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Home My WebLink AboutSS2 - Draft Housing Element - PowerPoint44 June 8, 2021 Item No. SS2 Draft Housing Element Update City Council Study Session June 8, 2021 City Council Feedback From April 27t" Study Session • ADUs Increased to 1,000 units • Increased units at: • Banning Ranch — 1,475 (+100) units • Coyote Canyon — 1,000 (+220) units • Modified affordability assumptions • Buffer reduced to 5% • Reduce overall rezone increases • Add/Remove properties that do or do not want to be included Slide 1 Q1: Why can't we just plan for a limited number of 100% affordable housing projects? A: This approach is too restrictive as it would preclude mixed -income housing development. State law requires sites to be identified by APNs that are suitable for housing development at different income categories to meet RHNA need. City does not have substantial evidence to support such a specific housing plan since we do not have committed sites, committed financing, or entitlements in place. Q2: Why do we need a buffer? A: Not every project will meet the Housing Plan's affordability assumptions. When they do not, the City cannot deny that project. The difference between the affordability assumption and the project must be accommodated in the Housing Plan. If there is no "cushion" the City would be required to find additional sites to accommodate the need within 180 days. slide 2 Q&A (cont.) Q3: What is the recommended buffer? A: HCD recommends a 20% to 30% surplus buffer to avoid 180 -day rezone remedy. Q4: What is an inclusionary housing ordinance, and can one eliminate the buffer? A: It's a law that mandates a specific minimum number of affordable units in future projects. High percentages make housing developments difficult to finance and will render many projects financially infeasible. If the inclusion percentage closely matches the Housing Plan assumptions, the buffer could be reduced or eliminated. Q5: What law guides the ADU assumption? A: State law allows ADUs to satisfy RHNA based on past production, the need for the units, the resources or incentives available, and any other relevant factors determined by HCD. The accepted HCD methodology for Newport Beach results in 175 ADUs. Q&A (cont.) Q6: Can we boost the ADU assumption? A: Yes, but the City must have policies that incentivize construction to ensure the community meets the construction estimate. Q7: Can we boost ADUs even higher from 1,000 units to 1,500 units? A: Staff does not believe HCD will accept such a high number based on the City's past performance, incentives or other relevant factors. Q8: What if the community falls short of the ADU construction estimate? A: The City reports all housing production to HCD annually. If ADU construction falls short, the City will have to find and rezone other sites to meet the shortfall in approximately 2 to 3 years. An adequate buffer of sites would be important. Slide 4 Implementation: Overlays Concept: • An added opportunity • Would not disturb current zoning or uses • Provides housing development standards • Only exists to meet RHNA need • Once need is satisfied, it would no longer be available Timing: • Overlay developed concurrently with update of Land Use Element • Within 36 months from adoption of Housing Element update OUSING OVERLAY XISTING ZONING PROPERTY Housing allowed Housing not allowed Slide 5 r, Summary of Sites Inventory April 27th Council Draft RHNA ALLOCATION 21386 1,050 Accessory Dwelling Units 228 100 Pipeline Projects, 5th Cycle Sites 130 348 Rezone Strategies 2,504 829 Total Development Potential 21862 11277 Surplus (Buffer) 476 1 227 Percentage Over Need 20% I 22% 11409 41845 6 334 Z204 2, 682 3,540 6,873 5,750 91889 4,341 5,044 308% 104% Slide 6 Summary of Sites Inventory Council Feedback OPTION 1 1nYentG Area develop d. JE 8,017 FTotal 300 b,Moderate) 11000 (A) Ai rpo rt Area 165 1106 SS% 5046 546 SO 432 43 389 864 (B) West Newport Mesa Area 48 300,6 40% 3546 5'i 45 223 33 391 652 (C) Dover -Westcliff Rezone 20 35% 45% 3046 1596 30 63 — 32 — 116 212 Strategies (D) N ew po rt Ce nter A rea 163 6 1U% 6 40.6 3546 51: 45 257 37 441 735 (E) Coyote Canyon Area * 22 100% 40% 2546 1596 50 275 165 660 1,100 (F) Banning Ranch * 3.3 100% 40% 30% 1096 SD 443 148 885 1,475 Total development Potential 2,499 1,105 4,414 8,017 ADU's (Aggressive Approach) 680 300 20 11000 Pipeline Projects, Sth Cycle Sites 120 348 1,511 1,979 Rezone Strategies 1,699 457 2,883 5,038 Surplus/Deficit 113 55 3,1105 3,172 Percentage Over Need 5% 5% 213% 65M Summary of Option 1 Council Feedback RHNA ALLOCATION Accessory Dwelling Units Pipeline Projects, 5th Cycle Sites Rezone Strategies Total Development Potential Surplus (Buffer) Percentage Over Need 2,386 680 120 1,1699 2,499 113 5% 1,050 300 • ��A 1,105 11409 41845 20 111000 1,511 1,979 2,883 5,038 41#414 81017 55 31005 3,172 5% 213% 65% Slide 8 Summary of Sites Inventory OPTION 2 Larger Buffer / Higher Rezt.,,� RHNAALLOCATION 2,386 %850 %409 4,845 Area Revised % Redevelop 11 Affordabillity AffordabilityInventory Total x,261 Area Strategies Assumed Net Units T Net Units Total Net Urils .. Tota I Net Units Total Net 1.000 Pipeline Projects, 5th Cycle Sites 220 (A) Ai rp art Area 165 15% 6096 50% 10% 54 617 123 494 1,235 (0) West Newport Mesa Area 48 25% 6O% 40% 20% 40 193 97 193 483 Rezone (C) Dover -Westcliff 20 12% 60% 40% 20 40 39 19 39 97 Strategies (D)Newport Center Area 163 1596 4496 35% 59b 50 429 61 735 1,225 (E) Coyote Canyon Area * 22 100% 40% 25% 35 5o 275 165 664 1,100 (F) Banning Manch * 30 100% 40% 30% 30% 50 443 148 885 1.475 RHNAALLOCATION 2,386 %850 %409 4,845 Total Development Potential 2,796 x,261 4,547 8,594 ADl1's (Aggressive Approach) 680 300 30 1.000 Pipeline Projects, 5th Cycle Sites 220 348 1,511 1,979 Rezone strutegies 1,996 633 3,006 .5,63.5 Surplus{Deficit 410 211 3,138 3,749 Percentage Over Need 17% 20% 11 223% 77 6 Summary of Option 2 Larger Buffer / Higher Rezone RHNA ALLOCATION Accessory Dwelling Units Pipeline Projects, 5th Cycle Sites Rezone Strategies Total Development Potential Surplus (Buffer) Percentage Over Need 2,386 680 120 1,996 21861 410 17% 1,050 300 • 613 1,257 11409 41845 20 111000 1,511 1,979 3,006 5,615 4,588 8,594 211 3,138 20% 223 3,749 77% Slide 10 Summary of Sites Inventory OPTION 3 More ADUs and Affordable Projects RHNA ALLOCATION 2,386 1,050 1,11109 4,845 RevisedScenario 3,013 Focus Area Strategies 1,020 iw 30 1,560 Pipeline Projects, 5th Cycle Sites InventoryF 348 '1 1 Rezone Strategies k !1Total 3,393 3,824 F F Ftal Net Units Surplus/Deficit 627 306 Affordability Percentage Over Need 26% F' Y Y 1 (Above I Y (A)AirportArea 155 6% 140% 70% 30% 54 346 143 0 494 (B) West Newport Mesa Area 48 30% 4495 35% 5% 45 228 33 391 552 (C) Dover -Westcliff 20 35% 45% 30% 15% 30 63 32 116 212 Rezone Strategies (D) Newport Center Area 153 6% 140% 86% 20% 45 353 88 0 441 (E) Coyote Canyon Area * 22 50% 100% 80% 20% 50 444 110 0 550 (F) Banning Ranch * 30 100% 4495 30% 10% 50 443 148 885 1,475 RHNA ALLOCATION 2,386 1,050 1,11109 4,845 Total Development Potential 3,013 1,356 2,934 7,303 ADV's (Aggressive Approach) 1,020 450 30 1,560 Pipeline Projects, 5th Cycle Sites 120 348 1,511 1,979 Rezone Strategies 1,873 558 3,393 3,824 Surplus/Deficit 627 306 1,525 2,458 Percentage Over Need 26% 29% 109% 51% Summary of Option 3 More ADUs and Affordable Projects RHNA ALLOCATION Accessory Dwelling Units Pipeline Projects, 5th Cycle Sites Rezone Strategies Total Development Potential Surplus (Buffer) Percentage Over Need 2,386 680 120 1,873 3,013 627 W 1,050 300 • 558 1,050 306 29% 1,409 4,845 20 , 1,500 11511 11979 1,393 3,824 21934 71303 11525 2,458 108% 51% NOTE: This option requires multiple 100% affordable projects. Heavy City subsidies and intensive policy framework would be necessary for feasibility. Also, 1,500 ADUs will not be supported by HCD. Slide 12 Summary of Options Category Original Option 1 Option 2 Option 3 Accessory Dwelling Units 334 1/000 1/000 11500 Pipeline Projects, 5th Cycle Sites Z682 11979 1,979 11979 Rezone Strategies 6,873 5,038 51615 31824 Total Development Potential 9,889 8,017 81594 71303 Low/Very-Low Buffer 20% 5% 17% 26% Moderate Buffer 22% 5% 22% 29% Total Surplus units 5,044 3,172 3,749 2,458 Total Percentage Over Need 104% 65% V77% 51% Slide 13 No Net Loss Inclusionary Ordinance and Buffer Let's say the City adopts an inclusionary housing ordinance to require 15% low/very-low-income units on all housing projects. The Housing Plan expected 1,100 new units with 25% being low/very-low-income units and 15% being moderate -income units at the site. Housing Plan - Expected Developer X Project - Actual Difference 275 165 110 165 55 110 Now, we must take the difference from the buffer. SiM lmen[orv: Coyote Gnyon Area No Net Loss Inclusionary Ordinance and Buffer Remember this? Summary of Sites Inventory OPTION 1 Council Feedback Accessory Dwelling Units 680 300 20 1,000 Pipeline Projects, 5th cycle sites 120 348 1,511 1,979 Rezone strategies 1,699 457 2,883 5,038 Surplus (Buffer) 113 Percentage Over Need 5 Housing Plan — Expected Developer X Project —Actual Difference Remaining Buffer 55 3,005 3,172 5% 213% 65% Slide 3 275 165 110 3 The Developer X single project on Coyote Canyon will nearly wipe out the entire buffer proposed in Option 1. 165 55 110 -55 Slide 16 Summary of Options Category Original Option 1 Option 2 Option 3 Accessory Dwelling Units 334 1/000 1/000 11500 Pipeline Projects, 5th Cycle Sites Z682 11979 1,979 11979 Rezone Strategies 6,873 5,038 51615 3,824 Total Development Potential 9,889 8,017 81594 71303 Low/Very-Low Buffer 20% 5% 17% 26% Moderate Buffer 22% 5% 22% 29% Total Surplus units 5,044 3,172 3,749 2,458 Total Percentage Over Need 104% 65% 'W77% 51% Slide 17 City Council Considerations 1. Which option or mix would you like to go with? Any changes? 2. Policy Action 1K establishes an interim 15% as the inclusionary requirement. Any thoughts on the interim percentage? Staff will return to City Council on July 13 with an updated draft of the Housing Element, Slide 18 Tentative Schedule P L, TASK Environmental Impact Report begins City Council study session modified housing scenario 7 i Virtual community workshop on modified housing scenario Kimley-Horn to deliver updated Housing Element to City City Council study session on updated Housing Element Housing Element submitted to HCD for 60 -day review Airport Land Use Commission (ALUC) hearing City Council Meeting - Notice of Intent to Override ALUC 45 -Day public comment period open for EIR Housing Element Update Advisory Committee meeting Planning Commission public hearing City Council public hearing, ALUC override, and adoption of Slide 6 Housing Element update 44 Questions.? Thank you! Seimone Jurjis, Community Development Director Jim Campbell, Deputy Community Development Director Ben Zdeba, Senior Planner Dave Barquist, Kimley-Horn & Associates CDD@newportbeachca.gov