was closed by the Director, or the Co -owned Housing Unit Permit shall be deemed abandoned. F. An application for the reinstatement of a previously suspended Co -owned Housing 4 jI j ,n-;. 12-10 Unit Permit shall be filed within thirty (30) calendar days of the end of the suspension period, or the Co -owned Housing Unit Permit shall be deemed abandoned. G. If any application is deemed incomplete, which shall be determined in the sole discretion of the Director, the application shall be completed within thirty (30) calendar days of the service of notice that the application is incomplete, which shall be served in accordance with Section 1.08.080, or the application and any associated permit shall be deemed abandoned. H. If good causes exist, as determined in the sole discretion of the Director, the Director may extend the deadlines set forth in this section. I. For purposes of calculating the maximum number of permits under Subsection 5.98.035(A), a Co -owned Housing Unit Permit shall be deemed valid until the applicable permit has been deemed abandoned. 5.98.025 Denial of Permit. If Co -owned Housing Unit Permits are available for issuance, no timely application filed by a Co -owned Property Manager for an annual permit, renewal of a permit, reinstatement of a permit or transfer of a permit for a unit eligible to be used as a Co -owned Housing Unit, as provided for in this Chapter and this Code, shall be denied unless: the Co -owned Property Manager does not have a current valid business license; or the Co -owned Housing Unit Permit for the same unit and issued to the same Co -owned Property Manager has been suspended. 5.98.030 Filing Fee. An application for a new annual permit, the renewal of an existing permit, the reinstatement of a permit, or the transfer of a permit shall be accompanied by a fee established by resolution of the City Council; provided, however, the fee shall be no greater than necessary to defer the cost incurred by the City in administering the provisions of this chapter. 5.98.035 Maximum Number of Co -owned Housing Unit Permits in the R-1 Zoning District. A. The maximum number of Co -owned Housing Unit Permits in the R-1 Zoning District shall be limited to five hundred (500) permits at any time. For purposes of calculating the maximum number of permits available, a permit shall be deemed valid and unavailable until it is abandoned in accordance with Sections 5.98.020(D) through (G). B. An Co -owned Property Manager who has a Co -owned Housing Unit Permit, or a Co - owned Property Manager seeking to reinstate a Co -owned Housing Unit Permit that has 5 12-11 not been abandoned in accordance with Sections 5.98.020(D) through (G), shall have priority to renew or reinstate the permit over anyone on the waiting list, as described in subsection (D) of this section. C. A Co -owned Property Manager seeking to transfer a valid Co -Owned Housing Unit Permit under Section 5.98.040 shall have priority to transfer the permit over anyone on the waiting list, as described in subsection (D) of this section. D. If the City has issued the maximum number of Co -owned Housing Unit Permits available in the R-1 Zoning District, the City shall maintain a waiting list. An application for placement on the waiting list shall be submitted to the Director, on a form approved by the Director, and shall be accompanied by a fee established by resolution of the City Council. In the event a Co -owned Housing Unit Permit becomes available, the Director shall notify the person or persons next in order on the waiting list. The notice shall specify that applications will be accepted for ten (10) calendar days after the date of the notice, and that failure to apply within the ten (10) calendar -day period shall result in removal of the person or persons receiving notice from the waiting list. Notice shall be deemed given when deposited in the United States mail, with the first-class postage prepaid, and addressed as specified by the person or persons on the waiting list. The City shall not be liable for a failure to notify any person or persons on the waiting list since placement on the list does not create any property right in any person or persons on the list nor any contractual obligation on the part of the City. 5.98.040 Transfer of Permit. A Co -owned Housing Unit Permits permit that is valid, and has not been abandoned in accordance with Sections 5.98.020(D) through (G), may be transferred by the Co -owned Property Manager to another Co -owned Property Manager that is permitted under this chapter. 5.98.045 Conditions for Co -owned Housing Unit Permits. A. All Co -owned Housing Unit Permits issued pursuant to this chapter are subject to the following standard conditions: 1. The Co -owned Property Manager shall prohibit the Owner(s) from renting the Co -owned Housing Unit to a transient user for short term lodging. 2. The Co -owned Property Manager shall ensure that the Owner(s) limits the overnight occupancy of the Co -owned Housing Unit to the maximum permitted by the building code and fire code. 3. The Co -owned Property Manager shall use best efforts to ensure that the occupants and/or guests of the Co -owned Housing Unit do not create unreasonable noise or disturbances, engage in disorderly conduct, or violate provisions of this Code or any state or federal law pertaining to noise, disorderly 6 12-12 conduct, the consumption of alcohol, or the use of illegal drugs. 4. The Co -owned Property Manager shall, upon notification that any Owner and/or guest of a Co -owned Housing Unit has created unreasonable noise or disturbances, engaged in disorderly conduct or committed violations of this Code or any state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs, promptly use best efforts to prevent a recurrence of such conduct by any Owner or guest. 5. The Co -owned Property Manager shall provide the Owner(s) with a copy of the Good Neighbor Policy. 6. With respect to any Co -owned Housing Unit that is located in any safety enhancement zone, the Co -owned Property Manager shall take immediate action during the period that the safety enhancement zone is in effect to prevent any Owner or guest from engaging in disorderly conduct or committing violations of this Code or state or federal law pertaining to noise, disorderly conduct, the consumption of alcohol or the use of illegal drugs. 7. The Co -owned Property Manager shall provide the City with the name and twenty-four (24) hour phone number of a Local Contact Person(s) (who resides within twenty-five (25) miles of the property) who shall respond to any call related to the Co -owned Housing Unit within thirty (30) minutes, and ensure compliance with this chapter in a timely manner. The Co -owned Property Manager must provide a new Local Contact Person and his or her phone number within five (5) business days, if there is a change in the Local Contact Person(s). 8. The Co -owned Property Manager shall ensure that all available parking spaces on site, which may include garage, carport, and driveway spaces as well as tandem parking, are available for the Owner and/or guest of the Co -owned Housing Unit. The Co -owned Property Manager shall disclose the number of parking spaces available on site and shall inform the Owner and/or guest that street parking may not be available. 9. The Co -owned Property Manager shall maintain a valid Co -owned Housing Unit Permit for each Co -owned Housing Unit under management. 10. The Co -owned Property Manager shall include the City issued Co -owned Housing Unit Permit number on all advertisements for the sale of the Co -owned Housing Unit. 11. The Co -owned Property Manager shall ensure that a permitted Co -owned Housing Units is only used for residential purposes and not used for nonresidential uses, including, but not limited to, large commercial or non-commercial gatherings, commercial filming and/or nonowner wedding receptions. 7 12-13 12. The Co -owned Property Manager shall ensure that no amplified sound or reproduced sound is used outside or audible from the property line between the hours of 10:00 p.m. and 10:00 a.m. 13. The Co -owned Property Manager shall provide the City with a copy of the Good Neighbor Policy, within seven (7) calendar days after the City serves the Co - owned Property Manager with a notice of request for the Good Neighbor Policy in accordance with Section 1.08.080. 14. The Co -owned Property Manager shall require every Owner and/or guest to comply with all State and local laws that regulate parking while staying at or visiting the Co -owned Housing Unit; 15. The Co -owned Property Manager shall ensure that any Owner and/or guest complies with all State and local laws that regulate parking while the Owner and/or guest is staying at or visiting the Co -Owned Housing Unit. B. The Director shall have the authority to impose additional conditions on any permit in the event of any violation of the conditions to the permit or the provisions of this chapter subject to compliance with the procedures specified in Section 5.98.060. 5.98.050 Violations of Permit Conditions. A. In addition to other provisions of this Code, it shall be unlawful for any Owner or guest of Co -owned Housing Unit to: 1. Exceed the overnight occupancy limit designated for the Co -owned Housing Unit. 2. Use street parking prior to utilizing all available on -site parking space(s) for the Co -owned Housing Unit. 3. Place trash for collection in violation of this Code's rules and regulations concerning: a. The timing, storage or placement of trash containers; or b. Recycling requirements. 4. Amplify or reproduce sound between the hours of 10:00 p.m. and 10:00 a.m.: a. Outside of the Co -owned Housing Unit; or 12-14 b. That is audible from the property line for the Co -owned Housing Unit. 5. Use the Co -owned Housing Unit for any nonresidential purpose, including, but not limited to, large commercial or noncommercial gatherings, commercial filming and/or nonowner wedding receptions. 6. Rent a Co -owned Housing Unit to any person for a short term. 7. Allow guests to use a Co -owned Housing Unit when the Owner(s) is not present. 5.98.055 Violations, Penalties, and Enforcement. A. It shall be unlawful for any person to violate any provisions or to fail to comply with any of the requirements of this chapter. B. In addition to, or separate from, the foregoing criminal penalties, any person violating any of the provisions or failing to comply with any of the requirements of this chapter is subject to the issuance of an administrative citation pursuant to the provisions of Section 1.04.010(E) and Chapter 1.05. 5.98.060 Suspensions. In addition to any fine or penalty that may be imposed pursuant to any provision of this Code including, but not limited to, Section 5.98.055, a Co -owned Housing Unit Permit may be suspended as provided in this section. A. Suspension of Co -owned Property Manager Permit. 1. Except as otherwise provided in this subsection, if any person violates any Co -owned Housing Unit Permit condition four (4) or more times in any six (6) month period or any other provision of this Code, state law or federal law, four (4) or more times in any six (6) month period, and the violation relates in any way to the Co -owned Housing Unit Permit, the Co -owned Property Manager Permit for the unit may be suspended for a period of up to six (6) months in accordance with subsection (B) of this section. 2. If a Co -owned Housing Unit that is subject to a Co -owned Housing Unit Permit has been the location of four (4) or more loud or unruly gatherings, as defined in Chapter 10.66, within any twelve (12) month period, the Co -owned Property Manager Permit may be suspended for a period of up to six (6) months. A loud or unruly gathering that occurred prior to the passage of fourteen (14) calendar days from the mailing of notice to the Co -owned Property Manager in 0 12-15 compliance with Section 10.66.030(D) shall not be included within the calculation of the four (4) or more loud or unruly gatherings required to suspend a Co -owned Property Manager Permit. B. Co -owned Property Manager Permits shall be suspended only in the manner provided in this section. 1. The Director shall investigate whenever he or she has reason to believe that a Co -owned Property Manager has submitted an application that contains false information or committed a violation of a permit condition, this Code, state or federal law related to a Co -owned Housing Unit. Such investigation may include, but is not limited to, on -site property inspections. Should the investigation reveal substantial evidence to support a finding that warrants a suspension of the Co - owned Property Manager Permit, the Director shall issue written notice of intention to suspend the Co -owned Property Manager Permit. The written notice shall be served on the Co -owned Property Manager in accordance with Section 1.08.080, and shall specify the facts which, in the opinion of the Director constitute substantial evidence to establish grounds for imposition of the suspension, and specify the proposed time the Co -owned Property Manager Permit shall be suspended within thirty (30) calendar days from the date the notice is given, unless the Co -owned Property Manager files with the Director, before the suspension becomes effective, a request for hearing before a hearing officer, who shall be retained by the City, and pays the fee for the hearing established by resolution of the City Council. 2. If the Co -owned Property Manager requests a hearing and pays the hearing fee, established by resolution of the City Council, within the time specified in subsection (B)(1) of this section, the Director shall serve written notice on the Co -owned Property Manager, pursuant to Section 1.08,080, setting forth the date, time and place for the hearing. The hearing shall be scheduled not less than fifteen (15) calendar days, nor more than sixty (60) calendar days, from the date on which notice of the hearing is served by the Director. The hearing shall be conducted according to the rules normally applicable to administrative hearings. At the hearing, the hearing officer will preside over the hearing, take evidence and then submit proposed findings and recommendations to the City Manager. The City Manager may suspend the Co -owned Property Manager Permit only upon a finding that a violation has been proven by a preponderance of the evidence, and that the suspension is consistent with the provisions of this section. The City Manager shall render a decision within thirty (30) calendar days of the hearing and the decision shall be final. C. If a Co -owned Property Manager Permit is suspended, it shall be the Co -owned Property Manager's responsibility to transfer management of the Co -owned Housing 10 i 0 � � fs 12-16 Unit(s) to another Co -owned Property Manager that is permitted under this chapter. D. After any suspension, the Co -owned Property Manager may reapply for reinstatement of the Co -owned Property Manager Permit which shall be processed in accordance with this chapter, provided the owner has paid the City all amounts owed the City in accordance with this chapter. 5.98.065 Permits and Fees Not Exclusive. Permits and fees required by this chapter shall be in addition to any license, permit or fee required under any other chapter of this Code. The issuance of any permit pursuant to this chapter shall not relieve the Co -owned Property Manager of the obligation to comply with all other provisions of this Code. 5.98.070 Permit Closure. Any Co -owned Property Manager that has ceased operating a Co -owned Housing Unit shall inform the Director in writing of the date of the last management day, and having done such, the Co -owned Property Manager Permit for that Co -owned Housing Unit shall be closed as to the specific Co -owned Property Manager. 11 ! -1y: �11 LE a 12-17 Exhibit Q September 13, 2022, City Council Agenda Item No. SS2 Fractional Homeownership Update https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2833800&dbid=0&repo=CNB Fractional Homeownership Update — Correspondence https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2833864&dbid=0&repo=CN B Fractional Homeownership Update — PowerPoint https:Hecros. newportbeachca.gov/WEB/DocView,aspx?id=2833866&dbid=0&repo=CNB Exhibit R September 27, 2022, City Council Agenda Item No. 1 https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2835823&dbid=0&repo=CNB Correspondence htt s://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2835861&dbid=0&repo=CNB Exhibit S October 6, 2022, Planning Commission Agenda Item No. SS.2 https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2836766&dbid=0&repo=CNB https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2836767&dbid=0&repo=CNB PO CITY OF NEWPORT BEACH n PLANNING COMMISSION STAFF REPORT ' October 6, 2022 �+4LIFOP. P Agenda Item No. 2 SUBJECT: Code Update Related to Fractional Homeownership (PA2022-0202) ■ Zoning Code Amendment ■ Local Coastal Program Amendment SITE LOCATION: Citywide APPLICANT: City of Newport Beach PLANNER: Jaime Murillo, AICP, Principal Planner (949) 644-3209, jmurillo(a�newportbeachca.gov PROJECT SUMMARY Staff will provide the Planning Commission with an update regarding the growing trend of fractional homeownership, how other jurisdictions are addressing the use, deficiencies in our current codes, and outcome of recent City Council discussions on this topic. RECOMMENDATION Receive presentation on fractional homeownership and provide direction to staff. BACKGROUND Fractional homeownership is when multiple owners purchase a property and split the allowed time at the property through a formal arrangement. In the fractional model, the allocated time for each owner is based on their percentage of ownership. November 16. 2021. Citv Council Studv Session On November 16, 2021, the City Council conducted a study session to discuss fractional homeownership. Information was presented that there was one known fractional ownership operator within the jurisdictional boundaries of the City and that four homes had either been fully sold or marketed for sale as fractional homeownership. The City Council directed staff to monitor fractional homeownership activity in the City and investigate how other jurisdictions were dealing with such issues and report back. September 13, 2022, City Council Study Session and Sagecrest Study Staff retained the services of Sagecrest Planning+Environmental (Sagecrest) to study jurisdictions with known fractional ownership properties and prepare a report. The report I 2 Fractional Homeownership Update (PA2022-0202) Planning Commission, October 6, 2022 Page 2 is included as Attachment PC1; however, due to bulk, the appendices are available online at www.newoortbeachca.aov/fractionalownershiD. On September 13, 2022, the City Council held a study session to discuss the results of the Sagecrest study. The study found that of the 22 jurisdictions surveyed, 15 classify these properties as a form of timeshare. Public testimony provided during the study session included concerns about increases in traffic and noise, as well as fractional homeownership properties having an adverse impact on the character of the existing residential neighborhoods. In some instances, fractional homeownership properties operate in a similar manner as short-term lodgings by limiting occupancy by owners of a fractional interest in a property to less than 30 consecutive days. Over the past 10 months, the number of fractional homeownership operators has increased to five and fractional homeownership residential properties within the City has nearly tripled with at least 11 fractional homeownership residential properties currently fully sold or marketed in the City. At the conclusion of the study session, the City Council directed staff to return with: 1) a moratorium to pause the transactions of new fractional homeownerships; and 2) an initiation of a code amendment to revise the NBMC to regulate the practice. September 27, 2022, City Council Meeting On September 27, 2022, the City Council held a special meeting and adopted Resolution No. 2022-61 initiating Zoning Code and Local Coastal Program Amendments related to fractional homeownership. Public testimony provided included the need for the City Council to adopt a moratorium to prevent the continued growth of fractional homeownership properties while the code amendments are prepared and reviewed through the various legislative bodies (i.e., Planning Commission, City Council, and California Coastal Commission). Ultimately the City Council chose not to pursue a moratorium but directed staff to work expeditiously with the Planning Commission to develop code amendments to better regulate fractional homeownership to protect the character of residential neighborhoods. The City Council identified definitions and other standards from the City of St. Helena, as well as other cities, that may be good examples of how to proceed. DISCUSSION Staff will provide the Planning Commission with an overview of how other jurisdictions, such as St. Helena, that have pursued code amendments to better regulate fractional ownership properties and identify potential revisions that can be applied in the City of Newport Beach. Consistent with City Council direction, staff intends to take the Planning Commission's direction and develop code amendments for the Planning Commission's formal review and recommendation at the next soonest meeting. S Fractional Homeownership Update (PA2022-0202) Planning Commission, October 6, 2022 Page 3 NOTICING The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Prepared by: Ja-rme Murillo Principal Planner ATTACHMENTS PC 1 Fractional Homeownership Report Submitted by: j+� 1�� Jim Campbell Deputy Community Development Director 4 5 0 FRACTIONAL HOMEOWNERSHIP W°pR Prepared For: re ?F City of Newport Beach Community Development Department 3■ii►rrd� r IIIIIIIIIIIIV IIIIIIIIIIIII August 29, 2022 IIIIIIIIIIIII : ' 3� SAGELREST I Table of Contents EXECUTIVE SUMMARY..................................................................................................................................1 BACKGROUND...............................................................................................................................................1 Known/Suspected Properties in Newport Beach.....................................................................................1 BENEFITS AND IMPACTS OF FRACTIONAL HOUSING .................................................................................... 2 Fractional Housing Benefits...................................................................................................................... 2 Fractional Housing Impacts....................................................................................................................... 3 COMMUNITYSURVEY...................................................................................................................................4 Cityof Beverly Hills, CA............................................................................................................................. 5 Cityof Carlsbad, CA...................................................................................................................................5 Cityof Carmel by the Sea, CA.................................................................................................................... 5 Cityof Encinitas, CA..................................................................................................................................5 Cityof Fort Lauderdale, FL........................................................................................................................ 6 Cityof Hermosa Beach, CA....................................................................................................................... 6 Cityof Indian Wells, CA............................................................................................................................. 6 Countyof Monterey, CA........................................................................................................................... 6 Cityof Napa, CA........................................................................................................................................ 6 Villageof North Haven, NY....................................................................................................................... 7 Cityof Oceanside, CA................................................................................................................................7 Cityof Pacific Grove, CA............................................................................................................................ 7 Cityof Palm Desert, CA............................................................................................................................. 7 Cityof Palm Springs, CA............................................................................................................................ 7 Cityof Park City, UT..................................................................................................................................8 Cityof Santa Barbara, CA.......................................................................................................................... 8 Cityof Santa Cruz, CA................................................................................................................................8 Cityof South Lake Tahoe, CA.................................................................................................................... 8 Cityof Sonoma, CA....................................................................................................................................9 Cityof St. Helena, CA................................................................................................................................9 Townof Truckee, CA................................................................................................................................. 9 Cityof Vail, CO........................................................................................................................................10 FRACTIONAL HOUSING -i- I APPENDICES................................................................................................................................................10 Appendix A — Pacaso Economic Impact Analysis, prepared by EBP........................................................A1 Appendix B — City of Beverly Hills Urgency Ordinance........................................................................... 131 Appendix C — City of Carlsbad Timeshare ordinance.............................................................................. C1 Appendix D — City of Carmel by the Sea Cease and Desist Order...........................................................D1 Appendix E — City of Hermosa Beach Planning Commission Resolution ................................................ E1 Appendix F — County of Monterey Cease and Desist Order................................................................... F1 Appendix G —Village of North Haven Code Amendment...................................................................... G1 Appendix H — City of Palm Desert Ordinance........................................................................................ H1 Appendix I — City of Palm Springs Cease and Desist Order......................................................................11 Appendix J — Park City Notice of Amendment.........................................................................................J1 Appendix K — City of Santa Cruz Ballot Initiative..................................................................................... K1 Appendix L— City of South Lake Tahoe Cease and Desist Order............................................................ L1 Appendix M — City of Sonoma Ordinance.............................................................................................. M1 Appendix N — City of St. Helena Ordinance........................................................................................... N1 Appendix 0 — Pacaso Inc. v. City of St. Helena....................................................................................... 01 Appendix P —Town of Truckee Ordinance.............................................................................................. P1 FRACTIONAL HOUSING -ii- Cover Photo by Dex Ezekiel on Unsplash 10 EXECUTIVE SUMMARY The City of Newport Beach (City) is beginning to see the rise of fractional homeownership of single-family houses. Fractional homeownership is when multiple owners purchase a property and split the allowed time at the property through a formal arrangement, as compared to multiple owners who occupy the residence full-time or have no formal arrangement for occupancy. In the fractional model, the allotted time for each owner is based on their percentage of ownership. In reviewing available data on fractional homeownership, there appears to be at least ten such properties within the City but there could be more. The City is receiving complaints from residents that these properties function similarly to short-term rental vacation homes and result in significant noise, traffic, and other impacts to residential neighborhoods. As a result of these concerns, the City asked Sagecrest Planning+Environmental (Sagecrest) to investigate how other jurisdictions are dealing with fractional housing and the companies that promote them. Based on this investigation, it appears that other communities are adopting moratoriums and pursuing operators of fractional housing companies through code enforcement actions. BACKGROUND Fractional homeownership (sometimes called co -ownership) is an emerging trend in real estate where ownership of properties is equally shared among multiple owners (typically between four and 12 owners). The amount of time the owner may spend at the property correlates to the fraction of ownership (e.g., a 1/8 share owner would be allotted 45 days per year). This time allotment is not typically used consecutively, but rather one or two weeks at a time. In addition to the cost to purchase their share of the home, the owners are responsible for their share of the maintenance, property management fees, HOA fees, cleaning costs, utilities, taxes, insurance, and payment into a reserve fund to cover long-term repairs, such as replacement of the roof. Fractional owners maintain an ownership interest, benefit from a change in property value due to appreciation and have the potential to generate income through short- term rentals, although the City would maintain authority on short-term rentals. It should also be noted that some fractional homeownership companies prohibit short-term rentals in their management agreement. Companies such as Pacaso, Sharetini, Ember, Equity Estates, and others facilitate the purchase of properties and provide the necessary maintenance, furnishments, property management, and cleaning services in exchange for a monthly fee. Many of these companies utilize ownership models that purchase and hold the properties under entities, such as limited liability companies, to avoid the need for a real estate transaction each time an owner sells their share. Alternatively, an ownership group could forego using a management company and self -govern the access to fractional housing. Known/Suspected Properties in Newport Beach Sagecrest reviewed the listings on various sites to identify properties in Newport Beach. Additionally, Sagecrest reviewed the City's database to find properties with mailing addresses that match the fractional home ownership companies. The following table lists the properties that are either known or suspected to be fractional ownership properties. FRACTIONAL HOUSING -1- ZZ 117 251h Street 121 Emerald Avenue Listed on Pacaso Listed on Pacaso 305 Grand Canal Listed on Pacaso 315 East Bay Avenue Listed on Ember 506 West Oceanfront Listed on Pacaso 1703 Plaza del Sur Listed on www.compass.com 2137 Miramar Drive Listed on Ember 2628 Ocean Boulevard City database mailing address match to Pacaso 3803 Marcus Avenue_ City database mailing address match to Pacaso 4106 River Avenue Listed on Pacaso BENEFITS AND IMPACTS OF FRACTIONAL HOUSING Fractional Housing Benefits The primary benefit of fractional homeownership is to own a second home at a more affordable price. According to county records, the home at 506 W Oceanfront sold on March 14, 2022, for $6,800,000. A 1/8 share of this house is currently being offered on Pacaso for $1,098,000. According to Equity Estates, a vacation home investment firm, the benefits of fractional housing are: 1 • It's more affordable - Perhaps a $410 home is out of reach, but $1M is right in your wheelhouse. Fractional ownership lets you get the home you want in the most desirable location at the price you can afford. This goes for home upkeep and maintenance, too. By sharing the costs of upkeep, fractional ownership makes long-term ownership a much more realistic possibility. • The home will get some love - No home should sit vacant 48 weeks out of the year. By sharing the ownership, the home will be opened up at regular intervals. Opening and closing windows and doors, running the water, turning on the AC and heater, and using amenities like the hot tub and pool —all of these are essential to maintaining the home. It provides an opportunity to identify issues early on and preserve the home's long-term value. • Peace of Mind - Fractional ownership also means sharing the burden of homeownership. Rather than a single point of failure (i.e., you), you essentially have a group that shares accountability, schedules maintenance, checks on the home, and divides the work and chores that would otherwise be left to a single owner. Another fractional housing company, Pacaso, claims that its model reduces demand in the housing market. Specifically, they state, "This demand on top of short supply has driven up home prices to unprecedented levels. Instead of eight second home buyers buying eight separate median -priced homes, which drives up prices even further, Pacaso consolidates those eight buyers into just one luxury home, which alleviates pressure at the median -priced tier."' To address concerns that they do not provide a benefit, Pacaso commissioned an economic impact analysis (Appendix A), which found that the average fractional ownership house generates an average of $48,390 in annual spending compared with the 1 https://eguityestatesfund.com/the-pros-and-cons-of-fractional-ownership, retrieved August 16, 2022 Z https://www.pacaso.com/blog/economic-impact-study, retrieved August 16, 2022 FRACTIONAL HOUSING -2- average second home. The study further found that fractional housing generates an average of $3,780 additional revenue in local and state tax dollars over the average second home. Fractional Housing Impacts Notwithstanding the aforementioned benefits, many communities have received complaints from their residents that fractional housing creates adverse impacts on the neighborhoods in which they are located and the City as a whole. Jurisdictions that have taken a proactive approach to preventing fractional housing in their communities all have expressed concerns about the following: • Fractional housing adversely impacts the affordability of full-time homes in the community. As more homes are taken out of the primary housing market and converted to vacation homes, the available housing stock is reduced. Even though the fractional housing companies focus on the high -end market, any loss in available housing supply results in increase costs across the entire market. • Due to the high turn -over of occupants, fractional housing could adversely impact long-term residents in the surrounding neighborhood. Given that vacations typically last for short periods of time, these properties would have similar impacts as short-term rentals, such as noise, loss of privacy, loss of community buy -in, and decline in property values. • The operation of the fractional homeownership companies within residential areas would result in the commercialization of residential neighborhoods. Several communities that Sagecrest spoke with noted that the operations of these companies would require a business license as they are establishing a commercial use. Sagecrest discussed concerns with fractional housing with a major opponent to fractional housing, Stop Pacaso Now3. This organization consists of volunteers who provide resources to residents to oppose fractional housing from being established in their community. This includes providing sample yard signs, sample letters, and volunteer coordination guidance. In discussing the effectiveness of their outreach, Stop Pacaso Now stated that they have had great success in communities in which residents have organized. Stop Pacaso Now has sponsored four petitions on change.org (Sonoma 4, Dry Creek Valleys, St. Helena', and a nationwide petition') against fractional housing with a total of 7,411 signatures. The Mitchell Hamline Law Journal of Public Policy and Practice published a journal article' that found that "The increasing commodification of single-family homes has had cascading effects on housing and on communities in general." Fractional housing is shared among various owners, as a result, an increase in 3 https://stoppacasonow.com/ 4 https://www.change.org/p/sonoma-county-planning-commission-pacaso-time-shares-don-t-belong-in-sonoma- neighborhoods, retrieved August 16, 2022 s https://www.change.org/p/pacaso-time-shares-don-t-belong-in-dry-creek-valley-s-agricultural-zoning-and- farmlands, retrieved August 16, 2022 ' https://www.change.org/p/mderosa-cityofsthelena-org-gellsworth-cityofsthelena-org-stop-pacaso-from- commercializing-our-residential-neighborhoods, retrieved August 16, 2022 ' https://www.change.org/p/pacaso-stop-pacaso-s-takeover-of-housing, retrieved August 16, 2022 s Markuson, Christopher (2022) "A Timeshare By Any Other Name: Fractional Homeownership and the Challenges and Effects of Commodified Single -Family Homes," Mitchell Hamline Law Journal of Public Policy and Practice: Vol. 43: Iss. 2, Article 1. Available at: https://open.mitchellhamline.edu/policypractice/vol43/iss2/1 FRACTIONAL HOUSING -3- 13 the number of units could decrease the demand for hotel rooms. This would likely result in a reduction in the amount of transient occupancy tax accrued by the City. COMMUNITY SURVEY Sagecrest researched other communities that have fractional ownership properties to determine if there is a concern with these properties and how the community is addressing these concerns. A summary of the actions is contained in the table below, followed by a description of each community. Notes (a) Code Amendment in Process (b) City Council is split on whether or not fractional housing is a timeshare FRACTIONAL HOUSING -4- Z4 City of Beverly Hills, CA On July 15, 2021, the City of Beverly Hills adopted an urgency ordinance establishing a 45-day moratorium on fractional ownerships of residential and commercial properties. In the staff report, the City expressed concerns that the properties would impact the residents in the surrounding neighborhood since they would operate as vacation rental homes. The City noted these properties would likely "experience high turnover rates of occupants, and result in impacts related to their operation such as noise, loss of privacy, loss of community buy -in, and decline in property values." In addition to these impacts, the City expressed concerns that converting homes to fractional housing would remove permanent housing from the housing market. Notwithstanding this prohibition, the moratorium does allow the City Council to approve a fractional ownership dwelling if they adopt a finding that "the fractional ownership of a property will not disturb the stability of a residential neighborhood or residential building and will not adversely impact future development, redevelopment, safety, and proper maintenance of the property" during a duly noticed public hearing. The moratorium was extended for ten months and 15 days on August 17, 2021 and extended again for a second year on June 14, 2022. The moratorium is now set to expire on July 14, 2023. The moratorium intends to allow the City staff time to study the issue and any potential impacts fractional housing may have on the health, safety, and welfare of those who live in surrounding homes and on the City as a whole. A copy of the urgency ordinance and staff report is included in Appendix B. City of Carlsbad, CA The City of Carlsbad noted that the use of fractional properties constitutes a timeshare. They have an existing timeshare ordinance (Appendix C), which they would enforce if they received a complaint. The City has not had an issue with operation of the fractional homes. City of Carmel by the Sea, CA The City is aware of fractional ownership companies and their assertation that they sell and manage properties, not timeshares. The City disagrees with this position and is of the opinion that any fractional housing has the same impacts on surrounding residential areas as short-term vacation rentals. Not only is it unlawful for any fractional ownership company to commence or carry on any kind of business in the City without first procuring a business license and pay the applicable business license tax, but any such business would be in violation of the City's prohibition of timeshares. The City noted that their regulations on transient commercial use of residential property have been previously adjudicated.' Carmel by the Sea has issued a cease -and -desist order (Appendix D), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance. City of Encinitas, CA The City is aware of the fractional ownership model and that other communities are working on regulations. Since Encinitas has not had any issues with fractional homeownership, they are not working on any code updates or taking enforcement actions. ' Ewing v. City of Carmel -by -the -Sea (1991) 234 Cal.App.3d 1579 FRACTIONAL HOUSING -5- 115 City of Fort Lauderdale, FL The City of Fort Lauderdale does not regulate fractional housing since they are considered transient lodging. Within the State of Florida, transient lodging is regulated by the State. Provided the fractional housing is within any zone which permits transient lodging, it would be allowed. City of Hermosa Beach, CA The City of Hermosa Beach classifies fractional housing as a timeshare. They are concerned that the operation of the fractional housing and timeshares could change the character of residential neighborhoods as the guest of the units may naturally stay out later, entertain more, and gather in larger numbers while on vacation. Currently, the Hermosa Beach Municipal Code does not regulate timeshares, but the City is processing a code amendment to prohibit timeshares in residential zones. If approved, the code amendment would allow timeshares in commercial zones with approval of a Conditional Use Permit. The Planning Commission conducted a public hearing on the code amendment on April 19, 2022, at which the Commission adopted a resolution (Appendix E) to recommend the City Council approve the code amendment. This amendment is currently scheduled for a public hearing before the Council on September 27, 2022. City of Indian Wells, CA The City of Indian wells does not currently regulate fractional housing but has received complaints from residents regarding impacts being created. The City Council discussed the matter on May 19, 2022, at which time the City Council was split if fractional housing constituents a timeshare or not. They expressed concerns about taking legal action on the fractional ownership companies due to the ongoing litigation in other jurisdictions. The City Council directed the City Attorney to return with options for them to consider on how to proceed. At this time, it is not known when this discussion will be taken back to the City Council. County of Monterey, CA Within areas of Monterey County that fall under the County's zoning jurisdiction, fractional ownerships are classified as timeshares. Pursuant to the Monterey County Municipal Code, timeshare projects are only allowed in zones where a hotel, motel, or similar visitor accommodation use would be permitted, and in such cases a Use Permit or a Coastal Development Permit would be required. Monterey County is aware of certain homes advertised as fractional housing that are located in the Carmel Highlands and the Del Monte Forest. Both areas are within the County's zoning jurisdiction and are within residential zones. Monterey County has issued a cease -and -desist order (Appendix F), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within these areas and will proceed through its code enforcement authority to obtain compliance. City of Napa, CA The City of Napa does not have an ordinance regulating fractional ownership citywide but does have a Master Development Plan (MDP) for the Stanly Ranch area. This MDP requires fractional ownership properties to pay a transient oriented tax for stays more than 14 days, but research indicates that no fractional ownership property has paid the TOT. In 2021, the City Council conducted a hearing to discuss the matter, during which residents complained of not wanting their neighborhoods to turn into a business venture for the wealthy. There has been no further discussion regarding fractional ownership. FRACTIONAL HOUSING -6- 10 Village of North Haven, NY The Board of Trustees of the Village of North Haven enacted a prohibition on fractional ownership, timesharing, and interval uses in single-family homes in January 2022 (Appendix G). The Board found that the needs of transients are adverse to the interest that protect and preserve single-family homes. Furthermore, the prohibition was deemed necessary to prevent the unwarranted commercialization of residential areas. In a discussion with the Town staff, the ordinance would be enforced through code enforcement if they receive a complaint, but they were unable to confirm if action had been taken on any existing units. City of Oceanside, CA The City of Oceanside is not aware of any specific issues surrounding single-family homes used as fractional ownerships. The City does allow fractional ownership in their Downtown District as it pertains to traditional timeshare listings, provided a Conditional Use Permit is approved for the use. Given that most of these fractional ownership listings resemble short-term rental models, staff would consider fractional housing has short-term rentals in single-family homes, which would require the issuance of a short-term rental permit. City of Pacific Grove, CA Currently the City of Pacific Grove prohibits timeshares throughout the City. The City Council accepted public comment on fractional housing and timeshares on May 18, 2022, at the conclusion of which the Council directed staff to review the City's current timeshare ordinance and recommend changes to better effectuate the City's prohibition of timeshare projects, including fractional housing. The City anticipates having the draft ordinance to their Planning Commission in October 2022 and to the City Council by the end of year. City of Palm Desert, CA In November 2021, the City Council discussed the emergence of fractional ownership businesses within the City. In the Staff Report, the City Attorney opined that the fractional homeownership "model fits within that definition of "time- share plan" as co -owners receive ownership rights to use a property for less than a year on a recurring basis" (Appendix H). The City only allows timeshares in the Planned Residential, General Commercial, and Planned Commercial Resort zones. On May 12, 2022, the City Council adopted an ordinance updating the timeshare provisions of the Palm Desert Municipal Code. The updates include expanding the definition of timeshare that includes the shared use of any property, where the owners have the right of occupancy for less than full year during any given year. The ordinance also established enforcement procedures for violations of the timeshare ordinance. City of Palm Springs, CA The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Timeshares are only permitted in zoning districts where hotel uses are permitted and with approval of a Conditional Use Permit. Notably, timeshares are not permitted in single-family zones. Furthermore, the City's business license ordinance requires any party that is transacting any business within the City to first procure a business license and pay the applicable business license tax. Although the fractional ownership companies claim that they only purchase and sell luxury homes, and therefore they do not impact the availability of affordable housing. However, the City believes the basic laws of supply and demand dictate that every home that is made unavailable to a full-time resident, FRACTIONAL HOUSING -7- z7 whether "luxury" or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City. In addition to the loss of housing, fractional ownership companies who involve multiple investors will result in their guests rotating the occupancy of the dwelling throughout the year. Although the fractional owners are not technically renters, the City believes the neighbors can expect the property to have many of the same secondary impacts that are caused by vacation rentals. The City of Palm Springs has issued a cease -and -desist order (Appendix 1), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City and will proceed through its code enforcement authority to obtain compliance. City of Park City, UT Park City, Utah allows fractional ownership in single-family homes provided the ownership obtains approval of a Conditional Use Permit. The areas in which the City allows fractional ownership are identified in the City's General Plan and consists of areas that support the resort economy. These are the same areas that allow timeshares and private residential clubs. The fractional ownership properties must comply with specific prohibitions such as on -street parking, nightly rentals, the outdoor display of goods and merchandise, and signage. Additionally, the fractional housing must obtain approval of a management plan that outlines a satisfactory level of management and maintenance of the fractional housing. The City is currently preparing a code amendment which would prohibit fractional ownership in most single-family zones. The amendments would allow fractional housing in zones where timeshares and private residential clubs are currently permitted. The amendment would also require a business license for fractional ownerships, submittal of a management plan, and prohibition of nightly rentals, on -street parking, outdoor display of goods, signs, and commercial uses (Appendix J). On August 30, 2022, the Planning Commission and City Council are scheduled to conduct a joint work session on the proposed amendments. City of Santa Barbara, CA The City of Santa Barbara does not have any regulation for fractional ownership. The City has received complaints regarding fractional housing in single-family residential area. The Planning Commission and City Council have conducted hearings on the matter but have not given staff direction for future research to regulate these ownerships. City of Santa Cruz, CA Even with fractional homes being offered within city limits, City staff was not aware of this type of ownership model. The City does not currently regulate fractional ownership or timeshares. Notwithstanding this, the City Council has placed a ballot initiative on the November election to establish a tax on residential properties that are occupied less than 120-days a year (Appendix K). City of South Lake Tahoe, CA The City stated that a property sale or deed that results ownership rights in or the right to use accommodations for a period of time less than full year during any given year is considered timeshare. Even though timeshares ten or fewer units are not subject to the Vacation Ownership and Timeshare Act of 200410, they are still subject to local authority. In fact, Section 11280(b) of the Business and Professions 10 California Business and Professions Code §§1121-11288 FRACTIONAL HOUSING -8- 12 Code expressly preserves the authority of local jurisdictions to regulate timeshares through "zoning, subdivision, or building code or other real estate use law, ordinance, or regulation." South Lake Tahoe has issued a cease -and -desist order (Appendix L), ordering Pacaso to stop all advertising and sale of fractional ownership of residential properties within the City until such time they comply with the City's timeshare ordinance. City of Sonoma, CA On January 19th, 2022, the Sonoma City Council voted unanimously to adopt an urgency ordinance to prohibit timeshares and fractional housing. The Council adopted the urgency ordinance due to concerns that these uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City. Furthermore, there are concerns that timeshare and fractional housing interest uses increase traffic and noise impacts as they have the same character as commercial hotels, motels, and other transient occupancy uses making them inappropriate for residential zones. On June 15, 2022, the Sonoma City Council adopted an ordinance (Appendix M) to amend the code to prohibit all timeshares and fractional housing in the City. City of St. Helena, CA Within St. Helena, timeshares are only permitted in Service Commercial District and Central Business District. The City Council recently updated the timeshare ordinance to specifically prohibit co -ownership of residential properties (Appendix N). The ordinance updated the definition of a timeshare to broaden its applicability to incorporate fractional housing and limits timeshares uses to their Service Commercial and Central Business District zone. The ordinance also bolsters the City's enforcement authority by including a specific prohibition on timeshare uses in most zones, but also outlines the enforcement process and mechanisms. The enforcement provision was modeled after the City's short-term rental ordinance to which they note has been very effective. It is important to note that Pacaso filed a lawsuit against the City in federal court" (Appendix O). Pacaso seeks to stop the City from enforcing their timeshare ordinance against Pacaso and other fractional ownership properties because they feel the timeshare ordinance is invalid and enforcement of said ordinance violates the fractional homeowners and Pacaso's due process protection afforded by the 14tn amendment to the U.S. Constitution. Pacaso had also claimed that the City's enforcement actions constituted an intentional interference with prospective economic advantage; however, the Court rejected this portion of the claim. The lawsuit remains pending. Town of Truckee, CA In May 2022 the Town of Truckee adopted a general zoning code cleanup ordinance (Appendix P). Among the various amendments included in the ordinance, the Town Council approved changes to the Town's timeshare uses. This includes outlining the application process, development standards and enforcement and violation protocols fortime-share uses; as well as clarifying that timeshare properties are only allowed within existing legal nonconforming single-family residences in the CG (General Commercial) and CN (Neighborhood Commercial) zones. 11 Pacaso Inc. v. City of St. Helena, 21-cv-02493-WHO (N.D. Cal. Jul. 15, 2021) FRACTIONAL HOUSING -9- 19 City of Vail, CO The City does not have regulations regarding fractional ownership. Explaining the concerns of the business model, the City Attorney would agree it resembles a timeshare model but does not see how any City ordinance would be able to regulate it since it is the ownership of a property rather than a use in a portion of a building. APPENDICES FRACTIONAL HOUSING -10- 20 Due to bulk, appendices available online at : www.newportbeachca.gov/fractionalownership 21 Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) Rodriguez, Clarivel Subject: FW: Planning Commission Special Mtg - 2022-10-06 - CODE UPDATE RELATED TO FRACTIONAL HOMEOWNERSHIP (PA2022-0202) Attachments: 2022-09-27 City Council Mtg-Comments to Fractional Ownership.pdf; Pacaso Mailed Flyer Encouraging Fractional Ownership.pdf; Sirkin Law -Fractional Ownership Resources and Articles.pdf; Pacaso-Homeowner Scheduling FAQs.pdf, Email to City Council - Mtg 2022-09-13 - SS2 Fractional Home Ownership Update.pdf; Sirkin Law -Fractional Ownership & Timeshare Law In CA_Highlighted.pdf From: Carmen Rawson <carmen rawson@att.net> Date: October 5, 2022 at 2:28:36 PM PDT To: "Kleiman, Lauren" <Ikleiman@newportbeachca.gov>, "Ellmore, Curtis" <CEllmore@newportbeachca.gov>, "Rosene, Mark" <mrosene@newportbeachca.gov>, "Harris, Tristan" <THarris@newportbeachca.gov>, "Klaustermeier, Sarah" <sklaustermeier@newportbeachca.gov>, "Lowrey, Lee" <Ilowrev@newportbeachca.gov>, "Weigand, Erik" <eweigand@newportbeachca.gov> Cc: "Jurjis, Seimone" <siuriis@newportbeachca.gov>, "Campbell, Jim" <JCampbell@newportbeachca.gov>, "Murillo, Jaime" <JMurillo@newportbeachca.gov>, "Leung, Grace" <gleung@newportbeachca.gov>, "Nichols, Heather" <hnichols@newportbeachca.gov> Subject: Planning Commission Special Mtg - 2022-10-06 - CODE UPDATE RELATED TO FRACTIONAL HOMEOWNERSHIP (PA2022-0202) [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Planning Commissioners, As a resident of Newport Beach (Balboa Peninsula) I am concerned regarding the proliferation of "Fractional Ownership" (Shared Deeded Ownership Timeshares)" in our city's residential zoning areas (R-1, R-2, R-M). I am forwarding to your attention a letter and attachments I had sent to City Council members and City staff addressing the "City Council Mtg 2022-09-27 - Special 4:00 PM Meeting_Fractional Home Ownership". I am also attaching an email had sent City Council members and City staff addressing the "City Council Mtg 2022-09-13 - SS2 Fractional Home Ownership Update". Since November 16, 2021, when the "Fractional Ownership" issue was first discussed at a City Council meeting the number of known "Fractional Ownership" (Timeshares) has grown from 1 to 12. That is in less than 1 year so it is imperative to expedite the regulation/control/ban of the "Fractional Ownership" as a timeshare business model. Here is a list of the known properties being operated as "Fractional Ownership" timeshares: Pacaso (9): 117 25th St 121 Emerald Av (Balboa Island) 305 Grand Canal (Balboa Island) 307 Goldenrod Av (Corona del Mar) 506 W Oceanfront 1703 Plaza Del Sur (Balboa Peninsula Point) 2628 Ocean Blvd (Corona del Mar) 3803 Marcus Av (Newport Island) 4106 River Av Ember (2): 315 E Bay Av 2137 Miramar Dr (Balboa Peninsula Point) Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) Nelson Family Estates (1): 310 Fernando St During the City Council Mtg on 2022-09-27 Pacaso's representatives and Pacaso's operated fractional share owners insisted they are not a "timeshare". By all intent and purposes they are. Further to the information I provided in my letter a question to Pacaso is: can two (2) separate fractional share owners occupy the property at the same time? If the answer is "No" then Pacaso's business model is a "timeshare". Pacaso also stated, during the 2022-09-27 City Council mtg, they do not limit the time a fractional share owner may use the property. That is not what their FAQs state (see attached). Each 1/8 owner is allowed a total of 44 nights in a 365 day period and to be able to stay at the property for additional nights (when available) the fractional share owner is charged a fee by Pacaso. Here is exactly what Pacaso's FAQs say: "WHAT IF I WA NT TO ENJOY MORE STAYS IN MY HOME? As a benefit to owners, you are able to book time beyond your maximum annual stay night threshold of 44 nights, pending home availability. A modest nightly operating fee is assessed to cover operating and ownership costs. The fee is used to offset costs for other owners, and there is no markup added. Owners will find rates to be dramatically less than booking a similar, non-Pacaso home." I also would like to bring to everyone's attention the reason Pacaso and other "Fractional Ownership" (Timeshare) operators limit the number of fractional ownership to eight (8) is because that way they are not regulated by the California's "Vacation Ownership and Time-share Act of 2004" (Chapters 11210 - 11288) - see attachment, which states: In Chapter 11210 (Application) the following is written: (b) This chapter does not apply to any of the following: (1) Time-share plans, whether or not an accommodation is located in this state, consisting of 10 or fewer time- share interests. Use of an exchange program by owners of time-share interests to secure access to other accommodations shall not affect this exemption. In Chapter 11212 (Definitions) the following is written: (z) "Time-share plan" means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives ownership rights in or the right to use accommodations for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A time-share plan may be either of the following: (1) A "single site time-share plan," which is the right to use accommodations at a single time-share property. The definition of "Time-share plan" used by other cities came from the California's "Vacation Ownership and Time-share Act of 2004" (Chapter 11210). Again, the "Fractional Share Owners" that are part of Pacaso and other operators business model/properties do not have the "right to use accommodations for a period of time less than a full year during any given year". Their operations are "Timeshares". I also would like to address Pacaso's 2022-09-27 comment stating that the City of Newport Beach has tools to regulate their properties. As one of those tools they mentioned the Short Term Lodging (STL) Ordinances the City has enacted. Note the STL Ordinances do not apply to the "Fractional Ownership" business model. When a STL unit does not follow the established ordinances/regulations the City of Newport Beach has the means to suspend or even further revoke a STL permit. With "Fractional Ownership" there is nothing the City will be able to do. You can not suspend or revoke someone's property ownership. Please take into consideration the information provided herein when reviewing the subject matter and as you provide City staff the path forward/direction regarding "Fractional Ownership" as a "Timeshare" operation in our city's residential zoning areas. Sincerely, Carmen Rawson Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) Citv Council Meetina 2022-09-27 — Saecial Meeting at 4:00 am — Fractional Homeownershi City Council Members and City Staff, Timeshares are Not Allowed in Newport Beach's Residential Coastal Zoning Districts As mentioned during the 2022-09-13 City Council Mtg (SS2 Fractional Home Ownership Update) the business model being operated by Pacaso, Ember Homes, Nelson Family Estates (and potentially other companies we still do not know about) in residential zoning districts of Newport Beach is not allowed by the Newport Beach Municipal Code (NBMC) as their business model is a "Shared Deed Ownership Timeshare" NBMC Chapter 21.18 Residential Coastal Zonina Districts Time Shares are not allowed per Table 21.18-1 (under Visitor Accommodations only Bed and Breakfast Inns and STLs are allowed in R-2 and RM zoning) The City of Newport Beach already has the tools to issue to Pacaso, Ember Homes and the Nelson Family Estates an "Immediately Cease and Desist Unlawful Operations" letter as done by other cities dealing with the proliferation of this business model in their communities. Or as an option a Moratorium on "Fractional Ownership (Timeshare)" must be urgently issued. Note Pacaso is mailing flyers to Newport Beach homeowners actively encouraging the "fractional ownership" concept. See attached copy of the Pacaso's flyer we received this week. Pacaso/Ember/Nelson Business Model is a "Shared Deed OwnershipTimeshare" These companies disguise their "shared deeded ownership timeshare" business under the term of "fractional ownership". Please refer to Investopedia where, under the definition of Timeshare, two (2) types of Timeshare Ownership are described. Timeshares are typically structured as shared deeded ownership or shared leased ownership interest. Shared Deeded Ownership: Shared deeded ownership gives each buyer a percentage share of the physical property, corresponding to the time period purchased. Shared deeded ownership interest is often held in perpetuity and can be resold to another party or willed to one's estate. Shared Leased Ownership Interest: Shared leased ownership interest entitles the buyer to use a specific property for a fixed or floating week (or weeks) each year for a certain number of years. In this structure, the timeshare developer retains the deeded title to the property, unlike the shared deeded ownership structure where the owner holds the deed. Due to the bad reputation associated with traditional (shared leased ownership interest) timeshares companies such as Pacaso have cleverly use a different term for their business model. And "fractional ownership" is not the only term being used in the industry. As City Staff looks into this matter please ensure all other terms are addressed (private residence club, destination club, vacation club, condotel, etc). For your reference see attached Adobe file named "Sirkin Law Fractional Ownership Resources and Articles" where the replacement of the term "timeshare" by terms such as "fractional ownership" is discussed. Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) "Fractional Ownership" versus "Shared Deeded (Fractional) Ownership Timeshare" The issue under review is not a fractional ownership (co -ownership) through an LLC, Trust, etc where the fractional owners are family members and/or friends. What is under review is a fractional ownership where specific/structured time restrictions exist for the use of the dwelling by the various co -owners (who are mostly strangers among them). Several family members or friends (co -owners) co -owning a property through an LLC, Trust, etc is allowed as they do not have the time restrictions Pacaso's business model has. For said LLCs, Trusts, etc several co -owners may occupy the dwelling simultaneously and if one co-owner does not use the dwelling other co - owners may use the dwelling instead with no specific time limit. Pacaso's "fractional ownership" business model has a structured/restrictive control of the time each fractional owner can spend at the dwelling. Pacaso's website clearly states, under FAQs and for an 1/8 ownership (see attached file), a) each fractional owner can have a maximum of 6 stays, b) each stay must be no less than 2 nights and no more than 14 nights, c) each owner has the right to a maximum of 44 nights in a year. That is a "Shared Deeded Ownership Timeshare" — no matter what "label" Pacaso (or Ember Homes or Nelson Family Estates" uses to name it. Regarding the fact that a large percentage of properties in Newport Beach have titles held under LLCs, Trusts, etc, as Pacaso highlighted during the 2022-09-13 city council meeting, is immaterial to this discussion. Many property titles are held by LLCs, Trusts, etc due to Estate Planning or even to reduce liability - not because the properties have "fractional ownership". Timeshares are allowed in Newport Beach's Mixed -Use and/or Commercial Coastal Zoning Districts The Newport Beach Municipal Code does allow timeshares in other areas of the city: NBMC Chapter 21.20 Commercial Coastal Zonina Districts Time Share Facilities are only allowed in specific commercial zoning, per Table 21.20-1 (under Visitor Accommodations only allowed in CG and CV zoning) NBMC Chapter 21.22 Mixed -Use Coastal Zoning Districts Time Shares are allowed in all mixed -use zoning districts, per Table 21.22-1 (under Visitor Accommodations) However, all the Newport Beach properties so far identified as part of Pacaso, Ember Homes and Nelson Family Estates "porfolio" are located in residential zoning districts. Time Share Definitions in the Newport Beach Municipal Code The following definitions are listed under NBMC Chapter 21.70 — Definitions. Section 21.70.020 — Definitions of Specialized Terms and Phrases. Under "Visitor Accommodations (Land Use)' "Time share project" means a development in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of an ownership interest in a lot, unit, room(s), or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the project has been divided and shall include, but not be limited to, time share estate, interval ownership, fractional Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) ownership, vacation license, vacation lease, club membership, time share use, hotel/condominium, or uses of a similar nature See also "Limited -Use Overnight Visitor Accommodations (LUOVA)." "Time share estate" means a right of occupancy in a time share project that is coupled with an estate in the real property. On 2022-09-13, during the city council meeting break, I was told by City Staff (Mr. Seimone Jurjis and Mr. Campbell) that the concern was the inclusion of the word "development" as part of the "Time share project" definition. And my question is why is that a concern? The following definition is listed under NBMC Chapter 21.70 — Definitions, Section 21.70.020 — Definitions of Specialized Terms and Phrases. Under "Visitor Accommodations (Land Use)' "Development" means on land, in or under water, the placement or erection of solid material or a structure; discharge or disposal of dredged material or of gaseous, liquid, solid, or thermal waste; grading, removing, dredging, mining, or extraction of materials; change in the density or intensity of use of land, including, but not limited to, subdivision in compliance with the Subdivision Map Act (commencing with Government Code Section 66410), and another division of land, including lot splits, except where the land division is brought about in connection with the purchase of the land by a public agency for public recreational use; change in the intensity of use of water, or of access thereto; construction, reconstruction, demolition, or alteration of the size of a structure, including a facility of a private, public, or municipal utility; and the removal or harvesting of major vegetation other than for agricultural purposes and kelp harvesting. Having an existing single family (or duplex or multi -family) dwelling (a structure) on a plot of land is covered by the "Development" definition contained in the NBMC. Note the above listed definition of "Time share project" (as shown in the NBMC) is not stating the "development" has to be "new" (non existing, in the future). It also does not specify the "development" has to be a large number of units (as it may apply to "Time Share Facilities"). So I would like to understand why the inclusion of the word "development", in the "Time share project" definition, is a concern for City Staff. I urge City Council members and City Staff to take immediate action to stop the "Shared Deed Ownership Timeshare" operations in our city's residential areas. Prompt action is needed. Sincerely, Carmen Rawson 4/12/22, 10:51 AM Planning Commission Special Meeting - October 6, 2022 Homeowner Scheduling FAQs I Pacasqtem No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) S JSD We're here to help X HOW MUCH TIME WILL I HAVE IN MY HOME EACH YEAR? Your access depends on the number of shares you own. Each share gives owners up to 44 stay nights, and they are tracked on a 365-day basis. For example, if your ownership anniversary date is October 18, 2021, we'd count the total number of stayed nights between October 19, 2021, and October 19, 2022. X WHAT IF I WANT TO ENJOY MORE STAYS IN MY HOME? As a benefit to owners, you are able to book time beyond your maximum annual stay night threshold of 44 nights, pending home availability. A modest nightly operating fee is assessed to cover operating and ownership costs. The fee is used to offset costs for other owners, and there is no markup added. Owners will fi nd rates to be dramatically less than booking a similar, non-Pacaso home. X HOW DO SHORT -NOTICE STAYS WORK? Short -notice stays give owners more fiexibilityto booktime intheir homes without having to plan far in advance. Open dates in the Pacaso app can be booked as short -notice stays 2-30 days ahead of your arrival date. Short -notice stays do not count toward an owner's general stay count (6 general stays per share of ownership), but they do contribute to your total annual stay nights. (Note: For homes with unsold shares, the short -notice booking window is 2-7 days ahead of the arrival date.) X HOW DOES THE SCHEDULING APP WORK? The Pacaso app is powered by our SmartStayTM scheduling system. It's easy to use and equitable for owners based on their number of shares owned. The app displays real-time availability and supports two tvnes of owner stays: genera I and sho rt-notice. Our website uses cookies to help us improve your browsing and shopping experience. By continuing, you agree to our use of cookies. Accept 1JUI IGI QI JLQY LI IQL IQIIJ VI IQJL.JGUIQ I UQLU IUUGI QII IV IIUQYJ VI L.JUY UIQI IVUQI UVUI ILJf. https://www.pacaso.com/faq/scheduling 2/7 4/12/22, 10:51 AM Planning Commission Special Meeting - October 6, 2022 Homeowner Scheduling FAQs I Pacasgtem No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) S JSD Over time, the SmartStay system will learn each owner's stay preferences and make X DO OWNERS HAVE A PRIORITY RANK ORDER FOR SCHEDULING? No, owners schedule their stays based on real-time availability; there is no set ranking order to select dates. This gives all owners equal access to dates important to them, regardless of when they purchased their home. X HOW MANY GENERAL STAYS CAN I SCHEDULE? Owners may hold up to six general stays at a time per 1/8 share owned. Stays must be for a minimum of two nights. A stay with a duration of 2-7 nights counts as one general stay, while a stay with a duration of 8-14 nights counts as 2 general stays. X HOW LONG ARE OWNER STAYS? The maximum length of a stay is based on shares owned. Owners of one share can enjoy a stay anywhere from 2 to 14 nights. A stay with a duration of 2-7 nights counts as one general stay, while a stay with a duration of 8-14 nights counts as 2 general stays. Owners of two shares have the option to book stays up to 28 nights. In off-season periods, owners also have the option to extend the length of their stay. X CAN I BOOK BACK-TO-BACK STAYS? No. To ensure ongoing access for all owners, the period between your arrival date and your prior departure must be equal to or greater than the number of nights of your last stay. X WHAT IS A SPECIAL DATE? Special dates include select U.S. federal holidays as well as popular local events. They vary for each region, but they are clearly marked with a blue dot in the scheduling calendar in the Pacaso Our website uses cookies to help us improve your browsing and shopping experience. By continuing, you agree to our use of cookies. Accept HOW MANY DATES CAN AN OWNER https://www.pacaso.com/faq/scheduling 3/7 Planning Commission Special Meeting - October 6, 2022 4/12/22, 10:51 AM Homeowner Scheduling FAQs i Pacasgtem No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) S JSD X WHAT IF I DON'T GET THE SPECIAL DATE I WANT? SmartStay is designed to be equitable, and each owner is guaranteed one special date per share. We recognize you may not always secure your fi rst choice of a special date in a given year (e.g., Christmas), but our 24-month stay calendar gives you the opportunityto request the date in the future. + HOW FAR AHEAD CAN I BOOK A STAY? X WHAT IF I NEED TO CANCEL A STAY THAT I'VE BOOKED? Owners can cancel with no penalty 60 or more days before arrival. Cancellations will trigger a notification to other owners, alerting them of the newly available dates. For cancellations made within 59 days of arrival, there is no penalty for the cancelling owner if the dates are rebooked by another owner. If the dates are not rebooked, the dates count toward the cancelling owner's annual stay night cycle for the year. X ARE ALL STAY REQUESTS ACCEPTED? HOW AM I NOTIFIED OF THE STATUS OF MY REQUEST? If a date is shown as available in the calendar, you can instantly secure the stay, and you will see your booked stay dates listed in the Upco m1ng tab under Stays in the Pacaso app. X WHAT TIME IS ARRIVAL AND DEPARTURE FOR OWNERS? Standard arrival and departure is noon, but owners can request earlier arrivals and later departures. All efforts will be made to accommodate your requests if the calendar and cleaning schedules permit. You will be notified if this is possible 48 hours prior to your arrival and/or departure. Our website uses cookies to help us improve your browsing and shopping experience. By continuing, you agree to our use of cookies. Accept Every region has a dedicated Home Manager who supports owners with scheduling, home https://www.pacaso.com/faq/scheduling 4/7 Item No. 2a Aaaltfonal Materfals Neceivea Code Update Related to Fractional Homeownership (PA2022 0202) C- LEARN MORE ABOUT HOW TO SELL WITH PACASO 0 pacaso-comiselidown AS FEATURED IN WSJ JIIL Bloomberg FORTUNE Cl-he XcutflorkThnes 10 /� FIRST CLASS MAIL PRESORTED FSC U.S. POSTAGE m ° NIX PAID F8G'C0136l0 ST. LOU15, MO PERMIT NO. 19011 KENNETH L RAWSON PO BOX 1221 NEWPORT BEACH, CA 92659-0221 Planning Commission Special. Meetin - October 6, 2022 10/5/22, 12:46 PM AT&T Yahoo Mail - City Council Mtg 2022-09-13 - SS2 Fractional I o% gQrAId45'it %aterials Received Code Update Related to Fractional Homeownership (PA2022-0202) City Council Mtg 2022-09-13 - SS2 Fractional Home Ownership Update From: Carmen Rawson (carmen_rawson@att.net) To: citycouncil@newportbeachca.gov Cc: gleung@newportbeachca.gov Date: Monday, September 12, 2022 at 04:15 PM PDT City Council members, Regarding the comprehensive Fractional Homeownership report, prepared by Sagecrest and submitted by City staff for the subject meeting, please note the following additional information: 1. In addition to the Newport Beach property addresses listed in the Table, on page 5 of the report, please note that as of today Pacaso is also advertising the sale of fractional ownership for the property located at 307 Goldenrod Av (see attached file). Also, note that 1703 Plaza Del Sur is advertised by Pacaso (in addition to Compass, see attached file). 2. Pacaso FAQs (see attached file) state the fractional owner stay can be as short as 2 nights and as long as 14 nights, with each owner having a total of 44 nights (based on 1/8 ownership). The FAQs also state each owner can have "up to six general stays at a time". I am not sure what "at a time" means in that sentence. However, if each owner can have 6 stays in a 12 months period then that could translate into a total of 48 separate stays in a 12 month period. From an operation stand point this is very similar to the operation of a a Short -Term Lodging Unit (STL Unit). 3. Ember Homes (Ember) has a similar scheduling practice (see attached file). Note that for a 1/12 ownership each fractional owner gets a total of 30 nights and the stay can only be a maximum of 10 nights. However, the total number of stays in a 12 months period would still be 48 separate stays. 4. Besides Pacaso and Ember there are other companies advertising Fractional Ownership deals in the internet. Although these companies may not been operating in Newport Beach today they may be planning to bring their business to our city in the near future. So action must be taken now to stop the fractional ownership tsunami. 5. Elite Destination Homes (Elite) is an international company already expanding their business in the USA. They have fractional ownership listings as well as rental listings in La Jolla - California, Wisconsin, North Carolina, Wyoming, etc. 6. Note Elite offers a "Home Exchange" program where you can exchange a stay at the property you (fractionally) own with a stay at another property. So how is this different than a "time share"? Also, Elite offers to rent out the property you (fractionally) own and get you rental income if you do not want to use all your days/stays. So how is this different than a STL Unit? See attached 4 files covering this information. 7. Another company offering Fractional Ownership is Luxury Fractional Guide (see attached 2 files). 8. Note that VacatiaPlus (see attached file) offers a Fractional Owners Exchange program (as does Elite) 9. Companies selling the Fractional Ownership concept firmly state that fractional ownership is not the same than having a time share. It is interesting to see that Re/Max Premier Timeshare Resale is reselling Fractional Ownership (see attached file). 10. For your information I have attached 2 articles about Arrived Homes (Arrived). Arrived is funded by Forerunner Ventures and backed up by Jeff Bezos. They say someone could buy a Fractional Ownership of a (vacation) property for as little as a $100 investment. So forget the 1/8 or 1/12 Fractional Ownership scheme. How about the 1/100 Fractional Ownership case? 11. Lastly, Fractional Ownership controlled/administered by Pacaso and/or Ember may be decently managed as they claim they will not allow Fractional Owners to rent out the property and apparently they do not have (so far) an Exchange Program. But how about the Fractional Ownership properties that may be managed by the individual Fractional Owners without rules among themselves about renting and/or exchanging the property? Without City established regulations we may get chaos. It is my understanding that the current City of Newport Beach Municipal Code does not allow "time shares" in the city. And as we all know the STL units are regulated in our city (business license and STL permit required, operators must pay TOT and comply with the enacted Ordinances, maximum number of STL units allowed in the city, etc). I urge you to take action and approve/adopt a Moratorium on Fractional Ownership properties in Newport Beach right away. That would provide additional time for City staff and our City Attorney to further research the options the City about:blank 1/2 Planning Commission Special. Meetin - October 6, 2022 10/5/22, 12:46 PM AT&T Yahoo Mail - City Council Mtg 2022-09-13 - SS2 Fractional I o% gQrAIdiRit %aterials Received Code Update Related to Fractional Homeownership (PA2022-0202) has to stop/contain/regulate Fractional Ownership in our community. Please take all the information provided herein into consideration during the subject meeting. Sincerely, Carmen Rawson Pacaso_307 Goldenrod Av Advertising.png 843.4kB Pacaso_1703 Plaza Del Sur Advertising.png 1MB Pacaso_Homeowner Scheduling FAQs.pdf 205.8kB Ember -Fractional Shares -Scheduling Stays.png 184.9 k B Elite Destination Homes -Fractional Ownership_l.png 181.7kB Elite Destination Homes -Fractional Ownership_2.png 182.5kB Elite Destination Homes -Fractional Ownership_3.png 187.7 k B Elite Destination Homes -Fractional Ownership_4.png 174.9kB Luxury Fractional Guide -Reselling of Fractional Ownership_l.png 289.3kB Luxury Fractional Guide -Reselling of Fractional Ownership_2.png 419.5kB VacatiaPlus_FAQs_Fractional Owners Exchange Program.png 201.2kB ReMax Premier Timeshare Resale -Reselling Fractional Ownership.png 201.8kB ReMax Premier Timeshare Resale -Reselling Fractional Ownership.png 201.8kB Forerunner Funds Arrived Homes.pdf 219.1kB Arrived Homes Shatters Funding Record With 6 Rental Properties Fully Funded In 8 Minutes.pdf 210.9kB about:blank 2/2 Planning Commission Special Meeting - October 6, 2022 9/12/22, 11:56 PM Fractional Ownership Resources and Articles — Sir4p6p?g8k%- Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) SIRKIN LAW Home Fractional Ownership Resources and Articles Introduction To Fractional Ownership The phrase "fractional ownership" is typically used to describe shared ownership of a vacation or resort property by people in an arrangement which allocates usage rights based on time. In other words, only one owner will be allowed to use a particular home or apartment at a particular time. The terms, private residence club (or "PRU), destination club, vacation club, quartershare, timeshare, and vacation home partnership are also used to describe variations on these arrangements, and there are no consistent distinctions in the use of these descriptions. Fractional ownership arrangements should not be confused with condohotels or condotels, in which each participant has whole ownership of a particular hotel room or suite Fractional ownership arrangements can be applied to a single home or apartment (typically referred to as a "one-off fractional") or to a multi -unit building or resort development. In multi -unit developments, each co-owner may have ownership rights to all the units, some of the units, or only one unit, and his/her usage rights, and cost obligations, may or may not correspond to his/her ownership rights. Groups can be assembled by a real estate development or hotel company, an individual builder, Realtor or seller, one or more of the prospective buyers/users, or groups of friends or family members. In recent years, there has been an explosion of interest in fractional ownership arrangements involving a single home or apartment led by the launch of several web -based platforms designed to organize, facilitate and manage these arrangements. For example, SirkinLaw client Pacaso locates suitable properties, solicits and qualifies prospective members for each owner group, provides purchase money https://andysirkin.com/fractional-ownership/ 1 /5 Planning Commission Special Meeting - October 6, 2022 9/12/22, 11:56 PM Fractional Ownership Resources and Articles — Sir4p6p?g8k%- Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) financing, renovates and outfits the shared home, provides ongoing calendaring, maintenance and management services, and even offers an "assessment guarantee" under which it effectively removes the risk theoretically created when a group member does not pay his/her share of costs. The advent of well -capitalized and comprehensive marketing and support platforms has created a disruption or inflection point in the fractional ownership/timeshare industry similar to those spawned by Uber in the taxi industry and AirBNB in the hotel industry. Recall that there was a time when private, independent car owners carrying paying passengers, or individual homeowners hosting paying guests on a nightly basis, were considered fringe economic activities that would never become serious alternatives to taxis and hotels (respectively). For may years, that same skepticism applied to the idea of small groups of strangers sharing a vacation home. (Believe me, I know: for over 15 years, I touted the idea of single -home fractional ownership at fractional ownership/timeshare industry conventions and symposia around the world, and was routinely treated with respectful dismissiveness.) Today, single - home vacation fractionals represent the fastest -growing segment of fractional ownership. The Difference Between Fractional Ownership and Timeshare It is incorrect to say that timeshare involves the sale of time, weeks or usage, while fractional ownership involves full titled ownership. Today, many timeshare properties involve titled ownership. The real differences between timeshares and fractional ownership arrangements are: • Fractional ownership typically involves more usage than timeshare for each owner each year • Fractional ownership typically involves fewer owners than timeshare • Fractional ownership is typically more expensive than timeshare Why Is Fractional Ownership Becoming So Popular? Although many people dream of owning vacation property, most either can't afford the type of property they want, or reason that they would not use the vacation home often enough to justify the expense. Fractional ownership provides a solution to these problems by allowing each co-owner to pay only a fraction of the costs and ongoing expenses of vacation home ownership, and share the risks of unforeseen maintenance problems and value depreciation with others. Fractional ownership is increasingly popular among those who already own a vacation home (or even a primary residence in a resort community) but feel burdened by the expense, upkeep and management of a property they use infrequently or are regularly absent from during certain seasons. Rather than sell a home they love, these people opt to sell one or more fractional ownership interests to others who will https://andysirkin.com/fractional-ownership/ 2/5 Planning Commission Special Meeting - October 6, 2022 9/12/22, 11:56 PM Fractional Ownership Resources and Articles — Sir4p6p?g8k%- Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) use the home when the original owner does not and will help share the costs and burdens. Besides lowering cost and time burdens, shared ownership can free capital for the purchase of other resort property, or for alternative investments. It can also provide an alternative when selling the entire home proves difficult due to market conditions. Fractional ownership can be a significantly less expensive and more attractive alternative offering in a new development, giving some buyers an incentive or opportunity to purchase that would otherwise be lacking. The builder or developer can thus open up a new market and access a different group of potential customers by offering fractional ownership, a particularly attractive opportunity when whole ownership sales are slow. Marketing a less costly ownership option may also increase the overall visibility of, and traffic to, the project sales sites, and increase sales volume of whole ownership. Finally, opening a project to fractional ownership will generally increase overall usage of the property, which can enhance the viability and financial performance of amenities and ancillary services such as a spa, golf course, ski resort, or restaurant. Learn More About Fractional Ownership This page is a gateway to many articles on all aspects of fractional ownership, categorized for easy navigation under the links below. General Information on Fractional Ownership Get started with the basics of fractional ownership and other vacation home sharing arrangements with a short overview of fractional ownership, a more comprehensive explanation of fractional ownership, definitions of fractional ownership terms and lingo, characteristics of fractional ownership and timeshare product categories, and essential tips for smaller, less formal vacation home sharing partnerships and family ownership groups. Designing and Creating Fractional Ownership Arrangements Guides and tips for vacation home owners, developers, and real estate professionals interested in selling property as fractional ownership, and individual buyers interested in organizing a fractional ownership group. Step-by-step instructions for analyzing the fractional ownership potential of individual homes and condominiums, and assessing the feasiblity of offering fractional ownership within a resort or other real estate development. A detailed article describing the various fractional ownership usage arrangements, and another explaining how to price fractional ownership offerings. https://andysirkin.com/fractional-ownership/ 3/5 Planning Commission Special Meeting - October 6, 2022 9/12/22, 11:56 PM Fractional Ownership Resources and Articles — Sir4p6p?g8k%- Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) Marketing and Selling Fractional Ownership Learn the most effective marketing and sales techniques for fractional ownership, private residence clubs, destination clubs, and quartershares. Most people quickly understand the benefits of fractional ownership arrangements, but can find many reasons to delay the decision to buy. To sell out a fractional ownership project quickly and cost-effectively, it is critical to understand how to expose the property to the right customers, explain the concept of fractional ownership in a clear and compelling way, and then convince the customer to buy now instead of later. These articles will explain the best practices used with the most successful fractional ownership properties, from individual homes to large private residence clubs. Fractional Ownership and Residence Club Buyer Guide Discover how to compare and choose between different fractional offerings.Which fractional is the best deal, and why? Which one will remain a good deal over time when owner dues are compared with other accommodations? Which ones will remain attractive and make you want to return? Which will best hold resale value? How valuable are exchange programs, and which ones are best? Get the tools you need to make an informed fractional buying decision. Operating and Managing Fractional Ownership Groups Everything you need to know to smoothly start and operate a fractional ownership group, whether you are a professional property manager or just someone who wants to manage a fractional with your family and friends. Learn what tax and governmental filings you need to make, how to open bank accounts, what records to keep, how to call and run meetings, how to create a budget and collect dues, how to keep repair replacement reserves, and how to organize and control decision -making. Most important, learn how to keep your fractional ownership associations running smoothly and without arguments or disputes. Fractional Ownership and Timeshare Law Articles on fractional ownership and timeshare law throughout the United States and Europe as well as resources to help you find the law in your jurisdiction. Fractional Ownership Resources https://andysirkin.com/fractional-ownership/ 4/5 Planning Commission Special Meeting - October 6, 2022 9/12/22, 11:56 PM Fractional Ownership Resources and Articles — Sir4p6p?g8k%- Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) Additional articles, podcasts and lists on various fractional ownership related topics including a list of books on fractional ownership, and sources for fractional ownership financing. https://andysirkin.com/fractional-ownership/ 5/5 9/13/22, 12:03 AM Planning Commission Special Meeting - October 6, 2022 Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) SIRKIN LAW Home » Fractional Ownership Resources and Articles » Fractional Ownership and Timeshare Law Fractional Ownership and Timeshare Law In California 11210 This chapter maybe cited as the Vacation Ownership and Time-share Act of 2004. The purposes of this chapter are to do all of the following: (a) Provide full and fair disclosure to the purchasers and prospective purchasers of time-share plans. (b) Require certain time-share plans offered for sale or created and existing in this state to be subject to the provisions of this chapter. (c) Recognize that the tourism industry in this state is a vital part of the state's economy; that the sale, promotion, and use of time-share plans is an emerging, distinct segment of the tourism industry; that this segment of the tourism industry continues to grow, both in volume of sales and in complexity and variety of product structures; and that a uniform and consistent method of regulation is necessary in order to safeguard California's tourism industry and the state's economic well-being. (d) In order to protect the quality of California time-share plans and the consumers who purchase them, it is the intent of the Legislature that this chapter be interpreted broadly in order to encompass all forms of time-share plans with a duration of at least three years that are created with respect to accommodations that are located in the state or that are offered for sale in the state, including, but not limited to, condominiums, cooperatives, vacation clubs, and multisite vacation plans. (e) It is the intent of the Legislature that this chapter not be interpreted to preempt the application of, the enforcement of, or alter the standards of, the general consumer protection laws of this state set forth in Sections 17200 to 17209, inclusive, and Sections 17500 to 17539.1, inclusive, of the Business and Professions Code. 1 121 1.5. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 1/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (a) This chapter applies to all of the following: (1) Time-share plans with an accommodation or component site in this state. (2) Time-share plans without an accommodation or component site in this state, if those time- share plans are sold or offered to be sold to any individual located within this state. (3) Exchange programs as defined in this chapter. (4) Short-term products as defined in this chapter. (b) This chapter does not apply to any of the following: (1) Time-share plans, whether or not an accommodation is located in this state, consisting of 10 or fewer time-share interests. Use of an exchange program by owners of time-share interests to secure access to other accommodations shall not affect this exemption. (2) Time-share plans, whether or not an accommodation is located in this state, the use of which extends over any period of three years or less. (3) Time-share plans, whether or not an accommodation is located in this state, under which the prospective purchaser's total financial obligation will be equal to or less than three thousand dollars ($3,000) during the entire term of the time-share plan. (c) For purposes of determining the term of a time-share plan, the period of any renewal or renewal option shall be included. (d) Single site time-share plans located outside the state and component sites of multisite time- share plans located outside the state, that are offered for sale or sold in this state are subject only to Sections 11210 to 11219, inclusive, Sections 11225 to 11245, inclusive, Sections 11250 to 11256, inclusive, paragraphs (2), (3), and (4) of subdivision (a), and subdivisions (b) and (c), of Section 11265, subdivision (g) of Section 11266, subdivisions (a) and (c) of Section 11267, Sections 11272 and 11273, subdivisions (b), (c), and (d) of Section 11274, and Sections 11280 to 11287, inclusive. 1 121 1.7. (a) Any time-share plan registered pursuant to this chapter to which the Davis -Stirling Common Interest https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 2/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) Development Act (Chapter 1 (commencing with Section 1350) of Part 4 of Division 2 of the Civil Code) might otherwise apply is exempt from that act, except for Sections 1354, 1355, 1355.5, 1356, 1357, 1358, 1361, 1361.5, 1362, 1363.05, 1364, 1365.5, 1370, and 1371 of the Civil Code. (b) (1) To the extent that a single site time-share plan or component site of a multisite time-share plan located in the state is structured as a condominium or other common interest development, and there is any inconsistency between the applicable provisions of this chapter and the Davis -Stirling Common Interest Development Act, the applicable provisions of this chapter shall control. (2) To the extent that a time-share plan is part of a mixed use project where the time-share plan comprises a portion of a condominium or other common interest development, the applicable provisions of this chapter shall apply to that portion of the project uniquely comprising the time-share plan, and the Davis -Stirling Common Interest Development Act shall apply to the project as a whole. (c) (1) The offering of any time-share plan, exchange program, incidental benefit, or short term product in this state that is subject to the provisions of this chapter shall be exempt from Sections 1689.5 to 1689.14, inclusive, of the Civil Code (Home Solicitation Sales), Sections 1689.20 to 1689.24, inclusive, of the Civil Code (Seminar Sales), and Sections 1812.100 to 1812.129, inclusive, of the Civil Code (Contracts for Discount Buying Services). (2) A developer or exchange company that, in connection with a time-share sales presentation or offer to arrange an exchange, offers a purchaser the opportunity to utilize the services of an affiliate, subsidiary, or third -party entity in connection with wholesale or retail air or sea transportation, shall not, in and of itself, cause the developer or exchange company to be considered a seller of travel subject to Sections 17550 to 17550.34, inclusive, of the Business and Professions Code, so long as the entity that actually provides or arranges the air or sea transportation is registered as a seller of travel with the California Attorney General's office or is otherwise exempt under those sections. (d) To the extent certain sections in this chapter require information and disclosure that by their terms only apply to real property time-share plans, those requirements shall not apply to personal property time-share plans. 11212 As used in this chapter, the following definitions apply: (a) "Accommodation" means any apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 3/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals, or any unit or berth on a commercial passenger ship, which is included in the offering of a time-share plan. (b) "Advertisement" means any written, oral, or electronic communication that is directed to or targeted to persons within the state or such a communication made from this state or relating to a time- share plan located in this state and contains a promotion, inducement, or offer to sell a time-share plan, including, but not limited to, brochures, pamphlets, radio and television scripts, electronic media, telephone and direct mail solicitations, and other means of promotion. (c) "Association" means the organized body consisting of the purchasers of time-share interests in a time-share plan. (d) "Assessment" means the share of funds required for the payment of common expenses which is assessed from time to time against each purchaser by the managing entity. (e) "Commissioner" means the Real Estate Commissioner. (f) "Component site" means a specific geographic location where accommodations that are part of a multisite time-share plan are located. Separate phases of a time-share property in a specific geographic location and under common management shall not be deemed a component site. (g) "Conspicuous type" means either of the following: (1) Type in upper and lower case letters two point sizes larger than the nearest nonconspicuous type, exclusive of headings, on the page on which it appears but in at least 10-point type. (2) Conspicuous type may be utilized in contracts for purchase or public permits only where required by law or as authorized by the commissioner. (h) "Department" means the Department of Real Estate. (i) "Developer" means and includes any person who creates a time-share plan or is in the business of selling time-share interests, other than those employees or agents of the developer who sell time- share interests on the developer's behalf, or employs agents to do the same, or any person who succeeds to the interest of a developer by sale, lease, assignment, mortgage, or other transfer, but the term includes only those persons who offer time-share interests for disposition in the ordinary course of business (j) "Dispose" or "disposition" means a voluntary transfer or assignment of any legal or equitable interest in a time-share plan, other than the transfer, assignment, or release of a security interest. (k) "Exchange company" means any person owning or operating, or both owning and operating, an exchange program. (l) "Exchange program" means any method, arrangement, or procedure for the voluntary exchange of time-share interests or other property interests. The term does not include the assignment of the right to use and occupy accommodations to owners of time-share interests within a single site time- https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 4/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) share plan. Any method, arrangement, or procedure that otherwise meets this definition in which the purchaser's total contractual financial obligation exceeds three thousand dollars ($3,000) per any individual, recurring time-share period, shall be regulated as a time-share plan in accordance with this chapter. For purposes of determining the purchaser's total contractual financial obligation, amounts to be paid as a result of renewals and options to renew shall be included in the term except for the following: (1) amounts to be paid as a result of any optional renewal that a purchaser, in his or her sole discretion may elect to exercise, (2) amounts to be paid as a result of any automatic renewal in which the purchaser has a right to terminate during the renewal period at any time and receive a pro rata refund for the remaining unexpired renewal term, or (3) amounts to be paid as a result of an automatic renewal in which the purchaser receives a written notice no less than 30 nor more than 90 days prior to the date of renewal informing the purchaser of the right to terminate prior to the date of renewal. Notwithstanding these exceptions, if the contractual financial obligation exceeds three thousand dollars ($3,000) for any three-year period of any renewal term, amounts to be paid as a result of that renewal shall be included in determining the purchaser's total contractual financial obligation. (m) "Incidental benefit" is an accommodation, product, service, discount, or other benefit, other than an exchange program, that is offered to a prospective purchaser of a time-share interest prior to the end of the rescission period set forth in Section 11238, the continuing availability of which for the use and enjoyment of owners of time-share interests in the time-share plan is limited to a term of not more than three years, subject to renewal or extension. The term shall not include an offer of the use of the accommodation, product, service, discount, or other benefit on a free or discounted one-time basis. (n) "Managing entity" means the person who undertakes the duties, responsibilities, and obligations of the management of a time-share plan. (o) "Offer" means any inducement, solicitation, or other attempt, whether by marketing, advertisement, oral or written presentation, or any other means, to encourage a person to acquire a time-share interest in a time-share plan, other than as security for an obligation. (p) "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, government, governmental subdivision or agency, or other legal entity, or any combination thereof. (q) "Promotion" means a plan or device, including one involving the possibility of a prospective purchaser receiving a vacation, discount vacation, gift, or prize, used by a developer, or an agent, independent contractor, or employee of any of the same on behalf of the developer, in connection with the offering and sale of time-share interests in a time-share plan. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 5/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (r) "Public report" means a preliminary public report, conditional public report, final public report, or other such disclosure document authorized for use in connection with the offering of time- share interests pursuant to this chapter. (s) "Purchaser" means any person, other than a developer, who by means of a voluntary transfer for consideration acquires a legal or equitable interest in a time-share plan other than as security for an obligation. (t) "Purchase contract" means a document pursuant to which a developer becomes legally obligated to sell, and a purchaser becomes legally obligated to buy, a time-share interest. (u) "Reservation system" means the method, arrangement, or procedure by which a purchaser, in order to reserve the use or occupancy of any accommodation of a multisite time-shareplan for one or more time-share periods, is required to compete with other purchasers in the same multisite time- share plan, regardless of whether the reservation system is operated and maintained by the multisite time-share plan managing entity, an exchange company, or any other person. If a purchaser is required to use an exchange program as the purchaser's principal means of obtaining the right to use and occupy accommodations in a multisite time-share plan, that arrangement shall be deemed a reservation system. When an exchange company utilizes a mechanism for the exchange of use of time- share periods among members of an exchange program, that utilization is not a reservation system of a multisite time-share plan. (v) "Short-term product" means the right to use accommodations on a one-time or recurring basis for a period or periods not to exceed 30 days per stay and for a term of three years or less, and that includes an agreement that all or a portion of the consideration paid by a person for the short-term product will be applied to or credited against the price of a future purchase of a time-share interest or that the cost of a future purchase of a time-share interest will be fixed or locked -in at a specified price. (w) "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. (x) "Time-share interest" means and includes either of the following: (1) A "time-share estate," which is the right to occupy a time-share property, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. (2) A "time-share use," which is the right to occupy a time-share property, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time- share property. (y) "Time-share period" means the period or periods of time when the purchaser of a time-share plan is afforded the opportunity to use the accommodations of a time-share plan. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 6/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (z) "Time-share plan" means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives ownership rights in or the right to use accommodations for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A time-share plan may be either of the following: (1) A "single site time-share plan," which is the right to use accommodations at a single time- share property. (2) A "multisite time-share plan," which includes either of the following: (A) A "specific time-share interest," which is the right to use accommodations at a specific time- share property, together with use rights in accommodations at one or more other component sites created by or acquired through the time-share plan's reservation system. (B) A "nonspecific time-share interest," which is the right to use accommodations at more than one component site created by or acquired through the time-share plan's reservation system, but including no specific right to use any particular accommodations. (aa) "Time-share property" means one or more accommodations subject to the same time- share instrument, together with any other property or rights to property appurtenant to those accommodations. 11213 Each time-shareestate, as specified in paragraph (1) of subdivision (x) of Section 11212, constitutes, for purposes of title, a separate estate or interest in real property including ownership in real property for tax purposes. (a) The developer shall supervise, manage, and control all aspects of the offering of the time-shareplan by or on behalf of the developer, including, but not limited to, promotion, advertising, contracting, and closing. The developer is responsible for each time-shareplan registered with the commissioner and for the actions of any sales or marketing entity utilized by the developer in the offering or selling of any registered time-share plan. (b) Any violation of this chapter that occurs during the offering activities shall be deemed to be a violation by the developer as well as by the person who actually committed the violation 11215 (a) The time-shareinstrument shall prohibit a person from seeking or obtaining, through any legal procedures, judicial partition of the time-shareinterest or sale of the time-share interest, in lieu of https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 7/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In 46fffRib2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) partition and shall subordinate all rights that a time-share interest owner might otherwise have as a tenant -in -common in real property to the terms of the time-share instrument. (b) Subdivision (a) shall not be deemed to prohibit a sale of an accommodation upon termination of the time-share plan or the removal of an accommodation from the time-share plan in accordance with applicable provisions of the time-share instrument. 11216 (a) An exchange program is not a part of a time-shareplan offering and, except as provided in this section and Section 11238, shall not be subject to either this chapter or the regulations of the commissioner adopted pursuant to this chapter. (b) If a developer offers a purchaser the opportunity to subscribe to or to become a member of an exchange program, the developer shall provide to the purchaser in writing all of the information set forth in paragraphs (1) to (17), inclusive. If the exchange company is offering directly to the purchaser the opportunity to subscribe to or become a member of an exchange company, the exchange company shall provide to the purchaser in writing all of the information set forth in paragraphs (1) to (17), inclusive. In either case, the written information shall be provided prior to or concurrently with the execution of any contract or subscription for membership in the exchange program. (1) The name and address of the exchange company. (2) The names of all officers, directors, and shareholders of the exchange company. (3) Whether the exchange company or any of its officers or directors have any legal or beneficial interest in any developer or managing entity for any time-share plan participating in the exchange program and, if so, the identity of the time-share plan and the nature of the interest. (4) A copy of the form of the contract between the purchaser and the exchange company, along with a statement that the purchaser's contract with the exchange company is a contract separate and distinct from the purchaser's contract with the seller of time-share interests. (5) Whether the purchaser's participation in the exchange program is dependent upon the continued affiliation of the applicable time-share plan with the exchange program. (6) Whether the purchaser's participation in the exchange program is voluntary. (7) A fair and accurate description of the terms and conditions of the purchaser's contractual relationship with the exchange program and the procedure by which changes thereto may be made. (8) A fair and accurate description of the procedures necessary to qualify for and effectuate exchanges. (9) A fair and accurate description of all limitations, restrictions, and priorities employed in the operation of the exchange program, including, but not limited to, limitations on exchanges based on seasonality, https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 8/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In 46fffRib2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) accommodation size, or levels of occupancy, expressed in conspicuous type. If those limitations, restrictions, or priorities are not uniformly applied by the exchange company, the information shall include a clear description of the manner in which they are applied. (10) Whether exchanges are arranged on a space available basis and whether any guarantees of fulfillment of specific requests for exchanges are made by the exchange company. (1 1) Whether and under what circumstances an owner, in dealing with the exchange program, may lose the right to use and occupy an accommodation of the time-share plan during a reserved use period with respect to any properly applied for exchange without being provided with substitute accommodations by the exchange program. (12) The fees or range of fees for participation by owners in the exchange program, a statement of whether any such fees may be altered by the exchange company and the circumstances under which alterations may be made. (13) The name and address of the site of each accommodation included within a time-share plan participating in the exchange program. (14) The number of accommodations in each time-share plan that are available for occupancy and that qualify for participation in the exchange program, expressed within the following numerical groups: 1-5; 6-10; 1 1-20; 21-50; and 51 and over. (15) The number of currently enrolled owners for each time-share plan participating in the exchange program, expressed within the following numerical groups: 1-100; 101-249; 250-499; 500-999; and 1,000 and over; and a statement of the criteria used to determine those owners who are currently enrolled with the exchange program. (16) The disposition made by the exchange company of use periods deposited with the exchange program by owners enrolled in the exchange program and not used by the exchange company in effecting exchanges. (17) The following information for the preceding calendar year, which shall be independently audited by a certified public accountant in accordance with the standards of the Accounting Standards Board of the American Institute of Certified Public Accountants and reported annually no later than August 1 of each yea r: (A) The number of owners currently enrolled in the exchange program. (B) The number of time-share plans that have current affiliation agreements with the exchange program. (C) The percentage of confirmed exchanges, which is the number of exchanges confirmed by the exchange program divided by the number of exchanges properly applied for, together with a complete and accurate statement of the criteria used to determine whether an exchange request was properly applied for. (D) The number of use periods for which the exchange program has an outstanding obligation to provide https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 9/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) an exchange to an owner who relinquished a use period during a particular year in exchange for a use period in any future year. (E) The number of exchanges confirmed by the exchange program during the year. (F) A statement in conspicuous type to the effect that the percentage described in subparagraph (C) is a summary of the exchange requests entered with the exchange program in the period reported and that the percentage does not indicate the probabilities of an owner's being confirmed to any specific choice or range of choices. (c) All written, visual, and electronic communications relating to an exchange company or an exchange program shall be filed with the commissioner upon its request. (d) The failure of an exchange company to observe the requirements of this section, and the use of any unfair or deceptive act or practice in connection with the operation of an exchange program, is a violation of this chapter. (e) An exchange company may elect to deny exchange privileges to any owner whose use of the accommodations of the owner's time-share plan is denied, and no exchange program or exchange company shall be liable to any of its members or any third parties on account of any such denial of exchange privileges. 11217 (a) The following communications shall not be deemed an advertisement or promotion and are exempt from this chapter so long as the communications are in compliance with Section 1 1245: (1) Any stockholder communication, such as an annual report or interim financial report, proxy material, a registration statement, a securities prospectus, a registration, a property report, or other material required to be delivered to a prospective purchaser by an agency of any state or the federal government. (2) Any oral or written statement disseminated by a developer to broadcast or print media, other than paid advertising or promotional material, regarding plans for the acquisition or development of time- share property. However, any rebroadcast or any other dissemination of the oral statements to a prospective purchaser by a developer or any person in any manner, or any distribution of copies of newspaper magazine articles or press releases, or any other dissemination of the written statements to a prospective purchaser by a developer or any person in any manner, shall constitute an advertisement. (3) Any advertisement or promotion in any medium to the general public if the advertisement or promotion clearly states that it is not an offer in any jurisdiction in which any applicable registration requirements have not been fully satisfied. (4) Any audio, written, or visual publication or material relating to the availability of any accommodations for transient rental, so long as a sales presentation is not a term or condition of the availability of the accommodations and so long as the failure of any transient renter to take a tour of a time- https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 10/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In 46fffRib2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) share property or attend a sales presentation does not result in any reduction in the level of services that would otherwise be available to the transient renter. (b) Any communication regarding a time-share interest that is addressed to any person who has previously executed a contract for the sale or purchase of that time-share interest and that does not constitute a solicitation of a time-share interest, shall be exempt from this chapter. 11218 A time-shareinterest in a time-shareplan shall be deemed an interest in subdivided lands or a subdivision for purposes of subdivision (f) of Section 25100 of the Corporations Code. 11219 (a) Time-shareplans registered as Qualified Resort Vacation Club Projects under prior law shall continue to operate under that prior law notwithstanding anything in this chapter to the contrary. (b) (1) All registrations of time-share plans in effect on the effective date of this chapter shall remain in full force and effect and shall be considered registered pursuant to this chapter. (2) All time-share plans included in this subdivision are subject to Sections 11217, 11219, 11238, 11239, 11245, 11250, and 11280 to 11286, inclusive, and shall be required to comply with the other provisions of this chapter at the time they seek amendment or renewal of their existing registrations. When an amendment or renewal of a time-share plan is filed with the commissioner, the existing registration continues in full force and effect while the amendment or renewal is pending before the commissioner. (c) Any existing injunction or temporary restraining order validly obtained that prohibits unregistered practice of time-share developers, time-share plans, or their agents shall not be invalidated by the enactment of this chapter and shall continue to have full force and effect on and after the effective date of this chapter. Article 2. Registration, Sale Requirements, and Fees 11225 A person shall not be required to register a time-share plan with the commissioner pursuant to this chapter if any of the following applies: (a) The person is an owner of a time-share interest who has acquired the time-share interest for the person's own use and occupancy and who later offers it for resale. (b) The person is a managing entity or an association that is not otherwise a developer of a time- share plan in its own right, solely while acting as an association or under a contract with an association to offer or sell a time-share interest transferred to the association through foreclosure, deed in lieu of foreclosure, or gratuitous transfer, if these acts are performed in the regular course of, or as an incident https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 11/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In 46fffRib2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) to, the management of the association for its own account in the time-share plan. Notwithstanding the exemption from registration, the association or managing entity shall provide each purchaser of a time- share interest covered by this subdivision a copy of the time-share instruments, a copy of the then - current budget, a written statement of the then -current assessment amounts, and shall provide the purchaser the opportunity to rescind the purchase within seven days after receipt of these documents. Immediately prior to the space reserved in the contract for the signature of the purchaser, the association or managing entity shall disclose, in conspicuous type, substantially the following notice of cancellation: YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY OR OBLIGATION WITHIN SEVEN CALENDAR DAYS OF RECEIPT OF THE PUBLIC REPORT OR AFTER THE DATE YOU SIGN THIS CONTRACT, WHICHEVER DATE IS LATER. IF YOU DECIDE TO CANCEL THIS CONTRACT, YOU MUST NOTIFY THE ASSOCIATION (OR MANAGING ENTITY) IN WRITING OF YOUR INTENT TO CANCEL. YOUR NOTICE OF CANCELLATION SHALL BE EFFECTIVE UPON THE DATE SENT AND SHALL BE SENT TO (NAME OF ASSOCIATION OR MANAGING ENTITY) AT (ADDRESS OF ASSOCIATION OR MANAGING ENTITY). YOUR NOTICE OF CANCELLATION MAY ALSO BE SENT BY FACSIMILE TO (FACSIMILE NUMBER OF THE ASSOCIATION OR MANAGING ENTITY) OR BY HAND -DELIVERY. ANY ATTEMPT TO OBTAIN A WAIVER OF YOUR CANCELLATION RIGHT IS VOID AND OF NO EFFECT. (c) The person is conveyed, assigned, or transferred more than seven time-share interests from a developer in a single voluntary or involuntary transaction and subsequently conveys, assigns, or transfers all of the time-share interests received from the developer to a single purchaser in a single transaction. (d) (1) The developer is offering or disposing of a time-share interest to a purchaser who has previously acquired a time-share interest from the same developer if the developer has a time-share plan registered under this chapter, which was originally approved by the commissioner within the preceding seven years, and the developer complies in all respects with the provisions of Section 11245, and, further, provides the purchaser with (A) a cancellation period of at least seven days, (B) all the time-share disclosure documents that are required to be provided to purchasers as if the sale occurred in the state or jurisdiction where the time-share property is located, and (C) the following disclaimer in conspicuous type: WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY), ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL OVER https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 12/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In 46fffRib2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY), TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES, UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH REAL ESTATE AND DEVELOPMENT LAW IN THE STATE WHERE THIS TIME- SHARE PROPERTY IS SITUATED. (2) By making such an offering or disposition, the person is deemed to consent to the jurisdiction of the commissioner in the event of a dispute with the purchaser in connection with the offering or disposition. (e) It is a single site time-share plan located outside of the boundaries of the United States or component site of a specific time-share interest multisite time-share plan located wholly outside of the boundaries of the United States, or a nonspecific time-share interest multisite time-share plan in which all component sites are located wholly outside of the boundaries of the United States. However, it is unlawful and a violation of this chapter for a person, in this state, to sell or lease or offer for sale or lease a time-share interest in such a time-share plan, located outside the United States, unless the printed material, literature, advertising, or invitation in this state relating to that sale, lease, or offer clearly and conspicuously contains the following disclaimer in capital letters of at least 10-point type: WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT EXAMINED THIS OFFERING, INCLUDING, BUT NOT LIMITED TO, THE CONDITION OF TITLE, THE STATUS OF BLANKET LIENS ON THE PROJECT (IF ANY), ARRANGEMENTS TO ASSURE PROJECT COMPLETION, ESCROW PRACTICES, CONTROL OVER PROJECT MANAGEMENT, RACIALLY DISCRIMINATORY PRACTICES (IF ANY), TERMS, CONDITIONS, AND PRICE OF THE OFFER, CONTROL OVER ANNUAL ASSESSMENTS (IF ANY), OR THE AVAILABILITY OF WATER, SERVICES, UTILITIES, OR IMPROVEMENTS. IT MAY BE ADVISABLE FOR YOU TO CONSULT AN ATTORNEY OR OTHER KNOWLEDGEABLE PROFESSIONAL WHO IS FAMILIAR WITH REAL ESTATE AND DEVELOPMENT LAW IN THE COUNTRY WHERE THIS TIME-SHARE PROPERTY IS SITUATED. (1) If an offer of time-share interest in a time-share plan described in subdivision (e) is not initially made in writing, the foregoing disclaimer shall be received by the offeree in writing prior to a visit to a location, sales presentation, or contact with a person representing the offeror, when the visit or contact was scheduled or arranged by the offeror or its representative. The deposit of the disclaimer in the United States mail, addressed to the offeree and with first-class postage prepaid, at least five days prior to the scheduled or arranged visit or contact, shall be deemed to constitute delivery for purposes of this section. (2) If any California resident is presented with an agreement or purchase contract to lease or purchase a time-share interest as described in subdivision https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 13/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (e), where an offer to lease or purchase that time-share interest was made to that resident in California, a copy of the disclaimer set forth in subdivision (e) shall be inserted in at least 10-point type at the top of the first page of that agreement or purchase contract and shall be initialed by that California resident. (3) Nothing contained in this subdivision shall be deemed to exempt from registration in this state a nonspecific time-share interest multisite time-share plan in which any component site in the time- share plan is located in the United States. 11226 (a) Any person who, to any individual located in the state, sells, offers to sell, or attempts to solicit prospective purchasers to purchase a time-share interest, or any person who creates a time-share plan with an accommodation in the state, shall register the time-share plan with the commissioner, unless the time-share plan is otherwise exempt under this chapter. (b) A developer, or any of its agents, shall not sell, offer, or dispose of a time-share interest in the state unless all necessary registration requirements are provided and approved by the commissioner, or the sale, offer, or disposition is otherwise permitted by this chapter, or while an order revoking or suspending a registration is in effect. (c) In registering a time-share plan, the developer shall provide all of the following information: (1) The developer's legal name, any assumed names used by the developer, principal office street address, mailing address, primary contact person, and telephone number. (2) The name of the developer's authorized or registered agent in the state upon whom claims can be served or service of process be had, the agent's street address in California, and telephone number. (3) The name, street address, mailing address, primary contact person, and telephone number of any time-share plan being registered. (4) The name, street address, mailing address, and telephone number of any managing entity of the time-share plan. (5) A public report that complies with the requirements of Section 11234 or for a time-share plan located outside of the state a public report that has been authorized for use by the situs state regulatory agency and that contains disclosures as determined by the commissioner upon review to be substantially equivalent to or greater than the information required to be disclosed pursuant to Section 11234. (6) A description of the inventory control system that will ensure compliance with Section 11250. (7) Any other information regarding the developer, time-share plan, or managing entities as established by regulation. (d) An applicant for a public report for a time-share plan shall present evidence of the following for each https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 14/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) accommodation of the time-share plan: (1) That the accommodation is presently suitable for human occupancy or that financial arrangements have been made to complete construction or renovation of the accommodation to make it suitable for human occupancy on or before the first date for occupancy by a time-share interest owner. (2) That the accommodation is owned or leased by the developer of the time-share plan or is the subject of an enforceable option or contract under which the developer will build, purchase, or lease the accommodation. Notwithstanding this subdivision, the developer shall present evidence prior to the receipt of a final public report that the accommodation to be sold is owned or leased by the developer and that the accommodation is free and clear of encumbrances in accordance with Sections 11244 and 11255. (e) If an accommodation in a time-share plan is located within a local governmental jurisdiction or subdivision of real property in which the dedication of accommodations to time-sharing is expressly prohibited by ordinance or recorded restriction, either absolutely or without a permit or other entitlement from the governing body, the applicant for a public report shall present evidence of a permit or other entitlement by the appropriate authority for the local government or the subdivision. (f) (1) The developer shall amend or supplement its disclosure documents and registration information, to reflect any material change in any information required by this chapter or the regulations implementing this chapter. The developer shall notify the commissioner of the material change prior to implementation of the change, unless the change is beyond the control of the developer; in which event, the developer shall provide written notice to the commissioner as soon as reasonably practicable after the occurrence of the event necessitating the change. All amendments, supplements, and facts relevant to the material change shall be filed with the commissioner within 20-calendar days of the material change. (2) The developer may continue to sell time-share interests in the time-share plan so long as, prior to closing, the developer provides a notice to each purchaser that describes the material change and provides to each purchaser the previously approved public report. (A) If the change is material and adverse to the purchaser, all purchaser funds shall be held in escrow, or pursuant to alternative assurances permitted by subdivision (c) of Section 11243, and no closing shall occur until the amendment relating to the material and adverse change has been approved by the commissioner. After the amendment relating to the material and adverse change has been approved and the amended public report has been issued, the amended public report shall be sent to the purchaser, and an additional seven-day rescission period shall commence. The developer shall be required to maintain evidence of the receipt by each such purchaser of the amended public report. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 15/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (B) If the commissioner refuses to approve the amendment relating to the material and adverse change, all sales made using the notice shall be subject to rescission and all funds returned. (3) The developer shall update the public report to reflect any changes to the time-share plan that are not material and adverse, including the addition of any component sites, within a reasonable time, and may continue to sell and close time-share interests prior to the date that the amended public report is approved. 11227 (a) Subject to subdivision (h), the commissioner shall issue a final public report if all registration requirements have been met as set forth in this chapter and if all deficiencies and substantive inadequacies in the substantially complete application for a final public report for the time-share plan have been corrected. (b) The commissioner may issue a conditional public report prior to issuing a final public report for a time-share plan if the requirements of subdivision (c) are met, all deficiencies and substantive inadequacies in the substantially complete application for a final public report for the time-share plan have been corrected, the material elements of the offering to be made under the authority of the conditional public report have been established, and all requirements for the issuance of the conditional public report have been met, except for one or more of the following requirements, as may be applicable: (1) A final map has not been recorded. (2) A condominium plan has not been recorded. (3) A declaration of covenants, conditions, and restrictions has not been recorded. (4) A declaration of annexation has not been recorded. (5) A recorded subordination of existing liens to the time-share instruments or declaration of annexation or escrow instructions to effect recordation prior to the first sale, are lacking. (6) Filed articles of incorporation are lacking. (7) A current preliminary report of a licensed title insurance company issued after filing of the final map and recording of the time-share instrument covering all time-share interests to be included in the public report has not been provided. (8) Other requirements the commissioner determines are likely to be timely satisfied by the applicant. (c) An applicant for a conditional public report shall submit the following information and documents with the applicable filing fee: (1) A copy of the statement set forth in subdivision (e). (2) A sales agreement or lease to be used in any transaction conducted under authority of the https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 16/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) conditional public report. The sales agreement or lease shall include all of the following provisions: (A) No escrow will close, funds will not be released from escrow, and the interest contracted for will not be conveyed until a current final public report for the time-share plan is furnished to the purchaser. (B) The contract may be rescinded, in which event the entire sum of money paid or advanced by the purchaser shall be returned if (i) a final public report has not been issued within six months after the date of issuance of the conditional public report if the conditional public report is not renewed, (ii) the final public report is not issued within 12 months after the initial conditional public report is received if the conditional public report has been renewed for an additional six-month period, or (iii) the purchaser or lessee is dissatisfied with the final public report because of a material and adverse change. (3) Escrow instructions to be used in any transaction conducted under authority of the conditional public report that includes at least the following information: (A) The name and address of the escrow depository. (B) A description of the nature of the transaction. (C) Provisions ensuring compliance with Section 11243. (D) Provisions ensuring that no escrow will close, funds will not be released from escrow, and the interest contracted for will not be conveyed until a current final public report for the time-share plan is furnished to the purchaser or lessee. (E) Provisions for the return of money as prescribed in subparagraph (B) of paragraph (2). (d) A decision by the commissioner to not issue a conditional public report shall be noticed in writing to the applicant within five business days after his or her decision and that notice shall specifically state the reasons why the report is not being issued. (e) A person may sell or lease, or offer for sale or lease, time-share interests in a time-share plan pursuant to a conditional public report if, as a condition of the sale or lease or offer for sale or lease, delivery of legal title or other interest contracted for will not take place until issuance of a final public report and provided that the requirements of subdivision (c) are met. (f) A developer, principal, or his or her agent shall provide a prospective purchaser a copy of the conditional public report and a written statement including all of the following information: (1) Specification of the information required for issuance of a final public report. (2) Specification of the information required in the final public report that is not available in the conditional public report, along with a statement of the reasons why that information is not available at https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 17/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) the time of issuance of the conditional public report. (3) A statement that no person acting as a principal or agent shall sell or lease, or offer for sale or lease, time-share interests in a time-share plan for which a conditional public report has been issued except as provided in this chapter. (4) Specification of the requirements of subdivision (e). (g) The prospective purchaser shall sign a receipt that he or she has received and has read the conditional public report and the written statement provided pursuant to subdivision (f). (h) The term of a conditional public report may not exceed six months unless renewed pursuant to this subdivision. The conditional public report may be renewed for one additional six-month period if the commissioner determines that the requirements for issuance of a final public report are likely to be satisfied during the renewal term. The renewal of a conditional public report shall not act to afford a purchaser who received the initial conditional public report any additional rescission rights other than those provided to a purchaser when a final public report is issued and a material and adverse change has been made. (i) For single site time-share plans and component sites of a multisite time-share plan located outside of the state, a disclosure document that has been authorized for use by the state regulatory agency in the state in which the time-share plan or component site is located that contains the disclosures as determined by the commissioner upon review to be substantially equivalent to or greater than the information required to be disclosed pursuant to Section 11234, shall be accepted in lieu of a public report required pursuant to this section. The disclosure document shall contain a cover page issued by the commissioner certifying the approval of its use in lieu of the public report required herein. (j) Notwithstanding anything in this section to the contrary, the commissioner may grant a 12-month preliminary public report allowing the developer to begin offering and selling time-share interests, in a time-share plan regardless of whether the accommodations of the time-share plan are located within or outside of the state, while the registration is pending with the commissioner. The commissioner may grant one additional 12-month period if the developer is actively and diligently pursuing registration under this chapter. The preliminary public report shall automatically terminate with respect to those time-share interests covered by a final public report that is issued before the scheduled termination date of the preliminary report. To obtain a preliminary public report, the developer shall provide all of the following: (1) Submit the reservation instrument to be used in a form previously approved by the department with at least the following provisions: (A) The right of both the developer and the potential purchaser to unilaterally cancel the reservation at https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 18/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) any time. (B) The payment to the potential purchaser of his or her total deposit following cancellation of the reservation by either party. (C) The placing of the deposit into an interest bearing escrow account. (2) Agree to provide each potential purchaser with a copy of the preliminary public report and an executed receipt for a copy before any money or other thing of value has been accepted by or on behalf of the developer in connection with the reservation. (3) Agree to provide a copy of the reservation instrument signed by the potential purchaser and by or on behalf of the developer to the potential purchaser, and place any deposit taken from the potential purchaser into a neutral escrow depository acceptable to the commissioner. 11228 The term of a final public report shall be limited to five years. A renewal shall be issued if the developer, owner, or agent makes application for renewal of any report and has submitted the additional information that the commissioner may require. 11229 (a) In connection with its review of the registration application of a time-share plan, the commissioner may make an examination of any time-share property submitted for registration pursuant to this chapter, and shall, unless there are grounds for denial, issue to the developer a public report authorizing the sale or lease in this state of the time-share interests within the time-share plan submitted pursuant to this chapter. The report shall contain the data obtained in accordance with Section 11234, (b) The commissioner may deny the issuance of the public report based on the applicant's failure to comply with any of the provisions of this chapter or the regulations of the commissioner pertaining thereto, including, but not limited to, all of the following: (1) The sale or lease would constitute misrepresentation to, or deceit or fraud of, the purchasers or lessees (2) Inability to deliver title or other interest contracted for. (3) Inability to demonstrate, in accordance with this chapter, that adequate financial arrangements have been made for all offsite improvements included in the offering. (4) Inability to demonstrate, in accordance with this chapter, that adequate financial arrangements have been made for any community, recreational, or other facilities included in the offering. (5) Failure to make a showing that the parcels can be used for the purpose for which they are offered. (6) Failure to provide in the contract or other writing the use or uses for which the parcels are offered, together with any covenants or conditions relative thereto. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 19/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (c) Any developer objecting to the denial of a public report may, within 30 days after receipt of the order of denial, file a written request for a hearing. The commissioner shall hold the hearing within 20 days thereafter unless the party requesting the hearing requests a postponement. If the hearing is not held within 20 days after request for a hearing is received plus the period of the postponement or if a proposed decision is not rendered within 45 days after submission and an order adopting or rejecting the proposed decision is not issued within 15 days thereafter, the order of denial shall be rescinded and a public report issued. 11230 If the time-shareplan, including any accommodations, or amenities within the common area are not completed prior to the issuance of a final public report for the time-share plan, the developer shall specify a reasonable date for completion and shall comply with any one of the following conditions: (a) Arranges for lien and completion bond or bonds, enforceable by the association, in an amount and subject to the terms, conditions, and coverage necessary to assure completion of the improvements lien -free. The bond shall not exceed 120 percent of the cost for completion, and the bond shall provide for the reduction of the bond amount as work is completed. (b) All funds from the sale of time-share interests as the commissioner shall determine are sufficient to assure construction of the improvement or improvements shall be bonded or impounded in a neutral escrow depository acceptable to the commissioner until the improvements have been completed and all applicable lien periods have expired. (c) An amount sufficient to cover the costs of construction shall be deposited in a neutral escrow depository acceptable to the commissioner under a written escrow agreement providing for disbursements from the escrow as work is completed. (d) An alternative plan that may be approved by the commissioner. 11231 Every registration required to be filed with the commissioner under this chapter shall be reviewed and issued the specified public report in accordance with the following schedule: (a) Time-share registration. Registration shall be effective only upon the issuance of a public report by the commissioner that shall occur no later than 60 calendar days after the actual receipt by the commissioner of the properly completed application. The commissioner shall provide a list of deficiencies in the application, if any, within 60 calendar days of receipt. This same time period applies when amending a public report to add additional phases or component sites of the time-share plan. (b) Preliminary public report registration. A preliminary public report shall be issued within 15 calendar days of receipt, unless the commissioner provides to the applicant a written list of deficiencies in the https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 20/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) application, if any, within 15 calendar days of receipt of an application. (c) Amended public report where no additional phases or component sites are added. An effective date for an amendment to a public report should occur no more than 45 calendar days after actual receipt by the commissioner of the amendment. The commissioner shall provide a list of deficiencies regarding the amendments, if any, within 45 calendar days of receipt. 11232 (a) The commissioner may by regulation prescribe filing fees in connection with applications to the Department of Real Estate for a public report pursuant to the provisions of this chapter that are lower than the maximum fees specified in subdivision (b) if the commissioner determines that the lower fees are sufficient to offset the costs and expenses incurred in the administration of this chapter. The commissioner shall hold at least one hearing each calendar year to determine if lower fees than those specified in subdivision (b) should be prescribed. (b) The filing fees for an application for a public report to be issued under authority of this chapter shall not exceed the following for each time-share plan, location, or phase of the time-share plan in which interests are to be offered for sale or lease: (1) One thousand seven hundred dollars ($1,700) plus ten dollars ($10) for each time-share interest to be offered for an original public report application. (2) Six hundred dollars ($600) plus ten dollars ($10) for each time-share plan interest to be offered that was not permitted to be offered under the public report to be renewed for a renewal public report or permit application. (3) Five hundred dollars ($500) plus ten dollars ($10) for each time-share interest to be offered under the amended public report for which a fee has not previously been paid for an amended public report application. (4) Five hundred dollars ($500) for a conditional public report application. (c) Fees collected by the commissioner under authority of this chapter shall be deposited into the Real Estate Fund pursuant to Chapter 6 (commencing with Section 10450) of Part 1. Fees received by the commissioner pursuant to this article shall be deemed earned upon receipt. No part of any fee is refundable unless the commissioner https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 21/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In 46fffRib2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) determines that it was paid as a result of mistake or inadvertency. This section shall remain in effect unless it is superseded pursuant to Section 10266 or subdivision (a) of Section 10266.5, whichever is applicable. 11233 An applicant for a public report for a time-shareplan in which the use and occupancy of the time- share interest purchased in the time-share plan is determined according to a point system shall include in the application the following information: (a) Whether additional points may be acquired by purchase or otherwise, in the future and the manner in which future purchases of points may be made. (b) The transferability of points to other persons, other years or other time-share plans. (c) A copy of the then -current point value use directory, along with rules and procedures for changes by the developer or the association in the manner in which point values may be used. (1) No change exceeding 10 percent per annum in the manner in which point values may be used may be made without the assent of at least 25 percent of the voting power of the association other than the developer. (2) No time-share interest owner shall be prevented from using a time-share plan as a result of changes in the manner in which point values may be used. (3) In the event point values are changed or adjusted, no time-share owner shall be prevented from using his or her home resort in the same manner as was provided for under the original purchase contract (d) Any limitations or restrictions upon the use of point values. (e) A description of an inventory control system that will ensure compliance with Section 11250. 11234 A developer shall prepare, for issuance by the commissioner, a public report that shall fully and accurately disclose those facts concerning the time-share developer and time-share plan that are required by this chapter or by regulation. The developer shall provide the public report to each purchaser of a time-share interest in any time-share plan at the time of purchase. The public report shall be in writing and dated and shall require the purchaser to certify in writing the receipt thereof. The public report for a single site time-share plan is subject to the requirements of subdivision (a). The public report for a specific time-share interest multisite time-share plan is subject to the requirements of both subdivisions (a) and (b). The public report for a nonspecific time-share interest multisite time-share plan is subject to the https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 22/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) requirements of subdivision (c). For time-share plans located outside of the state, a public report that has been authorized for use by the situs state regulatory agency and that contains disclosures as determined by the commissioner upon review to be substantially equivalent to or greater than the information required to be disclosed pursuant to this section may be used by the developer to meet the requirements of this section. (a) Public reports for a single site and those component sites of a specific time-share interest multisite time-share plan that are offered in this state shall include the following: (1) The name and address of the developer and the type of time-share plan being offered and the name and address of the time-share project. (2) A description of the existing or proposed accommodations, including the type and number of time- share interests in the accommodations, and if the accommodations are proposed or not yet complete or fully functional, an estimated date of completion. (3) The number of accommodations and time-share interests, expressed in periods of seven-day use availability or other time increments applicable to the time-share plan, committed to the multisite time- share plan, and available for use by purchasers and a representation about the percentage of useable time authorized for sale, and if that percentage is 100 percent, then a statement describing how adequate periods of time for maintenance and repair will be provided. (4) A description of any existing or proposed amenities of the time-share plan and, if the amenities are proposed or not yet complete or fully functional, the estimated date of completion. (5) The extent to which financial arrangements have been made for the completion of any incomplete, promised improvements. (6) A description of the duration, phases, and operation of the time-share plan. (7) The name and principal address of the managing entity and a description of the procedures, if any, for altering the powers and responsibilities of the managing entity and for removing or replacing it. (8) The current annual budget as required by Section 11240, along with the projected assessments and a description of the method for calculating and apportioning the assessments among purchasers, all of which shall be attached as an exhibit to the public report. (9) Any initial or special fee due from the purchaser at closing together with a description of the purpose and the method of calculating the fee. (10) A description of any financing offered by or available through the developer. (1 1) A description of any liens, defects, or encumbrances on or affecting the title to the time- share interests. (12) A description of any bankruptcies, pending civil or criminal suits, adjudications, or disciplinary actions of which the developer has knowledge, that would have a material effect on the developer's ability to perform its obligations. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 23/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (13) Any current or expected fees or charges to be paid by time-share purchasers for the use of any amenities related to the time-share plan. (14) A description and amount of insurance coverage provided for the protection of the purchaser. (15) The extent to which a time-share interest may become subject to a tax lien or other lien arising out of claims against purchasers of different time-share interests. (16) A statement disclosing any right of first refusal or other restraint on the transfer of all or any portion of a time-share interest. (17) A statement disclosing that any deposit made in connection with the purchase of a time- share interest shall be held by an escrow agent until expiration of any right to cancel the contract and that any deposit shall be returned to the purchaser if he or she elects to exercise his or her right of cancellation. Alternatively, if the commissioner has accepted from the developer a surety bond, irrevocable letter of credit, or other financial assurance, each of which shall be enforceable by the association, in lieu of placing deposits in an escrow account: (A) a statement disclosing that the developer has provided a surety bond, irrevocable letter of credit, or other financial assurance in an amount equal to or in excess of the funds that would otherwise be placed in an escrow account, (B) a description of the type of financial assurance that has been obtained, (C) a statement that if the purchaser elects to exercise his or her right of cancellation as provided in the contract, the developer shall return the deposit, and (D) a description of the person or entity to whom the purchaser should apply for payment. (18) A statement that the assessments collected from the purchasers will be kept in a segregated account separate from the assessments collected from the purchasers of other time-share plans managed by the same managing entity, along with a statement identifying the location of the account and a disclosure of the rights of owners to inspect the records pertaining to their accounts. (19) If the time-share plan provides purchasers with the opportunity to participate in an exchange program, a description of the name and address of the exchange company and the method by which a purchaser accesses the exchange program. (20) Any other information that the developer, with the approval of the commissioner, desires to include in the public report. (21) Any other information reasonably requested by the commissioner. (b) Public reports for specific time-share interest multisite time-share plans shall include the following additional disclosures: (1) A description of each component site, including the name and address of each component site. (2) The number of accommodations and time-share interests, expressed in periods of seven-day use availability or other time increments applicable to each component site of the time-share plan, https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 24/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) committed to the multisite time-share plan and available for use by purchasers and a representation about the percentage of useable time authorized for sale, and if that percentage is 100 percent, then a statement describing how adequate periods of time for maintenance and repair will be provided. (3) Each type of accommodation in terms of the number of bedrooms, bathrooms, and sleeping capacity, and a statement of whether or not the accommodation contains a full kitchen. For purposes of this description, a "full kitchen" means a kitchen having a minimum of a dishwasher, range, sink, oven, and refrigerator. (4) A description of amenities available for use by the purchaser at each component site. (5) A description of the reservation system, which shall include the following: (A) The entity responsible for operating the reservation system, its relationship to the developer, and the duration of any agreement for operation of the reservation system. (B) A summary of the rules and regulations governing access to and use of the reservation system. (C) The existence of and an explanation regarding any priority reservation features that affect a purchaser's ability to make reservations for the use of a given accommodation on a first -come -first - served basis. (6) The name and principal address of the managing entity for the multisite time-share plan and a description of the procedures, if any, for altering the powers and responsibilities of the managing entity and for removing or replacing it. (7) A description of any right to make any additions, substitutions, or deletions of accommodations, amenities, or component sites, and a description of the basis upon which accommodations, amenities, or component sites may be added to, substituted in, or deleted from the multisite time-share plan. (8) A description of the purchaser's liability for any fees associated with the multisite time-share plan. (9) The location of each component site of the multisite time-share plan, the historical occupancy of each component site for the prior 12-month period, if the component site was part of the multisite time- share plan during the 12-month time period, as well as any periodic adjustment or amendment to the reservation system that may be needed in order to respond to actual purchaser use patterns and changes in purchaser use demand for the accommodations existing at that time within the multisite time-share plan. (10) Any other information that the developer, with the approval of the commissioner, desires to include in the time-share disclosure statement. (c) Public reports for nonspecific time-share interest multisite time-share plans shall include the following: (1) The name and address of the developer. (2) A description of the type of interest and usage rights the purchaser will receive. (3) A description of the duration and operation of the time-share plan. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 25/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (4) A description of the type of insurance coverage provided for each component site. (5) An explanation of who holds title to the accommodations of each component site. (6) A description of each component site, including the name and address of each component site. (7) The number of accommodations and time-share interests, expressed in periods of seven-day use availability or other time increments applicable to the multisite time-share plan for each component site committed to the multisite time-share plan and available for use by purchasers and a representation about the percentage of useable time authorized for sale, and if that percentage is 100 percent, then a statement describing how adequate periods of time for maintenance and repair will be provided. (8) Each type of accommodation in terms of the number of bedrooms, bathrooms, and sleeping capacity, and a statement of whether or not the accommodation contains a full kitchen. For purposes of this description, a "full kitchen" means a kitchen having a minimum of a dishwasher, range, sink, oven, and refrigerator. (9) A description of amenities available for use by the purchaser at each component site. (10) A description of any incomplete amenities at any of the component sites along with a statement as to any assurance for completion and the estimated date the amenities will be available. (1 1) The location of each component site of the multisite time-share plan, the historical occupancy of each component site for the prior 12-month period, if the component site was part of the multisite time- share plan during such 12-month time period, as well as any periodic adjustment or amendment to the reservation system that may be needed in order to respond to actual purchaser use patterns and changes in purchaser use demand for the accommodations existing at that time within the multisite time-share plan. (12) A description of any right to make any additions, substitutions, or deletions of accommodations, amenities, or component sites, and a description of the basis upon which accommodations, amenities, or component sites may be added to, substituted in, or deleted from the multisite time-share plan. (13) A description of the reservation system that shall include all of the following: (A) The entity responsible for operating the reservation system, its relationship to the developer, and the duration of any agreement for operation of the reservation system. (B) A summary of the rules and regulations governing access to and use of the reservation system. (C) The existence of and an explanation regarding any priority reservation features that affect a purchaser's ability to make reservations for the use of a given accommodation on a first -come -first - served basis. (14) A description of any liens, defects, or encumbrances that materially affect the purchaser's use rights. (15) The name and principal address of the managing entity for the multisite time-share plan and a description of the procedures, if any, for altering the powers and responsibilities of the managing entity https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 26/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) and for removing or replacing it, and a description of the relationship between a multisite time- share plan managing entity and the managing entity of the component sites of a multisite time-share plan, if different from the multisite time-share plan managing entity. (16) The current annual budget as provided in Section 11240, along with the projected assessments and a description of the method for calculating and apportioning the assessments among purchasers, all of which shall be attached as an exhibit to the public report. (17) Any current fees or charges to be paid by time-share purchasers for the use of any amenities related to the time-share plan and a statement that the fees or charges are subject to change. (18) Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee. (19) A description of any financing offered by or available through the developer. (20) A description of any bankruptcies, pending civil or criminal suits, adjudications, or disciplinary actions of which the developer has knowledge, which would have a material effect on the developer's ability to perform its obligations. (21) A statement disclosing any right of first refusal or other restraint on the transfer of all or any portion of a time-share interest. (22) A statement disclosing that any deposit made in connection with the purchase of a time- share interest shall be held by an escrow agent until expiration of any right to cancel the contract and that any deposit shall be returned to the purchaser if he or she elects to exercise his or her right of cancellation. Alternatively, if the commissioner has accepted from the developer a surety bond, irrevocable letter of credit, or other financial assurance in lieu of placing deposits in an escrow account: (A) a statement disclosing that the developer has provided a surety bond, irrevocable letter of credit, or other financial assurance in an amount equal to or in excess of the funds that would otherwise be placed in an escrow account, (B) a description of the type of financial assurance that has been arranged, (C) a statement that if the purchaser elects to exercise his or her right of cancellation as provided in the contract, the developer shall return the deposit, and (D) a description of the person or entity to whom the purchaser should apply for payment. (23) If the time-share plan provides purchasers with the opportunity to participate in an exchange program, a description of the name and address of the exchange company and the method by which a purchaser accesses the exchange program. (24) Any other information that the developer, with the approval of the commissioner, desires to include in the time-share disclosure statement. (d) The commissioner may establish by regulation provisions regarding the delivery of the public report https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 27/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) and other required information through alternative media forms. (e) The commissioner may, upon finding that the subject matter is otherwise adequately covered or the information is unnecessary or inapplicable, waive any requirement set forth in this section. 11235 (a) A person who has entered into a contract to purchase a short-term product shall have the right to rescind the contract until midnight of the seventh calendar day, or a later time as provided in the contract, following the day on which the contract is first made, in which event the purchaser shall be entitled to a refund of 100 percent of the consideration paid under the contract, without deduction. (b) The developer or other person who offers a short-term product shall clearly and conspicuously disclose, in writing, to all purchasers of a short-term product, all of the following: (1) The right of rescission provided for in subdivision (a). (2) That reservations for accommodations under the contract are subject to availability and that there is no guarantee that a purchaser will be able to obtain specific accommodations during a specific time period, if applicable. (3) Specific blackout dates, if applicable. (4) That the earlier the purchaser requests a reservation, the greater the opportunity to received a confirmed reservation. (5) That, if the purchaser later purchases a time-share interest, the developer shall provide the purchaser with the then -current public report for the time-share plan being purchased and that the purchaser shall have until midnight of the seventh calendar day following receipt of the public report to cancel the purchase of the time-share interest. (c) If a purchaser is unable to obtain a confirmed reservation for a specific accommodation and time period requested, the developer or other person who offers the short-term product shall attempt to provide the purchaser with a substantially similar alternative to the reservation requested. If the developer or other person who offers the short-term product is unable to provide the reservation requested or an acceptable alternative during the initial term of the contract, the purchaser may request and be granted an extension of the contract for a period of 12 months. (d) The contract for the purchase of a short-term product shall include the date of the contract and shall contain, in immediate proximity to the space reserved for the signature of the purchaser, a conspicuous statement as follows: "YOU HAVE THE RIGHT TO CANCEL THIS CONTRACT AT ANY TIME PRIOR TO MIDNIGHT OF THE SEVENTH (7TH) (or later) CALENDAR DAY AFTER THE DATE OF THIS CONTRACT AND RECEIVE A FULL REFUND. YOU MAY https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 28/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6fff Nb2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) EXERCISE YOUR RIGHT TO CANCEL BY SENDING A FACSIMILE, OR BY DEPOSIT, FIRST-CLASS POSTAGE PREPAID, INTO THE UNITED STATES MAIL TO THE FOLLOWING ADDRESS: (SPECIFIC CONTACT INFORMATION)" (e) A purchaser of a short-term product may exercise the right of rescission by giving written notice to the owner of the short-term product as specified in subdivision (b), using a preprinted form provided by the developer. The developer or other person who offers the short-term product shall cause any deposit given by a purchaser who has exercised the right to rescind described in subdivision (a) to be returned to the purchaser not later than the last to occur of 10 business days following receipt of the purchaser's written notice of rescission, or 10 business days following the date upon which any deposit becomes good and immediately available funds. (f) A developer or other person who offers a short-term product shall do one of the following: (1) Place any purchase money funds received from the purchaser of a short-term product into an independent escrow depository until the seven-day period for rescission described in subdivision (a) has expired. (2) Post a bond to secure the return of a purchaser's purchase money funds in a form and in an amount prescribed by the commissioner. (3) Make alternative arrangements satisfactory to the commissioner to secure the owner's obligation to return the purchase money funds. (g) If applicable, the developer shall disclose to the purchaser the type of alternative arrangement to be used and, in the event of a claim, to whom the purchaser should apply for payment under the alternative arrangement. (h) The developer shall compensate the association for any services acquired from the association or for any of the association' s property used when fulfilling a short-term product in excess of services or use of property provided to other owners. (i) If the contract for a short-term product is negotiated primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, the developer shall provide to the prospective purchaser prior to the commencement of the rescission period an unexecuted translation of the contract in the language in which the contract was negotiated. The terms of the short-term contract that is executed in the English language shall determine the rights and obligations of the parties. 11236 (a) A receipt on the form specified herein shall be taken by or on behalf of the developer from each person executing a reservation agreement under authority of a preliminary public report and each person who has made a written offer to purchase or lease a time-share interest under authority of a https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 29/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) preliminary, conditional, or final public report. (b) The developer or his or her agent shall retain each receipt for a final public report for a period of three years from the date of the receipt and shall make the receipts available for inspection by the commissioner or his or her designated representative during regular business hours. (c) The form approved by the commissioner for the acknowledgment of receipt of a preliminary, conditional, or final public report shall be as follows: "RECEIPT FOR PUBLIC REPORT The Law and Regulations of the commissioner require that you as a prospective purchaser or lessee be afforded an opportunity to read the public report for this time-share before you execute a contract to purchase or lease a time-share interest or before any money or other consideration toward purchase or lease of a time-share interest is accepted from you. You must be afforded an opportunity to read the report before a written reservation or any deposit in connection therewith is accepted from you. DO NOT SIGN THIS RECEIPT UNTIL YOU HAVE RECEIVED A COPY OF THE REPORT AND HAVE READ IT. I have read the commissioner's public report on (File No., Tract No., or Name). I understand the report is not a recommendation or endorsement of the time-share, but is for information only. The date of the public report which I received and read is Developer Is Required to Retain This Receipt for Three Years. 11237 (a) If a purchaser of a time-shareinterest in a time-share plan is offered the opportunity to acquire an incidental benefit in connection with the sale of a time-share interest, the developer shall provide the purchaser with a disclosure statement containing all of the following information: (1) A general description of the incidental benefit, including the terms and conditions governing the use of the incidental benefit. (2) A statement that the continued availability of the incidental benefit is not necessary for the use and enjoyment of the purchaser's use of any accommodation of the time-share plan. (3) A statement that the purchaser's use of or participation in the incidental benefit is completely voluntary, and payment of any fee or other cost associated with the incidental benefit is required only upon that use or participation. (4) A listing of the fees, if any, that the purchaser will be required to pay to use the incidental benefit. (5) A statement that no costs of acquisition, operation, maintenance, or repair of the incidental benefit shall be passed on to purchasers of time-share interests in the time-share plan as a common expense of the time-share plan. (b) A developer shall include in its initial application for registration, a description of any incidental benefits which may be used by the developer. The developer may, but shall not be required to describe the incidental benefits in the public report for the time-share plan. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 30/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN8 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (c) The incidental benefit disclosure is not required to be filed with the commissioner prior to the use of the disclosure. However, the commissioner may request and review the records of the developer to ensure that the incidental benefit disclosure required by this section has been given to purchasers and to ensure that the statements required to be made in the disclosure are accurate as to the operation of each incidental benefit offered by the developer. The developer shall deliver the records to the commissioner within 10 business days of the commissioner's request. 11238 (a) The purchase contract entered into by any person who has made an offer to purchase a time- share interest or interests, any incidental benefit, made on the same day or within seven calendar days after the person attended a sales presentation for a time-share interest, or any right under an exchange program, made on the same day or within seven calendar days after the person attended a sales presentation for a time-share interest, shall be voidable by the purchaser, without penalty, within seven calendar days, or a longer period as provided in the contract, after the receipt of the public report or the execution of the purchase contract, whichever is later. (1) The purchase contract shall provide notice of the seven-day cancellation period, together with the name and mailing address to which any notice of cancellation shall be delivered. (2) Notice of cancellation shall be deemed timely if given not later than midnight of the seventh calendar day. (b) A person who has made an offer to purchase a time-share interest, incidental benefit, or rights under an exchange program as described above may exercise the right of cancellation granted by this section by giving written notification of the notice to cancel to the developer at the place of business designated by the developer in the purchase contract. (c) If the notice of cancellation is by United States mail, a rebuttable presumption shall exist that notice was given on the date that it is postmarked. If the notice is sent by facsimile, it shall be considered given on the date of a confirmed transmission. If the notice is by means of a writing sent other than by United States mail or telegraph, it shall be considered as given at the time of delivery at the place of business designated by the developer. Exercising the rescission rights of the time-share interest shall also automatically rescind any agreement for the purchase of an incidental benefit or an enrollment into an exchange program where the agreements were entered into in conjunction with the purchase of the time-share interest. (d) Each developer shall utilize and furnish each purchaser with a fully completed and executed copy of a contract pertaining to the sale of a time-share interest, which contract shall include the following information: (1) The actual date the contract is executed by each party. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 31/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (2) The names and addresses of the developer and time-share plan. (3) The initial purchase price and any additional charges to which the purchaser may be subject to in connection with the purchase of the time-share interest, including, but not limited to, financing, or other amounts that will be collected from the purchaser on or before closing, such as the current year's annual assessment for common expenses. (4) The estimated date of completion of construction of each accommodation promised to be completed which is not completed at the time the contract is executed. (5) A brief description of the nature and duration of the time-share interest being sold, including whether any interest in real property is being conveyed. (6) The specific number of years of the term of the time-share plan. (7) Immediately prior to the space reserved in the contract for the signature of the purchaser, the developer shall disclose, in conspicuous type, substantially the following notice of cancellation: You may cancel this contract without any penalty or obligation within seven calendar days of receipt of the public report or after the date you sign this contract, whichever date is later. If you decide to cancel this contract, you must notify the developer in writing of your intent to cancel. Your notice of cancellation shall be effective upon the date sent and shall be sent to (name of developer) at (address of developer). Your notice of cancellation may also be sent by facsimile to (facsimile number of the developer) or by hand -delivery. Any attempt to obtain a waiver of your cancellation right is void and of no effect. (8) The purchase contract for an interest in a single site or specific time-share interest multisite time- share plan without an accommodation in this state shall include the following additional disclosure in conspicuous type: The accommodations of this time-share plan are located outside of California. As such, the management (including all matters relating to the association, the association budget, and any management contract) of this time-share plan is not governed by California law, but by the applicable law, if any, of the jurisdiction in which the accommodations are located as stated in the public report. You should review the governing documents related to the association, the association's budget, and the management of the time-share plan. (e) If rescission is sought and granted for a violation of this section, the court may also award reasonable attorneys' fees and costs to the prevailing purchaser. 11239 (a) To inform a purchaser of his or her right of cancellation under Section 11238, the developer shall attach to the face page of every copy of a public report given to a prospective purchaser, the cancellation https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 32/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) notice set forth in subdivision (b) thereof printed in conspicuous type. (b) The form and content of the notice shall be as follows: NOTICE OF CANCELLATION RIGHTS You may cancel the purchase of the time-share interest(s) in the time-share plan identified below without any penalty or obligation and are legally entitled to the return of all money and other considerations that you have given toward the purchase. If you decide to cancel your purchase, you must notify the developer in writing of your intent to cancel within seven calendar days of receipt of the public report or the date you sign the purchase contract, whichever date is later. Your notice of cancellation shall be effective upon the date sent and shall be sent to the developer at the address or facsimile number provided in your purchase contract. Any attempt to obtain a waiver of your cancellation right is void and of no effect. (c) Each notice shall also contain the following form. The form shall have all developer -related information completed by the developer and may be used by a purchaser to cancel the sale of the time- share interest: (Name of Developer) (Address of Developer) (Facsimile Number of Developer) (Name of Time-share Plan) (DRE Registration File Number) RE: ELECTION TO CANCEL THE SALE OF A TIME-SHARE INTEREST(S) I hereby elect to cancel my purchase of the time-share interest(s) in the above -name time-share plan. (Date) (Signature) (Print Name) (Signature) (Print Name) 11240 An estimated operating budget for the time-shareplan shall be filed with the commissioner along with the other information required to be registered pursuant to this chapter, and shall contain the following information: (a) The estimated annual expenses of the time-share plan along with the estimated revenue of the association from all sources, including the amounts collectible from purchasers as assessments. The estimated payments by the purchaser for assessments shall also be stated in the estimated amounts for the times when they will be due. Expenses shall be shown in a manner that enables the purchaser to calculate the annual expenses associated with the time-share interest being purchased. Expenses that https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 33/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) are personal to purchasers that are not uniformly incurred by all purchasers or that are not provided for or contemplated by the time-share plan documents may be excluded from this estimate. (b) (1) The estimated items of expenses of the time-share plan and the association, except as excluded under subdivision (a), including, but not limited to, if applicable, the following items, that shall be stated either as association expenses collectible by assessments or as expenses of the purchaser payable to persons other than the association: (2) Expenses for the association: (A) Administration of the association. (B) Management fees. (C) Maintenance. (D) Rent for accommodations. (E) Taxes upon time-share property. (F) Taxes upon leased areas. (G) Insurance. (H) Security provisions. (1) Other expenses. (J) Operating capital. (K) Equitable apportionment of expenses between time-share and non -time-share uses of the common area, if applicable. (L) Reserves for deferred maintenance and reserves for capital expenditures. All reserves for any accommodations and common areas of a time-share plan located in this state shall be based upon the estimated life and replacement cost of accommodations and common elements of the time-share plan. For any accommodations and common elements of a time-share plan located outside of this state, the developer shall disclose the amount of reserves for deferred maintenance and capital expenditures required by the law of the situs state, if applicable, and maintained for those accommodations and common elements, which amount of reserves shall be based on the estimated life and replacement cost of each reserve item. The developer or the association shall include in the budget a reasonable reserve accumulation plan. A plan that (1) provides for reserves to be funded within five years at a level of 50 percent of the amount specified in the reserve study as fully funded, and (ii) requires those reserves collected in any given year to equal or exceed the amount of reserve expenditures estimated for that year shall be deemed to be a reasonable reserve accumulation plan. The funding of reserves may be based on collection of reserve amounts in conjunction with annual https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 34/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) assessments, or on some alternative mechanism, including, but not limited to, a bond, letter of credit, or similar mechanism. Collection of required reserve amounts solely by one or more special assessments is not reasonable. If control of the association is in owners other than the developer, and such owners vote not to maintain reserves or to maintain reserves at less than 50 percent, the failure to maintain the required level of reserves shall not be cause for denying the developer a public report. (c) The estimated amounts shall be stated for a period of at least 12 months and may distinguish between the period prior to the time that purchasers elect a majority of the board of administration and the period after that date. (d) The budget of a phase time-share plan shall contain a note identifying the number of time- share interests covered by the budget, indicating the number of time-share interests, if any, estimated to be declared as part of the time-share plan during that calendar year, and projecting the common expenses for the time-share plan based upon the number of time-share interests estimated to be declared as part of the time-share plan during that calendar year. (e) For single site time-share plans and component sites of a multisite time-share plan located outside of the state, the budget shall include the subject matter set forth in subdivisions (a) to (d), inclusive. The budget shall be in compliance with the applicable laws of the state or jurisdiction in which the time-share property or component site is located, and if there is a conflict between the affirmative standards set forth in the laws of the situs state and the requirements set forth in this section, the law of the situs state shall control. If the budget provides for the matters contained in subdivisions (a) to (d), inclusive, the budget shall be deemed to be in compliance with the requirements of this section, and the developer shall not be required to make revisions in order to comply with this section. (f) The budget shall include a certification subscribed and sworn by an expert in the preparation of time- share plan budgets, who may be (1) an independent public accountant, (2) a certified public accountant, who is an employee of the developer, or (3) at the discretion of the commissioner, another qualified individual or entity. If the budget certification is prepared by a certified public accountant who is an employee of the developer who is not the chief financial officer, the certification shall also be signed on behalf of the developer by an appropriate officer, if the developer is a corporation, or the managing member, if the developer is a limited liability company. The certification concerning the adequacy of the budget shall be in the following form: On behalf of the developer of the captioned time-share plan, I/my firm has reviewed or prepared the budget containing projections of income and expenses for time-share operation. My/our experience in this field https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 35/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) includes: I/we have reviewed the budget and investigated the facts set forth in the budget and the facts underlying it with due diligence in order to form a basis for this certification. I/we certify that the projections in the budget appear reasonable and adequate based on present prices (adjusted to reflect continued inflation and present levels of consumption for comparable units similarly situated) or, for an existing project, based on historical data for the project. I/we certify that the budget: M Sets forth in detail the terms of the transaction as it relates to the budget and is complete, current, and accurate. (2) Affords potential investors, purchasers, and participants an adequate basis upon which to found their judgment. (3) Does not omit any material fact. (4) Does not contain any untrue statement of a material fact. (5) Does not contain any fraud, deception, concealment, or suppression. (6) Does not contain any promise or representation as to the future which is beyond reasonable expectation or unwarranted by existing circumstances. (7) Does not contain any representation or statement which is false, where I/we: (A) Knew the truth. (B) With reasonable effort could have known the truth. (C) Made no reasonable effort to ascertain the truth. (D) Did not have knowledge concerning the representation or statement made. I/we understand that a copy of this certification is intended to be incorporated into the public report so that prospective purchasers may rely on it. This certification is made under the penalty of perjury for the benefit of all persons to whom this offer is made. We understand that violations are subject to the civil and criminal penalties of the laws of California. The certification shall be dated within 90 days prior to the date of the submission of the budget to the commissioner. The expert's certification shall be based on experience in the management of hotel, resort, or time-share properties and disclose the approximate number of properties managed and length of time managed, together with other relevant real estate experience, qualifications, and licenses. (g) Any budget that is not certified by an independent certified public accountant or an employee of the developer who is licensed as a certified public accountant may be reviewed by the commissioner to confirm the accuracy of the certification. (h) The certified budget for the time-share plan shall be prepared and submitted by the developer to the commissioner annually for as long as the registration is in effect. If the budget is increased more than 20 percent in any year, the developer shall submit to the commissioner, along with the increased budget, evidence that the requirements of paragraph (5) of subdivision https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 36/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (a) of Section 11265 have been met. The budget shall be submitted at least 15 days prior to the first day of the period that it covers. Upon the submission of each annual budget, the exhibit to the public report specified in paragraph (8) of subdivision (a) of, and paragraph (16) of subdivision (c) of, Section 11234 shall be updated. The updating of the exhibit shall not be considered to constitute an amendment of the public report. (i) The audited financial statements of the association prepared pursuant to paragraph (2) of subdivision (b) of Section 11272 shall be delivered to the commissioner upon request. (j) At the time an application is submitted for renewal of the public report or any amendment of the public report that affects the budget for the time-share plan, the developer shall submit with the application a copy of the most recent audited financial statement for the time-share plan, along with a certified copy of the budget reflecting the amendment or renewal. If the commissioner, upon reasonable comparison of the budget and the prior year's audited financial statements, determines that the budget is deficient, the commissioner may subject the budget to a substantive review. 11241 (a) The developer is obligated for the expenses associated with unsold inventory held by the developer. The obligation can be fulfilled in either of the following ways: (1) The developer shall pay the full maintenance fee for each of the interests owned by the developer. (2) The developer shall enter into a subsidy agreement with the association to subsidize the association budget by covering any shortfall from expenses incurred and assessments collected from other owners. (b) To assure the fulfillment of the obligations of the developer of a time-share plan to either pay assessments as an owner of time-share interests in the time-share plan or to pay a subsidy, the commissioner shall require that the developer furnish a surety bond, cash deposit, letter of credit, or other alternate assurance enforceable by the association and acceptable to the commissioner and that assurance shall be in the amount required by subdivision (c) and shall be in compliance with either paragraph (1) or (2) of subdivision (c). (c) The amount of the assurance shall be equal to the lesser of 50 percent of the anticipated cost of operation and maintenance of the time-share plan, including the establishment of reserves for https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 37/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) replacement and major repair, for an operational period of one year or 100 percent of the assessments attributed to the total amount of the total unsold time-share interests owned by the developer and registered pursuant to this chapter. The security shall be delivered to a neutral escrow depository, or to the trustee if title to the time-share property has been delivered to the trustee, along with instructions signed by the developer for the benefit of the association which shall provide as follows: (1) Where the developer pays full maintenance fees on unsold inventory the security shall remain available to pay any assessments for which the developer is liable and delinquent until the depository or trustee has received both of the following: (A) Written notice, from the developer that sales of 80 percent of the time-share interest in the time- share plan have been closed. (B) Written notice from the association that the developer is not delinquent in the payment of assessments for which it is obligated. (2) Where the developer subsidizes the association in lieu of paying full maintenance fees, the developer shall enter into a subsidy agreement in accordance with the provisions of Section 11242. (d) If there is a dispute between the developer and the association with respect to the question of satisfaction of the conditions for exoneration or release of the security, the issue shall, at the request of either party, be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The fee payable to the American Arbitration Association to initiate the arbitration shall be remitted by the developer. The cost of arbitration shall ultimately be borne as determined by the arbitrator under these rules. 11242 (a) In any time-shareplan in which the developer undertakes to subsidize the cost of operating and maintaining the time-share plan, the developer shall do all of the following: (1) Enter into a contract with the association that specifies in detail the obligations of the developer and the methods to be used in valuing the goods and services furnished under the time-share plan. The department will not approve a subsidization program unless provisions are made for the accumulation of reserves for replacement and major maintenance of the time-share property in accordance with accepted property management practices and the transfer of the reserve fund to the association on termination of the program. (2) Furnish the association with an executed copy of the subsidization contract within 10 days after closing of escrow of the first sale or lease of a time-share interest. (3) Furnish the assurance required by Section 11241. (b) The assurance specified in paragraph (3) of subdivision https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 38/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (a) shall be delivered to the trustee or an escrow depository acceptable to the department along with an executed copy of the subsidization contract and instructions to the escrow signed by the developer and on behalf of the association. The instructions shall provide for both of the following: (1) The escrow agent shall not release or exonerate the security device until it has received written notice, from the association that the developer has faithfully performed all of his or her obligations under the subsidization contract. (2) If there is a dispute between the developer and the association with respect to the questions of satisfaction of the conditions for exoneration or release of the security, the issue or issues shall, at the request of either party, be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. (c) The fee payable to the American Arbitration Association to initiate arbitration shall be submitted by the developer. The costs of arbitration shall be borne by the party as determined by the arbitrator pursuant to the rules specified in paragraph (2) of subdivision (b). 11243 The developer shall comply with the following escrow requirements: (a) A developer of a time-share plan shall deposit into an escrow account in an acceptable escrow depository 100 percent of all funds that are received during the purchaser's rescission period. An acceptable escrow depository includes, when qualified to do business in this state, escrow agents licensed by the Commissioner of Corporations, banks, trust companies, savings and loan associations, title insurers, and underwritten title companies. The deposit of these funds shall be evidenced by an executed escrow agreement between the escrow agent and the developer, that shall include provisions that state the following: (1) Funds may be disbursed to the developer by the escrow agent from the escrow account only after expiration of the purchaser's rescission period and in accordance with the purchase contract, subject to subdivision (b). (2) If a prospective purchaser properly cancels the purchase contract pursuant to its terms, the funds shall be paid to the prospective purchaser or paid to the developer if the prospective purchaser's funds have been previously refunded by the developer. (b) If a developer contracts to sell a time-share interest and the construction of any property in which the time-share interest is located has not been completed, the developer, upon expiration of the rescission period, shall continue to maintain in an escrow account all funds received by or on behalf of https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 39/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) the developer from the prospective purchaser under his or her purchase contract. The commissioner shall establish, by regulation, the types of documentation which shall be required for evidence of completion, including, but not limited to, a certificate of occupancy, a certificate of substantial completion, or an inspection by the State Fire Marshal designee or an equivalent public safety inspection agency in the applicable jurisdiction. Unless the developer submits financial assurances, in accordance with subdivision (c), funds shall not be released from escrow until a certificate of occupancy, or its equivalent, has been obtained and the rescission period has passed, and the time-share interest can be transferred free and clear of blanket encumbrances, including mechanics' liens. Funds to be released from escrow shall be released as follows: (1) If a prospective purchaser properly cancels the purchase contract pursuant to its terms, the funds shall be paid to the prospective purchaser or paid to the developer if the prospective purchaser's funds have been previously refunded by the developer. (2) If a prospective purchaser defaults in the performance of the prospective purchaser's obligations under the purchase contract, the funds shall be paid to the developer. (3) If the funds of a prospective purchaser have not been previously disbursed in accordance with the provisions of this subdivision, they may be disbursed to the developer by the escrow agent upon the issuance of acceptable evidence of completion of construction. (c) In lieu of the provisions in subdivisions (a) and (b), the commissioner may accept from the developer a surety bond, escrow bond, irrevocable letter of credit, or other financial assurance or arrangement acceptable to the commissioner. Any acceptable financial assurance shall be in an amount equal to or in excess of the lesser of (1) the funds that would otherwise be placed in escrow, or (2) in an amount equal to the cost to complete the incomplete property in which the time-share interest is located. However, in no event shall the amount be less than the amount of funds that would otherwise be placed in escrow pursuant to paragraph (1) of subdivision (a). (d) The developer shall provide escrow account information to the commissioner and shall execute in writing an authorization consenting to an audit or examination of the account by the commissioner on forms provided by the commissioner. The developer shall comply with the reconciliation and records requirements established by regulation by the commissioner. The developer shall make documents related to the escrow account or escrow obligation available to the commissioner upon the department's request. The escrow agent shall maintain any disputed funds in the escrow account until either of the https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 40/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) following occurs: (1) Receipt of written direction agreed to by signature of all parties. (2) Deposit of the funds with a court of competent jurisdiction in which a civil action regarding the funds has been filed. 11244 (a) Excluding any encumbrance placed against the purchaser' s time-share interest securing the purchaser's payment of purchase money financing for the purchase, the developer shall not be entitled to the release of any funds escrowed under Section 11243 with respect to each time-share interest and any other property or rights to property appurtenant to the time-share interest, including any amenities represented to the purchaser as being part of the time-share plan, until the developer has provided satisfactory evidence to the commissioner of one of the following: (1) The time-share interest, including, but not limited to, a time-share interest in any component sites of a nonspecific time-share interest multisite time-share plan, together with any other property or rights to property appurtenant to the time-share interest, including any amenities represented to the purchaser as being part of the time-share plan, are free and clear of any of the claims of the developer, any owner of the underlying fee, a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the time-share interest or appurtenant property or property rights. (2) The developer, any owner of the underlying fee, a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the time-share interest or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the time-share plan, has recorded a subordination and notice to creditors document in the appropriate public records of the jurisdiction in which the time-share interest is located. The subordination document shall expressly and effectively provide that the interest holder's right, lien, or encumbrance shall not adversely affect, and shall be subordinate to, the rights of the owners of the time-share interests in the time-share plan regardless of the date of purchase, from and after the effective date of the subordination document. (3) The developer, any owner of the underlying fee, a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the time-share interest or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the time-share plan, has transferred the subject accommodations, amenities, or all use rights in the amenities to a nonprofit organization or owners' association to be held for the use and benefit of the owners of the time-share plan, which shall act as a fiduciary to the purchasers, the developer has transferred control of the entity to the owners or does not exercise its voting rights in the entity with https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 41/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN8 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) respect to the subject accommodations or amenities. Prior to the transfer, any lien or other encumbrance against the accommodation or facility shall be made subject to a subordination and notice to creditors' instrument pursuant to paragraph (2). (4) Alternative arrangements have been made which are adequate to protect the rights of the purchasers of the time-share interests and approved by the commissioner. (b) Nothing in this section shall prevent a developer from accessing any escrow funds if the developer has complied with subdivision (c) of Section 11243. (c) The developer shall notify the commissioner of the extent to which an accommodation may become subject to a tax or other lien arising out of claims against other purchasers in the same time-share plan. The commissioner may require the developer to notify a prospective purchaser of any such potential tax or lien that would materially and adversely affect the prospective purchaser. 11245 (a) No person subject to this chapter shall do any of the following: (1) Make any material misrepresentation that is false or misleading in connection with any advertisement or promotion of a time-share plan. (2) Make a prediction of any increases in the resale price or resale value of the time-share interest. (3) Materially misrepresent the size, nature, extent, qualities, or characteristics of the offered time- share plan. (4) Materially misrepresent the conditions under which a purchaser may exchange the right to use accommodations in one location for the right to use accommodations in another location. (5) Materially misrepresent the current or future availability of a resale or rental program offered by or on behalf of the developer. (6) Materially misrepresent the nature or extent of any incidental benefit. (7) Fail to deliver any item offered in connection with a promotion to a prospective purchaser upon the conclusion of the sales presentation, or fail to deliver any item offered in connection with a promotion to a prospective purchaser, upon request, reasonably approximate to the conclusion of the length of time for the sales presentation that was previously represented to the prospective purchaser. (8) Fail to disclose, in a manner that meets the requirements of Section 17537.1 or 17537.2 of the Business and Professions Code, that a certificate, coupon, or raincheck redeemable for fulfillment for goods or services will be provided in connection with a promotion for the purchase of a time- share interest, if that is the case. (9) State that the purchase of a time-share interest constitutes a financial investment. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 42/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (10) Fail to clearly and conspicuously disclose, prior to the execution of any purchase contract, the annual maintenance and association dues or any separately billed taxes, when applicable. (1 1) Fail to clearly disclose in writing any automatic charging or billing procedure, and fail thereafter to obtain the express written authorization from the prospective purchaser for any purchase, subscription, or enrollment that results in that automatic charging or billing of initial or periodic amounts to the prospective purchaser. (12) If the contract for a time-share interest is negotiated primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, and the developer fails to provide to the prospective purchaser prior to the commencement of the rescission period an unexecuted translation of the contract in the language in which the contract was negotiated. (13) Fail to inform, verbally or in writing, any prospective purchaser that he or she can take as much time as he or she requires in order to read the public report, and any and all other documents necessary to consummate a sale before leaving the premises or signing a contract, and not allowing, upon request, the prospective purchaser the time and opportunity to do so. If the prospective purchaser requests that he or she be able to return the next calendar day to complete the review of the documents before signing, the developer shall accommodate such a request, and the return visit shall not disqualify the prospective purchaser from receiving any price reduction or other incentive for purchasing on the day of the scheduled sales presentation. Further, it shall not be fraudulent or misleading for a developer to honor the request even if presented as an incentive only available on the day of the offer. (14) Inform prospective purchasers that they are finalists in winning an item offered in connection with a promotion or have already won a specific prize, unless it is true. (15) Offer as a promotional incentive any travel certificate or coupon redeemable for transportation, accommodations, or other travel -related service that does not allow the recipient to activate or redeem the incentive without incurring any additional telephone expenses charged by or on behalf of the developer other than the usual toll costs imposed by the prospective purchaser's telephone service. (16) Offer as a promotional incentive any travel certificate or coupon redeemable for fixed air transportation or hotel accommodations or other travel -related service that entitles the prospective purchaser to a trip of a specified duration unless the offeror states at the time of the offer that there are terms or conditions that must be followed in order to utilize the incentive and that the details of the terms will be sent to the consumer in writing in time to be received by the consumer prior to leaving his or her house to attend the scheduled sales presentation. The writing shall include the approximate times of the air or sea transportation' s departure and return, if applicable, and all other material conditions, including any limitations as to the dates or times available for use of the incentive. (17) Misrepresent or fail to disclose that a prospective purchaser is required to attend a sales presentation to obtain a prize or promotional item, if attendance is a requirement of the promotion. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 43/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In 46fffRib2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (18) Fail to inform any prospective purchaser who contacts the developer with a request to cancel a purchase within the rescission period provided by this chapter all of the procedures necessary to effectively cancel the purchase. (19) Fail to cancel a purchase upon the receipt of a valid timely written notice of rescission. No person may obtain from the person a waiver or cancellation of the rescission. (20) Fail to provide any refund of moneys, within the required timeframe, due to the prospective purchaser upon receipt of a valid timely written notice of rescission. (21) Fail to provide a mechanism for an equitable apportionment of expenses between the time- share owner's association and any commercial operation on the property not operated by the time- share owner's association. (b) For any time-share plan in which the managing entity is an affiliate of the developer, neither the developer nor the managing entity shall, during any applicable priority reservation period, hold out for rental to the public on a given day, developer owned or controlled time-share periods in a number greater than the total number of time-share periods owned or controlled by the developer in a particular season, multiplied by a fraction wherein the numerator is the number of time-share periods owned or controlled by the developer in that particular season, and the denominator is the total number or time- share periods in that particular season. For example, if the developer owns or controls 1,000 time- share periods in a particular season, out of a total of 4,000 time-share periods available during that season, then the developer may not hold out for rental to the public during any applicable priority reservation period, more than 250 time-share periods on a given day during that season (1,000 X 1,000/4,000=250). The number of time-share interests permitted to be rented under this subdivision shall be in addition to any time-share interests that the developer may have the right to rent or use by virtue of having acquired those rights from another owner. The developer or managing entity may, at any time, rent any inventory transferred to the developer or managing entity by another owner in exchange for hotel accommodations, future use rights, or other considerations. For any use or rental by a developer of time-share interests owned or controlled by the developer, the developer shall reimburse the association for any increased expenses for housekeeping services that exceed the amount allocated in the assessment for maintenance for the use or rental. 11246 With each application for an amendment or renewal of a public report, and with the initial submittal of an application for a time-share plan in which sales have occurred prior to obtaining a California public report, the developer shall submit to the commissioner a certification by an independent third party acceptable to the commissioner and dated not more than three months prior to the submittal of the application, stating that the inventory control system, described in paragraph https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 44/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (6) of subdivision (c) of Section 11226 functions in accordance with the description set forth in that section. The certification shall be based on a random sampling of transactions performed within the six months preceding the date of the application. Inventory control systems that cover time-share estates for which the developer offers, and the title insurance company agrees to provide title insurance, shall not require certification. Independent title insurance companies licensed to do business as such in this state and independent certified public accountants shall be deemed acceptable third parties in accordance with this section. Article 3. Time -Share Plan Requirements 11250 A time-shareplan may be created in any accommodation unless otherwise prohibited. All time- share plans shall maintain a one-to-one purchaser to accommodation ratio, which means the ratio of the number of purchasers eligible to use the accommodations of a time-share plan on a given night to the number of accommodations available for use within the plan on that night, such that the total number of purchasers eligible to use the accommodations of the time-share plan during a given calendar year never exceeds the total number of accommodations available for use in the time- share plan during that year. For purposes of the calculation under this section, each purchaser must be counted at least once, and no individual accommodation may be counted more than 365 times per calendar year or more than 366 times per leap year. A purchaser who is delinquent in the payment of time-share plan assessments shall continue to be considered eligible to use the accommodations of the time-share plan for purposes of calculating the one-to-one purchaser to accommodation ratio. 11251 (a) The developer of a single site time-shareplan and for the component sites of a multisite time- share plan located in the state, shall cause to be recorded prior to the closing of the first sale of a time- share interest in each accommodation in the time-share plan, covenants dedicating the accommodations to the time-share plan and incorporating all covenants of the grantor or lessor of the time-share interests, and the following provisions: (1) Organization of an association of time-share interest owners. (2) A description of the real property for the common ownership or use of the time-share interest owners. Where the time-share plan is a personal property time-share plan, a description of the personal property for common use of the time-share interest owners. (3) A description of the method for calculating and collecting regular and special assessments from time-share interest owners to defray expenses of the time-share property and for related purposes. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 45/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (4) A description of the method for terminating the membership and selling the interest of a time- share interest owner for failure to pay regular or special assessments. (5) A description of the method for the disciplining of time-share interest owners for the late payment of assessments. (6) Provisions requiring comprehensive general liability insurance and adequate property and casualty insurance covering the time-share property. (7) Restrictions upon partition of an accommodation of the time-share plan. (8) A description of the method for amending the covenants affecting the time-share plan. (9) Where applicable, a description of the method relating to the annexation or de -annexation of additional accommodations, phases, or properties to the time-share plan. (10) A description of the procedures in the event of condemnation, destruction, or extensive damage to an accommodation, including provisions for the disposition of insurance proceeds or damages payable on account of damage or condemnation. (1 1) A method of the procedures on regular termination of the time-share plan. (12) Where applicable, allocation of the cost of maintenance and operation between different elements or mixed uses within the portions of a project or relating to reciprocal rights and obligations between the time-share project and other property. (13) A description of the method for entry into accommodations of the time-share plan under authority granted by the association for the purpose of cleaning, maid service, maintenance, and repair including emergency repairs and for the purpose of abating a nuisance or a known or suspected dangerous or unlawful activity. (14) Delineate all reserved rights of the developer. (15) For projects located within the state, the covenants shall, insofar as reasonably possible, satisfy the requirements of Section 1468 or Sections 1469 and 1470 of the Civil Code for real property located in this state. (b) For single site time-share plans and component sites of a multisite time-share plan located outside of the state, the developer shall cause to be recorded a declaration dedicating the accommodations to the time-share plan and incorporating all covenants of the grantor or lessor of the time-share interests. The declaration shall include the subject matter set forth in paragraphs (1) to (14), inclusive, of subdivision (a). If there is no provision for the recording of a declaration in the state or jurisdiction in which the time- share property or component site is located, alternatively, the developer shall establish that the declaration is otherwise enforceable in the state or jurisdiction in which the time-share property or component site is located. The declaration shall be in compliance with the applicable laws of the state or https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 46/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) jurisdiction in which the time-share property or component site is located, and if a conflict exists between laws of the situs state and the requirements set forth in this section, the law of the situs state shall control. If the declaration provides for the matters contained in paragraphs (1) to (14), inclusive, of subdivision (a), the declaration shall be deemed to be in compliance with the requirements of subdivision (a) and this subdivision and the developer shall not be required to make revisions in order to comply with subdivision (a) and this subdivision. (c) The developer of a time-share plan located within the state shall make provisions in the time- share instruments for all of the following: (1) A description of the services to be made available to time-share interest owners under the time- share plan. (2) A description, to be contained in the declaration or the bylaws of the association, of the procedures regarding transfer to the association of control over the time-share property and services comprising the time-share plan. (3) A description of the method for preparation and availability to time-share interest owners of budgets, financial statements, and other information related to the time-share plan. (4) A description of the methods for employing and for terminating the employment of a managing entity for the time-share plan. (5) A description of the method for adoption of standards and rules of conduct for the use of accommodations by time-share interest owners. (6) A description of the method for establishment of the rights of time-share interest owners to the use of an accommodation according to schedule or under a first -reserved, first -served priority system. (7) A description of the method for compensating use periods or monetary compensation for an owner of a time-share estate if an accommodation cannot be made available for the period of use to which the owner is entitled by schedule or under a reservation system because of an error by the association or managing entity. (8) A description of the method for the use of accommodations for transient accommodations or other income -producing purpose during periods of nonuse by time-share interest owners. (9) A description of the method for the inspection of the books and records of the association by time- share interest owners. (10) A description of the method for collective decisionmaking and the undertaking of action by or in the name of the association including, where applicable, representation of time-share accommodations in an association for the time-share in which the accommodations are located. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 47/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CfiWffW8 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (d) For single site time-share plans and component sites of a multisite time-share plan located outside of the state, the developer shall cause to be included in the time-share instrument the subject matter set forth in subdivision (c). The time-share instruments shall be in compliance with the applicable laws of the state or jurisdiction in which the time-share property or component site is located, and if there is a conflict between laws of the situs state and the requirements set forth in this section, the law of the situs state shall control. If the time-share instruments provide for the matters contained in subdivision (c), the time-share instruments shall be deemed to be in compliance with the requirements of subdivision (c) and this subdivision and the developer shall not be required to make revisions in order to comply with subdivision (c) and this subdivision. 11252 In a time-shareplan offering time-shareuse interests, the developer shall not encumber the accommodations of the time-share plan in a manner that could materially and adversely affect the use rights of the purchasers of the accommodations without the written assent of not less than 51 percent of the time-share interest owners other than the developer. This section shall not prevent the developer from encumbering the purchaser's use rights so long as the developer has sufficient protection as permitted by Section 11244. 11253 For single site time-shareplans and component sites of multisite time-share plans located in this state, the time-share instrument shall require that the following insurance be at all times maintained in force to protect time-share interest owners in the time-share plan: (a) Insurance against property damage as a result of fire and other hazards commonly insured against, covering all real and personal property comprising the time-share plan in an amount not less than 80 percent of the full replacement value of the time-share property. (1) In a time-share use offering, the trustee shall be a named coinsured, and if for any reason, title to the accommodation is not held in trust, the association shall be named as a coinsured as the agent for each of the time-share interest owners. (2) In a time-share estate offering, the association shall be named as a coinsured if it has title to the property or as a coinsured as agent for each of the time-share interests owners if title is held by the owners as tenants in common. (3) If, after control of the governing body of the association has passed to the owners other than the https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 48/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) developer, and the association amends the time-share instrument to reduce the percentage below 80 percent, the failure of the association to maintain coverage at 80 percent of replacement value shall not be grounds for denial of a public report. (b) Liability insurance against death, bodily injury, and property damage arising out of or in connection with the use, ownership, or maintenance of the accommodations of the time-share plan. (1) The amounts of the insurance shall be determined by the association, but shall not be less than five hundred thousand dollars ($500,000) to one million dollars ($1,000,000) for personal injury and one hundred thousand dollars ($100,000) for property damage. (2) The liability insurance policy shall provide for all of the following: (A) All time-share interest owners as a class are named as additional insureds in a policy issued to the association. (B) The waiver by the insurer of its right to subrogation under the policy against any time-share interest owner or member of his or her household. (C) No act or omission by a time-share interest owner, unless acting within the scope of his or her authority on behalf of the association, shall void the policy or operate as a condition to recovery under the policy by any other person. 11254 (a) In a time-shareplan in which the fee or a long-term leasehold interest in all or some of the accommodations and in appurtenant real and personal property is to be transferred to the association or to a corporate trustee under a trust agreement, the conveyance shall be made prior to the closing of the escrow for the first sale of a time-share interest in the accommodation. (b) The developer may reserve easements in the real property conveyed for purposes reasonably related to the conduct of commercial activities in the time-share property, if the developer covenants to use the easements in a manner that will minimize any adverse impact on the use and enjoyment of the accommodation by any time-share interest owner occupying it. 11255 (a) The department shall require that each of the accommodations in a time-share plan offering time- share use interests be conveyed to a trustee or an association acceptable to the commissioner prior to the closing of the escrow for the first sale of a time-share use interest that entitles the purchaser to occupy the accommodation in question. (b) If the accommodation in a time-share plan offering time-share use interests that is free and clear of https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 49/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) blanket encumbrances, other than a lien of current real property taxes, is conveyed to a trustee or an association, the trust or association instruments shall include, but not be limited to, all of the following: (1) Transfer of title to the accommodations to the trustee or association. (2) If the time-share use interests are conveyed to a trust, the association as a party to the trust or an express third -party beneficiary of the trust. (3) Notice to the department of the intention of the trustee to resign, if applicable. (4) Continuance of the trustee in that capacity until a successor trustee acceptable to the department assumes the position, if applicable. (5) Prohibition against any amendments of the trust or association instruments adversely affecting the interests or rights of time-share interest owners without the prior approval of the association. (6) Instructions for the distribution of condemnation or insurance proceeds by the trustee or the association. (c) The department may require that each of the accommodations in a time-share plan offering time- share estate interests that is subject to a blanket encumbrance be conveyed to a trustee acceptable to the department prior to the closing of the escrow for the first sale of a time-share estate which entitles the purchaser to occupy the accommodation in question. (d) If an accommodation in the time-share plan is conveyed to a trustee pursuant to subdivision (c), the trust instrument shall include all of the following provisions in addition to those set forth in subdivision (b): (1) The deposit into trust, and the retention for the duration of the trust, of nondelinquent installment sales contracts or promissory notes of time-share interests purchases having an aggregate principal balance owing not ordinarily less than 150 percent of the difference between the aggregate principal balance owing under blanket encumbrances against the accommodation and the amount of money, or its equivalent, in the trust and available at any time to be applied to the reduction of the principal balance of the blanket encumbrances. (A) The trust instrument shall further provide that if the 150 percent requirement has not been met within six months after execution of the trust instrument by the developer, the trustee shall thereafter retain in the trust, or apply to debt service on the blanket encumbrance, the entire amount of all installment payments received on contracts or promissory notes until the 150 percent requirement has been met. (B) For purposes of this regulation, a contract or promissory note is deemed delinquent when an installment payment is more than 60 days past due. (C) If the developer for purposes of satisfying the requirements of this subdivision proposes to deposit installment sales contracts or promissory notes of obligor other than purchasers of interests in https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 50/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) the time-share plan into the trust, the developer shall have the burden of establishing the liquidated value of the notes and contracts to the satisfaction of the department. (2) The deposit into trust, and the retention for the duration of the trust, of funds in an amount at all times sufficient to pay the total of three successive monthly installments of debt service on the blanket encumbrance. (A) If installments of debt service on a blanket encumbrance that is fully amortized are due less frequently than monthly, the funds retained in the trust shall be sufficient to pay all installments becoming due within the next succeeding six months, or, if no installments are due within the next succeeding six months the next installment due. (B) If a blanket encumbrance against the trust property is an interest -only loan, contains a balloon payment provision, or is otherwise not fully amortized under the terms for repayment, the trust instrument shall require that the developer make monthly payments into the trust sufficient to pay debt service installments as they become due and to create a sinking fund to extinguish the debt at its maturity. (3) Payment by the trustee of debt service on the blanket encumbrance, property taxes, or assessments on insurance premiums, either as the entity having primary responsibilities for the payments or the entity secondarily responsible if the person with primary responsibility fails to make the payments in a timely manner. (4) The deposit or investment by the trustee of funds constituting a part of the trust corpus in interest bearing accounts, treasury bills, certificates of deposit, or similar investments. (e) In the case of a time-share plan offering time-share use interests that have been conveyed to a trustee, the trust for the accommodation shall be irrevocable during the time that any time- share interest owner has a right to the occupancy of an accommodation. (f) In the case of a time-share plan offering time-share use interests that have been conveyed to an association, the association shall not be dissolved or terminated during the time that any time- share interest owner has the right to occupancy of an accommodation. (g) In a time-share plan offering time-share estate interests, the trust for an accommodation shall be irrevocable until the extinguishment of all blanket monetary encumbrances against the accommodation. 11256 (a) The contract proposed to be used by a developer applying for a public report for the sale or lease of time-share interests shall provide that if the escrow for sale or lease of a time-share interest does not close on or before the date set forth in the contract, or a later closing date mutually agreed to by the developer and the prospective purchaser or lessee, within 15 days after the closing date set forth in the contract or an extended closing date mutually agreed to by the developer and the prospective purchaser https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 51/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) or lessee, the developer shall, except as provided in subdivisions (c) to (h), inclusive, order all of the money remitted by the prospective purchaser or lessee under the terms of the contract for acquisition of the time-share interest (purchase money) to be refunded to the prospective purchaser or lessee. Any extension of the closing of escrow shall be in writing and shall clearly and conspicuously disclose that the purchaser is not obligated to extend the closing of escrow. (b) The contract may provide for disbursements or charges to be made against purchase money for payments to third parties for credit reports, escrow services, preliminary title reports, appraisals, and loan processing services by the parties if the contract includes the following: (1) Specific enumeration of all of the disbursements or charges that may be made against purchase money. (2) The developer's estimate of the total amount of the disbursements and charges. (c) Any contractual provision that calls for disbursement or a charge against purchase money based upon the prospective purchaser's or lessee's alleged failure to complete the purchase of the time- share interest shall conform with Sections 1675, 1676, 1677, and 1678 of the Civil Code. (d) Except for a disbursement made following substantial compliance with the procedures set forth in subdivision (f) or pursuant to a written agreement of the parties that either cancels the contract or is executed after the final closing date specified by the parties, a disbursement or charge against purchase money as liquidated damages may be done only pursuant to a determination by a court of law, or by an arbitrator if the parties have so provided by contract, that the developer is entitled to a disbursement or charge against purchase money as liquidated damages. (e) A contractual provision for a determination by arbitration that the developer is entitled to a disbursement or charge against purchase money as liquidated damages shall require that the arbitration be conducted in accordance with procedures that are equivalent in substance to the Commercial Arbitration Rules of the American Arbitration Association, that any arbitration include every cause of action that has arisen between the prospective purchaser or lessee and the developer under the contract, and that the developer remit the fee to initiate arbitration with the costs of the arbitration ultimately to be borne as determined by the arbitrator. (f) The contract of sale may include a procedure under which purchase money may be disbursed by the escrowholder to the developer as liquidated damages upon the prospective purchaser's or lessee's failure to timely give the escrowholder the prospective purchaser's or lessee's written objection to disbursement of purchase money as liquidated damages. This procedure shall contain at least the following elements: https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 52/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (1) The developer shall give written notice, in the manner prescribed by Section 116.340 of the Code of Civil Procedure for service in a small claims action, to the escrowholder and to the prospective purchaser or lessee that the prospective purchaser or lessee is in default under the contract that the developer is demanding that the escrowholder remit dollars ($ ) from the purchase money to the developer as liquidated damages unless, within 20 days, the prospective purchaser or lessee gives the escrowholder the prospective purchaser's or lessee's written objection to the disbursement of purchase money as liquidated damages. (2) The prospective purchaser or lessee shall have a period of 20 days from the date of receipt of the developer's 20-day notice and demand in which to give the escrowholder the prospective purchaser or lessee written objection to the disbursement of purchase money as liquidated damages. (g) The contract may not make the prospective purchaser's or lessee's failure to timely give the escrowholder the aforesaid written objection a waiver of any cause of action the prospective purchaser or lessee may have against the developer under the contract unless the waiver is conditioned upon service of the developer's 20-day notice and demand in a manner prescribed by Section 116.340 of the Code of Civil Procedure for service in a small claims action. (h) If the developer has had the use of purchase money pending consummation of the sale or lease transaction under authorization by the department pursuant to Section 11243, the developer shall immediately upon alleging the default of the prospective purchaser or lessee, transmit to the escrowholder, funds equal to all of the purchase money paid by the prospective purchaser or lessee. Article 4. Management and Governance 11265 (a) For single site time-shareplans and component sites of a specific time-share interest multisite time- share plan, the following requirements apply: (1) Except as provided in paragraph (2), regular assessments to defray the expenses of maintaining the time-share property and operating the time-share plan shall be levied against each time-share interest owner according to the ratio that the number of time-share interests owned by a time-share interest owner assessed bears to the total number of time-share interests subject to assessments. Regular assessments levied by the association shall not exceed the amount necessary to defray the estimated expenses for which the assessments are levied. (2) The assessment against each owner in the time-share plan may be determined according to a formula or schedule under which assessments against each time-share interest owner are equitably apportioned in accordance with operational and maintenance costs attributable to each time- share interest owner. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 53/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (3) A special assessment shall be levied upon the same basis as that prescribed for the levying of regular assessments except in the case where the special assessment is levied against a time-share interest owner for the purpose of reimbursing the association for costs incurred in bringing the time- share interest owner into compliance with provisions of the governing instruments for the time- share plan. (4) All time-share interests in the time-share plan for which a public report has been issued including those time-share interests held by the developer of the time-share plan are interests subject to the payment of regular and special assessments. (5) The governing body of the association may be authorized by the governing instruments to impose, without the vote or written assent of the association, a regular annual assessment per time-share interest that is as much as 20 percent greater than the regular annual assessment for the immediately preceding fiscal year. An annual assessment for each time-share interest that is more than 20 percent greater than the regular assessment per time-share interest for the immediately preceding fiscal year may not be levied without the vote or written assent of a majority of the voting power of the association residing in members other than the developer. An increase in the annual assessment attributable to an increase in real property taxes against accommodations of the time-share property shall be excluded in determining whether the annual assessment is more than 20 percent greater than the regular assessment per interest for the preceding fiscal year. (6) Except as provided in this section, special assessments against time-share interest owners in a time- share plan may not be imposed without the vote or written assent of a majority of the voting power of the association residing in members other than the developer. The governing body of the association may be authorized by the governing instruments to impose special assessments without the vote or written assent of the association as follows: (A) Special assessments against all time-share interest owners in the time-share plan, other than a special assessment to restore or rebuild because of damage or destruction to an accommodation, which in the aggregate in any fiscal year do not exceed 5 percent of the budgeted gross expenses of the association for that fiscal year. (B) A special assessment for the repair or rebuilding of an accommodation that does not exceed 10 percent of the budgeted gross expenses of the association for the fiscal year in which the assessment is levied. (C) Special assessments against a time-share interest owner or owners for the purpose of reimbursing the association for costs incurred in bringing the time-share interest owner into compliance with provisions of the governing instruments for the time-share plan. (7) Regular assessments against all of the time-share interests in an accommodation of the time- share plan shall commence on the same date. Regular assessments shall commence on the first day of https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 54/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) the month following the closing of the escrow of the first sale of a time-share interest in the time- share plan, but may be delayed to the date of commencement of time-share interest owners' occupancy rights in the accommodation or to a date that is not more than six months later than the date of closing of the first sale involving a right to use the accommodation, whichever occurs earlier in time. (b) For single site time-share plans and component sites of a multisite time-share plan located outside of the state the time-share instruments shall include the subject matter set forth in paragraphs (1) to (4), inclusive, of subdivision (a). The time-share instruments shall be in compliance with the applicable laws of the state or jurisdiction in which the time-share property or component site is located, and if a conflict exists between the affirmative standards of the laws of the situs state and the requirements set forth in this section, the law of the situs state shall control. If the time-share instruments provide for the matters contained in paragraphs (1) to (4), inclusive, of subdivision (a), the time-share instruments shall be deemed to be in compliance with the requirements of paragraphs (1) to (4), inclusive, of subdivision (a) and this subdivision and the developer shall not be required to make revisions in order to comply with paragraphs (1) to (4), inclusive, of subdivision (a) and this subdivision. If the maximum increase in annual assessments for a time-share plan located outside of this state is greater than the 20 percent set forth in paragraph (5) of subdivision (a), the public report shall include the following disclosure in conspicuous 14-point type: YOUR ANNUAL ASSESSMENTS ARE NOT SUBJECT TO THE CALIFORNIA LIMITATION OF A 20% ANNUAL INCREASE WITHOUT THE VOTE OF THE OWNERS OTHER THAN THE DEVELOPER. YOUR ASSESSMENT MAY BE INCREASED BY AS MUCH AS % PER YEAR. (c) For nonspecific time-share interest multisite time-share plans the following requirements apply: (1) Except as provided in paragraph (2), regular assessments to defray the expenses of maintaining and operating the multisite time- share plan shall be levied against each time-share interest owner according to the ratio that the number of time-share interests owned by a time-share interest owner assessed bears to the total number https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 55/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) of time-share interests subject to assessments. (2) The assessment against each time-share interest owner in the multisite time-share plan may be determined according to a formula or schedule under which assessments against each time- share interest owner are equitably apportioned in accordance with operational and maintenance costs attributable to each time-share interest owner. (3) A special assessment shall be levied upon the same basis as that prescribed for the levying of regular assessments except in the case where the special assessment is levied against a time-share interest owner for the purpose of reimbursing the association for costs incurred in bringing the time- share interest owner into compliance with provisions of the governing instruments for the time- share plan. (4) All time-share interests in the multisite time-share plan for which a public report has been issued including those time-share interests held by the developer of the multisite time-share plan are interests subject to the payment of regular and special assessments. 11266 (a) An amendment of a provision of the declaration or other document establishing the time-share plan may not be adopted without the vote or written assent of at least 25 percent of the voting power of the association residing in members other than the developer. (b) An amendment of the articles of incorporation or association may not be enacted without the vote or written assent of at least 25 percent of the governing body and 25 percent of the voting power of the association residing in members other than the developer. (c) An amendment of the bylaws of the association may not be enacted without the vote or written assent of at least 10 percent of the voting power of the association residing in members other than the developer. (d) An amendment to the rules and regulations of the association may not be enacted without the vote or written assent of at least a majority of the governing body of the association. (e) The percentage of the voting power necessary to amend a specific clause or provision in the time- share instrument, articles, or bylaws shall not be less than the prescribed percentage of affirmative votes or written assents required for action to be taken under that clause. (f) In addition to the restrictions upon the enactment of amendments of the governing instruments set forth in this section, the governing instruments may include provisions consistent with subdivision (c) of Section 11269 whereby the vote of the developer must be given effect in the amendatory process. (g) For a single site time-share plan or a component site of a specific time-share interest time- share plan or a nonspecific time-share interest multisite time-share plan located outside this state, that is being offered in this state, the public report shall include the following disclosure in conspicuous 14- https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 56/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) point type: THE DECLARATION OR OTHER DOCUMENT ESTABLISHING THIS TIME-SHARE PLAN MAY BE AMENDED BY A VOTE OF % OF THE MEMBERS OF THE ASSOCIATION. THE BYLAWS OF THE ASSOCIATION MAY BE AMENDED BY A VOTE OF % OF THE MEMBERS. 11267 (a) The time-shareinstruments shall require the employment of a managing entity for the time- share plan or component site pursuant to a written management agreement that shall include all of the following provisions: (1) Delegation of authority to the managing entity to carry out the duties and obligations of the association or the developer to the time-share interest owners. (2) Authority of the managing entity to employ subagents, if applicable. (3) A term of not more than five years with automatic renewals for successive three-year periods after expiration of the first term unless the association by the vote or written assent of a majority of the voting power residing in members other than the developer determines not to renew the contract and gives appropriate notice of that determination. However, in those time-share plans where the association is controlled by owners other than the developer, the management agreement shall not be subject to the term limitations set forth in this section, and any longer term shall not be grounds for denial of a public report, unless the longer term of the management contract is the result of the developer exercising control. (4) Termination for cause at any time by the governing body of the association. If the single site time- share plan or the component site of a multisite time-share plan is located within the state, then that termination provision shall include a provision for arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association if requested by or on behalf of the managing entity. (5) Not less than 90 days' written notice to the association of the intention of the managing entity to resign. (6) Enumeration of the powers and duties of the managing entity in the operation of time-share plan and the maintenance of the accommodations comprising the time-share plan. (7) Compensation to be paid to the managing entity. (8) Records to be maintained by the managing entity. (9) A requirement that the managing entity provide a policy for fidelity insurance or bond for the activities of the managing entity, payable to the association, in the sum of the largest amount of funds expected to be held or controlled by the managing entity at any time during the year, pursuant to the budget. (10) Errors and omissions insurance coverage for the managing entity, if available. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 57/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (1 1) Delineation of the authority of the managing entity and persons authorized by the managing entity to enter into accommodations of the time-share plan for the purpose of cleaning, maid service, maintenance and repair including emergency repairs, and for the purpose of abating a nuisance or dangerous, unlawful, or prohibited activity being conducted in the accommodation. (12) Description of the duties of the managing entity, including, but not limited to, the following: (A) Collection of all assessments as provided in the time-share instruments. (B) Maintenance of all books and records concerning the time-share plan. (C) Scheduling occupancy of accommodations, when purchasers are not entitled to use specific time- share periods, so that all purchasers will be provided the opportunity for use and possession of the accommodations of the time-share plan, that they have purchased. (D) Providing for the annual meeting of the association of owners. (E) Performing any other functions and duties related to the maintenance of the accommodations or that are required by the time-share instrument. (b) Any written management agreement in existence as of the effective date of this chapter shall not be subject to the term limitations set forth above. (c) For single site time-share plans and component sites of a multisite time-share plan located outside of the state, the time-share instruments shall include the subject matter set forth in subdivision (a). The time-share instruments shall be in compliance with the applicable laws of the state or jurisdiction in which the time-share property or component site is located, and if a conflict exists between laws of the situs state and the requirements set forth in this section, the law of the situs state shall control. If the time-share instruments provide for the matters contained in subdivision (a), the time-share instruments shall be deemed to be in compliance with the requirements of subdivision (a) and the developer shall not be required to make revisions in order to comply with subdivision (a) and this subdivision. 11268 (a) Unless impracticable because of the number of members of the association, their places of residence in relation to each other, the international nature of the offering, or other factors, provision shall be made for regular meetings of members of the association of time-share interest owners. Ordinarily regular meetings of members shall be scheduled not less frequently than once each calendar year at a time and place to be fixed by the bylaws or by resolution of the governing body. The first meeting of the association shall be scheduled not later than one year after the closing of the escrow for the first sale of a time-share interest in the time-share plan or completion of construction, whichever shall first occur. (b) Provision shall be made for special meetings of the association to be promptly called by the https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 58/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) governing body upon either of the following: (1) The vote of a majority of the governing body. (2) Receipt of a written request signed by members representing at least 5 percent of the voting power of the association residing in members other than the developer. (c) Meetings of the association shall be held at a suitable location that is readily accessible at reasonable cost to the largest possible number of members. (d) Written notice of regular and special meetings shall be given to members by first-class mail. This notice shall be given not less than 14 days and not more than 90 days before the scheduled date of the meeting. The notice, whether for a regular or special meeting shall specify the place, day, and hour of the meeting and a brief statement of the matters which the governing body intends to present, or believes that others will present, for action by the members. (e) (1) The bylaws of the association shall establish the quorum for a meeting of members at not less than 5 percent nor more than 331 /3 percent, of the voting power of the association residing in members other than the developer, represented in person or by proxy. (2) In the absence of a quorum as prescribed by the bylaws, no business shall be conducted and the presiding officer shall adjourn the meeting sine die. (3) If less than one-third of the total voting power of the association is in attendance, in person or by proxy, at a regular or special meeting of the association, only those matters of business, the general nature of which was given in the notice of the meeting may be voted upon by the members. (f) Any action that may be taken at any regular or special meeting of members may be taken without a meeting if the following requirements are met: (1) A written ballot is distributed to every member entitled to vote setting forth the proposed action, providing an opportunity to signify approval or disapproval of the proposal, and providing a reasonable time for the members to return the ballot to the association. (2) The number of votes cast by ballot within the specified time period equals or exceeds the quorum required to be present at a meeting authorizing the action. (3) The number of approvals of the action equals or exceeds the number of votes required to approve the action at a meeting at which the total number of votes cast was the same as the number of votes cast by written ballot. (4) The written ballot distributed to members of the association affords an opportunity for the member to specify a choice between approval and disapproval of each order of business proposed to be acted upon by the association and further provides that the vote of the members shall be cast in accordance with the choice specified. (g) The bylaws of the association may provide that governing body members may be elected by written https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 59/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) ballot. (h) A form of proxy may be distributed to each member to afford him or her the opportunity to vote in absentia at a meeting of members of the association provided that it meets the requirements for a written ballot set forth in paragraph (4) of subdivision (f) and includes the name or names of members who expect to be in attendance in person at the meeting to whom the proxy is to be given for the purpose of casting the vote to reflect the absent member's vote as specified in the form of proxy. 11269 (a) A member of an association including associations that provide for unequal assessments against members, shall be entitled to one vote for each time-share interest owned. (b) An association may have two classes of members for voting purposes according to the following provisions: (1) Each time-share interest owner other than the developer of the time-share plan shall be a class A member. If a time-share interest is owned by more than one person, each time-share interest owner shall be a class A member, but only one vote may be cast for each interest. (2) The developer shall be the class B member and shall have one vote for each time-share interest owned by him or her which has been authorized to be offered for sale by the issuance of a public report. (3) Class B membership shall be automatically converted to class A membership, and class B membership shall thereafter cease to exist, when the total outstanding votes held by the class B member falls below 20 percent of the total voting power of the association. (c) Except as otherwise expressly provided, no regulation which requires the approval of a prescribed percentage of the voting power residing in members other than the developer or a prescribed percentage of the voting power of class A members, for action to be taken by the association, is intended to preclude the developers from casting votes attributable to the time-share interests which he or she owns. Governing instruments may specify the following with respect to approval of action by the membership of the association other than an action to enforce an obligation of the developer: (1) In those associations in which class A and class B memberships exist, the vote or written assent of a prescribed percentage of the class A voting power and the vote or written assent of the class B member. (2) In those associations in which a single class of voting membership exists, either as originally established or after the conversion of the class B membership to class A memberships, the vote or written assent of a prescribed percentage of the total voting power of the association and the vote or written assent of a prescribed percentage of the voting power of members other than the developer. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 60/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) 11270 (a) The governing body shall consist of three directors for an association that does not contemplate more than 100 members and either five or seven directors for an association that contemplates more than 100 members. (b) (1) The first governing body shall consist of directors appointed by the developer. These directors shall serve until the first meeting of the association at which time an election of all of the directors for the association shall be conducted. (2) A special procedure shall be established by the governing instruments to assure that at the first election of the governing body, and at all times thereafter, at least one of the incumbent directors has been elected solely by the votes of members other than the developer. (3) A director who has been elected to office solely by the votes of the members of the association other than the developer may be removed from the governing body prior to the expiration of his or her term of office only by a vote of a prescribed percentage of the voting power residing in members other than the developer. (c) The terms of office of governing body members may be staggered provided that no person may serve a term of more than three years without standing for reelection. (d) For board of director members serving at the appointment of the developer, the developer may change the designated board member without the need of any further consent by the association. However, the term of the applicable director's seat on the governing body shall not be affected by that change. 11271 (a) Regular meetings of the governing body of the association shall be held as prescribed in the bylaws, but not less frequently than annually. (b) (1) Regular and special meetings of the governing body shall be held in or near the location of the time- share plan unless a meeting at another location would significantly reduce the cost to the association or the inconvenience to directors. (2) If the time and place of the regular meeting of the governing body is not fixed by the governing instruments, notice of the time and place of meeting shall be communicated in writing, including by facsimile, electronic mail, or other form of written or electronic communication, to directors not less than 14 days prior to the meeting. However, that notice of a meeting is not required to be given to any governing body member who has signed a waiver of notice or a written consent to the holding of the meeting. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 61/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (c) (1) A special meeting of the governing body may be called by written notice signed by any two members of the governing body. (2) The notice of a special meeting shall specify the time and place of the meeting and the nature of any special business to be considered. (3) Notice of a special meeting shall be communicated in writing, including by facsimile, electronic mail, or other form of written or electronic communication, to directors not less than 14 days prior to the meeting. However, notice of the meeting is not required to be given to any governing body member who signed a waiver of notice or a written consent to the holding of the meeting. (d) (1) Regular and special meetings of the governing body shall be open to all members of the association provided that members who are not on the governing body may not participate in any deliberations or discussions unless expressly so authorized by the governing body. (2) The governing body may, with the approval of a majority of a quorum of its members, adjourn a meeting and reconvene in executive session to discuss and vote upon personnel matters, litigation in which the association is or may become involved, and orders of business of a similar nature. The nature of any and all business to be considered in executive session shall first be announced in open session. (e) A bare majority of the total members of authorized members of the governing body shall constitute a quorum for the conduct of business. (f) The governing instruments for the time-share plan shall provide for reimbursement by the association for transportation expenses incurred and reasonable per diem payments to governing body members for attendance at regular and special meetings of the governing body. 11272 (a) The following information concerning the time-share plan shall be made available to all time- share interest owners in the time-share plan: (1) A proposed budget for each fiscal year consisting of the information required by Section 11240 shall be distributed not less than 15 days prior to the beginning of the fiscal year to which the budget applies. (2) An audit of the financial statements of the association by an independent certified public accountant shall be performed each year and shall be made available upon request by a time-share owner 120 days after the close of the fiscal year. The audited financial statements shall be included in a report that includes all of the following: (A) A balance sheet as of the end of the fiscal year. (B) An operating (income) statement for the fiscal year. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 62/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (C) A statement of the net changes in the financial position of the time-share plan during the fiscal year. (D) For any fiscal year in which the gross income to the association exceeds seventy-five thousand dollars ($75,000), a copy of the review of the annual report prepared in accordance with generally accepted accounting principles. (E) A list of the names and methods of contacting the members of the governing body of the association. (3) A list of the orders of business to be considered at the annual meeting of members of the association shall be distributed not less than 14 days prior to the meeting date. This list shall include the name, address, and a brief biographical sketch if available of each member of the association who is a candidate for election to the governing body. (b) In lieu of the distribution of the budget and report required by subdivision (a), the governing body may elect to distribute a summary of the budget and report to all time- share interest owners along with a written notice that the budget and report is available at the business office of the association or at another suitable location within the boundaries of the development, and that copies will be provided upon request and at the expense of the association. If any time- share interest owner requests that a copy of the budget and report required by subdivision (a) be provided to the time-share interest owner, the association shall provide the copy to the time- share interest owner by facsimile, electronic mail, or first-class United States mail at the expense of the association and delivered within 10 days. The written notice that is distributed to each of the time- share interest owners shall be in conspicuous 14-point type on the front page of the summary of the budget and report. (c) Delivery of the information specified in subdivision (a) may be combined where appropriate. (d) For single site time-share plans and component sites of a multisite time-share plan located outside of the state, the association shall be subject to the provisions set forth in this section. The association must be in compliance with the applicable laws of the state or jurisdiction in which the time- share property or component site is located, and if a conflict exists between laws of the situs state and the requirements set forth in this section, the law of the situs state shall control. If the association provides for the dissemination of information provided for in this section, the association shall be deemed to be in compliance with the requirements of this section and neither the developer nor the association shall be required to make revisions to the time-share instruments or budget in order to comply with this section. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 63/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN82a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) 11273 (a) The books of account, minutes of members and governing body meetings, and all other records of the time-share plan maintained by the association or the managing entity shall be made available for inspection and copying by any member, or by his or her duly appointed representative, at any reasonable time for a purpose reasonably related to membership in the association. (b) The records shall be made available for inspection at the office where the records are maintained. Upon receipt of an authenticated written request from a member along with the fee prescribed by the governing body to defray the costs of reproduction, the managing entity or other custodian of records of the association or the time-share plan shall prepare and transmit to the member a copy of any and all records requested. (c) The governing body shall establish reasonable rules with respect to all of the following: (1) Notice to be given to the managing entity or other custodian of the records by the member desiring to make the inspection or to obtain copies. (2) Hours and days of the week when a personal inspection of the records may be made. (3) Payment of the cost of reproducing copies of records requested by a member. (d) Every governing body member shall have the absolute right at any time to inspect all books, records, and documents of the association and all real and personal properties owned and controlled by the association. (e) The association shall maintain among its records a complete list of the names and addresses of all owners of time-share interests in the time-share plan. The association shall update this list no less frequently than every six months. Unless otherwise provided in the time-share instruments, the association may not publish this owner's list or provide a copy of it to any time-share interest owner or to any third party or use or sell the list for commercial purposes. (f) For single site time-share plans and component sites of a multisite time-share plan located outside of the state, the association shall be subject to the provisions set forth in this section. The association must be in compliance with the applicable laws of the state or jurisdiction in which the time-share property or component site is located, and if a conflict exists between laws of the situs state and the requirements set forth in this section, the law of the situs state shall control. If the association and the time- share instruments provide for the matters contained in this section, the association shall be deemed to be in compliance with the requirements of this section and neither the developer nor the association shall be required to make revisions to the time-share instruments in order to comply with the section. 11274 (a) The association shall not be authorized to cause the absolute forfeiture of a time-share interest owner's right, title, or interest in the time-share plan on account of the time-share interest owner's https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 64/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) failure to comply with provisions of the time-share instrument or the rules and regulations for the time- share plan except pursuant to either of the following: (1) The judgment of a court or the decision of an arbitrator as provided in the time-share instrument. (2) A foreclosure or sale under a power of sale for the failure of a time-share interest owner to pay assessments duly levied by the association. (b) The time-share instrument may authorize the governing body of the association, or the managing entity acting on behalf of the governing body, to suspend a time-share interest owner's right to the occupancy of an accommodation, and all related rights and privileges as a time-share interest owner of a time-share interest in the time-share plan, during the period of time that the time-share interest owner is delinquent in the payment of regular or special assessments or other charges duly levied by the association. The time-share interest owner shall be given written notice of the suspension of his or her rights and privileges immediately after the decision to suspend has been made. (c) The time-share instrument may authorize the association to impose a monetary penalty to suspend a time-share interest owner's right to use an accommodation or other facility that is part of the time- share plan or to take other disciplinary action that is appropriate, short of the forfeiture of the time- share interest owner' s right, title, and interest in the time-share plan, for violations of the provisions of the time-share instrument and of the rules and regulations for operation of the time-share plan by the time-share interest owner, his or her guests or persons under his or her control, including, but not limited to, all of the following: (1) Failure to vacate an accommodation upon expiration of the time-share interest owner's use period. (2) Damage to an accommodation or any other real or personal property that is part of the time- share plan. (3) Permitting a time-share interest to be subject to a lien, other than the lien of nondelinquent real property taxes or assessments, claim, or charge that could result in the sale of time-share interests of other time-share interest owners. (4) Creating a disturbance that interferes with the use and enjoyment of facilities of the time-share plan by other time-share interest owners. (d) Before disciplinary action authorized under subdivision (c) can be imposed by the association, the time-share interest owner against whom the action is proposed to be taken shall be given 30-days prior written notice and the opportunity to present a written or oral defense to the charges. (1) The governing body of the association shall decide whether the time-share interest owner's defense shall be oral or written. (2) The time-share interest owner shall be notified of the decision of the governing body of the association before disciplinary action is taken. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 65/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In 46fffRib2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (e) The association may delegate to the managing entity, the power and authority to carry out disciplinary actions duly imposed by the governing body. (f) For single site time-share plans and component sites of specific time-share interest multisite time- share plans and nonspecific time-share interest multisite time-share plans located outside this state, and offered for sale in this state, the public report shall contain the following disclosure in conspicuous 14-point type: THIS TIME SHARE PLAN MAY NOT BE SUBJECT TO THE SAME PROTECTIONS AGAINST FORFEITURE AND FORECLOSURE AS PROVIDED BY CALIFORNIA LAW. YOU SHOULD BECOME FAMILIAR WITH THE PROCEDURES PROVIDED BY THE LAWS OF THE STATE IN WHICH THE TIME-SHARE PLAN IS LOCATED. 11275 (a) Any contractual provision or other provision in the time-share instruments setting forth terms, conditions, and procedures for resolution of a dispute or claim between a time-share interest owner and a developer, or any provision in the time-share instruments setting forth terms, conditions, and procedures for resolution of a dispute of a claim between an association and the developer, shall, at a minimum, provide that the dispute or claim resolution process, proceeding, hearing, or trial be conducted in accordance with the following rules: (1) For the developer to advance the fees necessary to initiate the dispute or claim resolution process, with the costs and fees, including ongoing costs and fees, if any, to be paid as agreed by the parties and if they cannot agree then the costs and fees are to be paid as determined by the person or persons presiding at the dispute or claim resolution proceeding or hearing. (2) For a neutral or impartial person to administer and preside over the claim or dispute resolution process. (3) For the appointment or selection, as designation, or assignment of the person to administer and preside over the claim or dispute resolution process within a specific period of time, which in no event shall be more than 60 days from initiation of the claim or dispute resolution process or hearing. The person appointed, selected, designated, or assigned to preside may be challenged for bias. (4) For the venue of the claim or dispute resolution process to be in the county where the time-share is located unless the parties agree to some other location. (5) For the prompt and timely commencement of the claim or dispute resolution process. When the contract provisions provide for a specific type of claim or dispute resolution process, the process shall be deemed to be promptly and timely commenced if it is to be commenced in accordance with the rules applicable to that process. If the rules do not specify a date by which the proceeding or hearing is required to commence, then commencement shall be by a date agreed upon by the parties, and if they cannot agree, a date shall be determined by the person presiding over the dispute resolution process. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 66/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In CRWN8 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (6) For the claim or dispute resolution process to be conducted in accordance with rules and procedures that are reasonable and fair to the parties. (7) For the prompt and timely conclusion of the claim or dispute resolution process, including the issuance of any decision or ruling following the proceeding or hearing. (8) For the person presiding at the claim or dispute resolution process to be authorized to provide all recognized remedies available in law or equity for any cause of action that is the basis of the proceeding or hearing. The parties may authorize the limitation or prohibition of punitive damages. (b) A copy of the rules applicable to the claim or dispute resolution process shall be submitted as part of the application for a public report. (c) If the claim or dispute resolution process provides or allows for a judicial remedy in accordance with the laws of this state, it shall be presumed that the proceeding or hearing satisfies the provisions of subdivision (a). Article 5. Powers, Investigation, and Enforcement 11280 (a) Except as specifically provided in this section, the regulation of time-share plans and exchange programs is an exclusive power and function of the state. A unit of local government may not regulate time-share plans or exchange programs. (b) Notwithstanding subdivision (a), no provision of this chapter invalidates or modifies any provision of any zoning, subdivision, or building code or other real estate use law, ordinance, or regulation. 11281 The commissioner may adopt, repeal, or amend forms and regulations that are necessary to effectuate the intent of the Legislature in carrying out this chapter. These forms and regulations and any order, permit, decision, demand, or requirement issued by the commissioner shall be in writing and adopted pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 1 1340) of Part 1 of Division 3 of Title 2 of the Government Code). 11282 The commissioner may investigate the actions or qualifications of any person or persons holding or claiming to hold a public report under this chapter. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 67/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6fff Nb2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) 11283 (a) Whenever the commissioner determines from available evidence that a person has done any of the following, the commissioner may order the person to desist and refrain from those acts and omissions or from the further sale or lease of interests in the time-share plan until the condition has been corrected: (1) The person has violated or caused the violation of any provision of this chapter or the regulations pertaining thereto. (2) The person has violated or caused a violation of Section 17537, 17537.1, 17537.2, or 17539.1, in advertising or promoting the sale of time-share interests. (3) The person has failed to fulfill representations or assurances with respect to the time-share plan or the time-share offering upon which the department relied in issuing a public report. (4) The person has failed to inform the department of material changes that have occurred in the time- share or time-share offering that have caused the public report to be misleading or inaccurate or which would have caused the department to deny a public report if the conditions had existed at the time of Issuance (b) Upon receipt of such an order, the person or persons to whom the order is directed shall immediately discontinue activities in accordance with the terms of the order. (c) Any person to whom the order is directed may, within 30 days after service thereof upon him or her, file with the commissioner a written request for hearing to contest the order. The commissioner shall, after receipt of a request for hearing, assign the matter to the Office of Administrative Hearings to conduct a hearing for findings of fact and determinations of the issues set forth in the order. If the hearing is not commenced within 15 days after receipt of the request for hearing, or on the date to which continued with the agreement of the person requesting the hearing, or if the decision of the commissioner is not rendered within 30 days after completion of the hearing, the order shall be deemed to be vacated. (d) Service and proof of service of an order issued by the commissioner pursuant to this section may be made in a manner and upon those persons as prescribed for the service of summons in Article 3 (commencing with Section 415.10), Article 4 (commencing with Section 416.10), and Article 5 (commencing with Section 417.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure. 11284 Notwithstanding any other provisions of this chapter or of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 1 1340) of Part 1 of Division 3 of Title 2 of the Government Code), the https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 68/69 Planning Commission Special Meeting - October 6, 2022 9/13/22, 12:03 AM Fractional Ownership and Timeshare Law In C§6figi Nb 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) commissioner may negotiate agreements with registrants and applicants resulting in disciplinary consent orders. The consent order may provide for any form of discipline provided for in this chapter. The consent order shall provide that it is not entered into as a result of any coercion by the commissioner. The consent order shall be accepted by signature or rejected by the commissioner in a timely manner. 11285 An action for damages or for injunctive or declaratory relief for a violation of this chapter may be brought by any time-share interest owner or association against the developer, seller, or marketer of time-share interests, an escrow agent, or the managing entity. Relief under this section does not exclude other remedies provided by law. 11286 (a) It shall be unlawful for any person to make, issue, publish, deliver, or transfer as true and genuine any public report that is forged, altered, false, or counterfeit, knowing it to be forged, altered, false, or counterfeit or to cause to be made or participate in the making, issuance, delivery, transfer, or publication of a public report with knowledge that it is forged, altered, false, or counterfeit. (b) Any person who violates subdivision (a) is guilty of a public offense punishable by a fine not exceeding ten thousand dollars ($10,000), by imprisonment in the state prison, by imprisonment in the county jail not exceeding one year, or by both the fine and imprisonment. (c) The penalty provided by this section is not an exclusive penalty, and does not affect any other penalty, relief, or remedy provided by law. 11287 Any person who violates Section 11226, 11227, 11234, 11244, 11245, or 11283, is guilty of a public offense punishable by a fine not to exceed ten thousand dollars ($10,000), by imprisonment in the state prison or in a county jail not exceeding one year, or by both the fine and imprisonment. 11288 This chapter shall take effect on July 1, 2005. https://andysirkin.com/fractional-ownership/law-and-regulation/california-law/ 69/69 Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) October 6, 2022, Planning Commission Item 2 Comments These comments on a Newport Beach Planning Commission agenda item are submitted by: Jim Mosher (iimmosher(cD-yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229). Item No. 2. CODE UPDATE RELATED TO FRACTIONAL HOMEOWNERSHIP (PA2022-0202) At the September 27, 2022, special meeting of the City Council referenced in the present staff report I presented reasons to believe our existing municipal code already prohibits fractional homeownership as highlighted by the bullet points below, and in more detail on the attached pages of comments submitted to that meeting. While revisions to add clarity to our present code would be welcome, I continue to believe Pacaso- type home ownership is already banned and this is as much a code enforcement issue as a code revision one. Newport Beach's Fractional Homeownership Highlights (9/27/2022) • In 1982, Newport Beach banned the "development" of a time-share "project" anywhere in the City, finding it to be a detrimental form of land use. o "Time-share project' very broadly defined. o Included conversion of existing residential dwelling units into time-shared use. • In 1996, the City Council relaxed the ban to allow larger -scale time-share ventures in commercially -zoned districts, subject to special permitting restrictions. o Did not remove prohibition on "conversion of existing residential dwelling units into time- share units." • Subsequent reorganizations of the Zoning Code consolidating seemingly conflicting definitions of "development" and "project' relevant to other zoning provisions were never intended to alter the 1982/1996 time-share regulations. • Conclusion: The Pacaso-type model of ownership was banned in 1982 and remains banned. Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) After I made similar comments orally, City Attorney Harp said he could not agree that our existing ordinances banned timeshares in residential districts (see video at 26:50). His two reasons, both of which I believe are erroneous, were: The 1996 revisions "switched" the definition from applicable to single family homes to "dwelling units" (plural), and the intention was to regulate only 100-unit or larger projects. Mr. Harp seems unaware of our Municipal Code's general Rules of Construction (NMBC Subsec. 1.08.110.C) that "The singular number includes the plural, and the plural, the singular." In any event, it is more than a bit far-fetched to believe that in allowing regulated larger -scale timeshare developments in commercial districts it intended to de- regulate them everywhere else. 2. "Conversion" could not mean the purchase of an LLC because my interpretation would turn all homes owned by trusts or LLC's into prohibited timeshares. This second contention seems equally absurd, for the 1982 ordinance prohibits only timeshare uses, that is, where the purchaser acquires a right to occupy the property for only a limited part of the year on a recurring basis. I would guess very few trusts or LLC's contain such a provision, and if they do, they are indeed in violation of the current code. Since there was no opportunity to rebut these comments, the Council proceeded on the assumption the Pacaso model is not currently banned, and Council member O'Neill suggested staff consider proposing something modeled after the ordinance recently adopted in the City of St. Helena — hence the present special meeting of the Planning Commission to consider revising the code. It might be noted that St. Helena went through a similar experience, with one City Attorney saying their existing ordinance (ironically dating back to 1982, the same year as the broad timeshare prohibition in Newport Beach) was ineffective against the Pacaso model, and indeed that no regulation of it was possible. And then a new City Attorney saying that although revisions were desirable, the Pacaso model was already prohibited by the existing code (see description in the 2021 federal case, lost by Pacaso, of Pacaso v. City of St. Helena). In any event, the revised and restated code was reported to the St. Helena Planning Commission on March 1, 2022, and presented to their City Council as Item 11.1 for a March 22 1 st reading, and as Item 8.3 at an April 12 2nd reading. Throughout, the revised St. Helena code is cited as "reaffirming" their existing code. And although the new ordinance was supposed to repeal the old section that had been held to already prohibit Pacaso-style homeownership, their codifier (the same as Newport Beach's) seems to have missed that, so the old St. Helena municipal code Section 17.112.130 (which also bans "a time-share project") can still be viewed online. I think it is important to keep this distinction — that Newport Beach is reaffirming a long existing prohibition, not considering adopting a new one — so that the ownership model does not proliferate while the revisions wend their way toward enactment. (the following pages, like the bullet points above, are copied from the comments I submitted to the City Council on September 27) Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) Newport Beach's Fractional Homeownership Regulation History • In 1982, a former City Council adopted Ordinance No. 82-14 prohibiting the "development" of time-share "projects" anywhere in Newport Beach. o It banned any kind of arrangement in which a purchaser obtained an exclusive right to occupy a living space for limited, recurring intervals of time. o Despite the use of the words "project" and "development," both the statement of intent and the substance of Ord. No. 82-14 made clear the prohibition was on a type of land use and not confined to new construction. o It explicitly prohibited the conversion of any existing residential or hotel/motel units in the City to a time-shared model, including Pacaso-like shared ownership.' • In 1996, a later City Council relaxed the ban to allow, subject to special permitting restrictions, larger -scale timeshare ventures in commercially -zoned districts (Ordinances No. 96-7 and 96- 18), including allowing the conversion of some existing hotel/motel units to a time-share model. • However, in allowing limited permitting of hotel -type timeshares, there was no change in: o The 1982 definition of "time-share." o 1982's blanket prohibition on the "conversion of existing residential dwelling units into time-share units." • Subsequent well-intentioned comprehensive restatements and reorganizations of the City's Zoning Code in 1997 and 2010 caused the code adopted in 1982 and 1996 to become increasingly fragmented and difficult to follow, but never with any stated intent to change its meaning. • In the City's current Zoning Code the essentials of Ordinance No 82-14 remain intact: 0 1982's definition of "Time share project" remains as originally written, but moved to Sec. 20.70.020.V under "Visitor Accommodations (Land Use) — 7." 0 1982's prohibition on converting existing residential units of any kind to a time-shared model continues in Sec. 20.48.220.A.2. 0 1996's allowance of a time-shared land use in (and only in) certain commercially -zoned districts where hotel/motel land use would be allowed remains in Tables 2-4 and 2-5 of Sec. 20.20.020 (under "Visitor Accommodations, Nonresidential") and in Tables 2-8 and 2-9 of Sec. 20.22.020 (under "Visitor Accommodations"). • None of the revisions, rearrangements of code, or addition of definitions of "project" or "development" relevant to other sections of Title 20 provide any evidence of any intent by any Council to rescind the 1982 prohibition on conversion of residences to timeshares. Conclusion: The Pacaso-type model of ownership was banned in 1982 and remains banned in non-commercial districts. ' Subsec. 20.76.015.13 of Ord. No. 82-14 made it "unlawful to sell any right of occupancy in a time-share estate." Subsec. 20.76.015.0 could be read as contradicting this, but appears to be an attempt at a grandfathering clause for time share estates existing at the time of enactment. In any event, Subsec. 20.76.015.0 clearly prohibits conversion of existing dwellings to any form of timeshared arrangement, including "time-share estates" -- which is what Pacaso and others seem to be doing. Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) September 27, 2022, City Council Special Meeting Comments The following comments on the item on a Newport Beach City Council special agenda are submitted by: Jim Mosher ( iimmosher(a)-yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item 1. Resolution No. 2022-61: Initiation of Zoning Code and Local Coastal Program Amendments Related to Fractional Homeownership (PA2022-0202) I do not understand why this rather normal -appearing business matter is the subject of a "special meeting" at 4:00 p.m., rather than an item on the same day's regular agenda. If the intent is to give it greater visibility, scheduling it at a work day afternoon hour would seem to me to give it less visibility, rather than more. As to the substance of the matter, at the November 16, 2021, study session (as Item SS3), my impression was staff informed the public that the Pacaso fractional ownership model did not fit the City's definition of "time share" and for purposes of regulation could not be distinguished from the 56% of single-family properties owned by LLC's, Trusts and other forms of multiple ownership. But at the September 13, 2022, study session (as Item SS2), after receiving the Sagecrest Fractional Homeownership Report, that conclusion seems to have changed, and it is now believed that that regulations can distinguish ownership models in which an owner's right to occupancy of a dwelling is limited in time, and such forms of ownership constitute a distinguishable land use, but not one currently regulated in Newport Beach, prompting the present agenda item. As a non -attorney, I agree with Carmen Rawson's comments at that study session, to the effect that the Newport Beach Municipal Code already prohibits the Pacaso ownership model. I believe the reason for the disagreement arises from sloppy amendments to a code that has long been intended to prohibit this. In particular, as Carmen pointed out "fractional ownership" is specifically included in the definition of "Time share project" in NBMC Sec. 21.70 of our Coastal Implementation Plan, and while not in the parallel definition of NBMC Sec. 20.70 of the Zoning Code, the later does include any form of ownership that limits time of occupancy. In rejecting this interpretation in 2021, and again at the Council's last meeting, staff emphasized the separate definition of the word "development" which appears in the definition of "Time share project" and, in their view, makes the current prohibition of fractional ownership inapplicable to changes of ownership of existing properties. But one of the many defects of our City's system of codes is that it provides no means (such as capitalization or a different type face) to distinguish when a common word is being used in some limited, specifically defined sense. For the following reasons, I believe that, and the current definition of "project," is a misapplication of new definitions added after the fact and never intended to alter the longstanding definition of "Time share project." Based on the City's archives, Newport Beach first addressed the issue of residential timeshares in 1981, prompted by a proposal for a 20-unit residential timeshare project at 3336 Via Lido on what were then lots used for low-rise, waterfront office buildings at the south end of the present Lido Village commercial area. The application went to the Planning Commission on November 5, 1981 Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) (see page 1 of the minutes) and was denied on December 10, 1981 (see page 2 of the minutes). An appeal of the denial was to be heard by the Council on January 11, 1982 (see page 8 of the minutes), but tabled pending development of a timeshare ordinance. An ordinance prohibiting all timeshares was introduced at the July 12, 1982, meeting (see page 4 of the minutes) and adopted as Ordinance No. 82-14 on July 26, 1982 . Based on the findings in the new ordinance, the appeal was heard and denied on August 23, 1982 (see page 1 of the minutes). The ordinance added what was then labeled Chapter 20.76 to the Municipal Code. The preamble indicates it was intended not only to prohibit construction of new timeshare projects, but also conversion of existing dwellings into "time share projects," and the body specifically prohibits the conversion of an existing single family residence, condominium or multi -family units to "time-share use." Ordinance No. 82-14 is the origin of the words "project" and "development" that appear in relation to timeshares in the City's current code. And as confirmed by the City's collection of Historic Zoning Codes, "project" and "development" were also not assigned specialized definitions elsewhere in the Title 20 of 1982. So, especially since they were adopted without specific definitions in Ordinance No. 82-14, the context makes clear they were intended to have broad meaning, not the highly technical, specialized ones our staff now tries to assign to them. Fourteen years later, on January 22, 1996, a new Council relaxed the total ban on timeshare ownership in Newport Beach by adopting Resolution No. 96-9, which initiated amendments to allow timeshares in commercial districts (note that unlike at the present meeting, in 1996 "initiating" code amendments seems to have meant introducing a very specific language proposal for the Planning Commission to consider). This led to Ordinance No. 96-7, another Resolution No. 96-29, and some final tweaks with Ordinance No. 96-18. The timeshare code adopted in 1996 survived as NBMC Chapter 20.84 in the 1997 recodification of the Zoning provisions, in which "development" continued undefined, but " rp oject" was defined elsewhere in the code as "Any proposal for new or changed use, or for new construction, alterations, or enlargement of any structure, that is subject to the provisions of this code." Even if that definition of "project" was intended to modify the earlier definition of "time-share project," which seems unlikely, it would seem broad enough to me to include a change in ownership model as a "changed use." The next and most recent recodification of the Zoning Code in 2010 introduced, for the first time, a definition of "development" and a new definition of "project" that would both, for the first time, seem to exclude a change of ownership model. And those are the definitions that now seem to trouble staff. But there is no evidence either new definition was intended to amend the meaning of the 1982 time-share ordinance as refined in 1996. On the contrary staff seems to have been unaware of the conflict they were creating, for the City's 2010 Comprehensive Zoning Code Update Summary of Change document, which guided Council approval of the 2010 amendments, says (on page 13 of the PDF): Planning Commission Special Meeting - October 6, 2022 Item No. 2a - Additional Materials Received Code Update Related to Fractional Homeownership (PA2022-0202) Section 20.48.220 - Time Share Facilities (page 4.41) Current provisions are within Chapter 20.84 and the standards were updated to address operational plans. The requirement for all time share developments to obtain Development Agreements remains unchanged. In my view, our staff is chasing red herrings when it attempts to attach meanings to the words "project" and "development" that were never intended when they were enacted in association with the definition of "time-share project" in 1982. The 1982 ordinance was explicitly enacted to prevent the conversion of homes to time-share use through ownership, lease or any other arrangement — which would certainly include the Pacaso model. The 1996 amendments allowed timeshares, but only in commercial districts as does the current code. The 2010 Comprehensive Zoning Code Update sloppily added definitions elsewhere in Title 20 that seem to contradict the broad intent of the same words in Time -Share chapter. But the Summary of Changes clearly states the new code was adopted with no change intended other than an update to "operational plans." As Carmen pointed out at the last Council meeting, Title 21, added in 2017, explicitly identifies fractional ownership as a form of timeshare in the Coastal Zone, and Title 21, like Title 20, allows timeshare uses only in a subset of the commercial districts where hotels and motels are allowed. In summary, I believe it has been the clear intent of the Newport Beach Municipal Code to prohibit time-shared home ownership since 1982. Planning Commission Special Meeting - October 6, 2022 Item No. 2b - Additional Materials Received After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) From: Gary Cruz To: Planning Commissioners Subject: Fractional Ownership Date: October 05, 2022 6:06:20 PM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear Planning Commissioners, I just learned that the commission will be holding a meeting to discuss Fractional Ownership in Newport Beach. Unfortunately I am not available to attend but I want to express my concerns. Please excuse any grammatical errors or mistakes. I am composing this on my phone. We have already seen a growth from 3 to 13 properties since 2021 in fractional ownership. I understand there are 5 more properties on the market. The growth is staggering and it needs to be put under control before it is too late. This is reminiscent of short term rentals which were permitted to grow to an unmanageable level. Neither short term rentals nor fractional ownerships have a place in a residential (R1 or R2) community. They play havoc with a sense of community that is a trademark of a residential neighborhood. • These are businesses, not residences. • What happened to zoning? • They are driving up prices making home ownership impossible for any but the super rich. I know there are litigation concerns but what is right is worth defending. Why can't a moratorium be placed on new sales? Find some cities to partner with, get legal advice but most importantly don't let companies like Pacaso push Newport Beach around because they have deep pockets. This is not an issue solved by code enforcement. This is an issue solved by regulations. Sincerely, Gary Cruz Newport Beach Planning Commission Special Meeting - October 6, 2022 Item No. 2b - Additional Materials Received After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) From: Scott McFetters To: Plannina Commissioners Cc: citvcouncil(n newportbeachgov.ora Subject: No On Fractional Ownership Date: October 06, 2022 7:52:17 AM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear Planning Commioners, Fractional ownership could have a worse effect than short term rentals in residential neighborhoods. They will have the same negative quality of life impact without any code enforcement even with regulations. How would you like 8 owners plus whoever they let use it move in and out of the house next door to possibly multiple times a week for their vacations. Meanwhile you have to get up the next morning for work, your kids have to go to school and you are kept up all night because they are on vacation. They can also make early morning noise that also wakes you up. If you have a dog they constantly bark at the cons disruption. What happened to the concept of having real neighbors that actually live there in your neighborhood? Why have zoning if we don't protect our residential neighborhoods? The lack of integrity needs to stop. The planning commission completely struck out on the short term rental issue over the years and even on its last vote. Coastal Commission noted that STR's and now fractional ownership is negatively impacting the coastal population and housing stock, affordability along with other issues. Do the right thing and atop fractional ownership in Newport Beach or at a minimum put them commercial areas. The property rights claim does not work. Why should a business in a residential neighborhood have more property rights than a resident in a residential neighborhood? Newport Beach residential neighborhoods are not like New York City or Chicago's. Are restaurants next as long as it has an studio to sleep in? Scott McFetters Planning Commission Special Meeting - October 6, 2022 Item No. 2b - Additional Materials Received After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) From: Scott McFetters To: Planning Commissioners Cc: Dept - City Council Subject: No On Fractional Ownership Date: October 06, 2022 9:14:52 AM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear Planning Commissioners, Fractional ownership could have a worse effect than short term rentals in residential neighborhoods. They will have the same negative quality of life impact without any code enforcement even with regulations. How would you like 8 owners plus whoever they let use it move in and out of the house next door to possibly multiple times a week for their vacations. Meanwhile you have to get up the next morning for work, your kids have to go to school and you are kept up all night because they are on vacation. They can also make early morning noise that also wakes you up. If you have a dog they constantly bark at the cons disruption. What happened to the concept of having real neighbors that actually live there in your neighborhood? Why have zoning if we don't protect our residential neighborhoods? The lack of integrity needs to stop. The planning commission completely struck out on the short term rental issue over the years and even on its last vote. Coastal Commission noted that STR's and now fractional ownership is negatively impacting the coastal population and housing stock, affordability along with other issues. Do the right thing and atop fractional ownership in Newport Beach or at a minimum put them commercial areas. The property rights claim does not work. Why should a business in a residential neighborhood have more property rights than a resident in a residential neighborhood? Newport Beach residential neighborhoods are not like New York City or Chicago's. Are restaurants next as long as it has an studio to sleep in? Scott McFetters Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Update Related to homeownership Planning Commission Study Session October 6, 2022 Seimone Jurjis, CDD Director Jaime Murillo, AICP, Principal Planner O�A CAI FO R�`P Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Outline What is Fractional Homeownership Pros and Cons Current Regulations City Council Background and Direction Research Findings Options and Direction Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Fractional Ownership of Personal Property: What is it? Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Fractional Ownership of Real Estate • Partial ownership of property: Common with commercial properties Emerging with single-family residential Vacation property (2ndor 3rd homes) Fractions offered for sale online Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Companies Selling Fractional Ownership N E L S 0 N FAMILY ESTATES ;" Ember � SharetimTM EQUITY (-4 ESTATES Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff lowit Works Related to Fractional Homeownership (PA2022-0202) Property is purchased under a Limited Liability Corporation (LLC) Shares of the property are sold: 1/8 ownership or greater Operating Agreement is used to manage the property Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Operatic ns Co -owners agree on usage (days, week) 1/8 share = 45 days (not consecutive) typically less than 30 consecutive day stays managed through calender Owners pay share of property costs: maintenance, management, HOA, cleaning, tax, utilities, insurance, and reserve funds costs Short-term lodging or renting is not allowed } Co -owners can sell their interest ......I us .. ........ .. . Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code e rat Fractional Homeownership (PA2022-0202) 11 t SAC O 11C Function like short term rentals —non-resident vacation behaviors Commercialization of neighborhoods Impacts housing affordability —increased vacation homes and reduced housing stock Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code fill lated to Fractional Homeownership (PA2022-0202) er-s Less vacancies of second home Better property maintenance Increased spending in community • Alleviate pressure of median -priced homes Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff City Requiatidtfted to Fractional Homeownership (PA2022-0202) City can regulate Land Use but not Ownership. City regulates what is adopted in the Newport Beach Municipal Code • 56% of single-family properties in City are owned under an LLC or Trust Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Municipal Code Review - Single -Family Dwelling Use — House Owned by LLC Allowed — Can't Regulate Based orh Ownership Short Term Lodging Allowed by Permit- Except in R-1 Fractional Ownership doesn't fit definition Rented or leased for a period of less than 30 days (these are owned) Time Share Project— Prohibited, except in commercial and mixed -use zones • Fractional Ownership doesn't meet definition Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff "Time Share" DOfflIeo�tional Homeownership (PA2022-0202) 9. "Timeshare project" means a development in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of an ownership interest in a lot, unit, room(s), or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the project has been divided and shall include, but not be limited to, time share estate, interval ownership, fractional ownership, vacation license, vacation lease, club membership, time share use, hotel/condominium, or uses of a similar nature See also "Limited use overnight visitor accommodations (LUOVA)." 10. "Timeshare estate" means a right of occupancy in a timeshare project that is coupled with an estate in the real property. 11. 'Time share interval" means the period or length of time of occupancy in a timeshare unit. 12. 'Time share unit" means each portion of the real property or real property improvement in a project that is divided into time share intervals. 13. 'Time share use" means a license or contractual or membership right of occupancy in a time share project that is not coupled with an estate in the real property. NBMC §21.70.020 Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff "Development" D �nde al Homeownership (PA2022-0202) "Development" means the division of a parcel of land into two or more lots; the construction, reconstruction, conversion, structural alteration, relocation, addition to, or enlargement of a structure; any mining, excavation, landfill or land disturbance; and any use or enlargement of use of land. See "Enlargement of use." • Ownership, including multiple owners is not development Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Municipal CodeJf9ted to Fractional Homeownership (PA2022-0202) Time Share Requirements • Visitor accommodations • Conversion of dwellings prohibited • Minimum 100 timeshares or less with 300-unit resort hotel complex • Substantial amenities required • (e.g. golf courses, tennis courts, swimming pools, etc.) • Sales, operating, management, and contingency plans required • Use Permit and Development Agreement Required Adapted from NBMC §20.48.220 • Commercial visitor accommodations are not residential uses Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Background November 16, 2021, Study Session 4 known homes Directed staff to study what other cities are doing and report back September 13, 2022- City Council Study Session Sagecrest Planning+Environmental Report 11 known homes Directed staff to return with proposed action items Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) rection September 27, 2022 — Council Meeting Initiated Zoning Code and Local Coastal Program Amendment Did not pursue moratorium Directed staff to work expeditiously with Planning Commission Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Report Findings 22 Cities Survey Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) • 13 Cities - Consider Fractional Ownership a form of timeshare Carlsbad, Carmel by the Sea, Hermosa Beach, Monterey, Village of North Haven, Pacific Grove, Palm Desert, Palm Springs, Park City, South Lake Tahoe, Sonoma, St. Helena, Truckee • 7 Cities - Do not regulate Encinitas, Vail, Fort Lauderdale, Santa Cruz, Napa Indian Wells, Santa Barbara, • 4 Cities - Revised definition of timeshare Palm Desert, Truckee, St. Helena, Sonoma Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) 4 Cities — Issued Cease and Desist Letters Carmel by the Sea, Monterey County, Palm Springs, South Lake Tahoe • 3 Cities — Working on code update to timeshare Hermosa Beach, Pacific Grove, Park City • 1 City - Current moratorium to study Beverley Hills (expiring July 2023) 1 City - Active litigation St. Helena Planning Commission Special Meeting - October ¢mw 6m No. a- Additional Materials Presented &s!# Code Update Related to FradonalHomeownership (PAmG- &) 12 Known Properties in City + & # , � •w• � - � ® \ ¥p ~ Ile � , # 0 0� k� c � $; PARK AVE ' �j ©04 y� Vo / �s ` y ,-kr s Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Short Term Lodgingin City — upPe ®° 'Active Short Term �- m Regional r3'\a ® non ti'�"." r~ n nmuniry a w - jol Park 'o c r2s s ® laths[ Pan: Ce rater 51 4 2cih E3�Par _ Ha1'Ur 11630 Lbns F F'r q Park `aa .r- 618th St h '_'� Lodging Permits 7 Y 'i� n si ., - Total Permicc Map Lege nd R1 i -' O 'so Active Permits by Neighborhood 9 Y ^�_ .l llrl Pa[k -- J BalboaEsland 273 l��0�" Banning Bauchtlge�Yh'rk drr'329 4aC Eack Eay coe^� Corona Del M-Village 173 Y. Ne .ems S Faehon lido bland s i� Island M.arinersl�over Shores 1 ,Cn�st:NW' ,q San.h Newport Curter 1 — N H Ms i1 a� A a lip City of C—ta Mesa, City of Newport Beach, County orF L—Ang&[�, Bureau of La A01AP ell ewp— eig Newport Ridge Newpors Shores Newport Vill age Penins.la Poim Superior Heights West Newpors 0 200 400 600 Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Helena, CA Classifies fractional housing as timeshare Updated code Broaden timeshare definition Right of occupancy < Full year Limits timeshares to commercial zones Bolsters enforcement authority Modeled after short-term rental ordinance Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Helena, CA Current litigation -Ownership group and Pacaso filed suit against City Plaintiff's Claim City ordinance invalid (pending) Enforcement violates plaintiff's due process —14t" Amendment (pending) City is selectively and discriminatorily enforcing regulations (pending) Enforcement exceeds City's authority (pending) City interfering with economic advantage (dismissed) Planning Commission Special Meeting - October 6, 2022 ���2c - Addit� al Mater rs ip�22 0202) Fn Classified as timeshare Permitted in zones which permit hotels Require approval of a CUP Cease -and -Desist Order Proceeding with code enforcement actions on existing unpermitted units Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) o�rlla, city, UT Updating code to allow and regulate Tentative City Council hearing —October 6, 2022 Creating new definition -Single-Family Dwelling Fractional Ownership/Use Property owned by LC, LLC, or corporation Owner occupancy right < 30 days at a time Unrelated co -owners Advanced reservations via electronic systems Management subscription fee Case Studies — Park City, UT Locations Allowed • Commercial Zoning Districts • Residential Development - Medium Density • Same zones where Timeshares and Private Residential Clubs allowed Prohibited locations • Historic, Single -Family, and Estate Zoning Districts Fractional Ownership ing Comrnjssion Special Meeting - October 6, 2022 Item No. 2c - Additional Materiais Presented by Staff Farb City lirrid5 Code Up ate Related to Fr ctional Homeownership (PA2022-0202) zordN IAllowed Not Alk wed Suddlwalons r l - �- - � r ti k� � ✓ L \ "M Li / Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) nark City, UT Require approval of a CUP Require management plan Responsible party— return call within 20 minutes and within one hour drive of property Snow removal for access and parking Maintain property Noise and occupancy control Prohibit nightly rentals, on -street parking, commercial activities, and signs Business license Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Finitions - Option A Amend Timeshare Project Definition Eliminate "development" criteria (St. Helena) Clarify fractional use includes plan facilitated, offered, or organized by a third -party manager (Hermosa Beach) Exclude arrangements whereby multiple property parties join in directly purchasing full ownership of a unit and thereafter agree upon arrangements for its use (Palm Desert) • Considered an accommodation and would effectively prohibit in residential zones Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Definitions - Option B Create Fractional Ownership Land Use Create a new and separate fractional ownership use definition Owner occupancy right < 30 days at a time Establish specific regulations/standards • Considered a Corm of residential use and allow in all zones that allow residential uses Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Options Use Permit (Public Hearing) Conditional Use Permit (CUP):Planning Commission Minor Use Permit (MUP): Zoning Administrator Zoning Clearance (No Hearing) • Planning staff reviews and issues approval letter Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Requirements Parking shall conform with current standards (size and number) Parking shall be free of obstructions and available for use Prohibition of amplified sound outside or audible at PL from 10 pm to 10 am Compliance with City noise ordinance Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) dards R-1 Zones: 500 feet separation between other fractionals (areas where STL prohibited) Other Residential Zones — No separation Property manager responsible for ensuring containers put out/in on appropriate days Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) t Plan Require submission of operating agreement/management plan to City Contact person to address issues • Prohibit subletting of unit for rentals, including short-term lodging Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) od Neighbor colic•• Owner responsibilities and acknowledgment of potential enforcement/fines Contact person Parking rules Street sweeping Trash collection City noise restrictions Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) 10) Ovineo %••ledgments Sign acknowledgement by each owner submitted to the City Understanding of parking rules, street sweeping schedule, trash collection, and noise restrictions Understanding of Good Neighbor Policy Prohibition against subletting - Enforcement and fines Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) r�nrlf�fhorir�n Provisions Difficult to retroactively regulate existing uses or those in process Allow to remain as legal nonconforming uses Questions and Discussion Planning Commission Study Session October 6, 2022 Seimone Jurjis, CDD Director siuriis@newportbeachca.gov Jaime Murillo, AICP, Principal Planner jmurillo@newportbeachca.gov MLI WEN WK f; all WON 110 Newport Beach Pacaso Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) Co -ownership: An age-old practice Newport Beach property ownership Small groups of friends and family members commonly share ownership of a second home. • Propertyrecord data suggests that co- 4,604 ownership is common in Newport Beach 0 As of2021,41%(5,951) of homes were non owner -occupied and sssa owned in an LL.0 ortrust, which easilyenable multiple owner arrangements • In reflection ofthis practice,the Real 5,951 _ Estate Standards Organization in October 2021announced it willadd "co -ownership" as a dedicated property sub -type to its Non owner -occupied and owned in LLC or trust data standards ■ Othernon owner -occupied Owner -occupied Source: A1TOMdata Pacaso takes 2 to 8 buyers and puts them in 1 ho Meet Pacaso For generations, groups of families and friends have been�mvning second homes. Pacaso is modernizing the process and bringing together buyers. With Pacaso, between two and eight families: • Together co-own and control 100%of a luxury home (-2-4x local median value) in a property- specific LLC. • Employ Pacaso as a full -service property manager to reduce the hassle of second home ownership. Pacaso retains no ownership in the home, acting solely as a property manager after sale. 0 N N U n tanning Commission Special Meeting -October Item No. 2 - Additional Materials Presented at Meetign ' so Code Update Related to Fractional Homeownership (P 2�-0202) W Co-ownership,not Timeshare • There are no pfeet limitations on a homeowners ability to use the home. • '/8 ownership does not translatt/lo use. • Owners may use the home the same as any second home owner. 0 U n { tanning Commission Special Meeting - October Item No. 2 - Additional Materials Presented at Meetign " so Code Update Related to Fractional Homeownership (P 2�-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) Who are Pacaso Owners? Unlike vacation renters,-mNners make a large long term investment and return to their home yownd, just like any other second home owner. Pacaso owners: 40 Support local businesses during the shoulder seasons. • Have children in the area or are considering retiring in the region All families: • Pay property taxes • Put at least 30%cash down • Clear credit and criminal background checks Pacaso is so different from a short -term rental of somebody else's house. Its ownership, with significant capital outlay, so there's just a different mindset and duty of care. We're looking forward to being part of the neighborhood. " - Susan and Jason 0 N N U n Lr O f J err w I a1' I ,' ------- -------- �1y i Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) Neighbors, not Short -term Renters All ownersaresubjectto locallawand,in addition,agree to Pacaso'Csodeof Conduct,which outline policiessuch as • No rental of the property • No large events or parties • Quiet hours: 9 pm - 7 am • No commercial use of the home • Street parking discouraged M� Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) Fully -managed Experience As PropertyManagerPacastakesrareof the details sothat ownerscanenjoytheir seconchomewithout the hassle Pacasosupports owners with local companies providing • Cleaning • Landscaping • Interior design • Home&Pool maintenance • Easy & equitable scheduling using the Pacaso app • Home policies and enforcement V All the things that Pacaso does are the things that / don't want to do. / don't want to worry about upkeep —/ want to spend time with my sons, my daughters, my w/fe. " - Nkem and Angela lA Pacaso Pacaso vs. Other Models Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) Pacaso vs. Timeshare vs. Nightly Rental PACASO HOME RESORT TIMESHARE NIGHTLY RENTAL PROPERTY TYPE Singlefamily residence Hotel/Condo Singlefamily residence, Condo Apartment TRUE OWNERSHIP Yes, real property No, rightto-use time No, short term occupancy USAGE Ongoing access Fixed week(s) Nightly RESALE APPROACH Market pricing; sell on your terms Set pricing; sell with resort None, renters do not own the property NIGHTLY RENTAL Prohibited Allowed Allowed Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) Pacaso vs. Traditional Second Homes Source: EBP Economic Research Better Utilization Higher Price Point The average second home is used The average Pacaso home costs 6x just 11 %f the year compared to the more than the average second home average Pacaso home which is and 7x more than the average occupied nearly 90°/a>f the year. primary home. 0 N N U n More Spending & Tax Revenue Year-round home use means Pacaso homes result in nearly 10xmore spending at local businesses compared to the average second home. The owners also contribute more to state and local tax revenue. Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) Pacaso vs. Airbnb More enforcement Limited to owners and guests No revolving door Violations of Pacaso's owner policies The only people who may use the Pacaso homes are owned by an average may result in monetary penalties. home are owners and a limited of families who come back over and number of their guests. Owners over again, just like any other second cannot use other Pacasos other than home owners. It's not arevolving door their own. 0 N N U n of 30 new groupson average every year like you find with short term rentals. Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) Facts vs Fiction The majority of public comments have stated the following: • Pacaso owners are wonderful people • Home Management Teams are responsive to the communities needs • Pacaso works with the city to swiftly address code enforcement violations that have been filed We understand that bad companies and one-off bad actors could arise. Pacaso is committed to working with the city to build a framework to protect the community's character. 0 U U n Planning Commission Special Meeting - October 6, 2022 Item No. 2d - Additional Materials Presented at Meetign by Pacaso Code Update Related to Fractional Homeownership (PA2022-0202) n N neighbors@pacaso.com Have questions about a Pacaso in your neighborhood? W e have a dedicated team available to address neighbor questions or concerns. Email us at neighbors 4acaso.com Gabe Dim-Egmith, Public Affairs Manager 909.342.3144 gsmith@pacaso.com 4"A Pacaso, Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) From: Kathe Morgan To: Plannina Commissioners Subject: Fractional ownership staff reports/ordinances - St. Helena, Sonoma, Beverly Hills Date: October 08, 2022 8:07:54 PM Attachments: St.HelenaOrdinan.odf SonomaStaffRpt.odf SonomaSU m ma ry. pdf BHFracReot.odf [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Honorable Planning Commissioners: It was evident by Thursday evening's meeting that you all have been handed a fairly challenging project. I suspect that many residents have already researched the below documents which in majority are included in the website www.stoppacasonow.com. - so hopefully these will provide reference sources for your consideration. This website appears to be a `clearing house' for all cities currently dealing with fractional ownership. And these attached reports appear to be prepared by either City Attorney or Staff's offices of each respective city - My intention as a resident of Newport Beach is solely to be of assistance - as you will be facing a groundswell of invested homeowners. Respectfully, Kathe Morgan/Villa Point resident Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) PLANNING COMMISSION REPORT Planning Commission Meeting of March 1, 2022 hlE SUBJECT: Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code, and Deleting Section 17.112.130 of the St. Helena Municipal Code. PREPARED BY: Ethan Walsh, City Attorney REVIEWED BY: Maya DeRosa, Planning & Building Director APPROVED BY: Maya DeRosa, Planning & Building Director APPLICATION FILED: LOCATION OF PROPERTY: Citywide APN: n/a GENERAL PLAN/ZONING: n/a /_1 a"[ey_10 k rni1V BACKGROUND 10If] kiI=UP, Over the past two years, there has been significant discussion in the community regarding Section 17.112.130 of the City's Zoning Code, which prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple -family dwelling or any apartment house in the City (the "Time Share Ordinance"). The City Council discussed the Time Share Ordinance at its July 14, 2020 meeting in response to concerns raised regarding a real estate listing for a fractional or partial ownership interest in a residential home in the City. The prior City Attorney discussed this issue with the City, focusing on the question of the extent to which the City Council could regulate an ownership structure through the City's zoning authority, and noted the challenges of doing so. At the conclusion of the Council's discussion of this issue, Council directed the City Attorney and staff to continue to research its options to address the concerns raised by members of the community in response to the listing of the home at issue. Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) In the months following the July 2020 Council meeting, the company that had been marketing that original home, now known as Pacaso, began marketing other homes in the City, and the City received additional complaints from members of the community. Based on new information that was available to the City, primarily through Pacaso's marketing materials, the City Attorney's office concluded that the properties being marketed by Pacaso were not just fractional or partial ownership structures, but were also being marketed to be used as a time share project that would be prohibited under the City's ordinance, and informed Pacaso of that conclusion. Pacaso disagreed with the City Attorney's conclusion, and initiated a lawsuit in an effort to compel the City to retract its conclusion. That litigation is ongoing. When reviewing the Time Share Ordinance in this context, the City Attorney's office found that the substance of the Time Share Ordinance has not been updated since its adoption in 1982. The City Attorney's office concluded that the Time Share Ordinance would benefit from an update to refine the definitions to more directly address the impacts of time-share uses, to clarify the means used by the City to enforce the restrictions on time share uses, and to clarify how time share uses are treated in non-residential districts. City staff initially delayed initiating any changes to the Time Share Ordinance while the litigation was ongoing. However, due to the continued marketing of time share uses within the City, staff has decided to move forward with recommending the proposed updates to the City's ordinance. PROJECT DESCRIPTION N/A The Analysis section of the Staff Report is organized as follows: First, the section provides a brief explanation for the City's conclusion that the homes that have been marketed by Pacaso constitute time share projects. While the City's conclusion does not directly affect the changes to the Zoning Code set forth in the proposed ordinance, it is helpful to understand that the Time Share Ordinance, both in its original form and as proposed to be amended, is intended to protect against the impacts that these homes and similar uses could have on the City's housing supply and the character of the City's residential districts. Second, this section discusses the legal basis for the City's Time Share Ordinance, the reasons why the City prohibited time share uses in residential properties, and why those reasons continue to apply today. Third, this section outlines the changes made in the proposed ordinance and the reasons for the proposed changes. A.Current Time Share Ordinance and Application to Pacaso Homes Section 17.112.130 of the Zoning Code prohibits the creation of a time-share project as a means of ownership of any single-family, two-family or multiple family dwelling or apartment house within the City. A time-share project is defined in that section as any real property that is subject to a time-share program. A time-share program is in turn defined in part as an arrangement whereby the use, occupancy or possession of the Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) property circulates among purchasers according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year. Pacaso provides a significant amount of information on its website regarding the manner in which its homes are used by the purchasers of a Pacaso home. According to Pacaso's website, the single family residences marketed by Pacaso are held by a property -specific limited liability company ("LLC"), and each co-owner purchases a 1/8 share in the LLC. (Pacaso.com/learn) Each 1/8 share entitles the co-owner to 44 stay nights within any 365 day window. Stays can be from 2 to 14 nights in duration for each 1/8 share. Back-to- back stays are not permitted. (Pacaso.com/faq/scheduling) Stays are booked on an app, with specific rules governing the number of "special dates" that each co-owner can book, and the number of stays that each owner can book during "peak seasons." (Id.) Each owner can book the residence to use themselves, or may allow guests to use the residence, whether or not the co-owner is present. (Id.) Between each stay, Pacaso conducts a thorough inspection and cleaning. ("5 reasons Pacaso is better than a timeshare." Pacaso.com/blog/better-than-resort-timeshare) The Pacaso model grants each 1/8 owner the right to use the property for a specific period of time (44 days in a year) in increments of 2-14 days. The use, occupancy and possession of the property circulates among the co -owners according to a floating time schedule that gives each co-owner exclusive rights to the property for a specific period of time each year. This use structure fits squarely in the City's definition of a time-share program, and the properties operated by Pacaso in this manner would therefore be time- share projects under the existing Time Share Ordinance. B.Reasons for the Time Share Ordinance 1. The City's General Plan The City of St. Helena has long been defined by its rural, small town quality and agricultural character. In adopting the St. Helena General Plan Update 2040, the City noted that the defining, unifying goal of all the elements of the 1993 General Plan was: To protect the rural, small town quality and agricultural character of St. Helena. It is the General Plan's intent that the preservation of this small town character be the unifying philosophy that overlays all other stated goals and policies. (General Plan 2040, p. 1-2.) While the 2040 General Plan acknowledges that this is no longer the sole, overriding focus of the General Plan, retaining the small town character of St. Helena remains a primary focus of the City's land use planning. (Id.) A key component of retaining the City's small town character is maintaining a balance between the economic benefits that arise from visitors who come to St. Helena for its wineries, restaurants and historic downtown, and maintaining its authentic small town quality of life for the City's residents. This theme is consistent throughout the City's General Plan, and maintaining this balance is key to the City's long term viability. The General Plan notes in its Introduction that "[t]he community stands out in the Valley for its unique, historic character and its ability to attract visitors while also supporting the needs of its resident population." (General Plan p. 1-8.) The City has set goals to maintain that Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) balance, striving to achieve an economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors and provide better economic opportunities. (General Plan 1-15.) The City further seeks to "promote sustainable tourism practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small-town quality of life." (General Plan p. 3-9.) St. Helena is a renowned tourist destination, bringing visitors from throughout the world to its wineries, restaurants and downtown, but it is also a functioning City and community, with residents who contribute to its social fabric. Like most communities throughout California, one of the key means that the City utilizes to maintain this balance is through its Zoning Ordinance. The City has commercial districts, like the Service Commercial district and the Central Business district, that provide for uses that serve both visitors and the local community, such as restaurants, retail shops and winery tasting rooms, among others, along with lodging where those visitors can stay. (St. Helena Municipal Code §§17.48.030, 17.52.030.) The City also has residential districts that provide housing for those who live in the community, at varying densities in order to provide a diversity of housing types. 2. Use of Zoning to Preserve Residential Areas The use of zoning to preserve the character of the residential districts of a City has been common for over a century. In the seminal case of Euclid v. Ambler the United State Supreme Court upheld the validity of comprehensive zoning that would set aside residential districts "from which business and trade of every sort, including hotels and apartment houses, are excluded." (Euclid v. Ambler Co. 272 U.S. 365, 390.) The U.S. Supreme Court upheld the Village of Euclid's zoning ordinance in that instance, noting that the inclusion of non-residential uses in residential districts may have an increasingly deleterious impact on the residential area "until, finally, the residential character of the neighborhood and its desirability as a place of detached residences are utterly destroyed." (Id. at 394.) The California Court of Appeals followed Euclid and subsequent cases in upholding the City of Carmel-by-the-Sea's zoning restriction on short-term rentals. (Ewing v. City of Carmel -By -The -Sea (1991) 234 Cal.App.3d 1579.) In that case, the Court noted that the City's chief purpose in adopting the short-term rental restriction was "to provide an appropriately zoned land area within the City for permanently single-family residential uses and structures and to enhance and maintain the residential character of the City." (Id. at 1579.) In upholding Carmel's short-term rental restriction, the Court found that short-term rentals "undoubtedly affect the essential character of a neighborhood and the stability of a community. Short-term tenants have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally, they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." (Id. at 1591.) 3.Impacts of Time Share Uses on Residential Districts Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Like Carmel, the City of St. Helena strives to maintain the character of its residential areas in the face of intense demand for accommodations to serve visitors to St. Helena. The Time Share Ordinance is one of the means that the City has in place to ensure that it is able to maintain its existing and limited housing stock for use in long term residency, and to maintain the character of its residential zoning districts. When the City originally adopted the Time Share Ordinance in 1982, the City Council made specific findings based on the impact it foresaw if time share uses were to locate in the residential areas of the City. Those findings were as follows: 1.There is a critical shortage of affordable housing in the city for long-term occupancies (more than six months annually), and the availability of additional residential dwelling units is substantially restricted by the growth management system. 2.The conversion of residential dwelling units within the city to time-sharing projects eliminates residential dwelling units otherwise available for long-term occupancies (more than six months annually) in the city. 3.Time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short- term (less than six months annually) occupancies by those participating in time- sharing projects. 4.Such commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. 5.The city council finds and determines that this section is necessary to protect the public health, safety and welfare of the citizens of the city. As discussed in more detail below, these findings continue to hold true in St. Helena, and continue to support the City's decision to restrict time-share uses in residential districts. i.Housing Shortages and Impacts of Time -Share Uses on Existing Housing Stock In adopting the current Time Share Ordinance, the City Council found that there was a critical shortage of affordable housing in the City for long-term occupancies. That continues to be the case, and is undoubtedly worse than was the case at the time the Time Share Ordinance was originally adopted. The most recent census data lists the median value of owner occupied homes in St. Helena at $1,112,100 for the period of 2015-2019, while the Zillow Home Value Index estimates medial home values in St. Helena to be approximately $1,870,000 as of February 2022. (www.census.gov/quickfacts/sthelenacitycalifornia; zillow.com/home-values/.) In contrast, the median household income in St. Helena from 2015-2019 was $90,031, and the median income for a four person household in Napa County for 2021 is approximately $109,200. (www.census.gov/quickfacts/sthelenacitycalifornia; www.hcd.ca.gov/grant- funding/income-limits/state-and-federal-income-limits/docs/income-limits-2021.pdf.) Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) At the time of adoption of the City's Housing Element in 2015, the income necessary to purchase a median priced single family home was nearly $200,000 per year, and prices have risen dramatically since then. (City of St. Helena Housing Element Update 2015-23, p. 3.) The cost of homes currently in St. Helena are well in excess of what median income residents of St. Helena can afford, as well as median income residents of Napa County generally. Further, as Erika Sklar observed in the St. Helena Housing Update Report that she prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and non-profit directors cannot afford homeownership in St. Helena." (St. Helena Housing Update Report, p. 7 (April 2018).) The City has made and continues to make efforts to address the need for affordable housing in the City, including providing assistance for the Brenkle Court, Turley Flats and 963 Pope Street projects. The City has also ensured that new non-residential development will assist the City in providing adequate affordable housing, as evidenced by the significant contributions to affordable housing made by the Farmstead Lodging project through its development agreement with the City. These efforts, however, have highlighted the challenges of providing housing at all income levels, with the most significant challenge being a limited supply of existing housing stock in the City, and a limited supply of available land for new housing. Given the housing shortage already in existence, losing additional housing stock will only make this problem worse. The findings in the original Time Share Ordinance also note that the conversion of homes to time sharing projects would eliminate residential dwelling units that would otherwise be available for long term residential use. This continues to be true, as a home that is used for time share purposes will no longer be available for households to use as their long term residence. This threat to the City's existing housing stock is not insignificant. The publicity regarding Pacaso's rise as a company speaks to a pent up demand for homes that could be converted to time share use, reducing available housing stock for long term use. Pacaso's co-founder has indicated that "[t]here are tens of millions of families that aspire to own second homes but are unable to, due to reasons of cost." (Just Five Months Old, Zillow Co -founder's Pacaso Claims It's Already A Unicorn" Noah Kirsch, March 24, 2021 (www.forbes.com/sites/noahkirsch/2021/03/24/just-five-months-old-zillow- cofounders-pacaso-claims-its-alread-a-unicorn/.) In discussing Pacaso's model, Dan Wenhold of the venture capital firm Fifth Wall said "[t]hey were taking a previously illiquid asset, which was a timeshare, and making it affordable for the masses, also making it attainable for folks who wanted to own a second home but previously weren't able to." ("Pacaso, the Proptech Startup Founds by Zillow Alums, Raises $125M Series C" Sophia Kunthara (September 14, 2021) (news.crunchbase.com/news/proptech-startup-pacaso- raises-125m-series-c.) Creating a new market for these prospective buyers who otherwise would not buy second homes unquestionably increases demand for these Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) homes by creating an incentive for timeshare companies to buy up residences to meet this market demand. Creating more demand, and reducing supply, will further ratchet up housing costs, exacerbating the already significant housing shortage in the City. ii.Impacts to Character of the City's Residential Districts The City Council additionally found as part of the adoption of the original Time Share Ordinance that time-sharing projects have the same character as commercial hotels, motels and other transient occupancy uses due to their transient nature and to the multiple short-term occupancies by those participating in time-sharing projects. The Council concluded that this commercial or quasi -commercial like use is inappropriate in residential areas due to the increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods. This continues to be the case, as the nature of time share uses of residential property is different than the typical long term residential uses for which the residential districts of the City are intended. The complaints that have been made by some local residents regarding the Pacaso homes are illustrative of the distinctions between time share uses and long term residential uses. A sampling of the email complaints received by the City are included in Attachment No. 3 to this Staff Report. The complaints received center on concerns over more intense traffic and parking issues, outdoor parties and conversations going late into the evening, sometimes as late as 2 A.M. One neighbor complained of outdoor lighting shining into her daughter's room at night. They complained of traffic and inadequate parking for the visitors to these homes. Further, neighbors have noted that with each turnover from one stay to another, cleaning and landscaping crews come to clean the unit and prepare it for the next user. While this level of maintenance is appropriate for a commercial vacation property, it impacts the residential character of the surrounding area by adding parking and noise burdens in the neighborhood. Living next door to a home where the residents turnover every 2-14 days, and professional cleaning and landscaping crews come to the property between each visit is much more akin to living by a commercial lodging project than a residential home. This is not at all surprising, given that these time share homes are used by people who are on vacation. While long term residents may have an occasional party at their home, the time share model means that these residences are constantly being used by people who are on vacation, hosting parties or celebrating special occasions. These activities by their nature are more intense than typical residential use of property. The intensity of this use is a significant reason that these uses can change the character of a residential neighborhood. Long term residents, whether owners or renters, will occasionally have guests, and will occasionally have parties, but these time-share homes are used exclusively by people who are coming to the City on a short term basis for vacation or leisure. People will naturally stay out later, entertain more and gather in larger numbers while on vacation. That is the reason that these uses are more appropriate in non-residential areas that are intended to cater to the City's visitors and tourists. Time share uses can change the character of a residential neighborhood by having it serve not Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) only as a residential area but also a visitor lodging area, and subjecting it to the impacts that come with that more intense land use. In their marketing materials, Pacaso cites this intensity of use as a benefit, indicating that having these units filled with visitors seven days a week will benefit the local economy, since these visitors will patronize local businesses. (pacaso.com/communities) However, as noted above, the City strives through its General Plan to achieve a balance between benefits to the local economy and maintaining the character of the City. The City seeks to achieve this balance by promoting "sustainable tourist practices that allow the City to enjoy the economic benefits of visitors to the region while maintaining the authentic small- town quality of life, (General Plan p. 3-9) and striving to achieve a local economy that "will meet the basic needs of residents, while balancing the benefits and impacts of visitors." (General Plan p. 1-15.) Bringing more visitors into residential neighborhoods to improve the local economy does not help to achieve that balance. It instead tips the scales in favor of the local economy, at the expense of the residential character of these neighborhoods. The nature of the timeshare use itself can impact the residential character of the City's residential districts because it will ensure that the time share users can only use their property for a limited amount of time each year. In the case of Pacaso owners, each stay is limited to 2-14 days. As discussed above, in the Ewing v. City of Carmel -by -the -Sea case, the California Court of Appeal found that short term rentals would affect the essential character of a neighborhood and the stability of a community. The Court noted that "[s]hort term rentals have little interest in public agencies or in the welfare of the citizenry. They do not participate in local government, coach little league, or join the hospital guild. They do not lead a Scout troop, volunteer at the library, or keep an eye on an elderly neighbor. Literally they are here today and gone tomorrow —without engaging in the sort of activities that weld and strengthen a community." This same problem is present with time-share uses. Each co-owner is in the unit on a short-term basis, and without the time to participate in the types of activities or build the relationships that create the fabric of a community. At the April 28, 2021 council meeting several Pacaso co -owners spoke of their experiences in St. Helena. All of them spoke of their affection for the community and the traditions they had established, but these were centered on attending local events and visiting shops, restaurants and wineries. These types of transactional activities are all beneficial to the City's local economy and are what the City hopes to see from visitors to the City, but it is not the type of community involvement described in the Ewing case that binds and strengthens a residential community. Given the City's desire to strike a balance between the demands of the City's visitor and tourist economy, and retaining its small town character and quality of life, the City has an interest in maintaining housing stock in its residential districts for long-term residents who will engage in the community in the manner described by the Court in Ewing, to the betterment of the entire community. C.Proposed Amendments to the Time Share Ordinance The proposed Ordinance would make certain changes to the City's Existing Time Share Ordinance, as described below. Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) 1.Findings and Establishment of New Chapter The proposed Ordinance includes detailed recitals and findings describing the policy bases for the City's regulation of time share uses. The findings are consistent with the findings made as part of the original Time Share Ordinance, but more detail has been added. The policy bases for the proposed Ordinance are discussed in the sections above, and further discussion is not necessary here. The proposed Ordinance also relocates the restrictions on time share uses to its own chapter at Chapter 17.138. The Time Share Ordinance is currently located in Chapter 17.112, General Site Design and Development Standards. City staff believes that with the added level of detail in the Proposed Ordinance, these provisions merit being located in a separate chapter, and has changed the location of the Timeshare Ordinance accordingly. 2.Definitions The Proposed Ordinance amends the definitions that are used to define time share uses, with the new definitions set forth in Section 17.138.020. The new definitions are modeled on the definitions utilized by the state to regulate time-shares in the Vacation Ownership and Time -Share Act of 2004 (Bus. & Prof. Code §§11210-11288), but are modified somewhat to better apply in the land use regulation context. The new ordinance includes a number of definitions that work in concert to define a time- share use. The ordinance defines a "time-share use" as the use of one or more accommodations, or any part thereof, as part of a time-share property pursuant to a time- share plan. An "accommodation" is defined in this Chapter to include a range of residential units that could potentially be used for time-share purposes. The types of residential units that can be accommodations are listed at the beginning of Section 17.138.020 in the proposed ordinance. A "time-share plan" is defined in the ordinance, and generally includes any arrangement, plan, scheme or similar device whereby a purchase receives the right to exclusive use of the accommodation, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year. A "time-share property", in turn is defined as one or more accommodations that are subject to the same time-share plan together with any property rights that are appurtenant to the accommodations. A "time-share instrument", is the document or documents that create or govern the operation of the time-share plan. Therefore a time-share use is the use of a residential property that fits within the definition of an "accommodation" under the ordinance, pursuant to a "time-share plan", which grants each owner of the time-share property exclusive use of the property for a certain period of time each year, but not the full year. Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) It is important to note that not all properties with multiple owners or owned by business entities (such as LLCs) would constitute a time-share use under these definitions. The definitions focus on the manner in which the accommodation is used, not how it is owned. A time-share plan allows each owner exclusive use of the property for a specific period of time. This manner of use prevents the property from being used for long term residency, and leads to the continual cycling of visitors through the property and the more intense, constant vacation oriented use that the ordinance seeks to limit in residential districts of the City. A property that is owned by a group of friends or extended family members, whether through a separate business entity or otherwise, will not necessarily mandate that only one owner will be able to use the property at a time. The more formal arrangement found in time-share uses increases the intensity of use, in that each individual time-share owner cycles through the property, whereas families or friends are more likely to use the property together or in groups leading to less transition in the residential neighborhood. The more formal relationship, use of professional property managers and rights to exclusive use found in timeshare uses contributes to the commercial character of the property, with added traffic due to the more frequent turnover of visitors and more frequent cleaning and inspection between each user, which is common for a commercial vacation property, but not for a home owned by family or friends. 3.Enforcement The new ordinance additionally adopts a new enforcement structure for the City time- share restrictions, modeled on the City's short-term rental ordinance. The ordinance prohibits both the use of accommodations for time-share use, and the advertisement of accommodations for time-share uses. This will better allow the City to prevent time-share uses in residential neighborhoods before they occur. The proposed Ordinance also outlines the process that will be used to enforce this new Chapter, again based on the City's existing short-term rental regulations. This approach has proved to be effective in enforcing the City's short-term rental regulations, and will help the City to take a more preventative approach to enforcing its time-share regulations as well. 4. Time Share Uses in Service Commercial and Central Business Districts Finally, while the City's existing Time Share Ordinance did prohibit time-share projects within certain types of residential dwelling units within the City, it does not make distinctions based on the various zoning districts of the City. Given that the primary concerns and impacts of this use arise from the high intensity use of property that negatively impacts the residential character of residential districts within the City, this use may not have the same impacts in commercial districts where visitors can be closer to the amenities in the City that cater to visitors. The proposed new ordinance would allow time-share uses in the Service Commercial and Central Business Districts as conditional uses, provided that such time-share uses would be limited to accommodations in upper floors in conjunction with a mixed use project, would be required to provide at least one parking space for accommodations of two or fewer bedrooms, and at least two parking Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) spaces for accommodations of three or more bedrooms, and would be subject to such other conditions imposed by the City has part of the conditional use permit process. As part of the application for a time-share use, the applicant would have to provide specific information including a management plan and specific information on the accommodations and any ancillary uses. The City would then review the application process in accordance with its normal process for review of conditional uses. This would allow the City to address potential impacts associated with this use, similar to the approach that the City uses with hotels and other lodging accommodations in these districts. CEQA DETERMINATION The proposed ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance only affirms and clarifies existing regulations regarding timeshare uses within the City and merely authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. STAFF RECOMMENDATION For the reasons described above, staff recommends that the Planning Commission Adopt the Resolution Recommending that the City Council adopt an Ordinance Adding Chapter 17.138 "Time Share Uses" and Sections 17.138.010-17.138.060 to Title 17, Zoning, of the St. Helena Municipal Code and Deleting Section 17.112.130 of the St. Helena Municipal Code. ATTACHMENTS PC2022- 001 Timeshare Resolution 3-1-2022-c1 St. Helena Time Share Ordinance-c1 ExamDles of comDlaints received reaardina timeshare Droaerties-c1 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) CITY OF ST. HELENA PLANNING COMMISSION RESOLUTION NO. PC2022- A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ST. HELENA, CALIFORNIA, RECOMMENDING THAT THE CITY COUNCIL ADOPT AN ORDINANCE ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.101-17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE Recitals WHEREAS, the City of St. Helena is an popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner -occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena"; and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute One Million Dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional Two Million Two Hundred Thousand Dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long-term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) restriction was imposed because the conversion of residential dwelling units to time- sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one -eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time-share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the City gave public notice of the public hearing for the proposed ordinance by publishing in the Napa Valley Register; and WHEREAS, on March 1, 2022, the Planning Commission held a duly -noticed public hearing and considered the staff report, recommendations by staff, and public testimonyconcerning the proposed ordinance. Resolution NOW THEREFORE, THE PLANNING COMMISSION OF THE CITY OF ST. HELENA DOES RESOLVE, DETERMINE, FIND AND ORDER AS FOLLOWS: Section 1. This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Specifically, this ordinance only affirms and clarifies existing regulations regarding timeshare uses within the City and merely authorizes administrative and implementation activities which will not result in a direct or reasonably foreseeable indirect physical change in the environment. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Section 2. Based on the entire record before the Planning Commission, and all written and oral evidence presented, the Planning Commission hereby finds that the proposed ordinance is consistent with the City's adopted General Plan and does not conflict with any of the General Plan's goals or policies. Section 3. The Planning Commission hereby recommends that the City Council Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) adopt the attached proposed ordinance entitled: "ADDING CHAPTER 17.138,TIME SHARE USES AND SECTIONS 17.138.101-17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE." HEREBY CERTIFY that the foregoing recommendation to the City Council was duly and regularly approved by the Planning Commission of the City of St. Helena at a regular meeting of said Planning Commission held on March 1, 2022, by the following rollcall vote: AYES: NOES: ABSENT: ABSTAIN: APPROVED: John Pointe Planning Commission, Chair ATTEST: Maya DeRosa, AICP Planning and Building Director Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) CITY OF ST. HELENA ORDINANCE NO. ADDING CHAPTER 17.138 "TIME SHARE USES" AND SECTIONS 17.138.010 — 17.138.060 TO TITLE 17, ZONING, OF THE ST. HELENA MUNICIPAL CODE, AND DELETING SECTION 17.112.130 OF THE ST. HELENA MUNICIPAL CODE WHEREAS, the City of St. Helena is a popular tourist destination, known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character; and WHEREAS, preserving the rural, small town quality and agricultural character of the City of St. Helena has been a focal point of the City's land use planning for decades, and remains a primary focus in the City's 2040 General Plan; and WHEREAS, the City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy; and WHEREAS, the City values and welcomes all visitors to the City and recognizes their contributions to the City's economy, but finds that in order to maintain the City's long term viability as a community where people not only come to visit, but also live, work and contribute to the long term betterment of the community through participation in the City's schools, local community groups, civic government and local serving businesses, the City must maintain a balance between residential land uses and visitor serving uses; and WHEREAS, the City's existing housing stock is significantly impacted, with demand outweighing supply, resulting in extremely high housing prices as detailed in the accompanying staff report. A limited supply of suitable vacant land, exorbitantly high land costs, and limitations in the City's existing infrastructure, among other factors, have limited the construction of additional housing in the City of St. Helena; and WHEREAS, according to the U.S. Census Bureau, the current median household income in the City of St. Helena is $90,031, while the estimated value of owner - occupied housing units from 2015-2019 was approximately $1,112,100, with current real estate listings suggesting that prices are increasing significantly, meaning that homes in the City are not affordable to the median household in the City; and WHEREAS, as noted in the St. Helena Housing Update Report prepared for the City in April 2018, "St. Helena has more local jobs than people in the labor force, demanding large numbers of commuters to fill local jobs. Workers commute daily into St. Helena, many because there is no local housing that is affordable at the incomes Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) that they make. 36% of St. Helena households cannot afford market rents while 70% of St. Helena households cannot afford to purchase a home. Paramedics and preschool teachers cannot afford St. Helena's market rents. Teachers, registered nurses, winery and hospitality managers and nonprofit directors cannot afford homeownership in St. Helena", and WHEREAS, the City has made significant efforts to address the need for housing at lower income levels, of which recent examples include providing assistance to local nonprofit Our Town St. Helena for the Brenkle Court development, a mutual self-help housing development providing homeownership opportunities to eight low income working families, as well as the acquisition of a home located at 963 Pope Street using a charitable sale strategy. The property at 963 Pope Street is being developed with an additional four units to provide a total of five new affordable rental units in the City; and WHEREAS, further, in connection with the recently approved Farmstead lodging project, the City negotiated with the developer to contribute One Million Dollars toward the purchase of property to be used for the development of not less than twenty units of housing that will be affordable to low and very low income households, and an additional Two Million Two Hundred Thousand Dollars to be used more generally toward the development of affordable housing in the City; and WHEREAS, the City additionally provided substantial financial assistance to the recently completed Turley Flats Affordable Housing development, which provides eight units of rental affordable housing in a three story building located at 1105 Pope Street; and WHEREAS, these efforts have helped to address the City's need for affordable housing, but have also highlighted the challenge of providing sufficient housing to meet demand, particularly at more affordable levels, due to the significant costs of acquiring housing or land for the development of housing in the City and the limited supply of such land; and WHEREAS, the conversion of existing residential units to uses other than long- term residential use will further reduce the City's existing long-term housing supply, causing further imbalance between the demand for housing in the City and the existing supply, not only altering the character of the City's residential neighborhoods, but also presenting further challenges to the City's efforts to provide affordable housing within the community; and WHEREAS, the City additionally has, for many years, worked to preserve its existing housing stock for long term residential use, both to maintain the character of its residential neighborhoods and prevent residential districts from becoming visitor and tourist serving districts, and to ensure that it would not be converted to uses other than long-term residential uses; and Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) WHEREAS, to this end, in 1982 the City adopted Ordinance No. 82-07, which prohibited the creation of time-share projects as a means of ownership of any single- family, two-family or multiple -family dwelling or any apartment house within the City. This restriction was imposed because the conversion of residential dwelling units to time-sharing projects would eliminate residential dwelling units that would otherwise be available for long-term occupancies, and were inappropriate in residential areas because those uses have the same character as commercial hotels, motels and other transient occupancy uses, and would result in increased traffic generation and multiple occupancies disturbing the peace and quiet of residential neighborhoods; and WHEREAS, the City has historically not received complaints about time-sharing uses in residential neighborhoods. Commencing in 2020, however, the City began receiving complaints regarding single family homes in the City that were being sold and/or marketed as "fractional ownership" or "co -ownership" homes, wherein each buyer may acquire a one -eighth interest in a limited liability company that will own the home. Under the structure pursuant to which these dwelling units are marketed and sold, each owner gets a one -eighth share along with the right to use the home for one - eighth of each year indefinitely. During each owner's usage period, that owner has exclusive use of the entire house. All rentals are prohibited; only owners and their guests are permitted to use the house. Each owner pays regular assessments to fund the operating costs of the home and maintenance reserves; and WHEREAS, this arrangement, which provides that each purchaser is entitled to exclusive use of the property for a fixed number of days each year, is a "time-share plan" as defined in Business and Professions Code section 11212, and a "time share program" as defined in Section 17.112.130 of the City's Municipal Code; and WHEREAS, the City has received numerous complaints regarding these properties, including parking impacts from large numbers of people staying at these properties; excessive noise late into the evening due to frequent outdoor parties; traffic due to frequent visitor turnover; traffic, noise and parking concerns due to frequent visits from cleaning, landscape maintenance and pool cleaning services that come to the properties in between each stay to prepare the home for the next guest; and an inability to maintain lines of communication to set community expectations with the users of the unit, as visitors only frequent the homes for short term stays of 2 to 14 days; and WHEREAS, the complaints received by the City are reflective of the reasons that the City prohibited time-share projects within residential areas of the City. The time- share uses provide a short-term, high impact vacation oriented use of the property, where those that buy into the time-share use the home for entertaining and short term stays while visiting restaurants, wineries and other tourist oriented locations in St. Helena and the surrounding Napa Valley; and WHEREAS, this high impact use, combined with the frequent turnover and commercial management of these properties is not consistent with the residential districts in which they are located. It is commercial in nature, in that these time-share Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) uses are structured as a short-term, tourist oriented, visitor serving use of the subject properties. The use of these properties as time-shares adds excessive noise and traffic to residential districts by using these properties for high impact tourist oriented uses more appropriately located in commercial districts of the City; and WHEREAS, expanded use of residential properties for time-share uses will further reduce the availability of housing stock for long-term residential use, and create a new demand for time-share uses of residential properties; and WHEREAS, this encroachment of tourist oriented, visitor serving uses in residential neighborhoods will not only compromise the residential character of these areas, but will also further increase the costs for housing in the City, undermining the City's efforts to provide a balance of housing for all income levels in the City; and WHEREAS, the City's authority to enact zoning ordinances is based on the powers accorded cities and counties under the State constitution to make and enforce police regulations. This police power grants the City broad authority to regulate the development and use of real property within its jurisdiction to promote the public welfare; and WHEREAS, pursuant to and in accordance with this authority, the City Council desires to reaffirm its restrictions on time-share uses in residential areas, and to update the language of the Zoning Code to provide consistency with the terminology used to define time-share uses in State law. Further, the City desires to provide greater clarity as to the zoning districts in which time-share uses are permitted as conditional uses, and the standards pursuant to which they will be reviewed in those zoning districts; and WHEREAS, the Planning Commission of the City of St. Helena held a duly noticed public hearing on March 1, 2021, as required by law to consider all the information presented by staff, and public testimony presented in writing and at the meeting; and WHEREAS, on 2021, the Planning Commission of the City of St. Helena recommended that the City Council adopt this Ordinance amending the Municipal Code as described herein; and WHEREAS, on , 2021, the City Council held a duly noticed public hearing, accepting testimony from the public, and discussed the proposed amendments and staff's recommended approval of this Ordinance; and WHEREAS, the proposed zoning amendments are consistent with the General Plan goals, policies and implementation programs as the Ordinance will continue to preserve the agricultural, small town character of the City of St. Helena; will preserve the City's residential districts for residential uses; and will help to preserve the City's existing housing stock for long term residential uses, to avoid further exacerbating the existing impacts on the City's housing supply; and Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Now, therefore, the City Council of the City of St. Helena does hereby ordain as follows: SECTION 1: The above recitals are hereby incorporated as though set forth in this section. SECTION 2: Chapter 17.138 and sections 17.138.010 — 17.138.060 are hereby added to Title 17 of the St. Helena Municipal Code, to read as follows: "Chapter 17.138 TIME-SHARE USES 17.138.010 Purpose and Findings 17.138.020 Definitions 17.138.030 Time-share Uses Restricted to Service Commercial (SC) District 17.138.040 Application Process and Development Standards 17.138.050 Violations, Enforcement and Civil Penalties 17.138.010 Purpose and Findings A. There is a critical shortage of permanent, long-term housing in the City of St. Helena. B. A limited supply of suitable vacant land, land values, and market demand for land for other uses, including but not limited to use of property for vineyards, have limited the construction of additional housing in the City of St. Helena. C. St. Helena is a popular tourist destination known for its scenic Napa Valley location, exceptional wineries and restaurants, historic Main Street and small town agricultural character. D. The City of St. Helena stands out in the Napa Valley for its ability to attract visitors while also supporting the needs of its resident population. Maintaining the balance between the quality of life for residents and those who work in the City and the visitors who help to sustain the City's tourist economy is key to maintaining a sustainable community and a stable economy. E. Time-share uses are not an appropriate land use in the City's residential districts due to the multiple occupancy of time-share properties, the short-term, tourist oriented use of such property and commercial management of time-share facilities, all of which create increased traffic generation, excessive noise, disruption to residential Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) communities through commercial -level maintenance of the time-share facilities, and therefore are appropriately confined to commercial zoning districts. F. Conversion of permanent housing to time-share facilities removes existing housing units from the City's existing stock and exacerbates an already severe housing shortage. G. It is therefore in the public interest to prohibit conversions of existing housing units into time-share facilities, as to do so eliminates needed housing stock by diverting those units to a tourist -oriented, commercial use. 17.138.020 Definitions For purposes of this Chapter, the following words and phrases shall have the meaning respectively ascribed to them by this Section: "Accommodation" means any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including but not limited to a single family dwelling, or unit within a two family dwelling, three family dwelling, multiple family dwelling, or townhouse dwelling as defined in Section 17.04.160. "Building" shall have the meaning ascribed to it by Section 17.04.160. "Dwelling unit" shall have the meaning ascribed to it by Section 17.04.160. "Managing entity" means the person who undertakes the duties, responsibilities and obligations of the management of a time-share plan. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. "Time-share interest" means the right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, regardless of whether or not such right is coupled with a property interest in the time-share property or a specified portion thereof. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) year, on a recurring basis for more than one year, but not necessarily for consecutive years. "Time-share property" means one or more accommodations subject to the same time- share plan, together with any other property or rights to property appurtenant to those accommodations. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. 17.138.030 Time-share Uses Restricted to Service Commercial (SC) and Central Business (CB) Districts Time-share uses are conditional uses within the City's Service Commercial (SC) District and Central Business (CB) District, subject to approval of a conditional use permit applied for and approved in conformance with this Chapter. Time-share uses are not permitted in all other Zoning Districts in the City. 17.138.040 Application Process and Development Standards A. Application Process. Approval of a conditional use permit for time-share uses in the Service Commercial District or Central Business District shall be required in accordance with the requirements of Chapter 17.168. In addition to the application requirements contained in Chapter 17.168, an application for a time-share use shall be accompanied by the following documents which shall be subject to the approval of the planning director: 1. Management Plan. A management plan shall describe the methods employed by the applicant to guarantee the future adequacy, stability, and continuity of a satisfactory level of management and maintenance of the time share use. 2. Application Requirements. In addition to any application requirements established by this section and any other applicable requirements of this code, the following information shall be submitted as part of any application to develop or establish a time-share use: a. Typical floor plans for each accommodation. b. The phasing of the construction of the accommodations on the time- share property, if applicable. c. A description of any ancillary uses which are proposed in conjunction with the time share use. d. A description of the method of management of the time share use and indication of the management entity for the time-share property. e. Any restrictions on the use or occupancy of the accommodations. Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) f. Any other information or documentation the applicant, city staff or commission deems reasonably necessary to the consideration of the time-share use, including any required environmental documents. B. Development Standards and Operational Requirements. Notwithstanding any other provision of this chapter, the following conditions must be met by any time-share use in any conditionally permitted zone. Additional requirements may be attached to a conditional use permit or development agreement if found to be necessary to assure that the time-share use meets the intent of this chapter: 1. Time-share uses developed in the Service Commercial District or Central Business District shall be limited to accommodations in upper floors in conjunction with a mixed -use project. 2. No existing residential use in the Service Commercial or Central Business District shall be converted to a time-share use. 3. Development Standards. The time-share use shall comply with all development standards for the zone in which it is located. 4. Parking. Parking shall be provided as follows: a. For accommodations of two or fewer bedrooms, one parking space shall be provided for each accommodation. b. For accommodations of three or more bedrooms, two parking spaces shall be provided for each accommodation. 5. Modification or Waiver of Standards. The planning commission may modify or waive one or more of the regulations contained in this section if it determines that strict compliance is not necessary to achieve the purpose and intent of this section. 17.138.060 Violations, Enforcement and Civil Penalties A. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this chapter is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter B. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this chapter is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance. Any such nuisance may be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty for a violation shall be one thousand dollars ($1,000.00). Each day the violation occurs shall constitute a separate offense. Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) C. Any responsible person who violates this chapter shall be liable and responsible for a civil penalty of one thousand dollars ($1,000.00) per violation per day such violation occurs. The city may recover such civil penalty by either civil action or administrative citation. Such penalty shall be in addition to all other costs incurred by the city, including without limitation the city's staff time, investigation expenses and attorney's fees. 1. Where the city proceeds by civil action, the court shall have discretion to reduce the civil penalty based upon evidence presented by the responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the court should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the responsible person's enrichment or profit as a result of the violation of this chapter. In any such civil action the city also may abate and/or enjoin any violation of this chapter. 2. Where the city proceeds by administrative citation, the city shall provide the responsible person notice of the right to request an administrative hearing to challenge the citation and penalty, and the time for requesting that hearing. a. The responsible person shall have the right to request the administrative hearing within forty-five (45) days of the issuance of the administrative citation and imposition of the civil penalty. To request such a hearing, the responsible person shall notify the city clerk in writing within forty- five (45) days of the issuance of the citation. The appeal notification shall include all specific facts, circumstances and arguments upon which the appeal is based. b. The city manager is hereby authorized to designate a hearing officer to hear such appeal. The city hearing officer shall conduct a hearing on the appeal within ninety (90) days of the request for the hearing unless one of the parties requests a continuance for good cause. The hearing officer shall only consider those facts, circumstances or arguments that the property owner or responsible person has presented in the appeal notification. c. The hearing officer shall render a decision in writing within thirty (30) days of the conclusion of the hearing. The hearing officer shall have discretion to reduce the civil penalty based upon evidence presented by the property owner or responsible person that such a reduction is warranted by mitigating factors including, without limitation, lack of culpability and/or inability to pay. Provided, however, that in exercising its discretion the hearing officer should consider the purpose of this chapter to prevent and deter violations and whether the reduction of civil penalties will frustrate that purpose by resulting in the property owner's or responsible person's enrichment or profit as a result of the violation of this chapter. d. Any aggrieved party to the hearing officer's decision on the administrative appeal may obtain review of the decision by filing a petition for writ Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) of mandate with the Napa County superior court in accordance with the timelines and provisions set forth in Government Code Section 53069.4. e. If, following an administrative hearing, appeal, or other final determination, the owner of the property is determined to be the responsible person for the civil penalty imposed by this section, such penalty, if unpaid within forty-five (45) days of the notice of the final determination, shall become a lien to be recorded against the property on which the violation occurred pursuant to Chapter 1.12. Such costs shall be collected in the same manner as county taxes, and thereafter the property upon which they are a lien shall be sold in the same manner as property now is sold for delinquent taxes. D. Any violation of this chapter may also be abated and/or restored by the enforcement official and also may be abated pursuant to Chapter 1.12, except that the civil penalty under Chapter 1.12 for a violation shall be one thousand dollars ($1,000.00). E. Each day the violation of this chapter occurs shall constitute a separate offense. F. The remedies under this chapter are cumulative and in addition to any and all other remedies available at law and equity." SECTION 3: Deletion of Section 17.112.130 Section 17.112.130 is hereby deleted in its entirety. SECTION 4: CEQA This ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that this ordinance is not subject to CEQA because the adoption of this ordinance is not a "project" pursuant to Sections 15060(c)(2) and 15060(c)(3) of Title 14 of the California Code of Regulations. Moreover, under Section 15061(b)(3) of the State CEQA Guidelines, this ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. SECTION 5: Effective Date This ordinance shall take effect 30 days after its final adoption, and a summary of this ordinance shall be published once with the names of the members of the Council voting for and against the ordinance in the St. Helena Star, a newspaper of general circulation published in the City of St. Helena. Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) THE FOREGOING ORDINANCE was introduced City Council on the day of , meeting of the St. Helena City Council on the following vote: Mayor Ellsworth: Vice Mayor Dohring: Councilmember Chouteau: Councilmember Hardy: Councilmember Hall: APPROVED: Geoff Ellsworth, Mayor ATTEST: CITY OF ST. HELENA Cindy Tzafopoulos, City Clerk at a regular meeting of the St. Helena 2021, and was adopted at a regular day of , 2021, by the Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline From: Mari Jansdotter <mjansdotter pyahOO.COm>Code Update Related to Fractional Homeownership (PA2022-0202) To: Anna Chouteau Sent: 6/8/2021 7:25:45 AM Subject: Re: [External] 1242 Madrona pictures Re: Pacaso Thank you, Anna, for your kind reply. I'm sorry you all have to go through this lawsuit by Pacaso and hope the judge find in your favor. I have a follow-up question. Do you know who I should address it to? The Pacas house building on Kearney across the street from us has installed lights under the roofline that are on all night and installed in such a way they shine straight into our house, especially my daughter's bedroom. Are there any ordinances that I could refer to that help me ask them to please cover / redirect those lights or at least turn them off after 10 p.m? Thank you! Best Mari Planning Commission Special Meeting - October 6, 2022 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Sent from Yahoo Mail on Android On Tue, Jun 8, 2021 at 7:12 AM, Anna Chouteau <AChouteau@cityofsthelena.org> wrote: Hi Mari, Thank you for your email. I forwarded your email to City staff about the specific permitting questions. Our planning director is out of the office this week. We are defending ourselves in the lawsuit. Our City Attorney filed an anti-SLAPP motion that is now public information and the hearing will be coming up this summer. All my best, Anna Sent from my Wad On Jun 7, 2021, at 6:01 PM, Mari Jansdotter <mjansdotter@yahoo.com> wrote: To clarify, do they have permit allowing the new structure going up at 1242 Madrona? The rendering from original sales listing shows a trellis (see attached) but a structure looking like a live -on unit close to (and taller than) the Oak neighbour' fence is being built. See pictures from today <20210607_175202.jpg> <20210607_175219jpg> Sent from Yahoo Mail on Android On Mon, Jun 7, 2021 at 5:38 PM, Mari Jansdotter <mjansdotter@yahoo.com> wrote: Thank you for doing all you can to stop Pacaso! I am not o.k. with Pacaso's violation of city ordinance and I support the city's legal fight. In addition to signing the petition and putting a No Pacaso sign outside my home, what else can we on the community do to help, please? Planning Commission Special Meeting - October 6, 2022 I finally afforded my dream home after moving several til e ��}},,�t�t� g.� iti8q,� e i aVq � Deadline odSe Clpda�e ela11A Ff"' o a to ownership 22-0202) 4! of these Pacaso 'time share' like vacation LLC/commercially owned houses popping up in my neighborhood. I'm devastated - this is supposed to be a residential area!! I am very worried about my family's safe & peaceful living situation, now that I'll be impacted by 4 of these houses (one across the street) - each with 8 groups of owners and/or their guests circulating in and. out all year round. Many Pacaso have 4 bedrooms that easily accommodate 8+ people, and pool in the backyards with outdoor areas for gatherings/parties. It's a huge difference having your neighbor throwing an occasional party versus non-stop having a new group of people next door visiting for thier token time of vacation / partying. Pacaso houses also come with increased parking problems as these properties tend not have garages or driveways (often transformed into addl bedroom). Specifically would you mind looking into building code the one at 1242 Madrona / Oak? Looks like they're adding a guest house with vary narrow set back from the oak side neighbor. Is that an approved building? Maybe they're getting around that by making it a partial garage? Add to that, the 4 Pacaso houses are all in close proximity of RLS with kids walking / biking to and from school. What are the safety concerns that this is imposing with new people circulating in and out all year round and increased car traffic? Worst case scenario there will be a liability situation that will put a stop to Pacaso. Please, please stop Pacaso before we even get close to that. Respectfully, Mari Jansdotter Sent from Yahoo Mail on Android Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) PACASO = PARTY HOUSES! Debbie Polverino 5/11/2021 To the members of the City Council. In the recent Napa Register article, Austin Allison agrees that short term rentals are a problem, that commercial Timeshares are a problem- that's not what Pacaso is he said. Yet, Pacaso listed the Valley View Street "Pool House" as a 1 /8 Timeshare Ownership property. After the city was notified by several concerned citizens and myself regarding "timeshares" listed for sale in residential zoned areas, Pacaso changed its online marketing from 1/8 Timeshare Ownership to 1/8 Shared Ownership. Owners who purchase still share the property in available time slots just like a timeshare. Living next door to a Pacaso home has been living next door to a full-time party house! The constant music with speakers blaring, loud conversations until 2 am and later, noise violations along with excessive vehicles parked on the street or in front of our homes. The additional noise of gardeners blowing dirt and leaves into our yard, Pool service, catering trucks, housekeeping scheduled more frequently. Open houses are held with statements made with, "this is a great place for pool parties and entertaining, it's a perfect place to bring friends and extended family." This home on Valley View Street was a weekend getaway home for the previous owners who had loud weekend parties. It was a constant nightmare and all the homes nearby complained. Now the property has been split up to 8 owners. The Saint Helena P.D. has already been to this home at least 3 times for noise violations after 10pm. There must be a way to stop these repeated violations and offenders. Pacaso's has written policies for its owners on their website that they must adhere to. No parking on the street, no parties, no noise after 9pm to 7am, no dogs over 80 pounds. Policies have been broken several times already from each group including the Pacaso's owners. According to Mr. Allison, Saint Helena is running a dishonest campaign against Pacaso. Pacaso claims discrimination of outside ownership which is not the case. As we all know we welcome all people the opportunity to live in our quiet small town. Pacaso selling an 1,100 square foot home which is smallest of any home on our street for $1.7M is dishonest in my opinion. This is what he says is affordable housing for second home buyers who are paying in full, plus maintenance fees? When commercial companies buy a dozen homes in Napa Valley and plans additional purchases to be split up to 8 shares it is not committed to the community or our quiet neighborhoods. Zoning is in place for a reason. Commercial companies operating in full time residential streets should adhere to the rules that are in place and only buy up in areas where other vacation homes are abundant and not a disruption. What happens should we decide to sell our home? How will people feel about buying next door to a home owned by 8 owners who don't know each other and all come at different time slots for as little as 2 days at a time? We will have to disclose this information. This put a negative mark on our property. This is something I want you to think about! Say NO to Pacaso! Thank you. From: Amy Caldarola <amycal@comcast. net> To: Paul Dohring CC: Anna Chouteau; Lester Hardy; Eric Hall Sent: 5/23/2021 1:04:24 PM Subject: [External] Picaso Dear Council Members, Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) This is Amy Caldarola. here. I am very concerned about Picaso buying property in our residential neighborhoods under the guise of democratizing home ownership. This is not affordable housing. Picaso properties are time-shares and short-term rentals which violate municipal code provisions. The presence of these properties in residential neighborhoods is inappropriate and will degrade the quality of life. It has already done so with Picaso's property on Valley View; those neighbors are suffering with loud noise, music, and parties that go on to after midnight; even calling the police does not seem to stop them. I support the city in doing everything possible to defeat them. I also support a counter law suit against them if it makes legal sense. With that said, we are fighting for the soul of our community and this needs to be a number one priority. Picaso is in Napa, Sonoma, Healdsburg, and probably will move into Calistoga and Yountville. This is a fight worth fighting. It might be helpful for the affected counties and municipalities to join their resources together to oppose them. Please outline for me what the city is doing and what the plan is. Thank you. I really appreciate you taking the time to keep me informed on this very important and pressing issue. We must act now! Sincerely, Amy Caldarola Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) May 11, 2021 Good evening City Council members. My name is Clare Barr and I live in St. Helena. Tonight I would like to speak about the Pacaso Vacation Share homes. listened carefully to the public comments of Pacaso Share owners made at our last City Council meeting. They sounded sincere in their desire to be a part of the St. Helena community. The problem is they have bought into a business model that will make that nearly impossible. To be a part of a real community means forming bonds with neighbors. How can that come about with a home next door that has possibly dozens of strangers coming and going, with visits no longer than 14 days at a time, a few times a year? And with the likelihood of visits gifted by other share owners, and a cleaning crew who appears before each arrival, the number swells. With the result that a Pacaso share owner, is viewed by their neighbors as only one in a sea of unfamiliar faces. And though the intentions of some of the share buyers might be good, can we say the same for all 7 of the remaining shareowners? One of whom might gift a weekend to his brother for a blowout bachelor party? Or as was the case in Napa, a single shareowner who conducted retreats in which close to a dozen visitors would come and go within one stay. That particular shareowner was charging her guests, which is a complication on an entirely different level. Pacaso would have us believe that their sharebuyers are families who simply want a quiet, lovely getaway. But in actuality, a Pacaso home is built for partying. Their own website says of one offering "This home takes entertaining to new heights". And yet another listing says that a Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) particular home "has been completely re -imagined to accommodate families, friends, and large groups". Another listing offers "year round fun and adventure". Now, none of us resent the visitor who wants to have fun. Indeed, our beautiful valley is an ideal place for celebration. And we all do that on occasion. But when you realize that every single visitor owning a Pacaso share has been wooed with the promise of "fun and adventure" within a house "built for entertaining", then you have the possibility of major partying with each and every visitor, all crammed into stays that last from 2-14 days. This is transient occupancy in our residential neighborhoods that cannot possibly be regulated under the Pacaso system. There is a reason why we have ordinances in place that designate where tourists and visitors can stay. It allows us to appreciate our visitors, giving them the space and accommodations in which to party and celebrate, while we ourselves can conduct our daily lives in the sanctuary of our residential neighborhoods. Which in turn, are places where we know our neighbors so well that we trust them with our keys, our pets, and even our children. With whom we share joy and sometimes sorrow, and whom are quick to lend a hand in times of crisis. And if we have learned anything in the last few years, it is that the ability to know and rely on our neighbors is the very thing that sustains our community through thick and thin. A vacation home with a parade of visitors coming and going, does not belong in our residential neighborhoods. Please Say No to Pacaso. Clare Barr St. Helena From: Beth Gray <bgray14@gmail.com> To: Geoff Ellsworth Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Sent: 5/22/2021 3:01:13 PM Subject: [External] Pacaso Dear Mr. Mayor, I am writing to express my strong opposition against the infiltration of Pacaso and their timeshare strategy in the city of Saint Helena. As a full-time resident here in the city (and as your neighbor), I find it atrocious that the city has not been able to stop the infiltration of this community destroying business model. This business will do nothing but destroy our community. As an example, I witnessed the dumping of water from the pool into the creekbed from a home purchased by Pacaso right on the corner of Sylvaner/Reisling as they began to redevelop the home and expect to list it as fractional ownership. Illegal dumping of the pool water with disregard to any of the environmental consequences demonstrates their utter lack of care about the community. Similarly, hearing from the neighbors who live next to a Pacaso home on Valley View, I can only shake my head and sympathize with the poor neighbors having to deal with multiple cars showing up and loud music being played at all hours. One of the reasons I moved from San Francisco to Saint Helena was to enjoy the quiet sounds of nature, the beautiful outdoors - not to listen to vacationers who only want to party for the two weeks that they have their time in the home. Please protect our city from these timeshares. I understand the city is being sued. I hope that we can collectively put the necessary resources behind this lawsuit to stop Pacaso from any more timeshares in St. Helena. Respectfully, Beth Gray Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) kk5 City of Sonoma { Agenda Item Summary r_ Meeting: City Council - 19 Jan 2022 Department Planning and Community Services Agenda Item Title Staff Contact David A. Storer, AICP, Director, David J. Ruderman, Assistant City Attorney Discuss, Consider, and Take Possible Action on Introduction and Adoption of an Urgency Ordinance Amending the Sonoma Municipal Code to Add Section 19.50.140 — Timeshares — and Finding the Ordinance exempt from the California Environmental Quality Act (CEQA) under the general rule pursuant to Guidelines Section 15061(b)(3) because CEQA only applies to projects that have the potential for causing a significant effect on the environment and the Ordinance does not involve a commitment to any specific project that may result in a potentially significant physical effect on the environment. Summary Currently, the Municipal Code does not contain any regulation governing the use of properties as time-shares, meaning that, as a non -enumerated use, time-shares currently are prohibited throughout the City. However, due to the rise in fractional home ownership, there may be ambiguity regarding whether fractional home ownership uses constitutes a prohibited time- share or an allowed residential use. The urgency ordinance is intended to define time-shares broad enough to encompass fractional home ownership and ensure that their essentially commercial use is confined to those parts of the City that are planned for commercial uses. This will avoid losing valuable land zoned for residential purposes from being usurped by fractional home ownership and time-share uses. The proposed urgency ordinance thus continues the prohibition on time-shares in all residential zones and as the residential component of a Commercial or Mixed Use development. The following findings can be made by the City Council to support the adoption of the Urgency Ordinance: 1. A severe housing crisis exists in the state with the demand for housing outpacing the supply; 2. The City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; 3. Time-share uses threaten to reduce the housing supply in the City by turning long- term housing in the City into vacation rentals and reducing the affordable housing stock in the City; 4. Time-shares increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; 5. California Government Code Sections 36934 and 36937 authorizes the City of Sonoma to adopt an urgency ordinance by a four -fifths vote (4/5ths) necessary to protect the public peace, health, or safety; 6. An urgency ordinance adopted pursuant to Government Code Sections 36934 and 36937 is warranted on an urgency basis to allow regulations to govern how time-share are regulated. Without such ordinance, the issues raised above pose a significant threat to the public peace, health and safety. The attached Urgency Ordinance will add Section 19.50.140 — Timeshares into Title 19 and will be effective upon adoption. The attached Urgency Ordinance was presented to the Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission on January 13th, 2022, for comment and direction to staff, which will be reported to the City Council at the meeting. It is anticipated that the Planning Commission will review a regular ordinance at its meeting on February 10th, 2022, that will be later introduced to the City Council on February 23rd, 2022, and adopted by the City Council on March 2, 2022 to supersede the Urgency Ordinance; however the Urgency Ordinance would be in effect until a regular ordinance becomes effective. The attached Urgency Ordinance creates provisions for allowing timeshares with the approval of a Use Permit as part of the commercial component in a Commercial zoning district as defined in Section 19.10.020(B) or as a part of the commercial component in a Mixed Use zoning district as defined in Section 19.10.020(C). Recommended Council Action Introduce and adopt an Urgency Ordinance entitled "AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA ADDING TITLE 19, SECTION 19.50.140 (TIME- SHARES) TO THE CITY OF SONOMA MUNICIPAL CODE." Note: A 4/5 vote of the City Council is required to adopt an urgency ordinance and it takes effect immediately Alternative Actions 1. Take no action 2. Direct staff to amend urgency ordinance to only allow time-shares in commercial zones, but not as part of the residential component (i.e., also prohibiting them as part of the commercial component in MX) 3. Direct staff to amend urgency ordinance to prohibit time-shares in all zones in the City. Financial Impact None, other than the time necessary for staff to prepare this report and the accompanying urgency ordinance. Environmental Review Status ❑ Environmental Impact Report ❑ Approved/Certified ❑ Negative Declaration ❑ No Action Required ►J Exempt ❑ Action Requested Not Applicable Attachments Uraencv Ordinance No. XX-2022 Alignment with Council Goals: Not Applicable Compliance with Climate Action 2020 Target Goals: Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) CC n/a Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Cite of *onoma DRAFT ORDINANCE # -2022 AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA ADDING TITLE 19, SECTION 19.50.140 (TIME-SHARES) TO THE CITY OF SONOMA MUNICIPAL CODE WHEREAS, the City has recently become aware of time-share companies operating in the City; and WHEREAS, this Ordinance is adopted as an urgency ordinance pursuant to Government Code Sections 36934 and 36937. The facts constituting the urgency are as follows: a) A severe housing crisis exists in the state with the demand for housing outpacing the supply; b) The City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; c) Time-share uses threaten to reduce the housing supply in the City by turning long- term housing in the City into vacation rentals and reducing the affordable housing stock in the City; d) Time-shares increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; e) California Government Code Sections 36934 and 36937 authorizes the City of Sonoma to adopt an urgency ordinance by a four -fifths vote (4/5ths) vote where necessary to protect the public peace, health, or safety; f) An urgency ordinance adopted pursuant to Government Code Sections 36934 and 36937 is warranted on an urgency basis to allow regulations to govern how time- share are regulated. Without such ordinance, the issues raised above pose a significant threat to the public peace, health and safety. WHEREAS, the City Council find and determines that the immediate preservation of the public health, safety, and welfare requires that this Ordinance be enacted as an urgency ordinance pursuant to Government Code Section 36934 and 36937, and such that Ordinance take effect immediately upon adoption — therefore, this Ordinance is necessary for the immediate preservation of the public peace, health, safety and welfare and its urgency is hereby declared. WHEREAS, the City Council desires to amend the City's municipal code to address the impact that time-shares are having on the City's housing supply. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS: 272104.2 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) SECTION 1. RECITALS. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full. SECTION 2. URGENCY ORDINANCE. The urgency ordinance is necessary for the immediate preservation of the public peace, health, and safety because the operation of time-share companies in the City threatens to reduce the supply of affordable and market -rate housing in the City, increase site development conflicts and incompatibilities related to public safety, visual, privacy, and aesthetic impacts which would negatively impact the public welfare and the unique quality and character of the City of Sonoma. SECTION 3. MUNICIPAL CODE AMENDMENTS. Section 19.50.140 of the Sonoma Municipal Code is added to read as follows: 19.50.140 Time -Shares. This section sets forth requirements for the establishment and operation of time-share uses. A. Definitions. 1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals. 2. "Owner" means owner of a time-share interest. 3. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 4. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 5. "Time-share interest" means and includes either of the following: a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof. 272104.2 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) 6. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. 7. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 8. "Time-share use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time-share plan. B. Permitted zones. A time-share use shall only be permitted as part of the commercial component in a Commercial Zoning District, as defined by SMC § 19.10.020(B), or as part of the commercial component in a Mixed Use Zoning District, as defined by SMC § 19.10.020(C). C. Use Permit Required. The establishment and operation of a time-share use shall require the approval of a conditional use permit in compliance with SMC § 19.54.040. D. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 1.28 (Administrative Citations). 3. Time-share use, and/or advertisement for time-share use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time. 4. Each day a violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. 272104.2 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) SECTION 4. CEQA. This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on theenvironment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. SECTION 5. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. SECTION 6. EFFECTIVE DATE. This Ordinance is an urgency ordinance enacted under California Government Sections 36934 and 36937, subdivision (b). The urgency ordinance is effective upon adoption by a 4/5 vote of the Sonoma City Council, and shall take effect immediately upon its adoption. SECTION 7. PUBLICATION. This ordinance shall be published in accordance with the provisions of Government Code Section 36933(c)(1). SECTION 8. THIS ORDINANCE PREVAILS WHERE THERE IS CONFLICT. To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. APPROVED: Jack Ding, Mayor 272104.2 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) ATTEST: Rebekah Barr, MMC, City Clerk I HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Rebekah Barr, MMC, City Clerk 272104.2 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) COUNTY OF SONOMA 575ADMINISTRATION DRIVE, ROOM 102A SANTA ROSA, CA 95403 SUMMARY REPORT Agenda Date: 11/16/2021 To: Board of Supervisors Department or Agency Name(s): County Administrator and Permit Sonoma Staff Name and Phone Number: Tennis Wick x1925 Vote Requirement: Informational Only Supervisorial District(s): N/A Title: Update on the Litigation Pacaso Inc. v. City of St. Helena and Discussion of Land Use Impacts Associated with Temporary Usage By Non -Primary Owners of Fractionally Owned Homes Recommended Action: Receive an update on Pacaso Inc. v. City of St. Helena and hear public concerns regarding impacts to neighborhoods arising from temporary uses of fractionally owned residences by non -primary owners, including residences professionally managed by corporations such as Pacaso, and others, but excluding vacation rental uses. Executive Summary: Staff is recommending the Board of Supervisors gather information about impacts caused by temporary uses of residences held through fractional ownership by non -primary owners. Community members have expressed concern to staff about how these uses of residences impact neighborhoods. This public forum will provide the Board of Supervisors an opportunity to hear comments from the public on this topic and give direction to staff. The focus of this forum is not on vacation rental uses. Discussion: Temporary Uses of Residences This Board item focuses on non -primary owners' short-term uses of residences in Sonoma County's unincorporated area, other than vacation rental uses. Under the zoning ordinance, a primary owner is the property owner who resides in the property for a majority of the year, and does not have another primary residence. Vacation rentals outside of the coastal zone are regulated by the County's Vacation Rental Ordinance, which aims to regulate the impacts of vacation rental use. Thus, this forum is focused on gathering information about the impacts of other types of non -primary owners' short-term uses. In some scenarios, outside companies might facilitate the acquisition of a residence and/or professionally manage it and its use. Pacaso is a recent, well -publicized example of a company that facilitates the sale and temporary use of residences, and their management by professional companies for non -primary owners and others. Pacaso's website is www.Dacaso.com and an article from NPR on Pacaso is attached. (Attachment 1.) Staff's understanding is that Pacaso currently operates in the following regions in California: Lake Tahoe, Napa -Sonoma, Santa Barbara, Southern California beaches, Palm Springs, and San Diego. Pacaso also Page 1 of 4 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Agenda Date: 11/16/2021 operates out-of-state in Scottsdale Arizona; Park City, Utah; Aspen and other cities in Colorado and Florida commonly considered vacation destinations. To Staff's knowledge, Pacaso has facilitated the purchase of and management for about 10 homes in the Napa -Sonoma area. According to news reports, the company has received $75 million in equity financing, and is rapidly expanding. Beyond Pacaso, there are other companies that facilitate the purchase, use, and management of vacation or second homes, on a fractional, timeshare, or other basis, including companies operating in California, Florida, and Hawaii. Not every residence owned by an LLC or legal entity may be professionally managed, used for temporary stays, or used in a way that creates impacts. This public forum seeks information from the public on the nature of impacts created by temporary uses of residences that these types of companies specialize in, without regard to which entity or entities are involved. Although the exact number is unknown at this moment, there are residences in the County owned by LLCs or trusts. Some of these properties are utilized as sources of income and used as short-term or long-term rentals. Those used as short-term rentals often utilize outside property management companies to provide services such as coordination of repairs, addressing neighbor complaints, paying utility bills, etc. But other short-term rentals are self -managed completely by the LLC managers or trustees. Outside of the coastal zone, the County regulates transient use related to the short-term rental of vacation homes through its Vacation Rental Ordinance. Where there are residences used for temporary stays or other uses by non -primary owners, but not renters, this forum seeks public input on possible impacts of those multiple uses as well. In short, there are various ways, beyond traditional vacation rentals, that temporary stays occur in residences that may create impacts similar to vacation rental uses. This forum seeks to understand those impacts. St. Helena Litigation The City of St. Helena commenced an enforcement action against Pacaso alleging violations of the city's timeshare ordinance. In response, Pacaso sued St. Helena in federal court. Pacaso's lawsuit alleges that St. Helena's application of its timeshare ordinance is unlawful because the ordinance is unconstitutionally vague, timeshares and fractional -ownership models are distinct so the ordinance cannot apply to Pacaso, St. Helena engaged in unconstitutional selective enforcement because it has not applied the ordinance to other co -ownership models like Limited Liability Companies, and the ordinance attempts to regulate land ownership, and not land use, because any impacts of fractional -ownership on communities can be regulated through other means such as noise ordinances. Pacaso has displayed aggressive litigation tactics. Pacaso filed a motion to strike all of the affirmative defenses raised in St. Helena's answer and subsequently filed a motion to strike part of St. Helena's amended answer. The end result of these motions to strike was to require St. Helena to file amended answers, something that could be achieved through a more collegial approach of voluntarily meeting and conferring with opposing counsel. In addition, St. Helena had to file an anti-SLAPP (strategic litigation against public participation) motion due to Pacaso's lawsuit being based in part on a memorandum prepared by the city. This memorandum informed realtors that the issue of whether the sale of fractional interests in residential properties and short-term rentals was being reviewed by the city council after receiving concerns from constituents about these transactions potentially violating city ordinances. Despite Pacaso's opposition, the judge found in the city's favor and agreed that the fifth claim in Pacaos' lawsuit was improper and should be stricken. Page 2 of 4 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Agenda Date: 11/16/2021 The litigation is currently in the discovery phase and trial is scheduled for July 11, 2022. Discovery is a very time consuming and expensive process that can result in tens, if not hundreds, of thousands of dollars in expenses. Trial preparation also requires significant resources. Thus, if St. Helena does not prevail in defending against the lawsuit, Sonoma County staff estimates that the City's attorney's fees may amount to $300,000 - $400,000. Further, if Pacaso prevails on a constitutional argument, the judge may order the city of St. Helena to reimburse Pacaso for its attorney's fees, which could amount to $800,000 - $1,000,000. In the end, St. Helena may end up spending about $1- 1.5 million as a result of the litigation if Pacaso prevails. Staff has not confirmed these estimates with the City. Courtesy Notices and Responses Code enforcement in the County is complaint driven. If complaints are received about a potential violation of the County Code, Permit Sonoma either sends a code enforcement inspector to the subject parcel to investigate the conditions and discuss with the property owner/tenant how to remedy violations, if they exist, or sends a courtesy notice that discusses the possible violations and invites the property owner to contact Permit Sonoma to further discuss the issues. After receiving complaints related to the short-term use of properties, Permit Sonoma staff sent Courtesy Notices to Pacaso providing notice that complaints had been received of potential violations of the County's Zoning Code on the properties located at 2252 West Dry Creek Road, Healdsburg, CA, 6165 West Dry Creek Road, Healdsburg, CA, and 1405 Old Winery Court, Sonoma, CA. These notices are attached. (Attachments 2-A, 2-13, 2-C.) Pacaso responded to each Courtesy Notice alleging that the property identified in the Courtesy Notice is used as a single family residence as permitted by the Zoning Code, the terms of the LLC's operating agreement forbid the rental of the property, only one household may use the property at a time, and Pacaso provides scheduling and property management services. These responses are attached. (Attachment 3.) Staff did not provide a reply. The County is exploring the impacts caused by the uses of such properties, as well as legal and other options for next steps. Other Jurisdictions Other than St. Helena, Staff is not aware of other jurisdictions who have held public forums to discuss non -primary owner temporary use of professionally managed residential dwellings. Staff is not aware of any jurisdiction that has issued a notice of violation or commenced litigation against Pacaso. St. Helena did not commence a code enforcement action against Pacaso, but nevertheless was sued by Pacaso. Some jurisdictions may be waiting for the outcome of the St. Helena litigation for direction. Strategic Plan: Prior Board Actions: N/A Page 3 of 4 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Agenda Date: 11/16/2021 FISCAL SUMMARY Expenditures FY 21-22 Adopted FY22-23 Projected FY 23-24 Projected Budgeted Expenses Additional Appropriation Requested Total Expenditures Funding Sources General Fund/WA GF State/Federal Fees/Other Use of Fund Balance Contingencies Total Sources Narrative Explanation of Fiscal Impacts: N/A Staffing Impacts: Position Title (Payroll Classification) Monthly Salary Range (A -I Step) Additions (Number) Deletions (Number) Narrative Explanation of Staffing Impacts (If Required): N/A Attachments: Attachment 1: NPR Article Attachment 2-A: Code Enforcement Courtesy for Notice 2252 West Dry Creek Road, Healdsburg Attachment 2-B: Code Enforcement Courtesy for 1405 Old Winery Court, Sonoma Attachment 2-C: Code Enforcement Courtesy for 6165 West Dry Creek Road, Healdsburg Attachment 3: Response to Code Enforcement Courtesy Notices Related Items "On File" with the Clerk of the Board: N/A Page 4 of 4 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) AGENDA REPORT Meeting Date: July 15, 2021 Item Number: E-3 To: Honorable Mayor & City Council From: Ryan Gohlich, AICP, Director of Community Development Chloe Chen, Associate Planner Subject: AN INTERIM ORDINANCE OF THE CITY OF BEVERLY HILLS ESTABLISHING A MORATORIUM ON FRACTIONAL OWNERSHIP OF RESIDENTIAL AND COMMERCIAL PROPERTY, DECLARING THE URGENCY THEREOF AND MAKING A DETERMINATION OF EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) Attachments: 1. Draft Interim Urgency Ordinance Prohibiting Fractional Ownership RECOMMENDATION Staff recommends the City Council make a motion to read the interim urgency ordinance (Attachment 1) by title only, waive further reading, and adopt the interim urgency ordinance, including the findings set forth in Government Code §65858, by at least a 4/5 vote, and find the ordinance exempt from the California Environmental Quality Act (CEQA). FISCAL IMPACT It is not currently known whether allowing fractional ownership would have a positive impact on the City's revenue, as any revenue impacts would be determined by the applicable ownership model and taxation structure. However, prohibiting fractional ownership would not have an adverse impact on the City's revenue as it would maintain the status quo from a tax base perspective. Accordingly, there does not appear to be a fiscal impact associated with the adoption of an urgency ordinance to prohibit fractional ownership. INTRODUCTION At its special meeting on June 24, 2021, the City Council discussed the topic of fractional ownership in relation to a proposed development project in the City. Mayor Wunderlich requested that staff prepare an agenda item to more broadly discuss fractional Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Meeting Date: July 15, 2021 ownership, and more recently has requested that an Interim Urgency Ordinance be considered to prevent fractional ownership of properties in the City. Fractional ownership is an emerging trend in which shares of ownership rights to a property are sold to multiple buyers, thus allowing each buyer an ownership interest and rights to use said property for a certain period of time. Although this model effectively operates similarly to a timeshare model, it typically conveys actual ownership rights instead of a right for use of the property for a certain period of time only, and also divides a property into fewer fractions than a typical timeshare might. In some existing fractional ownership models, properties are bought and held under entities such as limited liability companies (LLC's), and the operating agreement for the entity conveys a fraction of ownership of the property through the sale of interest shares to a member of the entity. The California Department of Real Estate (DRE) regulates the sale of timeshare interests in dwelling units, which are typically sold as timeshare estate interests or timeshare use interests. Timeshare estate interests are a "right of occupancy in a timeshare property coupled with an estate in real property", which is typically transferred via grant deed'. Timeshare use interests are those "based on a purchase agreement between the seller and the purchaser in which the purchaser does not receive a deed to an interest", and does not receive a title of real property2. Pursuant to The Time Share Act, DRE requires public reports for both of the aforementioned timeshare interests if the purchase offer involves 11 or more timeshare interests with terms of at least four years in a timeshare plan. In a typical fractional ownership scheme, the fraction of ownership may directly correlate to the amount of time the owner is permitted to use and/or occupy the dwelling unit, whereas in a typical timeshare scheme, the customer typically buys only the rights to use the property for a set period of time. Additionally, recent trends indicate that fractional ownership schemes are being applied to single-family residences, while traditional timeshare schemes are more commonly applied to hotel and condominium properties. At its July 15, 2021 study session meeting, the draft interim urgency ordinance prohibiting fractional ownership was presented to the City Council for review and discussion. DISCUSSION Fractional ownership and timeshare models operate in more or less the same way, with members or owners using a property or portion of a property for a period of time that is typically less than one year at a time, and typically for vacation purposes. However, one important difference is that fractional ownership schemes are emerging more often in established single- and multi -family neighborhoods, which may create adverse impacts to residents of established neighborhoods that would otherwise not experience impacts from transient uses. Since fractional ownership agreements provide rights to utilize a property for a period of time that is shorter than a typical rental agreement, the property effectively operates as a short-term rental. The Beverly Hills Municipal Code (BHMC) currently prohibits "transient residential uses" in both the single-family3 and multi-family4 residential zones. In the single-family 'FAQ: Timeshares". California Department of Real Estate. <https://www.dre.ca.gov/files/pdf/fags/FAQ_ Timeshares.pdf> 2 Ibid. 3 For the single-family residential prohibitions, see BHMC §10-3-302, -401, -409, -501, -601, -701, -801, -901, -1001, and - 1101. 4 For the multi -family residential prohibitions, see BHMC §10-3-1201, -1231, -1301, -1401, -1502, and -1533. Page 2 of 4 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Meeting Date: July 15, 2021 residential zones, a transient residential use is defined as: "a rental or lease of a single- family residence or accessory dwelling unit for a period of less than six (6) months", and in the multi -family residential zones, it is defined as: "a rental or lease of a multi -family dwelling unit for a period of less than thirty (30) days". The current zoning regulations serve to effectively prohibit the use of both single-family and multi -family residential properties for rental through a third party vacation rental platform since the minimum rental periods are longer than those usually desired for a vacation rental. However, the current regulations do not directly prohibit the fractional ownership model from operating in either the residential or commercial zones, as the short-term users of the property are technically owners of those properties. The operation of a fractional ownership vacation home in the single-family or multi -family residential zones could result in adverse impacts to long-term residents in the surrounding neighborhood because the properties would operate as a vacation rental home. Given that vacations typically last for short periods of time, these properties would likely experience high turnover rates of occupants, and result in impacts related to their operation such as noise, loss of privacy, loss of community buy -in, and decline in property values. Additionally, the City and the greater Los Angeles metro region are experiencing a housing crisis, in which a lack of affordable housing is available. The purchase of a single-family or multi -family unit for the purpose of private vacation or other short term uses would further exacerbate this crisis, as it removes available housing units from the market for long-term residents to utilize. Finally, fractional ownership of residential or commercial property, can adversely impact future development, redevelopment, safety, and proper maintenance of the property as a result of the complexities associated with the incongruent and changing objectives, intents, and goals of multiple owners. Recently, in other areas of California, several companies have started to advertise fractional ownership shares of vacation dwellings. These companies facilitate the sale of the fractions of ownership, and manage the shared use of the property. Therefore, the potential proliferation of fractional ownership operations presents an immediate threat to the public health, safety, or welfare of the City, and an interim urgency ordinance may be appropriate to prevent these adverse impacts. The draft interim ordinance defines fractional ownership as "shared ownership of a property, entitlement to ownership rights of a property, entitlement to use of a property, or possession of a property through: a) direct ownership of a property, b) indirect ownership of a property through a membership, stake, interest, share, association, or similar device in the owner of the property or a subsidiary or parent of the owner of the property, or c) a membership, stake, interest, share, association, or similar device in an entity, group, association or similar device which by virtue of such membership, stake, interest, share, association or similar device grants entitlement to ownership rights or the use or possession of a property". The ordinance prohibits fractional ownership models from operating in the City if the fractional ownership includes "any arrangement, schedule, plan, scheme, or similar device, whether by agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby an owner of the property or a fraction thereof, receives ownership rights in, or the right to use, the property for a period of time less than a full year", with the exception of those approved through a specific plan. Thus, the ordinance language prohibits fractional ownership that correlates to a time -based occupancy agreement. ENVIRONMENTAL REVIEW The draft interim urgency ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA, Public Resources Code Sections 21000 et seq.), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq.), and the environmental regulations of the City. The adoption and implementation of the interim urgency ordinance represents Page 3 of 4 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Meeting Date: July 15, 2021 minor alterations in land use limitations and do not result in any changes in land use or density, and the ordinance does not authorize construction. In fact, the ordinance imposes greater restrictions on certain properties in order to protect the public health, safety and general welfare because the ordinance will impose a temporary moratorium on certain fractional ownership in the City in order to protect the public health, safety and general welfare, and will thereby serve to avoid potentially significant adverse environmental impacts during the term of the moratorium. It can therefore be seen with certainty that there is no possibility that the proposed amendments may have a significant effect on the environment. Accordingly, the City Council will consider the staff recommendation to find the interim urgency ordinance exempt from the environmental review requirements of CEQA pursuant to Sections 15305 as a minor change to land use regulations and 15061(b)(3), of the California Code of Regulations because it can be seen with certainty that there is no possibility that the activity in question would have a significant effect on the environment. Ryan Gohlich, AICP, Director of Community Development Approved By Page 4 of 4 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) Attachment 1 Draft Interim Urgency Ordinance Prohibiting Fractional Ownership Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) ORDINANCE NO.21-0- AN INTERIM ORDINANCE OF THE CITY OF BEVERLY HILLS ESTABLISHING A MORATORIUM ON FRACTIONAL OWNERSHIP OF RESIDENTIAL AND COMMERCIAL PROPERTY, DECLARING THE URGENCY THEREOF AND MAKING A DETERMINATION OF EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) THE CITY COUNCIL OF THE CITY OF BEVERLY HILLS HEREBY ORDAINS AS FOLLOWS: Section 1. Legislative Findings. A. California is experiencing a housing supply crunch. Existing housing in this state, especially in its largest cities, has become very expensive. California needs an estimated 180,000 additional homes annually to keep up with population growth, and the Governor has called for 3.5 million new homes to be built by 2025. B. Fractional ownership of residential property for use or possession of the property for a period of less than a full year, akin to a vacation time-sharing property model, reduces the availability of residential property for long-term occupancies in the City. Thus, creating the need for more housing. Moreover, the use of fractional ownership can be detrimental to the City and its residents because such multiple occupancies disturb the stability of residential neighborhoods. C. Fractional ownership of residential or commercial property, can adversely impact future development, redevelopment, safety, and proper maintenance of the property as a result of the complexities associated with the incongruent and changing objectives, intents, and goals of multiple owners. D. The City Council believes that unregulated fractional ownership of residential or commercial properties with time -based occupancy restrictions would unduly impact the City. The City Council therefore believes there is a current and immediate threat to the public health, safety and welfare that is presented by such ownership models, and that a moratorium is necessary to study the regulation of fractional ownership. E. The City Council finds that the time provided by the moratorium will allow for a comprehensive analysis of residential and commercial property ownership models, including fractional ownership, with time -based occupancy restrictions. During the moratorium, the City will be able to analyze potential impacts on public health and safety related to time -based occupancy restrictions; and impacts on the public welfare due to the removal of full-time housing units from the market and replacing them with vacation or part-time units, the inference with the stability of residential neighborhoods and the impact on the maintenance and redevelopment of properties. The City Council finds that these analyses will help the City Council determine how to best prevent impacts to the public health, safety and welfare. The City Council further finds that the moratorium will allow time to achieve a reasonable level of assurance that there will not B0785-0001\2552952v4.doc Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) be serious negative impacts to the overall community and ensure a positive and mutually acceptable set of outcomes for the City's residents, business community, and property owners. F. Based on the foregoing, the City Council finds that if the City fails to enact this moratorium, fractional ownership of properties with time -based occupancy restrictions may be allowed under outdated zoning regulations that do not address the unique impacts of such ownership models. Therefore, a current and immediate threat to the public safety, health and welfare exists. Section 2. Authority. Pursuant to Government Code Section 65858, the City Council may adopt, as an urgency measure, an interim ordinance that prohibits any uses that may be in conflict with a contemplated zoning proposal that the City Council is considering, studying, or intends to study within a reasonable period of time. Section 3. Urgency Findings. The City Council finds and determines that there is an immediate threat to the public health, safety, or welfare, and that fractional ownership of residential and commercial properties with time -based occupancy restrictions constitute a threat to the public health, safety or welfare. As described in Section 1, the staff report accompanying this Interim Urgency Ordinance, and other evidence in the record, such fractional ownership in the City could threaten the health, safety and welfare of the community through negative impacts that include, but are not limited to, removing full-time housing units from the market and replacing them with vacation or part- time units, interference with the stability of residential neighborhoods and interference with the maintenance and redevelopment of properties. To preserve the public health, safety, and welfare, the City Council finds that it is necessary that this Interim Urgency Ordinance take effect immediately pursuant to Government Code Sections 65858 to prevent such harm. Section 4. Moratorium Established. Based on the facts and findings set forth in Sections 1 through 3 of this Interim Urgency Ordinance, and notwithstanding any other ordinance or provision of the Beverly Hills Municipal Code, the City of Beverly Hill hereby establishes the following moratorium: A. Definitions. For the purposes of this moratorium, the following phrase has the meaning given herein. 1. "Fractional Ownership" shall mean shared ownership of a property, entitlement to ownership rights of a property, entitlement to use of a property, or possession of a property through any of the following means: a. Direct ownership of a property; b. Indirect ownership of a property through a membership, stake, interest, share, association, or similar device in the owner of the property or a subsidiary or parent of the owner of the property; or -2- B0785-0001\2552952v4.doc Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) c. A membership, stake, interest, share, association, or similar device in an entity, group, association or similar device which by virtue of such membership, stake, interest, share, association or similar device grants entitlement to ownership rights or the use or possession of a property. B. Time -Based Occupancy Restrictions. Unless approved by a specific plan, fractional ownership of any property in the City shall be prohibited if such ownership includes any arrangement, schedule, plan, scheme, or similar device, whether by agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby an owner of the property or a fraction thereof, receives ownership rights in, or the right to use, the property for a period of time less than a full year. Section 5. Enforcement. The provisions of this Interim Urgency Ordinance shall be enforceable pursuant to the general enforcement provisions in Title 1 of the Beverly Hills Municipal Code. Section 6. CEOA Findings. The City Council hereby finds that it can be seen with certainty that there is no possibility that the adoption of this Ordinance may have a significant effect on the environment. This Ordinance does not authorize construction and, in fact, imposes greater restrictions on certain properties in order to protect the public health, safety and general welfare because the Ordinance will impose a temporary moratorium on certain fractional ownership in the City in order to protect the public health, safety and general welfare, and will thereby serve to avoid potentially significant adverse environmental impacts during the term of the moratorium. In addition, the Ordinance consists of minor alterations in land use limitations and do not result in any changes in land use or density. It is therefore not subject to the California Environmental Quality Act review pursuant to Title 14, Chapter 3, Sections 15305 and 15061(b)(3) of the California Code of Regulations. Section 7. Severability. If any section, subsection, subdivision, paragraph, sentence, clause, phrase, or portion of this Ordinance or its application to any person, place, or circumstances, is for any reason held to be invalid or unenforceable by the final decision of any court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses, phrases, or portions of this Ordinance, or its application to any other person, place, or circumstance. The City Council hereby declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause, phrase, or portion hereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable. Section 8. Effective Date; Approval and Extension of Ordinance. This Ordinance, being an Interim Ordinance adopted as an urgency measure for the immediate protection of the public safety, health, and general welfare, containing a declaration of -3- B0785-0001\2552952v4.doc Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) the facts constituting the urgency, and passed by a minimum four -fifths (4/5) vote of the City Council, shall take effect immediately upon its adoption and shall continue in effect for a period of not longer than forty-five (45) days. After notice pursuant to Government Code Section 65090 and a public hearing, the City Council may extend the effectiveness of this Urgency Ordinance as provided in Government Code Section 65858. Section 9. Publication. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause its publication in accordance with applicable law. Adopted: Effective: ATTEST: (SEAL) HUMA AHMED City Clerk APPROVED AS TO FORM: LAURENCE S. WIENER City Attorney ROBERT WUNDERLICH Mayor of the City of Beverly Hills, California APPROVED AS TO CONTENT: GEORGE CHAVEZ City Manager B0785-0001\2552952v4.doc Im City of Sonoma ORDINANCE # -2022 AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SONOMA ADDING TITLE 19, SECTION 19.50.140 (TIME-SHARES) TO THE CITY OF SONOMA MUNICIPAL CODE WHEREAS, time share and fractional interest uses have been and currently are prohibited as uses not specifically enumerated in the Sonoma development code; and Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) WHEREAS, the City has recently become aware of time-share companies or fractional interest companies wishing to operate in the City; and WHEREAS, this Ordinance is adopted as an urgency ordinance pursuant to Government Code Sections 36934 and 36937. The facts constituting the urgency are as follows: a) A severe housing crisis exists in the state with the demand for housing outpacing the supply; b) The City of Sonoma is particularly experiencing a housing emergency due to its relative isolation, limited housing supply, and desirable location; c) Time-share or fractional interest uses threaten to reduce the housing supply in the City by turning long-term housing in the City into vacation rentals and reducing the affordable housing stock in the City; d) Time-share and fractional interest uses increase traffic and noise impacts and have the same character as commercial hotels, motels, and other transient occupancy uses due to their transient nature making them inappropriate for residential zones; e) The development of time-share or fractional interest uses in Commercial and Mixed Use zones (which also have a "residential component" requirement) will reduce the City's ability to collect valuable property tax, sales tax, or Transient Occupancy Tax; f) By allowing time-share or fractional interest uses in the City, market pressure will incentivize property owners to convert their existing commercial, hotel or residential uses, thereby reducing revenue to the City in the form of commercial property taxes, sales tax, Transient Occupancy Tax, and valuable existing housing stock; g) Allowing time-share or fractional interest uses in the Commercial and Mixed Use zones reduces the availability of suitable lands to provide housing units to meet the City's Regional Housing Needs Allocation for the 5th and 6th Cycles; h) By allowing times -share or fractional interest uses in the City, developers of those uses will seek to convert underutilized commercial uses (in Commercial and Mixed Use zones), thereby reducing the City's ability to identify those sites as potential Housing Opportunity sites in the development of the City's 6th Cycle Housing Element; i) California Government Code Sections 36934 and 36937 authorizes the City of Sonoma to adopt an urgency ordinance by a four -fifths vote (4/5ths) vote where necessary to protect the public peace, health, or safety; and j) An urgency ordinance adopted pursuant to Government Code Sections 36934 and 36937 is warranted on an urgency basis to allow regulations to govern how time-share and fractional interest uses are regulated. Without such ordinance, the issues raised above pose a significant threat to the public peace, health and safety. WHEREAS, the City Council find and determines that the immediate preservation of the public health, safety, and welfare requires that this Ordinance be enacted as an urgency ordinance pursuant to Government Code Section 36934 and 36937, and such that Ordinance take effect immediately upon adoption — therefore, this Ordinance is necessary for the immediate preservation of the public peace, health, safety and welfare and its urgency is hereby declared. WHEREAS, the City Council desires to amend the City's municipal code to address the impact that time-share and fractional interest uses are having or would have on the City's housing supply. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SONOMA DOES ORDAIN AS FOLLOWS: SECTION A_._RECITALS. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full. SECTION_2.�.1 ROE NC-Y—QRDI NANCE. The urgency ordinance is necessary for the immediate preservation of the public peace, health, and safety because the operation of time-share companies in the City threatens to reduce the supply of affordable and market -rate housing in the City, increase site development conflicts and incompatibilities related to public safety, visual, privacy, and aesthetic impacts which would negatively impact the public welfare and the unique quality and character of the City of Sonoma. SECTION 3._MUNICIPAL CCDE_AMENDMENTS. Section 19.50.140 of the Sonoma Municipal Code is added to read as follows: 19.50.140 Time -Shares. This section sets forth requirements for the establishment and operation of time-share uses. A. Definitions. 1. "Accommodation" means any dwelling unit, multifamily dwelling, apartment, condominium or cooperative unit, cabin, lodge, hotel or motel room, or other private or commercial structure containing toilet facilities therein that is designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals. 2. "Owner" means owner of a time-share interest. 3. "Person" means a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, or other legal entity, or any combination thereof. 4. "Time-share instrument" means one or more documents, by whatever name denominated, creating or governing the operation of a time-share plan and includes the declaration dedicating accommodations to the time-share plan. 5. "Time-share interest" means and includes either of the following: a. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, coupled with a freehold estate or an estate for years with a future interest in a time-share property or a specified portion thereof. b. The right to exclusively occupy a time-share property for a period of time on a recurring basis pursuant to a time-share plan, which right is neither coupled with a freehold interest, nor coupled with an estate for years with a future interest, in a time-share property or a specified portion thereof. 6. "Time-share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, sale, lease, deed, license, right to use agreement, articles of organization or incorporation, operating agreement or bylaws, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of an accommodation or accommodations, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. 7. "Time-share property" means one or more accommodations subject to the same time-share instrument, together with any other property or rights to property appurtenant to those accommodations. 8. "Time-share use" and "fractional interest use" means the use of one or more accommodations or any part thereof, as a time-share property pursuant to a time- share plan. B. Permitted zones. None, Time share uses and fractional interest uses are prohibited throughout the city of Sonoma C. Violations, Enforcement and Civil Penalties 1. Any responsible person, including but not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published, advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is guilty of a misdemeanor for each day in which such accommodation is used, allowed to be used, or advertised for sale or use in violation of this chapter. Such violation shall be punishable pursuant to Chapter 1.12 (General Penalty). 2. Any responsible person, including by not limited to an owner of a time-share interest, management entity, agent, or broker who uses, or allows the use of, or advertises or causes to be printed, published advertised or disseminated in any way and through any medium, the availability for sale or use of an accommodation in violation of this section is subject to administrative fines and/or penalties as set forth in Chapter 1.28 (Administrative Citations). 3. Time-share use, fractional interest use and/or advertisement for time-share use and/or fractional ownership use, of an accommodation in violation of this section is a threat to public health, safety or welfare and is thus declared to be unlawful and a public nuisance and may be abated pursuant to Chapter 1.12 (General Penalty), Chapter 1.30 (Administrative Notice and Order Proceedings), Chapter 9.56 (Noise), and any other relevant provision of this code as it may be amended from time to time. 4. Each day a violation of this chapter occurs shall constitute a separate offense. 5. The remedies under this section are cumulative and in addition to any and all other remedies available at law and equity. SECTION 4.. CEQA. This Ordinance has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the city. City Planning Staff has determined that the adoption and implementation of the Ordinance is exempt from further environmental review under the general rule in California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3) that CEQA only applies to projects that have the potential for causing a significant effect on the environment. As a text amendment and addition without any physical project being approved, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. The proposed Ordinance is therefore exempt from the provisions of CEQA because it does not involve a commitment to any specific project that may result in a potentially significant physical impact on the environment. The City Council concurs in these findings and adopts them as its own. The City Council, therefore, directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. SECTION 5.-SEVERADILITY If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional. SECTION-fi._E F E ECTIVE_QATE. This Ordinance is an urgency ordinance enacted under California Government Sections 36934 and 36937, subdivision (b). The urgency ordinance is effective upon adoption by a 4/5 vote of the Sonoma City Council, and shall take effect immediately upon its adoption. SECTION_7._PU DLICATION. This ordinance shall be published in accordance with the provisions of Government Code Section 36933(c)(1). SECTION $. THIS—QRDINANCE_PREVAILS WHERE THERE_ISSONFLIC_T. To the extent that this Ordinance conflicts with any other provision in the Sonoma Municipal Code or city ordinance (urgency or otherwise), policy or regulation, this Ordinance will control. APPROVED: Jack Ding, Mayor ATTEST: Rebekah Barr, MMC, City Clerk HEREBY CERTIFY the foregoing ordinance was duly adopted at a Regular Meeting of the City Council of the City of Sonoma held on the , 2022 by the following vote: AYES: NOES: ABSENT: ABSTAIN: Rebekah Barr, MMC, City Clerk 273619.3 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) From: Kathe Morgan To: Plannina Commissioners Subject: Cease and desist letters - Carmel -by -the -Sea, Monterey County and Palm Springs Date: October 09, 2022 10:16:30 AM Attachments: CarmelCeas.odf MontereyCounty.odf PalmSpringsCease.pdf [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Honorable Planning Commissioners: Attached are Cease and Desist letters sent to Pacaso from counsels representing Carmel -by - the -Sea, Monterey County and Palm Springs. All letters state violation of timeshare municipal codes for each respective city versus attempts of code accommodations or modifications for timeshare use. These letters were included amongst others on www.stoppacasonow.com. There appears no public or current evidence of legal pushback by Pacaso. Respectfully, Kathe MorganNilla Point resident Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline 2310 East Ponderosa Drivtode qAatAelated to Fractional Homeownership (PA2022-0202) . IlkCamarillo, California 93010-474 voice 805.987.3468 - fax 805.482.9834 BURKE, WILLIAMS&SOHENSEN, LLP www.bwslaw.com April 7, 2022 VIA E-MAIL TO PATRICK(a)-PACASO.COM and ELLEN(o)-PACASO.COM Senior Legal Counsel Pacaso, Inc. 2021 Fillmore St. Suite 183 San Francisco, CA 94115 Ellen Haberle, Director Government & Industry Relations Pacaso, Inc. 2021 Fillmore St. Suite 183 San Francisco, CA 94115 Cell No.: 805.377.3565 bpierik@bwslaw.com Re: Request to Immediately Cease and Desist Unlawful Operations Dear Mr. Abell and Ms. Haberle: This law firm serves as City Attorney for the City of Carmel -by -the Sea, California ("City"). In that capacity, we are writing to advise Pacaso Inc. ("Pacaso") that Pacaso's current operations within the City are unlawful and must cease immediately. The City has been made aware of at least one property sold by Pacaso within the City at Dolores 7 SW 13th, Carmel by -the -Sea, CA 93921. The sale of this property constitutes the sale of a timeshare prohibited by the Carmel -by -the -Sea Municipal Code ("CMC") Section 17.28.010. City Prohibition on Timeshare Uses CMC section 17.28.010 provides that "[t]imeshare projects, programs and occupancies are prohibited uses within all of the zoning districts within the City." Timeshare projects, programs and occupancies are further defined in CMC Section 17.70.020: Los Angeles - Inland Empire - Marin County - Oakland - Orange County - Palm Desert - San Diego - San Francisco - Silicon Valley - Ventura County Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BURKE, WILLIAMS & SORENSEN, LLP Patrick Abell Ellen Haberle Pacaso, Inc. April 7, 2022 Page 2 A "time-share program" is "[a]ny arrangement for a project whereby the use, occupancy, or possession of real property has been made subject to a time- share estate, use, or occupancy, whereby such use, occupancy, or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis for a specific period of time during any given year, but not necessarily for consecutive years." • A "time share estate" is defined as "[a] right of occupancy in a time-share project that is coupled with an estate in the real property. • A "time-share use" is "a license or contractual or membership right of occupancy in a time-share project which is not coupled with an estate in the real property." A "time-share project" is "[a] project in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted for the use or occupancy periods into which the project has been divided. • A "project" specifically includes "[a]ny proposal for a new or changed use." Pacaso's Business Involves the Sale and Management of Prohibited Timeshare Uses Pacaso's website indicates that its business model involves sales of property held by an limited liability company in 1/8 ownership shares, with the associated right to exclusive use of the subject property by the owner of the share, with Pacaso managing among other things, the upkeep of the property and providing an app to arrange for periods of exclusive use by the share owners. Pacaso's website further states that each owner of a 1/8 share is entitled to 6 "general stays," booked at least 61 days in advance, which may range between 2 to 14 nights, and unlimited "short notice stays" booked less than 60 days in advance. However, maximum stay length is limited to 14 nights regardless of the method of booking. Owners of two shares have the option to book stays up to 28 nights. Pacaso's business model meets the City's Ordinance's definition of a prohibited "timeshare program," because the ownership of the property through the LLC is an "arrangement for a project whereby the use, occupancy, or possession of real property Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BURKE, WILLIAMS & SORENSEN, LLP Patrick Abell Ellen Haberle Pacaso, Inc. April 7, 2022 Page 3 has been made subject to a time-share estate, use, or occupancy," and rights to periods of exclusive use are circulated among the owners of the shares, in specific intervals up to 14 nights per 1/8 share, "according to a ... floating schedule on a periodic basis for a specific period of time during any given year." Additionally, division of the property into fractionalized ownership under Pacaso's business model will create either a "time-share estate" or "time-share use" — either the owners of the shares of the LLC hold a "right of occupancy" and "an estate in the real property" which establishes a time-share estate, or if the LLC is deemed the sole holder of the "estate in the real property," then such owners have a "time-share use" because they will hold a right to determine and establish their rights of occupancy pursuant to their right to operate and control the LLC under the terms of any membership or operating agreements. We are aware that Pacaso has asserted to other jurisdictions that the properties that they sell and manage are not timeshares, but rather "fractionalized ownerships." According to Pacaso, a Pacaso home is no different from any other single family residence. However, this is simply not true. Regardless of what Pacaso wants to calls its business model, the impact is the same — this type of commercially managed short-term vacation use has the same impacts on surrounding residential areas as short-term vacation rentals, which are generally prohibited by the City's municipal code. (See CIVIC Sections 17.08.040, 17.68.030; 17.28.040.) The frequent, rotating occupancy of the owners is functionally akin to short-term rentals, and the City's existing regulations on timeshare uses are specifically intended to minimize the impacts created by this type of use and occupancy of land. Similar prohibitions on short-term rotating occupancies have already found lawful under Ewing v. City of Carmel -by -the -Sea (1991) 234 Cal.App.3d 1579, which found that the City could lawfully prohibit short-term rental of residential property for transient occupancy in residential neighborhoods as an incompatible "commercial" use. Finally, several significant policy reasons justify the City's prohibition against timeshares. The City's prohibitions on timeshares were first adopted in 1988 in order to preserve housing stock. The Housing Element of the City's General Plan includes Goal G3-2, which is to "[p]reserve existing residential units and encourage the development of new multifamily housing in the Commercial and R-4 Districts." Furthermore, Goal G3-4 specifically requires that the City "[p]rotect the stability of residential neighborhoods by promoting year-round occupancy and neighborhood enhancement." As part of this goal, the City has committed to "maintain and encourage the expansion of permanent residential housing stock," because the Housing Element notes that "[a] substantial percentage of the City's housing stock lies vacant much of the Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BURKE, WILLIAMS & SORENSEN, LLP Patrick Abell Ellen Haberle Pacaso, Inc. April 7, 2022 Page 4 year as second homes occupied for weekends, vacations or on a seasonable basis" which "has the effect of reducing the number of permanent, year-round residents in the City." To avoid depletion of residents and associated impacts on community, City services, Goal G3-4 of the City's Housing Element specifically requires the enforcement of the prohibitions on short-term, transient rentals and timeshares in residential dwellings. In sum, conversion of any existing housing stock into timeshares or "fraction aIized ownerships" reduces the available supply of homes for occupation for full-time residency, and therefore reduces the affordability of housing in the City, based on basic laws of supply and demand. Pacaso is Unlawfully Operating Without Required Business Licenses Pursuant to CIVIC section 5.04.020, it is unlawful for any person employed by Pacaso to commence or carry on any kind of business in the City without first procuring a business license and pay the applicable business license tax. (CIVIC section 5.04.020.) Pacaso does not possess a City business license, nor has it paid any business license tax to the City. As a result, Pacaso's operations within the City also are in conflict with the City's business license ordinance. However, we note that even if Pacaso obtains a business license, the business may not operate in the manner described above due to the prohibitions in the City's Municipal Code regarding timeshares. Request to Cease Unlawful Operation In conclusion, Pacaso's current operations within the City are unlawful and must cease immediately. The City requests that Pacaso cease all advertising and sale of fractional ownership of residential properties within the City. Failure to comply may result in enforcement. Any violation of City zoning prohibitions is subject to administrative citation and imposition of new fines for each day of unlawful operation pursuant to CIVIC Chapter 18.04. Furthermore, any violation of CIVIC section 17.28.010 prohibiting timeshare uses is a misdemeanor subject to criminal prosecution, punishable by a fine not exceeding $1,000 and imprisonment for a term not exceeding a period of six months. (CIVIC 1.16.010, 17.66.040.) We are requesting your written response to this letter by April 21, 2022 which you may submit to me via email to bpierik(a)_bwslaw.com Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BURKE, WILLIAMS & SORENSEN, LLP Patrick Abell Ellen Haberle Pacaso, Inc. April 7, 2022 Page 5 Thank you for your cooperation. Sincerely, vp Brian A. Pierik City Attorney City of Carmel -by -the Sea BAP:SAR/jc CAM #4855-3499-0355 v1 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional MONTEREY COUNTY OFFICE OF THE COUNTY COUNSEL 168 WEST ALISAL STREET, 3RD FLOOR, SALINAS, CALIFORNIA 93901-2439 (831) 755-5045 FAX: (831) 755-5283 LESLIE J. GIRARD COUNTY COUNSEL June 24, 2022 Patrick Abell Senior Legal Counsel Pacaso, Inc. 2021 Fillmore St. Suite 183 San Francisco, CA 94115 patricka,]2acas o. com Ellen Haberle, Director Government & Industry Relations Pacaso, Inc. 2021 Fillmore St. Suite 183 San Francisco, CA 94115 ellen@pacaso.com .4ent via email KELLY L. DONLON ASSISTANT COUNTY COUNSEL Re: Request to Immediately Cease and Desist Unlawful Operations Dear Mr. Abell and Ms. Haberle, I write to bring your attention to the requirements of the Monterey County Codel with regard to Pacaso's operations. As detailed fully below, to the extent that Pacaso's advertisements or operations are occurring in zones within the unincorporated areas of Monterey County ("County") where timeshares are not allowed, Pacaso's operations are unlawful and must cease immediately. For Pacaso's operations in zones where timeshares are allowed under the Monterey County Code ("MCC"), Pacaso must apply for a Use Permit in the inland zone or Coastal Development Permit in the coastal zone as applicable. Under Chapters 20.06 and 21.06 of the MCC the following definitions are relevant to Pacaso's operations: - "Timeshare Estate" is defined as "a right of occupancy in a timeshare project which is coupled with an estate in the real property." - "Timeshare Use" is defined as "a license or contractual or membership right of occupancy in a timeshare project which is not coupled with an estate in the real property." - "Timeshare Project" is defined as "a development in which a purchaser receives the right 1 hlt2s:Hlibrary.municode.com/ca/monterey county/codes/code of ordinances http://www2. co.monterey. ca.us/planning/dots/ordinances/Title2O/20_toc.htm Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) in perpetuity, for life, or for term of years, to the recurrent, exclusive use or occupancy of a lot, parcel, unit or segment of real property, annually or on some other periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the project has been divided. The definition of time share project includes a timeshare estate and a timeshare use." Pacaso's website indicates that its business model involves sales of property held by limited liability companies in 1/8 ownership shares, with the associated right to exclusive use of the subject property by the owner of the share, with Pacaso managing among other things, the upkeep of the property and providing an app to arrange for periods of exclusive use by the share owners. Pacaso's website further states that each owner of a 1/8 share is entitled to 6 "general stays," booked at least 61 days in advance, which may range between 2 to 14 nights, and unlimited "short notice stays" booked less than 60 days in advance. However, maximum stay length is limited to 14 nights regardless of the method of booking. Owners of two shares have the option to book stays up to 28 nights. Pacaso's business model clearly meets Monterey County's definitions of "Timeshare Estate" and "Timeshare Project", because Pacaso provides a right of occupancy which is coupled with an estate in real property. Specifically, individuals have a right to occupy/use the real property for a certain number of days per year, and they hold a fractional ownership interest in the real property. Sections 20.64.110 and 21.64.110 of the MCC state that Timeshare Projects are only allowed in zones where a hotel, motel or similar visitor accommodation use would be permitted and in such a case a Use Permit or a Coastal Development Permit is required. Specifically, these zones include the following: High Density Residential, Mixed Use, Light Commercial, Heavy Commercial, Visitor Serving, and Coastal General Commercial. As such, in order for Pacaso to market and sell homes within these zoning districts, it first must apply with the County's Housing Community & Development department for a Use Permit or Coastal Development Permit depending on the prospective home's location. We are aware that Pacaso has asserted to other jurisdictions that the properties that they sell and manage are not timeshares, but rather "fractionalized ownerships." According to Pacaso, a Pacaso home is no different from any other single family residence. However, this is simply not the case. Pacaso's business model of selling and then commercially managing short- term vacation use results in frequent, rotating occupancy, that has a dire impact on housing supply and community integrity. As discussed above, the County's existing timeshare regulations are specifically intended to minimize the impacts created by this type of use and occupancy of real property. Monterey County is aware of certain homes advertised on Pacaso's website that are located in the Carmel Highlands and the Del Monte Forest. Both of these areas are zoned Low Density Residential, Rural Density Residential or Medium Density Residential, and therefore Timeshare Projects are not allowed per the MCC. The County respectfully requests that Pacaso cease all advertising and sale of fractional ownership of residential properties within incorporated zones where Timeshare Projects are not allowed. The County also requests, if applicable, that Pacaso apply with Housing Community & Development for an appropriate land use entitlement in zones where Timeshare Projects are permitted. Failure to comply with the MCC may result in enforcement. Any violation of the MCC is subject to administrative citation and imposition of new fines for each day of unlawful operation pursuant to Chapter 1.22 of MCC. Furthermore, any violation of the MCC is a misdemeanor subject to criminal prosecution, punishable by a fine not exceeding $1,000 and imprisonment for a term not exceeding a period Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) of six months pursuant to Chapter 1.20 of the MCC. I appreciate your prompt attention to this matter. Please feel free to contact me with any questions at donlonkl&co.monterey.ca.us or 831-755-5313. Sincerely, LESLIE J. GIRARD County Counsel By: 94L9 !� Kelly LJ�Donlon Assistant County Counsel cc: Monterey County Board of Supervisors Charles J. McKee, County Administrative Officer Leslie J. Girard, County Counsel Erik Lundquist, Director of Housing Community & Development Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) TTORNEYS AT LA I� �1-k BEST & KRrE dway, 15th Floor, San Di 00 � Fax: (619) 233-6118 December 6, 2021 Indian Wells Riverside (760) 568-2611 (951) 686-1450 Irvine BEST GER Sacramento Jeffrey S. Ballinger (619) 525-1343 jeff.ballinger@bbklaw.com VIA E-MAIL ELLEN(U7PACASO.COM Ellen Haberle Director, Government & Industry Relations Pacaso.com 2021 Fillmore St. Suite 183 San Francisco, CA 94115 Re: Pacaso's Operations within the City of Palm Springs, California Dear Ms. Haberle: As you know, this law firm serves as City Attorney for the City of Palm Springs, California. In that capacity, we are writing to advise Pacaso.com that Pacaso's current operations within the City are unlawful and must cease immediately. While I appreciate your recent efforts to meet with City officials and present Pacaso's position as to why the City's timeshare ordinance does not apply to Pacaso, as set forth more fully below, such a position it not legally tenable. Pacaso is a company that holds itself out as a new way to own a second home. According to Pacaso's website (https://www.pacaso.com/leam), accessed earlier this year, Pacaso operates as follows: "Co -ownership with Pacaso is the best way to buy and own a great second home. From buying to closing here's how Pacaso works. First, tell us a little about yourself and what you are looking for in a second home. Then, start shopping. If a listing currently on Pacaso is not a fit, find one you love on any real estate site and share it with us. If the home is a match for Pacaso, we will partner with you to purchase up to half of the property in a private and professionally managed LLC uniquely designed for co -ownership. This LLC is referred to as the Pacaso Home LLC. On behalf of Pacaso, we line up financing for the LLC and close quickly. In parallel Pacaso remarkets remaining ownerships shares in the home to interested buyers. Buyers can purchase their desired amount of ownership from one -eighth 55575.18100\34590098.1 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BEST BEST & KMEGER ATTORNEYS AT LAW VIA E-MAIL ELLEN@PACASO.COM Ellen Haberle December 6, 2021 Page 2 to one-half of the whole home. We enable qualified buyers to access funds in the LLC and finance up to half of their purchase. The financing relationship is directly between the LLC and the buyer. Pacaso signs closing paperwork on behalf of the LLC. In parallel buyer signs the LLC owner operating agreement to complete their purchase. Ownership is recorded in the owner's schedule section of the owner operating agreement. Following closing the collective owners own 100% ownership interest in the LLC. We transform the home with modern interior design and address any necessary repairs. Owners use the mobile app to book stays 2 days to 24 months in advance. Scheduling is easy and equitable based on the number of shares owned. From there we take care of everything, overseeing local property management, bill pay and platform technology, all from the mobile app. Owners simply show up, relax and enjoy their Pacaso." The maximum length of a stay is based on shares owned. Owners of one share can enjoy a stay anywhere from 2 to 14 nights. A stay with a duration of 2-7 nights counts as one general stay, while a stay with a duration of 8-14 nights counts as 2 general stays. Owners of two shares have the option to book stays up to 28 nights. Pacaso asserts that the properties that they sell and manage are not timeshares. According to Pacaso, a Pacaso home is no different from any other single family residence. Pacaso further asserts that Pacaso co -owners agree to several restrictions to help ensure that their use promotes the public interest, safety and comfort. For example, Pacaso states that there is a maximum of eight co -owners for any home, with only one family using the property at a time; co -owners are prohibited from having large events or parties that exceed the maximum occupancy of the home; co -owners must adhere to a 9pm to lam quiet hour policy; co -owners are prohibited from renting the home; and Pacaso encouraged homeowners to avoid parking on the street unless absolutely necessary. However, Pacaso does not provide any documentation or explanation of how these rules are enforced. The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days. According to Pacaso, as of September, one single-family residence within Palm Springs has been fully sold, and Pacaso was marketing four others within the City. City of Palm Springs Timeshare Ordinance The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Specifically, under the City's zoning ordinance, a timeshare 55575.18100\34590098.1 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BEST BEST & KMEGER ATTORNEYS AT LAW VIA E-MAIL ELLEN@PACASO.COM Ellen Haberle December 6, 2021 Page 3 project is allowed only in those zoning districts where a hotel use would be permitted (i.e., R-3, R-4, R-4VP, C-B-D, C-1, C-lAA and C-2 zones, and G-R-5 and R-2 zones when fronting on a major or secondary thoroughfare). (Palm Springs Zoning Code, § 93.23.11(B).) Indeed, such uses are not allowed by right, but instead require a conditional use permit. Notably, timeshares are not permitted in single-family zones. as The City's Zoning Ordinance defines a "timeshare" as follows: "...a "time-share project" is one in which time-share rights or entitlement to use or occupy any real property or portion thereof has been divided as defined in Section 3.24.020(7) of the Palm Springs Municipal Code into twelve (12) or more time periods of such rights or entitlement." (PSZC, § 93.23.11(A).) Section 3.24.020(7) defines timeshares, for purposes of taxation. It defines a "timeshare" "occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonable or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The said right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s), or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times." Despite Pacaso's assertions to the contrary, Pacaso's business model meets the City's Ordinance's definition of a "timeshare". The City's definition, broken down into its constituent parts, applies to Pacaso. Specifically, Pacaso's business model fits the following definition: "wherein a purchaser receives the right in perpetuity... or other extended term, to the recurrent, exclusive use or occupancy of a lot ... annually or on some other ... periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided." Here, purchasers of a Pacaso LLC receive the right, in perpetuity or some other period defined in the LLC agreement, to the recurrent and exclusive use of the lot on which the residence 55575.18100\34590098.1 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BEST BEST & KMEGER ATTORNEYS AT LAW VIA E-MAIL ELLEN@PACASO.COM Ellen Haberle December 6, 2021 Page 4 is located. The right to such use is on some periodic basis, for a period of time that is allotted under the LLC agreement. Thus, by its terms, the City's ordinance applies to a use such as Pacaso's. As such, Pacaso's operations are not permitted in single family -zones within the City of Palm Springs, California. In addition to the City's Zoning Ordinance, the City's business license ordinance requires any party that is transacting any business within the City to first procure a business license and pay the applicable business license tax. (Palm Springs Municipal Code, § 3.48.010.) Pacaso does not possess a City business license, nor has it paid any business license tax to the City. As a result, Pacaso's operations within the City also are in conflict with the City's business license ordinance. Finally, several significant policy reasons justify the City's prohibition against timeshares in single-family zones. As the City's Housing Element of the General Plan states, "Palm Springs considers housing affordability to be a critical issue. The inability to afford housing leads to a number of undesirable situations, including the doubling up of families in a single home, overextension of a household's financial resources, premature deterioration of housing due to the high number of occupants, situations where children and seniors cannot afford to live near other family members because of the lack of affordable housing options, and in more extreme cases, homelessness." (City of Palm Springs General Plan, Housing Element, p. 3-19, (2014-2019).) For every house that Pacaso sells to one of its limited liability corporations, to be used as a second, vacation home, that house becomes unavailable to a buyer or renter who could live there full time. This necessarily reduces the amount of housing stock that is available for full time residents in the City. The reduction in housing stock, in turn, feeds the affordability crisis, making the remaining houses within the City more costly. Pacaso may claim that it only purchases and sells "luxury" homes, and therefore does not impact the availability of affordable housing. However, basic laws of supply and demand dictate that every home that is made unavailable to a full time resident, whether "luxury" or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City. One of the policies of the City's Housing Elements is to "protect established single-family residential neighborhoods from the transition, intensification, and encroachment of uses that 55575.18100\34590098.1 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BEST BEST & KMEGER ATTORNEYS AT LAW VIA E-MAIL ELLEN@PACASO.COM Ellen Haberle December 6, 2021 Page 5 detract and/or change the character of the neighborhood." (Housing Element, HS1.8, p. 3-63.) Pacaso portrays its business model as "the modern way to buy and own a second home". However, Pacaso's "modern way" involves up to eight (8) investors and their guests rotating occupancy throughout the year. Although the LLC investors are not technically "renters", neighbors can expect the property to have many of the secondary impacts of vacation rentals, which are currently prohibited in many Coachella Valley cities and heavily regulated in Palm Springs. For example, house cleaners will have to come to the home in between each stay, and the home can turn over multiple times in a week. To a neighbor, that impact is very much the same as if the occupants were short-term vacation renters. In addition, the "co -owners" of the limited liability company really have no connection with one another, other than their investment in the company. All of this necessarily changes the character of a neighborhood, in contravention of the City's stated policy of preserving the single-family residential character of its neighborhoods. Another Housing Element policy is to "preserve the supply of affordable rental housing in the community, including mobile home parks, publicly subsidized rental housing, and special needs housing." (Housing Element, HS2.9, p. 3-68.) As stated above, Pacaso's business model removes single-family homes from the housing market for individuals or families who wish to reside in Palm Springs and therefore reduces the supply of affordable rental housing for those individuals or families. Therefore, Pacaso's current operations within the City are unlawful and must cease immediately. Should you have any questions, please do not hesitate to contact me. Sincerely, 3. Jeffrey S. Ballinger of BEST BEST & KRIEGER LLP City Attorney City of Palm Springs 55575.18100\34590098.1 Planning Commission Special Meeting - October 6, 2022 Item No. 2e - Additional Materials Submitted After Deadline Code Update Related to Fractional Homeownership (PA2022-0202) BEST BEST & KMEGER ATTORNEYS AT LAW VIA E-MAIL ELLEN@PACASO.COM Ellen Haberle December 6, 2021 Page 6 cc: Hon. Mayor and Councilmembers Justin Clifton, City Manager Teresa Gallavan, Asst. City Manager Flinn Fagg, Development Services Director 55575.18100\34590098.1 Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Update Related to homeownership Planning Commission Study Session October 6, 2022 Seimone Jurjis, CDD Director Jaime Murillo, AICP, Principal Planner O�A CAI FO R�`P Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Outline What is Fractional Homeownership Pros and Cons Current Regulations City Council Background and Direction Research Findings Options and Direction Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Fractional Ownership of Personal Property: What is it? Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Fractional Ownership of Real Estate • Partial ownership of property: Common with commercial properties Emerging with single-family residential Vacation property (2ndor 3rd homes) Fractions offered for sale online Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Companies Selling Fractional Ownership N E L S 0 N FAMILY ESTATES ;" Ember � SharetimTM EQUITY (-4 ESTATES Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff lowit Works Related to Fractional Homeownership (PA2022-0202) Property is purchased under a Limited Liability Corporation (LLC) Shares of the property are sold: 1/8 ownership or greater Operating Agreement is used to manage the property Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Operatic ns Co -owners agree on usage (days, week) 1/8 share = 45 days (not consecutive) typically less than 30 consecutive day stays managed through calender Owners pay share of property costs: maintenance, management, HOA, cleaning, tax, utilities, insurance, and reserve funds costs Short-term lodging or renting is not allowed } Co -owners can sell their interest ......I us .. ........ .. . Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code e rat Fractional Homeownership (PA2022-0202) 11 t SAC O 11C Function like short term rentals —non-resident vacation behaviors Commercialization of neighborhoods Impacts housing affordability —increased vacation homes and reduced housing stock Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code fill lated to Fractional Homeownership (PA2022-0202) er-s Less vacancies of second home Better property maintenance Increased spending in community • Alleviate pressure of median -priced homes Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff City Requiatidtfted to Fractional Homeownership (PA2022-0202) City can regulate Land Use but not Ownership. City regulates what is adopted in the Newport Beach Municipal Code • 56% of single-family properties in City are owned under an LLC or Trust Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Municipal Code Review - Single -Family Dwelling Use — House Owned by LLC Allowed — Can't Regulate Based orh Ownership Short Term Lodging Allowed by Permit- Except in R-1 Fractional Ownership doesn't fit definition Rented or leased for a period of less than 30 days (these are owned) Time Share Project— Prohibited, except in commercial and mixed -use zones • Fractional Ownership doesn't meet definition Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff "Time Share" DOfflIeo�tional Homeownership (PA2022-0202) 9. "Timeshare project" means a development in which a purchaser receives the right in perpetuity, for life, or for a term of years, to the recurrent, exclusive use or occupancy of an ownership interest in a lot, unit, room(s), or segment of real property, annually or on some other seasonal or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the project has been divided and shall include, but not be limited to, time share estate, interval ownership, fractional ownership, vacation license, vacation lease, club membership, time share use, hotel/condominium, or uses of a similar nature See also "Limited use overnight visitor accommodations (LUOVA)." 10. "Timeshare estate" means a right of occupancy in a timeshare project that is coupled with an estate in the real property. 11. 'Time share interval" means the period or length of time of occupancy in a timeshare unit. 12. 'Time share unit" means each portion of the real property or real property improvement in a project that is divided into time share intervals. 13. 'Time share use" means a license or contractual or membership right of occupancy in a time share project that is not coupled with an estate in the real property. NBMC §21.70.020 Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff "Development" D �nde al Homeownership (PA2022-0202) "Development" means the division of a parcel of land into two or more lots; the construction, reconstruction, conversion, structural alteration, relocation, addition to, or enlargement of a structure; any mining, excavation, landfill or land disturbance; and any use or enlargement of use of land. See "Enlargement of use." • Ownership, including multiple owners is not development Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Municipal CodeJf9ted to Fractional Homeownership (PA2022-0202) Time Share Requirements • Visitor accommodations • Conversion of dwellings prohibited • Minimum 100 timeshares or less with 300-unit resort hotel complex • Substantial amenities required • (e.g. golf courses, tennis courts, swimming pools, etc.) • Sales, operating, management, and contingency plans required • Use Permit and Development Agreement Required Adapted from NBMC §20.48.220 • Commercial visitor accommodations are not residential uses Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Background November 16, 2021, Study Session 4 known homes Directed staff to study what other cities are doing and report back September 13, 2022- City Council Study Session Sagecrest Planning+Environmental Report 11 known homes Directed staff to return with proposed action items Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) rection September 27, 2022 — Council Meeting Initiated Zoning Code and Local Coastal Program Amendment Did not pursue moratorium Directed staff to work expeditiously with Planning Commission Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Report Findings 22 Cities Survey Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) • 13 Cities - Consider Fractional Ownership a form of timeshare Carlsbad, Carmel by the Sea, Hermosa Beach, Monterey, Village of North Haven, Pacific Grove, Palm Desert, Palm Springs, Park City, South Lake Tahoe, Sonoma, St. Helena, Truckee • 7 Cities - Do not regulate Encinitas, Vail, Fort Lauderdale, Santa Cruz, Napa Indian Wells, Santa Barbara, • 4 Cities - Revised definition of timeshare Palm Desert, Truckee, St. Helena, Sonoma Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) 4 Cities — Issued Cease and Desist Letters Carmel by the Sea, Monterey County, Palm Springs, South Lake Tahoe • 3 Cities — Working on code update to timeshare Hermosa Beach, Pacific Grove, Park City • 1 City - Current moratorium to study Beverley Hills (expiring July 2023) 1 City - Active litigation St. Helena Planning Commission Special Meeting - October ¢mw 6m No. a- Additional Materials Presented &s!# Code Update Related to FradonalHomeownership (PAmG- &) 12 Known Properties in City + & # , � •w• � - � ® \ ¥p ~ Ile � , # 0 0� k� c � $; PARK AVE ' �j ©04 y� Vo / �s ` y ,-kr s Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Short Term Lodgingin City — upPe ®° 'Active Short Term �- m Regional r3'\a ® non ti'�"." r~ n nmuniry a w - jol Park 'o c r2s s ® laths[ Pan: Ce rater 51 4 2cih E3�Par _ Ha1'Ur 11630 Lbns F F'r q Park `aa .r- 618th St h '_'� Lodging Permits 7 Y 'i� n si ., - Total Permicc Map Lege nd R1 i -' O 'so Active Permits by Neighborhood 9 Y ^�_ .l llrl Pa[k -- J BalboaEsland 273 l��0�" Banning Bauchtlge�Yh'rk drr'329 4aC Eack Eay coe^� Corona Del M-Village 173 Y. Ne .ems S Faehon lido bland s i� Island M.arinersl�over Shores 1 ,Cn�st:NW' ,q San.h Newport Curter 1 — N H Ms i1 a� A a lip City of C—ta Mesa, City of Newport Beach, County orF L—Ang&[�, Bureau of La A01AP ell ewp— eig Newport Ridge Newpors Shores Newport Vill age Penins.la Poim Superior Heights West Newpors 0 200 400 600 Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Helena, CA Classifies fractional housing as timeshare Updated code Broaden timeshare definition Right of occupancy < Full year Limits timeshares to commercial zones Bolsters enforcement authority Modeled after short-term rental ordinance Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Helena, CA Current litigation -Ownership group and Pacaso filed suit against City Plaintiff's Claim City ordinance invalid (pending) Enforcement violates plaintiff's due process —14t" Amendment (pending) City is selectively and discriminatorily enforcing regulations (pending) Enforcement exceeds City's authority (pending) City interfering with economic advantage (dismissed) Planning Commission Special Meeting - October 6, 2022 ���2c - Addit� al Mater rs ip�22 0202) Fn Classified as timeshare Permitted in zones which permit hotels Require approval of a CUP Cease -and -Desist Order Proceeding with code enforcement actions on existing unpermitted units Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) o�rlla, city, UT Updating code to allow and regulate Tentative City Council hearing —October 6, 2022 Creating new definition -Single-Family Dwelling Fractional Ownership/Use Property owned by LC, LLC, or corporation Owner occupancy right < 30 days at a time Unrelated co -owners Advanced reservations via electronic systems Management subscription fee Case Studies — Park City, UT Locations Allowed • Commercial Zoning Districts • Residential Development - Medium Density • Same zones where Timeshares and Private Residential Clubs allowed Prohibited locations • Historic, Single -Family, and Estate Zoning Districts Fractional Ownership ing Comrnjssion Special Meeting - October 6, 2022 Item No. 2c - Additional Materiais Presented by Staff Farb City lirrid5 Code Up ate Related to Fr ctional Homeownership (PA2022-0202) zordN IAllowed Not Alk wed Suddlwalons r l - �- - � r ti k� � ✓ L \ "M Li / Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) nark City, UT Require approval of a CUP Require management plan Responsible party— return call within 20 minutes and within one hour drive of property Snow removal for access and parking Maintain property Noise and occupancy control Prohibit nightly rentals, on -street parking, commercial activities, and signs Business license Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Finitions - Option A Amend Timeshare Project Definition Eliminate "development" criteria (St. Helena) Clarify fractional use includes plan facilitated, offered, or organized by a third -party manager (Hermosa Beach) Exclude arrangements whereby multiple property parties join in directly purchasing full ownership of a unit and thereafter agree upon arrangements for its use (Palm Desert) • Considered an accommodation and would effectively prohibit in residential zones Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Definitions - Option B Create Fractional Ownership Land Use Create a new and separate fractional ownership use definition Owner occupancy right < 30 days at a time Establish specific regulations/standards • Considered a Corm of residential use and allow in all zones that allow residential uses Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Options Use Permit (Public Hearing) Conditional Use Permit (CUP):Planning Commission Minor Use Permit (MUP): Zoning Administrator Zoning Clearance (No Hearing) • Planning staff reviews and issues approval letter Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) Requirements Parking shall conform with current standards (size and number) Parking shall be free of obstructions and available for use Prohibition of amplified sound outside or audible at PL from 10 pm to 10 am Compliance with City noise ordinance Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) dards R-1 Zones: 500 feet separation between other fractionals (areas where STL prohibited) Other Residential Zones — No separation Property manager responsible for ensuring containers put out/in on appropriate days Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) t Plan Require submission of operating agreement/management plan to City Contact person to address issues • Prohibit subletting of unit for rentals, including short-term lodging Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) od Neighbor colic•• Owner responsibilities and acknowledgment of potential enforcement/fines Contact person Parking rules Street sweeping Trash collection City noise restrictions Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) 10) Ovineo %••ledgments Sign acknowledgement by each owner submitted to the City Understanding of parking rules, street sweeping schedule, trash collection, and noise restrictions Understanding of Good Neighbor Policy Prohibition against subletting - Enforcement and fines Planning Commission Special Meeting - October 6, 2022 Item No. 2c - Additional Materials Presented by Staff Code Update Related to Fractional Homeownership (PA2022-0202) r�nrlf�fhorir�n Provisions Difficult to retroactively regulate existing uses or those in process Allow to remain as legal nonconforming uses Questions and Discussion Planning Commission Study Session October 6, 2022 Seimone Jurjis, CDD Director siuriis@newportbeachca.gov Jaime Murillo, AICP, Principal Planner jmurillo@newportbeachca.gov Exhibit T October 20, 2022, Planning Commission Agenda Item No. 6 https://ecros. newportbeachca.gov/WEB/DocView.aspx?id=2837565&dbid=0&repo=CN B e. �WpOR CITY OF NEWPORT BEACH PLANNING COMMISSION STAFF REPORT ' r October 20, 2022 CIFOR[AP Agenda Item No. 6 SUBJECT: Code Update Related to Fractional Homeownership (PA2022-0202) SITE LOCATION: Citywide PLANNER: Jim Campbell, Deputy Community Development Director 949-644-3210, icampbell(a�newportbeachca.gov PROJECT SUMMARY Establish an ad hoc committee of Planning Commissioners to assist City staff and the City Council in reviewing the issue of fractional homeownership. RECOMMENDATION 1) Find the recommended action not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3; and 2) Form an ad hoc committee consisting of Commissioners Lowrey, Harris, and Rosene to assist City staff and the City Council in reviewing and potentially regulating fractional homeownership. DISCUSSION On September 13, 2022, the City Council conducted a study session regarding fractional homeownership. The City Council discussed a possible moratorium and requested the initiation of code amendments to regulate the use of fractional homeownership. On September 27, 2022, the City Council initiated Zoning Code and Local Coastal Program amendments and they directed staff to work expeditiously with the Planning Commission. Ultimately, the City Council did not pursue a moratorium. On October 6, 2022, the Planning Commission conducted a study session. Due to the complexity of the issue, the Commission expressed the desire to form an hoc committee and work closely with staff to formulate appropriate regulations. During the meeting, Commissioners Lowrey, Harris, and Rosene expressed a willingness to serve. The anticipation is to have the ad hoc committee meet as necessary to assist staff with the creation of regulations over the next 60 days or so. Draft regulations would then be presented to the Planning Commission at a future public hearing for consideration and action. of 2 Code Update Related to Fractional Homeownership (PA2022-0202) Planning Commission, October 20, 2022 Page 2 Environmental Review This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Public Notice The item appeared on the agenda for this meeting, which was posted at City Hall and on the City website. Prepared and submitted by: Jim Campbell Deputy Community Development Director Attachments: None 3 4 Exhibit U February 23, 2023, Planning Commission Agenda Item No. 6 https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2859668&dbid=0&repo=CNB Staff Presentation https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2859669&dbid=0&repo=CNB Planning Commission February 23, 2023 Item No. 6 Fractional Homeownership (PA2022-0202) Staff will give a presentation to the Commission. Planning Commission - February 23, 2023 Item No. 6a - Additional Materials Received Fractional Homeownership (PA2022-0202) February 23, 2023, Planning Commission Item 6 Comments These comments on a Newport Beach Planning Commission agenda item are submitted by: Jim Mosher (iimmosher(a)-yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229). Item No. 6. FRACTIONAL HOMEOWNERSHIP (PA2022-0202) Since this is a matter that has attracted considerable public interest, and since the agenda announcement says the Commission will hear a presentation and be asked to make a recommendation to the City Council, it is very disappointing that neither the Commission nor the public has been given any advance hint of what the report might say or what recommendation might be suggested, nor has any background information of any kind been provided. The absence of such information compounds the difficulty of conducting a thoughtful discussion of what staff may have already made an unnecessarily difficult subject. I have commented extensively on this topic in the past, including especially at the September 27, 2022, special meeting of the City Council, which was called to initiate code amendments related to fractional homeownership, where my comments can be found starting on page 4 of the Item 1 correspondence. In my view, timeshare arrangements, including ones achieved through "fractional ownership" of homes, have long been banned in Newport Beach and continue to be banned except for the larger timeshare developments that are allowed under limited circumstances in certain commercial districts. In essence, I think there can be no doubt that Ordinance No. 82-14, adopted by our City Council in 1982, was intended to prohibit, in all of Newport Beach, the "development" of any kind of time-share "projects" in which a purchaser obtained an exclusive right to occupy a living space for limited, recurring intervals of time. And despite its use of the words "project" and "development," both the statement of intent and the substance of Ordinance No. 82-14 made clear the prohibition was on a type of land use and not confined to new construction. In particular, it explicitly prohibited the conversion of any existing residential or hotel/motel units in the City to a time-shared model, including Pacaso-like shared ownership. Current City staff argues that subsequent amendments to the Zoning Code repealed the 1982 ban on converting residences to timeshares. But I am not aware of any evidence to suggest there was ever any such intent. Indeed, Ordinances No. 96-7 and 96-18 relaxed the complete ban to allow, subject to special permitting restrictions, larger -scale timeshare ventures in commercially -zoned districts, including the conversion of some existing hotel/motel units to a time-share model. But those ordinances carefully retained the 1982 definition of "time-share" and 1982's prohibition on the "conversion of existing residential dwelling units into time-share units." Saying, as staff seems to, that the 1996 decision to allow the heavily -regulated creation of timeshares in commercial districts was, without saying so, simultaneously intended to open the door for the completely unregulated appearance of timeshares in residential districts makes no sense to me. Planning Commission - February 23, 2023 Item No. 6a - Additional Materials Received Fractional Homeownership (PA2022-0202) February 23, 2023, PC agenda Item 6 comments - Jim Mosher Page 2 of 2 Subsequent comprehensive restatements and reorganizations of the City's Zoning Code, in 1997 and 2010, have admittedly caused the code adopted in 1982 and 1996 to become increasingly fragmented and difficult to follow, but neither the Council nor the public was ever told any of those comprehensive restatements of code were intended to change the meaning of the previously -adopted timeshare regulations. In particular, staff has presented no evidence that seemingly conflicting post-1996 definitions of "development" and "project" that have been introduced in connection with other Zoning Code provisions were ever intended to affect the interpretation of the 1982/1996 time-share regulations. Indeed, in the City's current Zoning Code, the essentials of those earlier regulations remain intact: 1982's definition of "Time share project" remains as originally written, but has been moved to Sec. 20.70.020.V under "Visitor Accommodations (Land Use) — 7." • 1982's prohibition on converting existing residential units of any kind to a time-shared model continues in Sec. 20.48.220.A.2 — and would make little sense if the later definitions of "development" and "project" that staff cites had been intended to allow it. • 1996's allowance of a time-shared land use in (and only in) certain commercially -zoned districts where hotel/motel land use would be allowed remains in Tables 2-4 and 2-5 of Sec. 20.20.020 (under "Visitor Accommodations, Nonresidential") and in Tables 2-8 and 2-9 of Sec. 20.22.020 (under "Visitor Accommodations"). Quite specifically, the principal public concern I have heard is about the conversion of existing residential units in residential districts to timeshare units through a change to Pacaso-style fractional ownership, and there has never been any statement of intent to allow timeshares in residential districts. My conclusion is that the Pacaso-type model of home ownership was banned in 1982 and remains banned in non-commercial districts. Rather than recommending the Council adopt new regulations, my suggestion is the Planning Commission simply recommend the Council affirm to staff our City's long - existing prohibition on residential timeshare conversions. If the meaning of the current code is as unclear as staff claims it is, this could be accomplished through a new and clearer ordinance approved with the caveat that it is a restatement of existing law, not an adoption of new law — for, at least in my view, continuing an existing regulation is much better than attempting to justify new regulations. Planning Commission - February 23, 2023 Item No. 6b - Additional Materials Received Fractional Homeownership (PA2022-0202) From: Gary Cruz To: Planning Commissioners Subject: Fractional Ownership Date: February 21, 2023 5:46:38 PM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Dear Commissioners, I understand there will be a discussion regarding fractional ownership on the upcoming agenda. I am not sure the commission understands how many homeowners are against fractional ownership. Regretfully I am unable to attend in person, but I would like to offer my perspective on it. It is disappointing that it has taken this long for the discussion to ensue. It was presented to the commission a long time ago and it feels like taking no action is counter to what has been asked of the commission. Residents most certainly are in the dark on where the city stands on it and we are frustrated by a lack of action. Please envision how it feels to not know what the position of the city has on this issue. The short- term lodging issue became a crisis when the city took no action, and it seems like history is repeating itself. Personally, I have three homes within 100 yards from me that have recently sold, are up for sale or soon to go up for sale. Each one is a potential fractional ownership. One shared ownership property already exists about 300 yards away. This is a residential neighborhood and the thought of corporations taking over the residential neighborhood is depressing. Regardless of the quality of the people that purchase a share in a house the fact is they do not live here and are basically on vacation while resident go to work. There is no control over who they let use their week or whether they are renting it out under the table. Everyone considers fractional ownership as timeshares except fractional ownership companies. A recent article says it all: How to get rid of a fractional ownership time share 1. Sell it 2. Give it away 3. Work with your timeshare company 4. Hire a reputable timeshare exit company I also read that Pacaso recently laid off 100 workers and that they were focusing on cities where they already had a foothold. Do we want to be one of those cities where fractional ownership is condoned. Are we going to stand around while other cities ban them? Given the state is trying to create housing do we want to create less housing by offering fractional ownership? Gary Cruz Newport Island Planning Commission - February 23, 2023 Item No. 6b - Additional Materials Received Fractional Homeownership (PA2022-0202) From: L M To: Planning Commissioners Subject: Item 6 - Fractional Homeownership Date: February 22, 2023 4:17:45 PM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. I am opposed to Fractional Homeownership! This model is almost identical to timeshare ownership and is incompatible for use in my neighborhood! I live on the Balbia Peninsula. This ownership structure should not be allowed to evade the limitations we placed to avoid short term property usage burdens on the City and our natural resources. Thank you, Larry Mathena Planning Commission - February 23, 2023 Item No. 6c - Additional Materials Received Fractional Homeownership (PA2022-0202) Planning Commissioning Meeting 2023-02-23 — Item 6 — Fractional Homeownership Planning Commissioners and City Staff, Not knowing what details will be presented and discussed about the subject during the meeting I would like to express the following: Rather than focusing the discussion on "Fractional Homeownership" the discussion should be focused on "Shared Deed Ownership Timeshares". 2. The issue under review is not a fractional ownership (co -ownership) through an LLC, Trust, etc where the fractional owners are family members and/or friends. What is under review is a fractional ownership where specific/structured time restrictions exist for the use of the dwelling by the various co -owners (who are mostly strangers among them). 3. Pacaso business model is a "Shared Deed Ownership Timeshare" business. For more detail supporting this statement please refer to the letter submitted by Maureen Cotton representing the Pier to Pier (Central Newport Beach Community) Association. 4. Investopedia definition of "Shared Deeded Ownership Timeshare": Shared deeded ownership gives each buyer a percentage share of the physical property, corresponding to the time period purchased. Shared deeded ownership interest is often held in perpetuity and can be resold to another party or willed to one's estate. 5. California's "Vacation Ownership and Time-share Act of 2004" (Chapter 11210) defines "Time-share plan" as follows: "...means any arrangement, plan, scheme, or similar device, other than an exchange program, whether by membership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives ownership rights in or the right to use accommodations for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years". 6. Although California's "Vacation Ownership and Time-share Act of 2004" (Chapter 11210) regulations only applies to "Time-share plans" consisting of more than 10 time-share interests, the "Time-share plan" definition clearly describes what Pacaso is doing with their business model. One of the reasons to keep the fractional ownership to a maximum of eight (8) fractional owners seems to be not to have to comply with the regulations imposed by California's "Vacation Ownership and Time-share Act of 2004" (Chapter 11210). 7. Timeshares have never been allowed in Newport Beach's Residential Coastal Zoning Districts. The city residents do not want Timeshares to be allowed in the residential areas of the city. 8. Timeshares are allowed in Newport Beach's Mixed -Use and/or Commercial Coastal Zoning Districts so the focus should be for Pacaso, and others, to bring their business model to said areas of the city. 9. During the 2022-10-06 Planning Commission Study Session city staff presentation included "Option A" (prohibit timeshares in residential zones", which city residents support) and "Option B" (create Fractional Ownership Land Use and regulate, which city residents do not support). Regarding the suggested "500 feet separation between other fractionals" of "Option B" please note that most of the residential areas in the Balboa Peninsula, Balboa Island and Corona del Mar are not R-1 but R-2 or RM so such suggested "separation" would have no benefit to most areas. Planning Commission - February 23, 2023 Item No. 6c - Additional Materials Received Fractional Homeownership (PA2022-0202) 10. As some may argue in favor of allowing Pacaso, and others, to operate Timeshares in our residential areas and for city staff to develop standards to regulate them (rather than prohibit them) please think of the unintended consequences: a) Pacaso business model reduces permanent housing in our city b) Pacaso business model increases housing pricing so it becomes less affordable to locals c) The "fractional homeowners" will have "property rights" so can they truly be regulated? How? d) Pacaso may cooperate with the regulations but how about other companies who may decide to operate in our city (i.e. Ember Homes, Nelson Family Estates, Fractional Villas, Elite Destination Homes, etc) I urge the Planning Commissioners and City Staff to take firm action to stop the "Shared Deed Ownership Timeshare" operations in our city's residential areas. Any other outcome will be detrimental to our coastal residential areas. Sincerely, Carmen Rawson 949-278-2447 Cell Planning Commission - February 23, 2023 Item No. 6c - Additional Materials Received Fractional Homeownership (PA2022-0202) From: Cheryl To: Plannina Commissioners Cc: hello(&mynewportbeach.org; Stapleton, Joe; Avery, Brad; Avery, Brad; Grant, Robyn; O"Neill, William; Kleiman, Lauren Subject: regarding fractional ownership Date: February 22, 2023 5:25:25 PM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. City Council Members and Planning Commission: My husband and I have resided at 311 Island Avenue on the peninsula since 1995. We value our neighbors and our neighborhood and urge the City to look long and hard at what the consequences of fractional ownership will be. Please refer to information sent to you by our Pier to Pier representative Maureen Cotton about the Pacaso website and how fractional ownership would work. It is a time share, no matter what they call it. The City has an obligation to consider and protect the quality of life of its residents, and fractional ownership only breaks down neighborhoods. We live here. Our roots are here. We look out for each other and care about each other. We will continue following this issue and hope to see 'fractional home ownership' prohibited in Newport Beach, just as time share ownership is. Thank you for hearing us. Keith & Cheryl Garrison 311 Island Avenue Planning Commission - February 23, 2023 Item No. 6c - Additional Materials Received Fractional Homeownership (PA2022-0202) From: escapeartist55 (null) To: Plannina Commissioners Subject: Item 6 - Fractional Homeownership Date: February 23, 2023 5:21:56 AM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. I am opposed to Fractional Homeownership! This model is almost identical to timeshare ownership and is incompatible for use in my neighborhood! The Peninsula was a lovely place (even though 80000 people came in summer) to live when we bought our home. It has turned into a zoo ALL YEAR LONG since the commissioners have approved 1600 short term rentals and now considering Fractional (ie timeshare). How many persons on the commission live on the Peninsula)? Take a lesson from Laguna and Huntington Beach where none or a fraction are allowed. How much money does the City need to improve tourism at the cost of the long term owners? Sara Abraham. Sent from my Whone Planning Commission - February 23, 2023 Item No. 6d - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202) From: Linda Orozco To: Plannina Commissioners Cc: Chosty NB Subject: Item 6 - Fractional Homeownership OPPOSED Date: February 23, 2023 8:57:02 AM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. To NB Planning Commission I have been a resident/owner on the Balboa Peninsula since 1983. During that time, I've seen the city of Newport Beach treat the Peninsula, and its residents as second class citizens of the city. Over the decades, the city has created segregationist rules to treat the peninsula separately. Specifically, I'm talking about short term rentals, drug and alcohol rehab houses, half way houses, homeless, etc. Now the new topic is fractional ownership? The rules should be simple. Anything the city adopts for the Peninsula should be good enough for any other part of the city, including Big Newport, Corona Del Mar, Newport Coast, Crystal Cove, etc. I strongly oppose timeshares and/or fractional ownership anywhere in Newport Beach, particularly the Newport peninsula. The peninsula is already densely populated with horrific traffic problems. If the city believes that fractional ownership is a good thing, please begin with our neighbors inland, such as Crystal Cove, Newport Coast, or big Newport. Sort out the progress of such fractional ownership in those residential neighborhoods before you bring it to the Peninsula alone. I am strongly opposed to Fractional Homeownership. This model is almost identical to timeshare ownership and is incompatible for use in my residential neighborhood! Sincerely, Linda Orozco, Ph.D. 1800 block Balboa Blvd. Cell. 949-413-5483 Planning Commission - February 23, 2023 Item No. 6d - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202) From: Elliott Bonn To: Planning Commissioners Subject: Item 6 - Fractional Homeownership Date: February 23, 2023 10:07:14 AM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. I am opposed to Fractional Homeownership! This model is almost identical to timeshare ownership and is incompatible for use in my neighborhood! Elliott Bonn 714-299-9758 Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202) From: iepalmCalearthlink.net To: Plannina Commissioners Subject: Fractional Ownership - Item #6 Date: February 23, 2023 4:58:17 PM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. We are 100% against the proposed fractional ownerships in our community. These "short term stays" will lead to noise and parking issues and cause disturbance to our now perfect community. Hotels and Airbnb's belong in areas zoned for such use and NOT in quiet residential neighborhoods! Please vote NO on this issue! We thank the Planning Commission for your understanding and NO vote! Sincerely, Jan -Erik and Diane Palm 1104 W. Bay Ave Newport Beach, CA 92661 Planning Commission - February 23, 2023 No. 6e - Additional Materials Received After Deadline P i e r-,_Pier- Fractional Homeownership (PA2022-0202) Central Newport Beach Community Association PO Box 884 • Newport Beach, CA • 92661-0884 www. MyNewportBeach.Org February 21, 2023 City of Newport Beach, Planning Commission 100 Civic Center Drive Newport Beach, CA 92660 Subject: Item 6. Fractional Homeownership (PA2022-0202) Dear Planning Commissioners, City Staff, and City Councilmembers Apologies in advance for the length of this letter. We thank you for engaging with Central Newport Beach Community Association (CNBCA) on the matter of fractional homeownership —which is just an alternate expression for timeshare ownership, as evidenced below. Let me get right into it. Per the Pacaso website, the maximum continuous stay in a Pacaso for a 1/8-share owner is capped at 14 days and back-to-back stays are prohibited. One -eighth (1/8) share owners are allowed to book six (6) stays and any stay greater than 7 days counts as two stays, encouraging 2- to 7-day stays. Back-to-back stays are prohibited with a gap between stays equal to or greater than the length of your previous stay. X HOW MUCH TIME WILL I HAVE IN MY HOME EACH YEAR? On average, owners stay at their homes 6-7 times per year, depending on their personal travel preferences. Ultimately, you decide what dates are most important to you, and your usage may vary from year to year. X HOW MANY GENERAL STAYS CAN I SCHEDULE? Owners may hold up to four general stays at a time per 1/8 share owned. Stays must be for a minimum of two nights. A stay with a duration of 2-7 nights counts as one general stay, while a stay with a duration of 8-14 nights counts as 2 general stays. X HOW LONG ARE OWNER STAYS? The maximum length of a stay is based on shares owned. Owners of one share can enjoy a stay anywhere from 2 to 14 nights. A stay with a duration of 2-7 nights counts as one general stay, while a stay with a duration of 8-14 nights counts as 2 general stays. Owners of two shares have the option to book stays up to 28 nights. In off-season periods, owners also have the option to extend the length of their stay. X CAN I BOOK SACK -TO -BACK STAYS? No. To ensure ongoing access for all owners, the period between your arrival date and your prior departure must be equal to or greater than the number of nights of your last stay. Planning Commission - February 23, 2023 No. 6e - Additional Materials Received After Deadline P i e r� Pier - Fractional Homeownership (PA2022-0202) Central Newport Beach Community Association PO Box 884 • Newport Beach, CA • 92661-0884 www. MyNewportBeach.Org The City of Newport Beach has never seen a commercial business come into single-family and multi- family -zoned neighborhoods with the express goal of upending single- and multi -family ownership by converting homes into 8 timeshare units. Unlike hotels where transient overnight traffic is permitted or where permitted short-term rentals exist, the impact of having unpermitted, transient overnight traffic in single- and multi -family neighborhoods will be profound and adverse. / The sense of neighborhood and community that prevails in single-family zoned areas will be destroyed. Areas where neighbors know each other, take in each other's garbage cans, or collect packages will be replaced by a rotating cast of unrelated people with no connection to the neighborhood. This change will be permanent, as once homes are converted into 8 timeshares, the likelihood that they will ever revert to historic single-family homeownership is all but eliminated as it would take persuading all 8 entities to sell. / Home utilization will create occupancy patterns that are prohibited in Single -Family zoned areas as Pacaso homes will change occupancy as often as they wish (e.g., up to 3 times per week): Without a Short -Term Lodging Permit, stays for less than 30 days are prohibited. Per the Pacaso website, the maximum continuous stay in a Pacaso for a 1/8 share owner is capped at 14 days and back-to-back stays are prohibited. One -eighth (1/8) share owners are allowed to book 6 stays and any stay greater than 7 days counts as two stays, encouraging 2- to 7-day stays. To further illustrate how dissimilar the Pacaso Model is from single-family homeowners, Pacaso owners do not store personal items inside the home. They are provided storage units. Garages will accommodate the required eight (8) storage units, making the garage unusable for parking, and placing an increased demand on street parking. Anyone who has participated in shared property management, via a Homeowners Association (HOA) or similar mechanism, understands this model can be very difficult. Each Pacaso property will be its own "HOA." Pacaso's assertion that they will provide professional management is illusory. Per the Pacaso website, Pacaso can be terminated as the property manager and "the owner group can ... self - manage the property." It is not hard to imagine reasons to terminate Pacaso (e.g., poor performance, an effort to save management fees, etc.) with the resulting potential downside of eight (8), unrelated owners having to agree on upkeep, maintenance, and repairs —leading to poorly maintained properties with no single, responsible entity required to implement solutions. Imagine broad swaths of Newport Beach neighborhoods with such properties. In §21.48.025 — Visitor Accommodations of Newport Beach Municipal Code Chapter 21.48 — Standards for Specific Land Uses, it states, "If the review authority determines that the development will impact lower cost visitor -serving accommodations, or provide only high or moderate cost visitor accommodations, or limited use overnight visitor accommodations such as timeshares, fractional ownership and condominium - hotels, then mitigation commensurate with the impact shall be provided..." Planning Commission - February 23, 2023 No. 6e - Additional Materials Received After Deadline P i e r� Pier - Fractional Homeownership (PA2022-0202) Central Newport Beach Community Association PO Box 884 • Newport Beach, CA • 92661-0884 www. MyNewportBeach.Org Ordinance No. 2020-15—An Ordinance of the City Council of the City of Newport Beach, California, Amending Section 3.16.060 and Chapter 5.95 of the Newport Beach Municipal Code Relating to Short Term Lodging —details the adverse impacts that short-term lodging and limited use overnight accommodations, including: City streets and services are burdened with an increased demand on parking, sewage, and refuse facilities, paramedics, and police services (responding to complaints of noise disturbances, disorderly conduct, and other illegal activity). Permanent residents and long-term tenants' peace, safety, and general welfare are negatively impacted with increased noise, traffic, refuse, and demand for parking resulting from short-term lodging by a variety of occupants. Destroying the quality and residential character of the City's existing single family and multi -family homes. The increase in demand for City services resulting from timeshare/fractional homeownership overburdens and threatens the City's ability to provide necessary services to long-term residents. By creating its own definition/business model, Pacaso and similar organizations have developed an alternative expression for timeshare ownership. This type of ownership is already banned by the City. Also, unless the operating agreement states unequivocally that each one -eighth owner must use his/her 44 days consecutively, the City's regulations on Short -Term Rentals is being circumvented (i.e., securing short-term lodging permits, fulfilling the requirements of the Uniform Transient Occupancy Tax Ordinance, etc.). Potential rental income A fractionally owned property can be rented cut either as a short-term or long-term rental if the ownership agreement allows it. Depending on the terms of the agreement, all owners may earn a share in the proceeds of rental income. In Newport Beach, timeshares are prohibited. We think the City of Newport Beach wisely made this zoning decision, because timeshares are an incompatible use within our neighborhoods. We believe that the Pacaso Model is prohibited by code and request that the City of Newport Beach take action to prevent further violations by Pacaso and similar businesses that seek to create timeshare -type businesses/ activities in areas where they are prohibited by the City's zoning ordinances. As the City of Newport Beach performs its analysis, CNBCA and our 300+ members encourage the City to remember why single-family and multi -family zoning exists and why the City limited the number of Short -Term Lodging Permits. We request that the City of Newport Beach not allow uses that are inconsistent with the zoning intent and current short-term lodging ordinances. Given the foregoing ordinances and municipal codes, fractional homeownership should be banned since it is just an alternate expression for timeshare ownership. The property manager or owners of each existing property should be subject to securing short-term lodging permits and fulfilling the requirements of the Uniform Transient Occupancy Tax Ordinance. Until short-term lodging permits can be secured (there is already a wait list), each one -eighth owner should be informed of the requirement to occupy the property for no less than 30 days to comply with our City's codes and ordinances. Planning Commission - February 23, 2023 No. 6e - Additional Materials Received After Deadline P i e r-'-Pier- Fractional Homeownership (PA2022-0202) Central Newport Beach Community Association PO Box 884 • Newport Beach, CA • 92661-0884 www. MyNewportBeach.Org We thank City Staff, the Planning Commission, and City Council for its willingness to engage with the residents on this topic. We believe if the City of Newport Beach does not take action to enforce our zoning laws, codes, and ordinances to prevent this alternate timeshare ownership model from taking over our neighborhoods, the sense of community will be irreparably harmed. The CNBCA Board and our members are happy to engage further with you or others in the city government on this topic. Respectfully, CENTRAL NEWPORT BEACH COMMUNITY ASSOCIATION Maureen Cotton President Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202) From: MORGAN DAVIS To: Plannina Commissioners Subject: Item 6 - Fractional Homeownership Date: February 23, 2023 6:03:21 PM [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. I am opposed to Fractional Homeownership! This model is basically weekly rentals, and should not be allowed where zoning does not allow weekly turnover. Morgan Davis Sent from my Wad Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202) Rodriguez, Clarivel Subject: FW: Planning Commission Feb 23 Discussion and Recommendations re Fractional Ownership From: Denys Oberman <dho@obermanassociates.com> Sent: February 25, 2023 2:39 PM To: celimore@newportbeachca.gov; Rosene, Mark <mrosene@newportbeachca.gov>; sklaustermeire@newportbeachca.gov; Ilowerv@newportbeachca.gov; Harris, Tristan <THarris@newportbeachca.gov> Cc: Jurjis, Seimone <siuriis@newportbeachca.gov>; BOB YANT <bvant@aol.com>; Russ Doll <radoll@road runner.com>; Nancy Scarbrough <Nancv@nancvfornewport.com>; SmartPearll@hotmail.com; ckrawson@att.net; Fred Levine <fredric.mark. levine@gmail.com>; CdMRA <info@cdmra.org>; dho@obermanassociates.com Subject: Planning Commission Feb 23 Discussion and Recommendations re Fractional Ownership [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. Chair Ellmore, Vice Chair Rosene, Secretary Klaustermeier ,Commissioner Lowrey and Commissioner Harris - We would like to thank the Planning Commission and also City staff, for the work and discussion surrounding the issue of Fractional Ownership/timeshare businesses. We appreciate the efforts of the Planning Commission , and those of City staff to prepare recommendations for the City Council for the upcoming March 141h meeting. Staff made a Presentation at the February 23, 2023 Planning Commission meeting, which was not made available to the public for review in advance of the February 23rd meeting, despite multiple requests to staff. We would appreciate the Commission's direction to Staff to forward this presentation to those who requested it or otherwise make it publicly available for review. The presentation was of concern to the residents that attended the Feb. 23rd meeting. It seemed to suggest that Fractional Ownership businesses be characterized and regulated by the City as Short Term Lodging —when they are clearly a form of Timeshare . Further, the approach to regulation suggested herein would be of questionable feasibility and effectiveness . The proposal by a Pacasso representative that the City adopt a cap of 500 Fractional Ownership units allowed was absurd and disrespectful. After thoughtful discussion, the Commission proposed the following position regarding recommendations to City Council: 1. Broaden the Definition of Timeshare in the City's ordinances ( Fractional Ownership clearly form of Timeshare ) 2. Provide for public transparency, review and permitting process through Zoning Administrator, including public hearing * 3. Do not allow in R-1 residential zones* 4. No recommendation made regarding a Cap on number of Fractional Ownership units (* if Council, against residents' position and City ordinance prohibiting timeshares, insists on allowing Fractional businesses with regulation) Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202) We appreciated the Commission's ultimate summary of their position. This is responsive to the residents' position that Fractional Ownership businesses should not be permitted in our residential neighborhoods. Also, we appreciate the Commissioners' guidance to the public that, ultimately, decisions reside with the political body, eg. The City Council; . Therefore, residents should meet with and express their position with Council representatives. Our Leadership Committee is comprised of representatives from Penninsula Point, Central Penninsula, West Newport, Newport Island, Balboa island, and Corona del Mar. Thank you again for your time and care on this important subject. Denys H. Oberman Oceanfront resident and community leader Regards, Denys H. Oberman, CEO flOBERMAN SITcdWy orb Fvwx�c" Advisors OBERMAN Strategy and Financial Advisors 19200 Von Karman Avenue, 6th Floor Irvine, CA 92612 Tel (949) 476-0790 Cell (949) 230-5868 Fax (949) 752-8935 Email: dho .obermanassociates.com CONFIDENTIALITY NOTICE: The documents accompanying this transmission contain confidential information belonging to the sender which is legally privileged. The information is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on the contents of this telecopied information is strictly prohibited. If you have received this transmission in error, please notify us immediately at 949/476-0790 or the electronic address above, to arrange for the return of the document(s) to us. Planning Commission - February 23, 2023 Item No. 6e - Additional Materials Received After Deadline Fractional Homeownership (PA2022-0202) Rodriguez, Clarivel Subject: FW: Fractional Ownership From: Denys Oberman <dho@obermanassociates.com> Sent: February 26, 2023 7:00 AM To: planningcommission@newportbeachca.gov; Jurjis, Seimone <siuriis@newportbeachca.gov> Cc: BOB YANT <byant@aol.com>; Lee Pearl <smartpearll@hotmail.com>; Russ Doll <radoll@roadrunner.com>; Nancy Scarbrough <Nancv@nancvfornewport.com> Subject: Fractional Ownership [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content is safe. We wish to confirm that the position of residents in the following communities is that Fractional Ownership businesses are time share businesses, operating commercially in our residential neighborhoods: Penninsula Point Central Penninsula Balboa island Newport Island West Newport Corona del Mar Fractional Ownership/Timeshare is already banned under the City's current Timeshare ordinances. Under any circumstance, Fractional Ownership businesses should NOT be permitted in Family Residential zones--- To be clear, these include R1, R1 %, and R2 in our communities. These are dense, family residential communities with strong ties to the community. Fractional Ownership is not consistent with the City's General Plan. Allowing Fractional Ownership timeshares will have an irrevocable adverse impact on our community. Thank you for your consideration as you develop your recommendations to the City Council. Denys Oberman Resident and member of the Leadership Committee to address Fractional Ownership Regards, Denys H. Oberman, CEO flOBERMAN SkcdWy oW Firkartc" Advgors OBERMAN Strategy and Financial Advisors 19200 Von Karman Avenue, 6t" Floor Irvine, CA 92612 Tel (949) 476-0790 Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Fractional Hnmeowne •ship Planning Commission February 22, 2023 Seimone Jurjis, CDD Director Jaime Murillo, AICP, Principal Planner Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Fractional Ownership of Real Estate Partial ownership of property: Common with commercial properties Emerging with single-family residential Vacation property (2ndor 3rd homes) Fractions offered for sale online Pacaso Ember EUITY ESTATES 1`V E L S 0 N hareflniTM FAMILY ESTATES Planning Commission - February 23, 2023 Howit Works Item No. 61 - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Property is purchased under a Limited Liability Corporation (LLC) Shares of the property are sold: 1/8 ownership or greater Operating Agreement is used to manage the property Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Operatic ns Co -owners agree on usage (days, week) 1/8 share = 45 days (not consecutive) - typically less than 30 consecutive day stays managed through calender Owners pay share of property costs: maintenance, management, HOA, cleaning, tax, utilities, insurance, and reserve funds costs • Co -owners can sell their interest Comp Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (P12022-0202) nts/Concerns Function like short term rentals —non-resident vacation behaviors Commercialization of neighborhoods Impacts housing affordability —increased vacation homes and reduced housing stock Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) ty Council Background November 16, 2021, Study Session 4 known homes Directed staff to study what other cities are doing and report back September 13, 2022- City Council Study Session Sagecrest Planning+Environmental Report 11 known homes Directed staff to return with proposed action items Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) ty Council 10 rection September 27, 2022 — Council Meeting Initiated Zoning Code and Local Coastal Program Amendment Did not pursue moratorium Directed staff to work expeditiously with Planning Commission Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) lannin, Commission October 6, 2022 —Study Session Staff presented comprehensive overview and options Due to complexity of issue, direction to form an Ad - Hoc Committee October 20, 2022 —Formation of Ad -Hoc Committee Commissioners Lowery, Rosene, and Weigand Total of 7 meetings Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Ad -Hoc Committee Considerations Regulatory process • Location restrictions • Development standards • Operational standards • Grandfathering Provisions Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Regulatory Procd.%4m4m Create regulatory process to permit . ractional Hon,eownership • Regulate like STL in Title 5 of NBMC- Business License and Regulations Require permits for both dwelling units and property manager Clarify not applicable to co -owned property not managed and facilitated by third -party Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) 2. Location Rd: Maximum C. frictions and Limited in all residential zoning districts by a cap Seeking Planning Commission input on appropriate cap Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Parking Requirements Parking shall conform with current standards (size and number) Parking shall be free of obstructions and available for use Restrictiow Prohibition of amplified sound outside or audible at PL from 10 pm to 10 am • Compliance with City noise ordinance Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Managen * plan Require submission of operating agreement/management plan to City Addresses landscape collection plan maintenance and trash Identify local contact person to address issues 24 hour contact Located within 25 miles Respond within 30 minutes Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) 8. Prohibit Subletting and Guest Use Prohibit subletting of unit for rentals, including short-term lodging Prohibit guest usage when owner not present Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Good Neignioc policy Written policy posted in unit Owner responsibilities Contact person Parking rules Street sweeping Trash collection • City noise restrictions Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) 10. Owner Acirnowledgments Sign acknowledgement by each owner submitted to the City Understanding of all rules and Good Neighbor Policy Prohibition against subletting and guest use • Enforcement and fines Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Grandfathering Provisions Needed for existing units that are nonconforming due to parking requirements Difficult to retroactively regulate existing uses or those in process Allow to remain as legal nonconforming uses Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) ecommendation Requested Seeking recommendation to City Council March 14, 2023, City Council meeting Options: Support Ad -Hoc Committee recommendations Modify Ad -Hoc Committee recommendations No recommendation Regulatory Process Location Restrictions Parking Requirements Noise Restrictions Management Plan Subletting Good Neighbor Policy Owner Acknowledgements Grandfathering Provisions Planning Commission - February 23, 2023 Materials Presented at Meeting by actional Homeownership (PA2022-02 Title 5 permits for unit and property manager Limited in all residential zones by a maximum cap Current standards; free and clear No amplified sound 10 pm-10 am; City standards Required to address landscape, trash, local contact person Prohibit short-term lodging and guest use Posted in unit outlining rules Signed and submitted by each owner Allows existing nonconforming units to remain Questions and D Planning Commission Stuuy 3ebblun February 24, 2023 Seimone Jurjis, CDD Director siuriis@newportbeachca.gov Jaime Murillo, AICP, Principal Planner jmurillo@newportbeachca.gov Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Fractional Hnmeowne •ship Planning Commission February 22, 2023 Seimone Jurjis, CDD Director Jaime Murillo, AICP, Principal Planner Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Fractional Ownership of Real Estate Partial ownership of property: Common with commercial properties Emerging with single-family residential Vacation property (2ndor 3rd homes) Fractions offered for sale online Pacaso Ember EUITY ESTATES 1`V E L S 0 N hareflniTM FAMILY ESTATES Planning Commission - February 23, 2023 Howit Works Item No. 61 - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Property is purchased under a Limited Liability Corporation (LLC) Shares of the property are sold: 1/8 ownership or greater Operating Agreement is used to manage the property Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Operatic ns Co -owners agree on usage (days, week) 1/8 share = 45 days (not consecutive) - typically less than 30 consecutive day stays managed through calender Owners pay share of property costs: maintenance, management, HOA, cleaning, tax, utilities, insurance, and reserve funds costs • Co -owners can sell their interest Comp Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (P12022-0202) nts/Concerns Function like short term rentals —non-resident vacation behaviors Commercialization of neighborhoods Impacts housing affordability —increased vacation homes and reduced housing stock Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) ty Council Background November 16, 2021, Study Session 4 known homes Directed staff to study what other cities are doing and report back September 13, 2022- City Council Study Session Sagecrest Planning+Environmental Report 11 known homes Directed staff to return with proposed action items Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) ty Council 10 rection September 27, 2022 — Council Meeting Initiated Zoning Code and Local Coastal Program Amendment Did not pursue moratorium Directed staff to work expeditiously with Planning Commission Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) lannin, Commission October 6, 2022 —Study Session Staff presented comprehensive overview and options Due to complexity of issue, direction to form an Ad - Hoc Committee October 20, 2022 —Formation of Ad -Hoc Committee Commissioners Lowery, Rosene, and Weigand Total of 7 meetings Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Ad -Hoc Committee Considerations Regulatory process • Location restrictions • Development standards • Operational standards • Grandfathering Provisions Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Regulatory Procd.%4m4m Create regulatory process to permit . ractional Hon,eownership • Regulate like STL in Title 5 of NBMC- Business License and Regulations Require permits for both dwelling units and property manager Clarify not applicable to co -owned property not managed and facilitated by third -party Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) 2. Location Rd: Maximum C. frictions and Limited in all residential zoning districts by a cap Seeking Planning Commission input on appropriate cap Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Parking Requirements Parking shall conform with current standards (size and number) Parking shall be free of obstructions and available for use Restrictiow Prohibition of amplified sound outside or audible at PL from 10 pm to 10 am • Compliance with City noise ordinance Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Managen * plan Require submission of operating agreement/management plan to City Addresses landscape collection plan maintenance and trash Identify local contact person to address issues 24 hour contact Located within 25 miles Respond within 30 minutes Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) 8. Prohibit Subletting and Guest Use Prohibit subletting of unit for rentals, including short-term lodging Prohibit guest usage when owner not present Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Good Neignioc policy Written policy posted in unit Owner responsibilities Contact person Parking rules Street sweeping Trash collection • City noise restrictions Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) 10. Owner Acirnowledgments Sign acknowledgement by each owner submitted to the City Understanding of all rules and Good Neighbor Policy Prohibition against subletting and guest use • Enforcement and fines Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Grandfathering Provisions Needed for existing units that are nonconforming due to parking requirements Difficult to retroactively regulate existing uses or those in process Allow to remain as legal nonconforming uses Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) Planning Commission - February 23, 2023 Item No. 6f - Additional Materials Presented at Meeting by Staff Fractional Homeownership (PA2022-0202) ecommendation Requested Seeking recommendation to City Council March 14, 2023, City Council meeting Options: Support Ad -Hoc Committee recommendations Modify Ad -Hoc Committee recommendations No recommendation Regulatory Process Location Restrictions Parking Requirements Noise Restrictions Management Plan Subletting Good Neighbor Policy Owner Acknowledgements Grandfathering Provisions Planning Commission - February 23, 2023 Materials Presented at Meeting by actional Homeownership (PA2022-02 Title 5 permits for unit and property manager Limited in all residential zones by a maximum cap Current standards; free and clear No amplified sound 10 pm-10 am; City standards Required to address landscape, trash, local contact person Prohibit short-term lodging and guest use Posted in unit outlining rules Signed and submitted by each owner Allows existing nonconforming units to remain Questions and D Planning Commission Stuuy 3ebblun February 24, 2023 Seimone Jurjis, CDD Director siuriis@newportbeachca.gov Jaime Murillo, AICP, Principal Planner jmurillo@newportbeachca.gov L:Mi11-IT &T/ March 14, 2023, City Council Agenda Item No.12 https://ecros.newportbeachca.qov/WEB/DocView.aspx?id=2863026&dbid=0&repo=CNB Correspondence htt s:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2863125&dbid=0&repo=CNB https:Hecros.newportbeachca.qov/WEB/DocView.aspx?id=2863126&dbid=0&repo=CNB PowerPoint https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2863131 &dbid=0&repo=CNB Staff Memo https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=2863127&dbid=0&repo=CN B Week in Review https:Hecros.newportbeachca.gov/WEB/DocView.aspx?id=2863128&dbid=0&repo=CNB :MMOr1'VA Local Coastal Program Amendment No. PA2022-0202 W4:11131I TA LOCAL COSTAL PLAN AMENDMENT NO. PA2022-0202 Section 1: The row entitled "Time Share Facilities" in Table 21.20-1 of Section 21.20.020 (Commercial Coastal Zoning Districts Land Uses) of the Newport Beach Municipal Code is amended to read as follows: Commercial Coastal Zoning Districts TABLE 21.20-1 A Allowed ALLOWED USES — Not Allowed* Land Use See Part 7 of this Specific Implementation Plan for CC CG CM CN CV CV- OG Use land use definitions. (3) (3) LV (3) Regulations See Chapter 21.12 for unlisted uses. Visitor Accommodations Time Shares — A — — A — — Section 21.48.025 Section 2: Section 21.48.025(A) (Applicability) of the Newport Beach Municipal Code is amended to read as follows: A. Applicability. The provisions of this section shall apply to applications involving the development or creation of new visitor accommodations or the expansion, reduction, redevelopment, demolition, conversion, closure, or cessation of existing visitor accommodations. The conversion of property that was not used as a visitor accommodation into a time share accommodation shall constitute the development or creation of a new visitor accommodation. As used herein, "time share accommodation(s)" shall have a separate meaning from visitor accommodation(s)." For purposes of this section, "time share accommodation(s)" shall mean any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including, but not limited to, a single -unit dwelling, two -unit dwelling, or multi -unit dwelling. Section 3: Section 21.48.025(C)(5) (Mitigation) of the Newport Beach Municipal Code is amended to read as follows: 5. Mitigation. If the review authority determines that the development will impact existing lower cost visitor -serving accommodations, or provide only high or moderate cost visitor accommodations or limited use overnight visitor accommodations such as time share uses and condominium -hotels, then mitigation commensurate with the impact shall be provided by one of more of the following: a. Replacement of low cost rooms lost shall be provided at a one-to-one ratio either on site or a suitable off -site location within the City; b. Payment of an in -lieu fee commensurate with the impact shall be required; c. Programmatic components that provide low cost overnight visitor accommodations; or d. Other form of mitigation addressing cost of stay. The review authority may authorize deviations from development standards that provide economic incentives to the development to maintain affordability. Section 4: Section 21.48.025(E) (Tsunami Information and Evacuation Plans) of the Newport Beach Municipal Code is retitled and amended to read as follows: E. Conversion of Existing Dwelling Units Prohibited. The conversion of existing residential dwelling units into a time share use shall be prohibited. Section 5: Section 21.48.025(F) (Tsunami Information and Evacuation Plans) of the Newport Beach Municipal Code is added to read as follows: F. Tsunami Information and Evacuation Plans. Visitor -serving accommodations in areas identified as susceptible to tsunami inundation shall be required to provide guests with information on tsunami information and evacuation plans. Section 6: The definition of "Limited use overnight visitor accommodations (LUOVA)" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows: Limited use overnight visitor accommodations (LUOVA). See "Time share use." Section 7: The definition of "LUOVA" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is deleted. Section 8: The definition of "Time Share Facility (Land Use)" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows: Time Share (Land Use). See "Visitor accommodations. Section 9: The definition of "Visitor Accommodations (Land Use)" within Section 21.70.020 (Definitions of Specialized Terms and Phrases) of the Newport Beach Municipal Code is amended to read as follows: Visitor Accommodations (Land Use) "Time share accommodations" shall have a separate meaning from "visitor accommodation(s)." "Time share accommodations" as used in the definition of "time share instrument," "time share interval," "time share property," and "time share use" shall mean any dwelling unit, apartment, condominium or cooperative unit, hotel or motel room, or other structure constructed for residential use and occupancy, including, but not limited to, a single -unit dwelling, two -unit dwelling, or multi -unit dwelling. 1. "Bed and breakfast inn" means a dwelling unit that offers guest rooms or suites for a fee for less than thirty (30) days, with incidental eating and drinking service provided from a single kitchen for guests only. 2. "Campground" means a lot upon which one or more sites are located, established, or maintained for rent as an overnight tenting or camping area for recreation or vacation purposes. 3. "Hostel" means establishments offering supervised overnight sleeping accommodations, primarily for travelers who use nonmotorized transportation or commercial or public transportation. Such sleeping accommodations are designed, intended to be used and are used, rented or hired out as temporary or overnight accommodations for guests in which daily services of linen change, towel change, soap change and general cleanup are provided by the management. If kitchen or eating facilities are provided, they are communal in nature. 4. "Hotel" means an establishment that provides guest rooms or suites for a fee to transient guests for sleeping purposes. Access to units is primarily from interior lobbies, courts, or halls. Related accessory uses may include conference and meeting rooms, restaurants, bars, and recreational facilities. Guest rooms may or may not contain kitchen facilities for food preparation (i.e., refrigerators, sinks, stoves, and ovens). Hotels with kitchen facilities are commonly known as extended stay hotels. A hotel operates subject to taxation under Revenue and Taxation Code Section 7280. 5. "Motel" means an establishment that provides guest rooms for a fee to transient guests for sleeping purposes. Guest rooms do not contain kitchen facilities. A motel is distinguished from a hotel primarily by direct independent access to, and adjoining parking for, each guest room. A motel operates subject to taxation under Revenue and Taxation Code Section 7280. 6. "Recreational vehicle (RV) park" means a lot upon which two or more recreational vehicle sites are located, established, or maintained for occupancy for a rental fee by recreational vehicles of the general public as temporary living quarters for recreation or vacation purposes. 7. "Short-term lodging" means a dwelling unit that is rented or leased as a single housekeeping unit (see "Single housekeeping unit") for a period of less than thirty (30) days. 8. "Single room occupancy, residential hotels (SRO)" means buildings with six or more guest rooms without kitchen facilities in individual rooms, or kitchen facilities for the exclusive use of guests, and which are also the primary residences of the hotel guests. 9. "Time share instrument" means one or more documents, by whatever name denominated, creating a time share plan or governing the operation of a time share plan, and includes the declaration dedicating time share accommodations to the time share plan. 10. "Time share interval" means the period or periods of time when the purchaser in a time share plan is afforded the opportunity to use the time share accommodations of a time share plan. 11. "Time share plan" means any arrangement, plan, scheme, or similar device, whether by membership agreement, bylaws, shareholder agreement, partnership agreement, sale, lease, deed, license, right to use agreement, or by any other means, whereby a purchaser, in exchange for consideration, receives the right to exclusive use of real property, or any portion thereof, whether through the granting of ownership rights, possessory rights or otherwise, for a period of time less than a full year during any given year, on a recurring basis for more than one year, but not necessarily for consecutive years. A time share plan shall be deemed to exist whenever such recurring rights of exclusive use to the real property, or portion thereof, are created, regardless of whether such exclusive rights of use are a result of a grant of ownership rights, possessory rights, membership rights, rights pursuant to contract, or ownership of a fractional interest or share in the real property, or portion thereof, and regardless of whether they are coupled with ownership of a real property interest such as freehold interest or an estate for years in the property subject to the time share plan. 12. "Time share property" means one or more time share accommodations subject to the same time share instrument, together with any other property or rights to property appurtenant to those time share accommodations. 13."Time share unit" means the time share property or portion of a time share property in which a time share interval exists and that is designated for separate use. 14."Time share use" means the use of one or more time share accommodations or any part thereof, as a time share property. EXHIBIT X FINDINGS OF LOCAL COASTAL PROGRAM AMENDMENT NO. PA2022-0202 CONSISTENCY WITH THE GENERAL PLAN AND COASTAL LAND USE PLAN 1. The Local Coastal Program Amendment No. PA2022-0202 is consistent with the City's General Plan. It would serve to implement the following goals and policies of the General Plan: Land Use Element Policy LU 2.6, which states, "Visitor Serving Uses Provide uses that serve visitors to Newport Beach's ocean, harbor, open spaces, and other recreational assets, while integrating them to protect neighborhoods and residents." Local Coastal Program Amendment No. 2022-0202 would continue to allow time share uses, which is a visitor serving use in some commercial zones, while clarifying that fractional ownership uses are a time share as confirmed by a representative of Pacaso and not permitted in residential zones areas. This would prevent additional commercialization of the residential neighborhoods and protect them from impacts created by increased traffic and noise. Land Use Element Goal LU 4, which states, "Management of growth and change to protect and enhance the livability of neighborhoods and achieve distinct and economically vital business and employment districts, which are correlated with supporting infrastructure and public services and sustain Newport Beach's natural setting." Classifying fractional ownership uses as time shares continues to allow the business within certain commercial zones. This clarification would also help preserve the long-term housing stock by eliminating the conversion of existing and new housing developments into time share uses, and further ensure that the commercial businesses would not encroach into residential areas and impact the livability of said neighborhoods. Housing Element Goal #4, which states, "Housing opportunities for as many renter- and owner -occupied households as possible in response to the market demand and RHNA obligations for housing in the City." Conversion of residential dwelling units into time shares removes the dwelling units from the market, thus making them no longer available for occupancy of full-time residences. The proposed amendment would serve to prevent single -unit residences from being taken off the market, thus protecting these housing opportunities for renters and owner -occupied households alike. Housing Element Goal #5, which states, "Preservation of the City's housing stock for extremely low-, very low-, low-, and moderate -income households." Removing market - rate dwelling units from the City's housing stock impacts the affordability of housing across all income levels. As fewer dwelling units become available for rent or sale, the price increases. These price increases reduce the opportunities to provide affordable housing to extremely low-, very low-, low-, and moderate -income households. The proposed amendment would prevent conversion of single -unit residences into a visitor serving accommodation, thus preserving the number of units in the City's housing stock, which would help minimize increases to housing costs. 2. Local Coastal Program Amendment No. 2022-0202 serves to implement Coastal Land Use Plan (CLUP) Table 2.1.1-1 (Land Use Plan Categories) of the LCP, which establishes the type, density, and intensity of land uses within the coastal zone, including residential land use categories that are intended for residential dwellings. The amendment clarifies that time share use of residential property is prohibited in order to maintain the residential character of communities. Local Coastal Program Amendment No. 2022-0202 would continue to allow time shares in other areas where visitor serving uses are currently permitted. This includes the CM, CV, MU-H, and MU- W Coastal Land Use Designations, which are identified in CLUP Table 2.1.1-1 to provide visitor serving uses. 3. While CLUP Policy 2.3.3-6 authorizes the short-term rental of dwelling units as a means of providing lower -cost overnight visitor accommodations, the maximum number of short-term rentals are capped at a maximum of 1,550 permits to prevent adverse impacts to residential areas and preserve housing stock within the coastal zone. Unlike short term rentals, time share use of coastal residential properties is a high -cost option to visit the coast on a limited basis, but have similar negative impacts to housing supply and neighborhood disturbances that short term rentals create. Therefore, it is appropriate to prohibit this type of visitor -serving commercial use in residential neighborhoods. Furthermore, Local Coastal Program Amendment No. 2022-0202 will not impact the City's ability to support the wide variety of visitor accommodations that are currently provided, including 4,086 hotel/motel rooms hotels and motels, a cap of 1,550 short term lodging units, and approximately 471 campground and RV sites. 4. The operation of time share use of residential property increases noise and traffic in residential neighborhoods that changes the character of the neighborhoods in a manner that negatively impacts the public health, safety, and welfare. 5. As the number of time share uses of residential property increases in the City, the number of dwelling units for long-term occupancy can decrease. This decrease impacts the ability for the City to comply with the 6th and future cycle RHNA allocation. EXHIBIT Y LOCAL COASTAL PROGRAM AMENDMENT No. PA2022-0202 DE MINIMIS FINDINGS 1. The Local Coastal Program Amendment No. 2022-0202 would have no impact, either individually or cumulatively, on coastal resources, and that it is consistent with the Chapter 3 policies of the Coastal Act. The City of Newport Beach has seen an influx of time share use of residential property, where ownership of residence is equally shared among multiple nonrelated owners (typically between four and 12 owners) through a formal arrangement. The amount of time an owner may access and use the property is directly correlated to their share of ownership (e.g., a 1/8 share owner would be allotted 45 days per year). This time allotment is not typically used consecutively, but rather one or two weeks at a time. This has resulted in increased traffic, additional parking congestion, and increased noise within the residential areas of the coastal zone due to the fractional ownership uses operating as a short-term vacation stay in lieu of a full-time owner -occupied unit. Local Coastal Program Amendment No. 2022-0202 would clarify that fractional ownership uses are defined as a time share use within the City of Newport Beach. Time share uses are currently allowed in the CG (Commercial General), CV (Commercial Visitor -Serving), MU-MM (Mixed -Use Mariners' Mile), and MU-CV/15th St. (Mixed -Use Cannery Village and 15th Street) coastal zoning districts. The permitted locations and development standards that apply to time shares would not be changed by Local Coastal Program Amendment No. 2022-0202. Furthermore, the LCP does not authorize new development or establish new uses within the coastal zone. As a result, there would be no impact on coastal resources or public access to coastal resources. Moreover, Local Coastal Program Amendment No. 2022-0202 is consistent with the Chapter 3 policies of the Coastal Act. 2. The local government provides public notice of the proposed amendment at least 21 days prior to submitting the amendment to the Commission, by one of the following methods: posting on -site and off -site in the affected area, newspaper publication, or direct mailing to owners and occupants of contiguous property. The City Council of the City of Newport Beach held study sessions to accept public testimony and discuss the impacts of fractional ownership uses on November 16, 2021, September 13, 2022, September 27, 2022, and March 14, 2023. Likewise, the Planning Commission of the City of Newport Beach held similar study sessions on October 6, 2022, October 20, 2022, and February 24, 2023. The public testimony provided during the study sessions provided guidance to formulate the specific language contained in Local Coastal Program Amendment No. 2022-0202. These study sessions were duly agendized and posted to the City's website 72-hours in advance of the study session. To consider Local Coastal Program Amendment No. 2022-0202, the Planning Commission conducted a public hearing on April 20, 2023. Public Notice of this hearing was published on April 8, 2023, in the Daily Pilot, the local adjudicated newspaper with distribution in Newport Beach; as well as, posted on the City's website. Additionally, a Notice of Availability of a draft LCP amendment was posted in the city libraries on March 21, 2023. The City Council also conducted a public hearing to consider the proposed amendment to the LCP on May 9, 2023. Public notice of the City Council hearing was published in the Daily Pilot and posted to the City's website on April 29, 2023. Therefore, the 21-day notice requirement has been satisfied. 3. The amendment does not propose any change in use of land or water or allowable use of property. The Local Coastal Program (Title 21 of the Newport Beach Municipal Code) includes various permitted use and development regulations for the coastal zone. Among these is time shares, a visitor accommodation that is permitted in the CG (Commercial General), CV (Commercial Visitor -Serving), MU-MM (Mixed -Use Mariners' Mile), and MU-CV/15th St. (Mixed -Use Cannery Village and 15th Street) coastal zoning districts. Local Coastal Program Amendment No. 2022-0202 would clarify that fractional ownership uses are defined as a time share use. There would be no change to the allowable uses within the coastal zone as established by the LCP. Furthermore, the LCP amendment does not authorize development or alter existing development standards, thus would not result in the change in use of land or water. STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing ordinance, being Ordinance No. 2023-5 was duly introduced on the gih day of May, 2023, at a regular meeting, and adopted by the City Council at a regular meeting duly held on the 23rd day of May, 2023, and that the same was so passed and adopted by the following vote, to wit: AYES: Mayor Noah Blom, Mayor Pro Tern Will O'Neill, Council Member Brad Avery, Council Member Robyn Grant, Council Member Lauren Kleiman, Council Member Joe Stapleton, Council Member Erik Weigand NAYS: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 24th day of May, 2023. nLeilani I. rown, MMC City Clerk City of Newport Beach, California CqL/Fovk P CERTIFICATE OF PUBLICATION STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, LEILANI I. BROWN, City Clerk of the City of Newport Beach, California, do hereby certify that Ordinance No. 2023-5 has been duly and regularly published according to law and the order of the City Council of said City and that same was so published in The Daily Pilot, a newspaper of general circulation on the following dates: Introduced Ordinance: May 9, 2023 Adopted Ordinance: May 23, 2023 p' �Ub'1f/ In witness whereof, I have hereunto subscribed my name this D� day of ", 2023. — e&k. Leilani rown, MMC City Clerk City of Newport Beach, California