HomeMy WebLinkAboutZA2024-023 - APPROVING AN AMENDMENT TO AFFORDABLE HOUSING IMPLEMENTATION PLAN NO. AH2022-001 FOR THE RESIDENCES AT 1300 BRISTOL STREET PROJECT LOCATED AT 1300 NORTH BRISTOLRESOLUTION NO. ZA2024-023 A RESOLUTION OF THE ZONING ADMINISTRATOR OF THE
CITY OF NEWPORT BEACH, CALIFORNIA APPROVING AN AMENDMENT TO AFFORDABLE HOUSING IMPLEMENTATION PLAN NO. AH2022-001 FOR THE RESIDENCES AT 1300 BRISTOL STREET PROJECT LOCATED AT 1300 NORTH BRISTOL STREET (PA2024-0039)
THE ZONING ADMINISTRATOR OF THE CITY OF NEWPORT BEACH HEREBY FINDS AS FOLLOWS: SECTION 1. STATEMENT OF FACTS.
1. An application was filed by The Picerne Group (Applicant), concerning property located at 1300 North Bristol Street, and legally described as Parcel 2, in Book 49, Page 18 of Parcel Maps, requesting an amendment of Affordable Housing Implementation Plan No. AH2022-001 (AHIP) that was approved as a part of the Residences at 1300 Bristol Street Project.
2. On March 22, 2022, the City Council approved Residences at 1300 Bristol Project (Approved Project) consisting of a 193-unit apartment building atop of 346-space parking structure. The land use entitlements for Approved Project consisted of Site Development Review No. SD2021-003, Traffic Study No. TS2022-001, Transfer of Development Rights
No. TD2022-001, Affordable Housing Implementation Plan No. AH2022-001, and CEQA Addendum No. 5 (ER2022-001). 3. The Approved Project consists of 77 base density units allotted to the property, based on the conversion of existing 33,292 square feet of office use, a 50% or 39-unit increase of
the base units in density, allowed by Chapter 20.32 (Density Bonus) of Newport Beach Municipal Code and Government Code Section 65915 (Density Bonus Law), and a transfer of development rights of 77 units from the nearby Uptown Newport development at 4311 Jamboree Road, for a total of 193 residential units.
4. The existing AHIP specified how the Approved Project would meet the City’s affordable housing requirements of the PC-11 Residential Overlay and meet the eligibility requirements for a 50% density bonus (39 density bonus units). In addition to a density bonus, the project was eligible and received two development concessions related to the mix of affordable units and park in-lieu fee payment, and six development standard waivers
related to park land dedication, building setbacks, building height, private open space for the studio-size rental units, common open space, and overall residential project density. 5. The existing AHIP was prepared in compliance with the then PC-11 requirement that a minimum of 30% of the units within a residential development utilizing the Residential
Overlay to be affordable to lower-income households and subject to a minimum 30-year affordability covenant. Since 77 units were transferred from Uptown Newport development, where affordable housing obligation have already been met, the Residential Overlay’s 30% inclusionary housing requirement only applied to the project’s remaining 77 base units. Of the 24 affordable units provided, 12 were restricted to very
Zoning Administrator Resolution No. ZA2024-023 Page 2 of 5
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low-income households for a minimum term of 55 years and were the basis for the project’s eligibility for a 50% density bonus and development concessions and waivers.
The remaining 12 affordable housing units were needed to comply with the PC-11
Residential Overlay and restricted to low-income households and restricted for a minimum term of 30 years. The approved unit mix for the affordable units would be 10 studio units, 12 one-bedroom units, and two two-bedroom units. The affordable units would consist of the same size and amenities as the market-rate units and distributed
throughout the project.
6. On July 25, 2023, the City Council approved an amendment to Newport Place Planned Community (PC-11) (PC-11 Amendment), to reduce the minimum affordable housing inclusionary requirement to be affordable to lower income households from 30% to 15% of
the base units in a residential project. Lower income category includes low and very-low-
income households. The reduction was necessary to reduce a potential impediment to housing development within the Residential Overlay as it was the only area in the Airport Area that required the inclusionary housing and with the highest percentage. Additionally, the reduction was necessary to affirmatively further fair housing consistent with policies
and policy actions of the certified Sixth Cycle Housing Element in order to meet the City’s
Regional Housing Needs Assessment (RHNA) for lower-income households. The amendment was also supported by the February 17, 2022, Inclusionary Housing: Financial Evaluation, prepared by Keyser Marston Associates for the City of Newport Beach. The study concluded that inclusionary housing percentages higher than 15% would likely be
too high rendering most residential projects financially infeasible.
7. The Applicant requests an amendment to AHIP (AHIP Amendment) to reduce the Approved Project’s percentage of affordable units commensurate with the number of inclusionary units currently required under the PC-11 Amendment. Specifically, the
applicant proposes to reduce the total number of residential units set aside for affordable
housing from 24 units (30%) to 12 units (15%). All 12 affordable housing units would be set aside for very low-income households for a minimum term of 55 years. No other changes are proposed.
8. Table 5-1 in Section 20.50.030(B) (Multiple Permit Application – Concurrent Processing)
of Newport Beach Municipal Code provides the Zoning Administrator is the review authority for those AHIPs, including any amendment to AHIPs, that do not include development standard waiver and/or incentives/concession requests. Given that the density bonus was based on the 12 units restricted to very low-income household that will continue to be
provided, the project remains eligible for the previously approved density bonus,
development concession and waivers. For the Zoning Administrator’s consideration is only the request to reduce the number of units set aside for affordable housing from 30% to 15%.
9. A public hearing was held on April 11, 2024, online via Zoom. A notice of the time, place,
and purpose of the hearing was given in accordance with the Newport Beach Municipal Code (NBMC). Evidence, both written and oral, was presented to and considered by, the Zoning Administrator at this hearing.
Zoning Administrator Resolution No. ZA2024-023 Page 3 of 5
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SECTION 2. CALIFORNIA ENVIRONMENTAL QUALITY ACT DETERMINATION.
1. All significant environmental concerns for the proposed AHIP Amendment have been
addressed in a previously approved CEQA Addendum No. 5 (ER2022-001) that the City of Newport Beach intends to use said document for the above-noted AHIP Amendment. Furthermore, there are no additional reasonable alternatives or mitigation measures that should be considered in conjunction with said AHIP Amendment as there would be no
physical that would trigger any further environmental analyses. Copies of the previously
prepared environmental document are available for public review and inspection at the Planning Division or the City of Newport Beach website at www.newportbeachca.gov/ceqa.
2. The Zoning Administrator finds that judicial challenges to the City's CEQA
determinations and approvals of land use projects are costly and time-consuming. In addition, project opponents often seek an award of attorneys' fees in such challenges. As project applicants are the primary beneficiaries of such approvals, it is appropriate that such applicants should bear the expense of defending against any such judicial
challenge, and bear the responsibility for any costs, attorneys' fees, and damages that
may be awarded to a successful challenger. SECTION 3. REQUIRED FINDINGS.
In accordance with Government Code Section 65915 et seq. (State Density Bonus Law),
Chapter 20.32 (Density Bonus) of the NBMC, and PC-11 Amendment, the following findings in support of AHIP Amendment are as follows: 1. The AHIP Amendment is consistent with requirement that a minimum of 15% of the base
units within a residential development utilizing the PC-11 Residential Overlay be
affordable to lower-income households and subject to a minimum 30-year affordability covenant. The project would restrict 12 units (15% of the 77 base units) to very low-income households for a minimum term of 55 years, exceeding the 30-year requirement for lower income households per PC-11 Residential Overlay. Furthermore, the AHIP
Amendment remains eligibility for a 50% density bonus and the development
concessions and waivers as previously approved. 2. The affordable unit mix, approved as part of the development concessions, for the very low-income units would remain at five studio units, six one-bedroom units, and one two-
bedroom units, consisting of the same size and amenities as the market-rate units, and
distributed throughout the project, consistent with AHIP No. AH2022-001 and AHIP Amendment. SECTION 4. DECISION.
NOW, THEREFORE, BE IT RESOLVED: 1. The Zoning Administrator of the City of Newport Beach hereby finds all significant environmental concerns for the AHIP Amendment have been addressed in a previously
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adopted CEQA Addendum No. 5 (ER2022-001) to the 2006 General Plan Update Program Environmental Impact Report and the 2008-2014 City of Newport Beach
Housing Element Update Initial Study/Negative Declaration for the Residences at 1300
Bristol Street Project.
2. The Zoning Administrator of the City of Newport Beach hereby approves AHIP Amendment(PA2024-0039), an amendment to Affordable Housing Implementation Plan No. AH2022-
001, subject to the conditions outlined in Exhibit A, which is attached hereto and
incorporated by reference. The existing Site Development Review No. SD2021-003,Traffic Study No. TS2022-001, and Transfer of Development Rights No. TD2022-001shall remain in full force and effect.
3.This action shall become final and effective 14 days following the date this Resolution
was adopted unless within such time an appeal or a call for review is filed with theCommunity Development Director by the provisions of Title 20 Planning and Zoning, ofthe Newport Beach Municipal Code.
PASSED, APPROVED, AND ADOPTED THIS 11TH DAY OF APRIL, 2024.
Attachments: Exhibit A: Conditions of Approval Exhibit B: Residences at 1300 Bristol AHIP Amendment
Zoning Administrator Resolution No. ZA2024-023 Page 5 of 5
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EXHIBIT “A”
CONDITIONS OF APPROVAL
(Project-specific conditions are in italics)
Planning Division
1.A minimum of 12 apartment units shall be made affordable to very low-income
households, consistent with AHIP Amendment (PA2024-0039) dated March 6, 2024.
This condition shall supersede Condition No. 6 of City Council Resolution No. 2022-20.
2.The very low-income unit mix shall be five studio units, six one-bedroom units, and onetwo-bedroom units. These units shall consist of the same size and amenities as the market-
rate units and shall be distributed throughout the project, consistent with AHIP Amendment
(PA2024-0039) dated March 6, 2024.
3.AHIP Amendment (PA2024-0039) shall expire unless exercised within 24 months from thedate of approval as specified in Section 20.54.060 of the Newport Beach Municipal Code
unless an extension is otherwise granted.
4.A copy of the Resolution, including conditions of approval Exhibit “A” shall beincorporated into the Building Division and field sets of plans before issuance of thebuilding permits.
5.To the fullest extent permitted by law, the applicant shall indemnify, defend and holdharmless the City, its City Council, its boards and commissions, officials, officers,employees, and agents from and against any claims, demands, obligations, damages,actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs, and
expenses (including without limitation, attorney’s fees, disbursements, and court costs) of
every kind and nature whatsoever which may arise from or in any manner relate (directlyor indirectly) to City’s approval of Residences at 1300 Bristol Street Project Affordable
Housing Implementation Plan Amendment (PA2024-0039). This indemnification shallinclude, but not be limited to, damages awarded against the City, if any, costs of suit,
attorney’s fees, and other expenses incurred in connection with such claim, action, causes
of action, suit, or proceeding whether incurred by the applicant, City, and/or the partiesinitiating or bringing such proceeding. The applicant shall indemnify the City for all the City'scosts, attorneys' fees, and damages that which City incurs in enforcing the indemnificationprovisions outlined in this condition. The applicant shall pay to the City upon demand any
amount owed to the City under the indemnification requirements prescribed in this
condition.
RESIDENCES AT 1300 BRISTOL STREET
AMENDMENT TO AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS
APPLICATION
February 28, 2024
Prepared by
EXHIBIT "B"
2
RESIDENCES AT 1300 BRISTOL STREET AMENDED AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS
APPLICATION
Project Description & Affordability Level
The Picerne Group (“Picerne”) is developing the Residences at 1300 Bristol Street Project
(“Project”), consisting of 193 apartment units, on a 1.97-acre site located in the Newport Place Planned Community. The site is generally bounded by Bristol Street North on the South and Spruce Street on the West, with an auto storage yard on the North and East sides. The Newport Beach General Plan designates the project site as Mixed-Use Horizontal 2 (MU-H2) and the zoning is Newport Place Planned Community (PC 11).
On March 22, 2022, the City Council approved land use entitlements for the Project, including environmental clearances, a Site Development Review, an Affordable Housing Implementation Plan (“AHIP”), a Traffic Study, and a Transfer of Development Rights of 77 residential units from Uptown Newport Planned Community (collectively “Entitlement Approvals”) (PA2021-161). The
approved AHIP was prepared in compliance with the then existing inclusionary housing requirement of the PC-11, which required that 30% of the base units in the project be affordable to Lower Income households. The approved AHIP includes a total of 24 lower income units, including 12 units affordable to Very-Low-Income households and 12 units affordable to Low-Income Households in order to meet the PC-11 requirement.
On July 25, 2023, the City Council approved an amendment to PC-11 (PC-11 Amendment), to reduce the minimum affordable housing inclusionary requirement to be affordable to lower income households from 30% of the base units in a project to 15%.
Picerne is requesting that the inclusionary housing requirement for the Project be revised to conform to the requirement of PC-11 Amendment as approved by the City Council on July 25, 2023. This change would reduce the inclusionary requirement from 30% to 15% lower income units.
The affordable housing requirement for this Project, as would be required by PC-11 Amendment, is 12 units (15% of 77 Base units) to be provided as lower income units. Picerne is exceeding this requirement by providing 12 Very-Low-Income units (instead of Low-Income units) for a 55-year term (instead of the 30-year term required by PC-11 Amendment). The proposed amendment to AHIP does not request any other changes in the Entitlement Approvals.
Lower Income households, including both Very Low and Low-Income categories, as defined in California Health and Safety Code Section 50079.5, are defined as households earning between 50 percent to 80 percent or less of area (Orange County) median income, adjusted for family size.
The proposed amendment will bring the Project in alignment with the affordability requirements of PC-11 Amendment and will help to offset the significant increase in interest rates and construction costs since the Project was approved. The increases in interest rates and construction costs have significantly impacted the feasibility of the Project.
Residences at 1300 Bristol Street Affordable Housing Implementation Plan February 28, 2024
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Density Bonus Computation and Term of Affordability
The 12 Very-Low-Income units qualify the Project for a 50% density bonus. The density bonus computation for the Project per Government Code Section 65915 was approved as part of the Entitlement Approvals and is shown below:
Table 1 Density Bonus Computation1
Base Units 77
Density Bonus 39
Transfer of Development Rights 77
Total Units 193
Picerne intends to operate the apartment project as a rental community. The 12 Very-Low-Income
units will remain rent restricted for a minimum of 55 years, per Government Code Section 65915(c)(1), more than the 30-year affordability term set forth in the PC-11 Amendment.
Reduction in Parking As provided for in Government Code Sec. 65915(p) and Section 20.32.030 of the City’s Zoning Code, the Project is eligible for a reduction in parking requirements. Pursuant to the developer’s
request, the Entitlement Approvals included a reduction in the parking requirements for the Project,
as summarized in Table 2 below:
Table 2 Parking Requirements
Unit Type
Number of
Units
Stalls/Unit
Per Gov.
Code 65915
Total Stalls
Per Gov.
Code 65915
Studio 25 1 25
1 BR 89 1 89
2 BR 79 1.5 119
TOTAL PARKING STALLS REQUIRED 193 233
TOTAL PARKING STALL PROVIDED 346
PARKING PROVIDED IN EXCESS OF MINIMUM REQUIREMENT 113
As shown above, the Project will provide 346 onsite parking spaces for its residential units, which
is 113 spaces more than the requirements of Sec. 65915 (p).
Residences at 1300 Bristol Street Affordable Housing Implementation Plan February 28, 2024
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Development Incentives Request
Pursuant to Government Code Section 65915(d)(1) and Section 20.32 of the City’s Zoning Code,
Picerne is entitled to three concessions or incentives due to providing at least fifteen percent (15%) of the units as affordable for Very-Low-Income households. The AHIP approved by the City Council included two development incentives including an incentive that the mix of lower income units provided not be reflective of the total project unit mix. This amended AHIP does not propose any change to the affordable unit
mix for the Very-Low-Income units as previously approved or to the second incentive approved by the City
Council as shown below: Table 3 Unit Mix
As the second incentive, the City Council approved a waiver of the park in lieu fee referenced in General Plan Policy LU 6-15.13 and in Section 19.52 of the City’s Subdivision Code in the amount
of $1,837,500. These incentives will result in cost reductions which will provide for the affordable rents to be set in accordance with Government Code Sec. 65915(c). Development Standards Waiver Request
Government Code Sec. 65915(e)(1) provides that a city or county may not apply any development
standard (including height limits) that will have the effect of physically precluding the construction of a density bonus project at the density permitted under the density bonus statute. For the Project, the Entitlement Approvals included the following development waivers consistent with Government Code Sec. 65915(e)(1); no change is proposed for these waivers:
(1) Waiver of General Plan Policy LU 16-15.13 public park dedication requirement (2) Waiver of Planned Community Text No. PC 11 (Newport Place) 30’ street setback requirement as well as the corresponding Covenant and Agreement Regarding Maintenance of Yards for an Oversized Building in Favor of the City of Newport Beach
Recorded May 16, 1977 in Book 12196, Page 750, O.R.
(3) Waiver of Planned Community Text No. PC 11 (Newport Place) 55’ height limit (4) Waiver of Newport Beach Municipal Code Section 20.18.030 (Table 2-3) private open space requirement (5) Waiver of General Plan Land Use Policy 6.15.7 maximum density requirement
(6) Waiver of Newport Beach Municipal Code minimum sidewalk width requirement
(7) Waiver of Newport Beach Municipal Code Section 20.18.030 (Table 2-3) minimum common open space requirement
Unit Type Total Units
Very Low Income
Units
Studio 25 5
1 Bedroom 89 6
2 Bedroom 79 1
Total 193 12
Residences at 1300 Bristol Street Affordable Housing Implementation Plan February 28, 2024
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Waiver of these requirements is necessary to accommodate the additional units permitted by the density bonus.
Income Limits and Examples of Eligible Tenants for Affordable Homes
Table 4 below shows the maximum income limits as determined by the U.S. Department of Housing and Urban Development and the California Department of Housing and Community Development for Very-Low-Income households with household sizes appropriate for the Project:
Table 4 Maximum Income Limits
The 12 affordable homes that Picerne will provide will be rented to eligible Very-Low-Income Households. As shown in Table 4, Very-Low-Income Households includes incomes ranging
from $50,250 per year for a one-person household to $77,500 per year for a five-person household,
consistent with the income limits set for Orange County, issued by the Department of Housing and Community Development on June 6, 2023. These income limits are updated annually. Higher income limits apply to larger families; those families however are not considered to be a
target market for the Project, where the unit mix consists of studios, one-bedroom, and two-bedroom apartment homes. As such these could include City employees, school district employees, health care professionals, restaurant and other retail workers, and other occupations which provide needed services to our
community. While household size, overtime pay, summer jobs, or second jobs may affect
eligibility, the income limits above are reflective of pay to many public or health care sector workers, as shown in Table 5 on the following page:
Household Size
Very Low Income
Units Maximum
Annual Income -
2023/2024
1 Person $50,250
2 Person 57,400
3 Person 64,600
4 Person 71,750
5 Person 77,500
Residences at 1300 Bristol Street Affordable Housing Implementation Plan February 28, 2024
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Table 5 Examples of Qualifying Salaries
The pay ranges shown above are as of 2023 and are subject to update. Retired persons, couples, or
young business professionals starting their careers may also qualify to rent the affordable homes at
the Project. In order to provide opportunities for workers to live in one of the affordable homes, the City could provide guidelines providing for acceptance of applications on a priority basis from classes of individuals who qualify under the income limits in effect. The guidelines could provide for priority treatment for City residents, City employees, employees of the local school district, and
employees of major health care institutions or other categories identified by the City for priority
treatment.
Rental Rate Limits for Affordable Homes
The 12 Very-Low-Income Units shall be rented at an affordable rent calculated in accordance with the provisions of Section 50053 of the Health and Safety Code. Government Code Section 65915(c)(1)(B)(i) requires that rents for units qualifying a project for a density bonus be set in accordance with Section 50053 of the Health and Safety Code. Per Health and Safety Code Section
50053, the gross rental payment for a Very-Low-Income unit is calculated based on 50% of Median Income which results in lower rents than those set using the applicable income limits in areas qualifying for the high-cost area adjustment. Additionally, Section 50053 limits affordable rent to 30% of total income for a Very-Low-Income household, as calculated in Table 6 on the following
page. That section also requires that the rent calculation for a studio unit assumes a one-person
household, a one-bedroom unit assumes a two-person household, and a two-bedroom unit assumes a three-person household. The calculated rents are then adjusted by a utility allowance as determined annually by the County
of Orange Housing & Community Services Department. As of October 1, 2023, the reduction for
the utility allowance is $149 per month for a studio unit, $163 per month for a one-bedroom unit, and $215 per month for a two-bedroom unit. The utility allowance assumes gas cooking, gas space
Position Pay Range
Information
Source Comments
Equipment Mechanic I $52,356-$77,268 City Will qualify for Very Low Income units
Police Dispatcher $63,372-$93,648 City May qualify for Very Low Income
units depending on household size
Utilities Specialist $55,332-$81,756 City May qualify for Very Low Income
units depending on household size
Clinical Support Tech I - Irvine OR $39,686-$60,985 Hoag Will qualify for Very Low Income units
Licensed Vocational Nurse (LVN) - HHH Home Health $53,144-$81,681 Hoag May qualify for Very Low Income
units depending on household size
Newport-Mesa Unified School District ("NMUSD")
Teacher
$67,116-$75,497 NMUSD Credentialed teacher with no advanced
education and up to 4 years
expereience will qualify for Very Low
Income units.
Campus Safety Facilitator #39-24 $47,831-$58,139 NMUSD Will qualify for Very Low Income units
Information Technology Technician #35-24 $56,867-$69,120 NMUSD Will qualify for Very Low Income units
Residences at 1300 Bristol Street Affordable Housing Implementation Plan February 28, 2024
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heating, gas water heating, water, sewer, and trash fees to be paid by the tenant.
Table 6 Maximum Rents by Bedroom Count
Picerne will enter into an affordable housing agreement, in recordable form, with the City prior to obtaining the first building permit for any residential unit. That agreement will ensure that the
maximum rents for the affordable apartment homes will be calculated using the methodologies as
utilized in Table 6. The rental rates shown will be updated prior to the commencement of rental activities and on an ongoing basis to reflect then-current income limits, utility allowances, and any changes in applicable regulations and statutes.
Unit Mix, Design, and Location of Affordable Homes While the exact location of each of the affordable homes within the Project site has not yet been determined, the affordable homes will be spread throughout the development to avoid concentration of affordable homes in any area. The affordable homes shall be comparable in the quality of
construction and exterior design to the market rate homes. As provided for in the PC-11, all affordable homes will have access to the facilities and amenities offered by the development.
Bedrooms
Maximum
Annual Rent
Maximum
Monthly Rent
Utility
Allowance
Affordable
Rent
Studio $13,418 $1,118 $149 $969
1 Bedroom 15,338 1,278 163 1,115
2 Bedroom 17,250 1,438 215 1,223