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Staff Report 240-10 (2)
CITY OF PALO ALTO Memorandum TO: HONORABLE CITY COUNCIL FROM: DATE: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT MAY 12, 2010 CMR: 240:10 REPORT TYPE: ACTION ITEM SUBJECT: Joint City CounciUPlanning & Transportation Commission Review and Direction Regarding the Comprehensive Plan Amendment and Housing Element Update As requested, the attached packet for this item is provided two weeks in advance of the Joint City Council/Planning & Transportation Commission meeting on May 12, 2010 to provide the Council and Planning & Transportation Commissioners ample time to review the City Manager's Report and all the attachments. 0,„„1/4 CURTIS WILLIAMS Director of Planning and Community Environment ES KEE Manager TO: HONORABLE CITY COUNCIL FROM: DATE: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT MAY 12, 2010 CMR: 240:10 REPORT TYPE: ACTION ITEM SUBJECT: Joint City Council/Planning & Transportation Commission Review and Direction Regarding the Comprehensive Plan Amendment and Housing Element Update EXECUTIVE SUMMARY The joint City Council and Planning and Transportation Commission (PTC) meeting on the Comprehensive Plan amendment process is intended to enable the City Council to provide direction to staff and the PTC for their continuing work in completing the work program initially adopted by the City Council in 2006. On March 3, 2010, a joint study session with the City Council and PTC was held to update the Council on progress in completing the work program for the Comprehensive Plan and to identify key issues requiring Council input. A follow- up session was planned to enable staff to return with additional information requested by the City Council and to identify specific questions for Council direction regarding key elements of the work program, most specifically: a) the approach to identifying housing opportunity sites in the housing element; b) proposed growth projections; c) the extent of revisions to the vision statements and key policies; and d) whether to expand the scope of the work program. PURPOSE AND RECOMMENDATION Staff requests direction from the City Council on various work items on the Comprehensive Plan prior to moving forward with preparation of the Comprehensive Plan Amendment. Staff recommends that the City Council direct staff to undertake the suggested approaches to each key issue identified in this report. BACKGROUND The City Council initiated the Comprehensive Plan amendment process in 2006. Funding for the project was allocated in 2007 and a consultant team selected in 2008. For the past two years, staff has been working with the consultant team and the Planning Commission on several work program elements, including the update of goals, policies and programs, background reports on relevant baseline topics, and two concept area plans. On March 3, 2010, the City Council and the PTC held a joint study session (see Attachments A and B) to discuss the status of the major components of the work program. At that study session, the City Council requested staff to 1) bring back to Council questions related to both the amendment and the Housing Element update that need further direction CMR: 152:10 Page 1 of 8 from the Council and 2) provide specific information that could assist the Council in developing direction for staff. Specifically, the City Council requested background on the following items, which are attached to this report: • Summary of SB375 (Sustainable Communities Planning Legislation) • Implications of Housing Element non-compliance • Information regarding Housing Element "self -certification" • Housing Element status for neighboring jurisdictions • Palo Alto Below Market Rate (BMR) Program Data • City correspondence with Association of Bay Area Governments re: RHNA • Vehicular availability for households near transit • Estimated student generation from City's RHNA • LEED for Neighborhood Development (LEED-ND) information DISCUSSION In this report, staff has framed several questions for the City Council related to different work elements of the Comprehensive Plan; each set of questions is followed by a "suggested staff approach" for Council consideration. The "suggested staff approach" contains the scope of work for specific items, the suggested timeframe for completion and any additional costs required to perform the tasks. A. Housing Element: Staff has made considerable progress in updating the City's Housing Element over the past year focusing on updating the population, household and housing data required for the Housing Element, evaluating of the effectiveness of the current element's programs and policies, conducting public outreach meetings through the Technical Advisory Group (TAG) process and analyzing strategies to identify effective housing inventory sites to meet the RHNA numbers. One of the most critical components of the Housing Element is the housing sites inventory list, which identifies parcels with zoning appropriate to allow for housing sufficient to meet the City's current Regional Housing Needs Allocation (RHNA) which is included in Attachment E5. Also attached to this report in Attachment E2 are newspaper articles and a summary of recent case law affecting the City of Pleasanton regarding the legal mandates of state housing law and RHNA compliance. Specific direction is requested from Council on the following issues to fulfill the Housing Element requirements: 1. Should the City of Palo Alto draft a Housing Element with a primary goal of providing adequate sites to accommodate all of the City's RHNA allocation?? 2. Should the City use a "bottoms -up" approach to define what kind and amount of housing can best be accommodated, consistent with the principles of locating housing in areas close to support services and transit, regardless of whether it ultimately complies with the RHNA allocation? 3. What criteria should be used to identify sites to include in the housing inventory, e.g., housing type, size, location, existing zoning, proximity to transit and pedestrian -oriented areas? CMR: 152:10 Page 2 of 8 4. Should the bulk of new multi -family housing be located near train stations and along El Camino Real, focusing on areas served by transit? Suggested Staff Approach: • Identify existing sites zoned for housing or mixed use in proximity to transit and services. • Evaluate increased housing potential in the California Avenue area as part of the California Avenue Concept Plan. • Explore working with Stanford to reassign up to 600 units from the County to the City for housing sites allowed under Stanford's Community Plan and General Use Permit, in conjunction with or following the Development Agreement for the Stanford University Medical Center expansion. • Explore potential housing inventory sites using LEED-ND (LEED for Neighborhood Development) criteria as a primary evaluation tool, particularly near transit and services (El Camino Real, Stanford, and University Ave.) • Include policies and programs to develop a concept plan for downtown, focusing higher density housing near the University Avenue multi -modal transit station. • Emphasize smaller size units and units for seniors to minimize housing impacts on schools and other public facilities. • Emphasize construction of affordable units. B. Growth Projections: Staff has identified three different' potential growth scenarios for jobs and housing development in Palo Alto through 2020 for evaluation in the Environmental Impact Report (EIR) for the Comprehensive Plan amendment. The first growth scenario would use ABAG Projections 2009 data (an additional 530 jobs and an additional 3,210 households) and the second growth scenario would use historic growth rates and "pipeline" (in process) projects for residential development (an additional 1,065 households) and employment projections recommended by the City's economic consultant based on ABAG Projections 2007 data which estimates an additional 5,321 jobs. The third scenario would be a low growth alternative that would be developed when the EIR for the Comprehensive Plan Amendment is prepared and would result in no net new impacts. Staffrequests that the Council provide guidance on the appropriate project scenario(s) to discuss with the public in a series of community meetings anticipated to be initiated later this year: 1. Should staff use ABAG Projections 2009 numbers to develop and analyze a project scenario with limited job growth and significant housing growth through 2020 or should CMR: 152:10 Page 3 of 8 a project scenario be prepared based on numbers generated by staff from the historical growth of population and pipeline projects of new housing development in the City and a forecast number for jobs recommended by the City's economic consultant? 2. Should the City's citywide growth limit for non-residential development be extended to 2020 as outlined in Policy L-8 of the 1998-2010 Comprehensive Plan that currently allows for up to approximately 2.38 million additional square feet of new non residential development, at least for evaluation in the EIR, or should the City set a more restrictive citywide growth limit for non-residential growth through 2020? Suggested Staff Approach: • Use the Population, Housing and Jobs forecast number through 2020 developed by staff and the consultant that take into account the historical growth of population, past and pipeline housing development in the City and recent local and national economic conditions. • Use the Citywide growth limits for non-residential development outlined in Policy L-8 of the 1998-2010 Comprehensive Plan. C. Vision Statements, Goals, Policies and Programs: The Planning and Transportation Commission (PTC) has indicated through its review of the Comprehensive Plan that significant revisions to the Comprehensive Plan format should be undertaken in order to create a clearer, more general, cohesive and less redundant policy document. This could substantially change the format of the existing plan and result in significant additional staff work and costs since the existing work program envisioned only limited changes to the current format and focused policy changes only on those specific areas identified by the work program. Staff requests that Council provide guidance on the following questions: 1. Should the Vision statements of the Comprehensive Plan and supporting policies and programs be modified comprehensively or should changes be limited to key substantive work program priorities and to update clearly outdated policies and programs? 2. Should staff and the PTC extensively "word -smith" policies and programs as well? Suggested Staff Approach: • Revise the Vision Statements (in conjunction with the PTC subcommittee) as needed for clarity and key concepts. • Update the Policies and Programs for consistency with the Vision Statements and to eliminate or update obsolete policies and programs. Add new policies and programs where needed to reflect changes to the Vision Statements or to address new issues. CMR: 152:10 Page 4 of 8 • Allow the PTC subcommittee and staff to determine the need for fine grain wordsmithing. • Perform Comprehensive Plan re -organization and additional review with consultant support. Cost for this additional consultant work is estimated at $20, 000. D. Additional Scope of Work: In addition to the potential to expand the work scope to provide extensive revisions to the Comprehensive Plan format, policies, and programs, other potential work program elements have been identified that are outside of the original scope of work and could add significant cost and time to the planning effort. Based on the outcome of the joint City Council and PTC meeting of March 3, 2010, staff has outlined the following questions for Council to provide guidance. The suggested staff approach discusses the time frame and costs associated with each of these additional tasks. 1. Should staff give priority to reviewing/revising the South El Camino Real Guidelines within the next year? 2. Should (or how should) LEED-ND (LEED for Neighborhood Development) be used in updating the Comprehensive Plan? 3. Should the following tasks be added to the existing work program? o University Avenue/Downtown Area Concept Plan o South El Camino Real Area (from Charleston to San Antonio Rd) Concept Plan o High Speed Rail land use scenarios o Sea -Level rise study and mitigation measures o Housing at Stanford Shopping Center site Suggested Staff Approach: • Modify 4-5 key components of the South El Camino Real Design Guidelines (setbacks for different streets, land uses, height step backs, break-up building length, and retail frontage); estimate $25K -$30K design consultant cost. • Develop a policy for inclusion in the Comprehensive Plan supporting preparation of a University Ave. /Downtown Area Concept Plan at a later date, and that restricts rezoning for residential intensification unless/until the Concept Plan is approved. Approximate consultant cost for preparing the Concept Plan is estimated at $140K • Develop a policy for inclusion in the Comprehensive Plan supporting preparation of a South El Camino Real Area Concept Plan (from Charleston to San Antonio portion of El Camino Real) at a later date, and that restricts rezoning for residential intensification unless/until the Concept Plan is approved. Approximate consultant cost for preparing the Concept Plan is estimated at $135K • Develop appropriate policies in the Comprehensive Plan to address key High Speed Rail CMR: 152:10 Page 5 of 8 (HSR) issues (coordination with other agencies, design parameters for review, position on a HSR station in Palo Alto, etc) and revisit these in a year, to see how/if the HSR project progresses. Consultant cost for preparation of land use scenarios is estimated at $100+K, if desired, and should be a separate work item from the Comprehensive Plan, given the HSR timeframe. • Develop maps of potential sea -level rise and policies for future considerations, but not identify mitigation measures at this point; provide direction for preparing appropriate studies within the Comprehensive Plan timeframe. fl • Identify policies in the Comprehensive Plan that are already consistent with the policies of LEED-ND, and add policies if necessary. • Evaluate area concept plans under LEED-ND principles. • Develop a policy for inclusion in the Comprehensive Plan supporting preparation ofa concept plan to include housing at the Stanford Shopping Center site at a later date. Approximate consultant cost for preparing the concept plan is $11 OK. PUBLIC OUTREACH Several community workshops and public meetings will be conducted throughout the rest of 2010 to discuss the Comprehensive Plan Amendment and the Housing Element update. The City also maintains a website (www.paloaltocompplan2020.org) that provides information about the Comprehensive Plan including the Housing Element. Meeting outreach will include neighborhood associations, business groups, the school district and other interested parties. Staff also intends to integrate the Comprehensive Plan effort into a City Facebook page to allow for real-time updates of Comprehensive Plan information. POLICY IMPLICATIONS The Comprehensive Plan amendment work plan process enables the plan to be updated to focus on current City policy and to adequately reflect the City's vision consistent with or modified using the goals of the existing Comprehensive Plan. The updated plan is intended to provide an effective guide for future growth in the City. RESOURCE IMPACTS The Council approved a budget of $850,000 in April 2008 for completing the amendment work program. The City Council's adoption of the 2010 budget extended the Comprehensive Plan Amendment work schedule by one year and decreased the Comprehensive Plan Amendment budget by $75,000 for fiscal years 2009/2010 and 2010/2011. Expansion of the work program would require additional resources as outlined above and would likely lengthen the schedule for completion. Funding is not currently available for these tasks. ENVIRONMENTAL REVIEW This report to the City Council is not considered a project pursuant to Section 21065 of the California Environmental Quality Act. CMR: 152:10 Page 6 of 8 PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: ATTACHMENTS Attachment A: Attachment B: Attachment C: Attachment D: Attachment E: Attachment F: CHITRA MOITRA Planner 413":""4 CURTIS WILLIAMS Director of Planning and Community Environment aittAuda-0A-1-- P ‘,JAMES KEENE City Manager CMR: 152:10 March 3, 2010 Joint Study Session regarding Comprehensive Plan Amendment Work Program and the Approved Work Program Synopsis of March 3, 2010 Joint Study Session meeting regarding Comprehensive Plan Amendment Work Program and the Approved Work Program Work Program Schedule Brief Summary of SB375, Joint Policy Committee Policies: The Bay Area Implementation of SB375 (September 2009) and League of California Cities, "Technical Overview of SB375 (January 2009) 1) Brief on Housing Element Non -Compliance 2) Articles regarding City of Pleasanton Housing Element Court Decision on Housing Caps and California Housing Community & Development (HCD) Press Release on the Court Decision on Housing Caps 3) Overview of SANDAG's Housing Element Pilot Self Certification Process (Full report can be downloaded at: http://www.paloaltocompplan2020.org/document/sandag-housing-element- self-certification-report-legislature) 4) Housing Element Compliance Report of Neighboring Cities 5) Palo Alto Regional Housing Needs Allocation (RHNA) 2007-2014 1) Appeal Letter from Mayor to Association of Bay Area Governments (ABAG) and other City correspondence with ABAG re: Regional Housing Needs Allocation (RHNA) CMR: 152:10 Page 7 of 8 2) CMR: 389:07 October 15, 2007 Study Session re: ABAG RHNA for Palo Alto and Housing Element Requirement Attachment G: Attachment H: Attachment I: Attachment J: City of Palo Alto Below Market Rate (BMR) Units Profile 1) Vehicular Availability for Households Near Transit (2000 Census) 2) Executive Summary of Effects of TOD on Housing, Parking and Travel, Transit Cooperative Program Research Report #128 (Full report can be downloaded at: http : //www.paloaltocompplan2020.org/document/effects-tod-housing-parking- travel) Potential Student Generation data in relation to RHNA requirement 1) A review of LEED-ND Rating System and its Compatibility with Existing Green Building Regulations and Comprehensive Plan. 2) LEED-ND Checklist. CMR: 152:10 Page 8 of 8 ATTACHMENT A TO: FROM: DATE: REPORT TYPE: SUBJECT: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT MARCH 3, 2010 CMR: 152:10 STUDY SESSION JOINT CITY COUNCIL/PLANNING & TRANSPORTATION COMMISSION STUDY SESSION REGARDING THE COMPREHENSIVE PLAN AMENDMENT AND HOUSING ELEMENT UPDATE EXECUTIVE.SU MARY The purpose of the study session is for staff and the Planning and Transportation Commission (PTC) to update the City Council on progress in completing the work program for the Comprehensive Plan Amendment and Housing Element. The Comprehensive Plan provides the basis for the City's zoning ordinance and development decisions, the Capital Improvements Program (CIP), transportation programs, economic development efforts, environmental sustainability measures, and a host of other actions by staff, various boards and commissions, and the City Council. The City Council, in response to several issues and trends, particularly those related to a rapid increase in housing development and loss of commercial uses and land, initiated the Comprehensive Plan Amendment process in 2006. The Amendment was not intended to overhaul the Plan, but to focus on preservation of commercial uses and land, provision of retail and community services to support new residential growth, incorporation of sustainability concepts, update of the housing element, and preparation of concept plans for the East Meadow area and California Avenue/Fry's area. The joint City Council and Planning and Transportation Commission study session provides an opportunity for the City Council and the PTC to discuss the status of the major components of the work program for the Comprehensive Plan amendment and the Housing Element update. Staff and the PTC have identified five primary areas of discussion for the study session: 1. Vision Statements, Policies and Programs 2. Growth Projections 3. Housing Element 4. Scope of Work 5. Concept Plans CMR: 152:10 Page 1 of 12 Brief summaries of each topic are provided in the report. At a follow-up study session, Council may then provide direction to staff and the PTC regarding these and other work items. Staff anticipates that the Concept Plans will be presented to Council in the spring or summer of 2010, a draft Housing Element will be prepared shortly thereafter, and the entire Comprehensive Plan Amendment, including the accompanying Environmental Impact Report, will be completed in early 2012. PURPOSE AND RECOMMENDATION The purpose of the study session is for staff and the Planning and Transportation Commission (PTC) to update the City Council on progress in completing the work program for the Comprehensive Plan Amendment and Housing Element. Key policy issues are identified as background for the study session, and a follow-up session is planned to allow for City Council direction regarding the implementation of the work program, most specifically in the areas of: a) the extent of revisions to vision statements and key policies; b) proposed growth projections; c) the approach to identifying housing opportunity sites in the housing element; and d) whether to expand the scope of the work program. No Council or Commission action is required or may be taken at a study session. Staff recommends that the Council and PTC discuss the work program and key issues, and provide questions and direction for a follow-up study session, to be scheduled within the coming two months. BACKGROUND The City's Comprehensive Plan and Housing Element are required planning documents under State law. The Comprehensive Plan provides the basis for the City's zoning ordinance and development decisions, the Capital Improvements Program (CIP), transportation programs, economic development efforts, environmental sustainability measures, and a host of other actions by staff, various boards and commissions, and the City Council. State law requires that a general (or comprehensive) plan include a minimum of seven elements, such as Land Use, Circulation, and Housing. The Housing Element responds to State requirements to provide for adequate zoning to accommodate housing for households of varying income levels, as well as programs and policies to assure fair housing practices and housing services. Evaluation of Palo Alto Comprehensive Plan 1998-2010 The City's existing Comprehensive Plan covers the timeframe of 1998 to 2010, and provides for all State -mandated plan elements plus a Business and Economic Element. A Comprehensive Plan is usually in need of updating every 10 years or so, as circumstances change and policies and programs become obsolete or new ones are required. Many of the current Plan's goals, policies and programs remain relevant today and have been supported by improvements and projects over the past 12 years, but changed conditions and less successful projects led to the Council's direction to update the Plan. Examples of successful implementation of the existing Comprehensive Plan could include: • Creation of a significant number of affordable and senior housing projects • The redevelopment of the South of Forest Area (SOFA) to a mixed use, mixed housing, pedestrian and bicycle -friendly community • Additional recreation and cultural facilities, such as the Mayfield Soccer Complex, Heritage Park, and the Jewish Community Center • Preparation and initial implementation of the City's Climate Protection Plan • Pedestrian and bicycle facilities such as the Homer Tunnel and the Waverley bridge • The approval of three new neighborhood grocery stores CMR: 152:10 Page 2 of 12 • Preservation and restoration of several historic structures using transferable development rights and other incentives On the other hand, examples of other projects and improvements were less than successful with some potential long-term adverse effects, such as: • The loss of the Hyatt Rickey's Hotel and an attendant loss of transient occupancy tax revenue • Conversion of other commercial and industrial sites to residential projects, again reducing the City revenues and job base • Lack of a cohesive planning framework for new projects in south Palo Alto, resulting in development that is sometimes not well integrated into the community fabric of street connections or urban design • Lack of provision of commercial and public services commensurate with the new housing development • Little accommodation for significant economic development opportunities, particularly those that enhance City revenues Staff believes that the primary driver of some of these adverse changes was the 1998-2010 Comprehensive Plan focus on housing to the detriment of commercial and industrial uses. When that Plan was prepared, the City had a very strong office market and a weak housing market, and the Plan compensated by placing a priority on housing shortly before housing became a highly profitable land use. Some of these concerns were addressed with zoning changes that arrested the change in land use from commercial to housing, but the overall Comprehensive Plan approach remains to be refocused. It will be important, as the City updates the Comprehensive Plan, to provide an appropriate balance of land uses, services, and economic development to lead the City to 2020. At the same time, climate change has become a major theme at the local, regional, statewide, and national level, altering lifestyles and development patterns over the coming 10 years of the updated Comprehensive Plan. State Senate Bill 375, in particular, will provide incentives (and possibly regulation) to encourage measures to reduce vehicle miles traveled and to facilitate compact, higher density development in walkable, transit adjacent areas. Work Program The City Council, in response to many of the changes and projects noted above, initiated the Comprehensive Plan Amendment process in 2006 with approval of a Colleague's Memo that outlined the general parameters of the work program. Funding for the project was allocated in 2007 and a consultant team selected in 2008. At a joint study session with the Planning and Transportation Commission (PTC) held on July 28, 2008, City Council reviewed and finalized the work program (Attachment A). The primary purposes of the amendment were stated as: 1. to extend the horizon year of the Plan to 2020; 2. to update baseline data and growth projections; 3. to modify the vision statements, policies and programs as needed to address the focus of the Comp Plan Amendment; 4. to ensure the retention of sufficient land for neighborhood -serving retail uses and commercial growth; 5. to adequately mitigate impacts of increased housing on community services such as parks, libraries and schools; and CMR: 152:10 Page 3 of 12 6. to address the City's commitment to climate protection and sustainability. The work program also called for the development of Concept Plans for the East Meadow Circle/Fabian Way/ West Bayshore area and the California Avenue area (including the existing Fry's Electronics site and adjacent properties) for inclusion in the amended Comprehensive Plan, to determine appropriate future land uses, circulation, and services in these two areas. Finally, updating the City's Housing Element was included as part of the work effort. The Council indicated at the time the work program was adopted that the amendment was to continue much of the direction of the 1998 Comprehensive Plan and to underscore its major themes, including: • Building Community and Neighborhoods • Maintaining and Enhancing Community Character • Reducing Reliance on the Automobile • Meeting Housing Supply Challenges • Protecting and Repairing Natural Features • Meeting Residential and Commercial Needs • Providing Responsive Governance and Regional Leadership The Council allocated $850,000 for this work effort over a four year period, which has since been extended one year due to budget constraints. This budget and timeframe is premised on retaining the focused scope outlined at the time and further discussed below. The City's update of the Housing Element was also part of the work scope, but consultant funding was not provided, as the document is to be prepared by staff. Further background on the Housing Element update is provided in the discussion below. DISCUSSION The joint City Council and Planning & Transportation Commission (PTC) study session provides an opportunity for the City Council and the PTC to discuss the status of the major components of the work program for the Comprehensive Plan amendment and the Housing Element update. At a follow-up study session, Council may then provide direction to staff and the PTC regarding specific work items that are in process. Staff has included a draft schedule (Attachment B) for the work program that identifies the major work scope components and a timeframe for their completion. Staff and the PTC have identified five primary areas of discussion for the study session: 1. Vision Statements, Policies and Programs 2. Growth Projections 3. Housing Element 4. Scope of Work 5. Concept Plans Each of these topics is discussed below, and the PTC members will further explain some of their specific concerns about the initial three key policy issues. Staff has identified the extent of the scope of work as an additional issue requiring clarification from Council. The status of the Concept Plans is also discussed below, and each will be coming forward to the Commission and Council in greater CMR: 152:10 Page 4 of 12 detail in the spring and summer of this year. More information about these items will be provided to the PTC and Council at the follow-up study session, along with responses to questions raised at this meeting. 1. Vision Statements, Policies, and Programs The PTC discussed the major themes and vision statements (Attachment C) of the existing Comprehensive Plan during two separate meetings, held in September and October of 2009, focusing on the overall framework of the plan and the interrelationship between the vision statements of each element of the Comprehensive Plan. Commissioners made specific recommendations for changes to each element's vision statement (Attachment D) and also made general recommendations regarding modifying the vision statements, including the following: • The style of the vision statements should be more cohesive; • Vision statements should be realistic and not overarching or too general; • The language of the vision statement should be clearer; and • The vision statements for each element should reflect a balance between existing conditions and future growth. As part of the review, the PTC has indicated that revisions to the Comprehensive Plan format should be undertaken in order to create a clearer, more general, cohesive and less redundant policy document. This could involve rearranging chapters and elements and substantially changing the format of the existing plan and would result in significant additional staff work and costs. The work program envisioned only limited changes to the existing format and focused policy changes only on those specific areas identified by the work program. The staff and consultant resources allocated to the work program are based on that direction from Council. 2. Growth Projections Staff discussed draft population, housing and employment growth projections to be considered in the Comprehensive Plan through 2020 at three separate PTC meetings in late 2008 and early 2009. Staff proposes to evaluate three different growth scenarios for jobs and housing development through 2020 and to evaluate those three scenarios in the Environmental Impact Report (EIR). One growth scenario would use ABAG Projections 2009 data and a second growth scenario would use historic growth rates and "pipeline" (in process) projects for residential development and employment projections would be based on data developed by the economic consultant for the Comprehensive Plan, Advanced Development Economics. Each of these scenarios is further described below. A third scenario would be a low growth alternative that would be developed when the EIR for the Comprehensive Plan Amendment is prepared and would result in no net new impacts. ABAG Projections 2009, released last year, is the most recent edition of ABAG's long-term forecast of population, households, and employment. ABAG Projections 2009 adjusted the regions and local employment projections to reflect the economic climate during the last half of 2008. Table 1 shows ABAG's projected employment, population and households for the City's jurisdictional boundary and sphere of influence (SOI) through 2020. CMR: 152:10 Page 5 of 12 Table 1 ABAG Projections 2009 City of Palo Alto EMPLOYMENT 2000 2010 2020 Jobs (City)* 86,960 76,480 77,010 Jobs (SOI)** 107,950 97,300 99,280 City of Palo Alto POPULATION AND HOUSEHOLDS 2000 2010 2020 Population (City)* 58,598 61,600 70,400 Population (SOI)** 71,914 76,400 86,100 Households (City)* 25,216 26,700 29,910 Households (SOI)** 28,424 30,350 33,870 * City Jurisdiction ** City Sphere of Influence ABAG 2009 projects minimal "net" job growth from 2010-2020, indicating the slow recovery from the current economic recession and that substantial employment growth will mostly occur after 2020. Staff notes that the Stanford University Medical Center expansion is scheduled for completion after 2020. Projections 2009 assumes a population growth rate of approximately 14% from 2010-2020, while historical Census data shows the City of Palo Alto's population has only grown by approximately 4.7% over the last 30 years (1970-2000 Census data). Although Palo Alto experienced significant new housing development from 2000 — 2008, that growth rate has now decreased due to changing economic conditions. Staff has consistently maintained to ABAG the accelerated growth in the period from 1997-2008 is unlikely to be sustained given Palo Alto's limited land availability and existing redevelopment potential, and thus proposes using the Population and Household growth in ABAG Projections 2009 as the high -growth scenario for the EIR. Based on historical development patterns, household and population estimates of the State Department of Finance from 2001-2008, and known past and "pipeline" residential development, staff forecasts a more modest population and household growth through 2020. Historical Census data shows the City's population grew 1.2% from 1980 to 1990 and an additional 4.8% from 1990 to 2000. Known residential projects either in the entitlement process or entitled that have not received building permits will generate approximately 400 dwelling units in the next several years. Table 2 shows staff's developed total population, household and housing unit forecasts through 2020. CMR: 152:10 Page 6 of 12 Table 2 Staff Population and Household Projections Staff Projections for City of Palo Alto Jurisdiction 2000 2010 2020 Total Population* 58,598 62,700 65,400 Households** 25,216 26,913 27,978 Housing Units 26,048 27,800 28,900 * Total Population includes household population and persons living in group quarters. ** Staff projected Households data with the assumption that 3.2% of housing units in Palo Alto is unoccupied or vacant derived from civilian vacancy rate based on Census 2000 benchmark. Staff projects a 4.3% population increase from 2010-2020, which is indicative of historical population growth trends and purposes to use these projections as the "mid -growth scenario" for population and housing growth. Staff anticipates further input from the City's economic consultant (Applied Development Economics) regarding the potential for job growth through 2020 prior to further discussion by the City Council and PTC. Previous forecasts prepared by the consultant did not reflect the full extent of the recent economic downturn. Staff will develop the third scenario of low growth alternative that would result in no new impacts during the preparation of the DEIR. A summary of the ABAG and staff proposed growth is detailed in Table 3. • Table 3 Proposed High and Mid Growth Scenarios for Comprehensive Plan Amendment DEIR City of Palo Alto *EMPLOYMENT 2000 2010 2020 Staff Jobs Growth (based on 2008 data)**** 86,960 76,774 82,095 ABAG Jobs Growth 86,960 76,480 77,010 City of Palo Alto *POPLTLATION and HOUSEHOLDS 2000 2010 2020 High Growth Population** 58,598 61,600 70,400 Mid Growth Population** 58,598 62,700 65,400 High Growth Households 25,216 26,700 29,910 Mid Growth Households*** 25,216 26,913 27,978 High Growth Housing Units 26,048 27,552 30,864 Mid Growth Housing Units 26,048 27,800 28,900 City of Palo Alto Jurisdictional Boundary. Total Population includes household population and persons living in group quarters. Staff projected Households data with the assumption that 3.2% of housing units in Palo Alto are unoccupied or vacant derived from civilian vacancy rate based on Census 2000 benchmark. CMR: 152:10 Page 7 of 12 **** To be updated by economic consultant 3. Housing Element Considerable progress has been made to update the City's Housing Element over the past year. Staff work on the Housing Element has focused on updating the population, household and housing data required for the Housing Element and evaluation of the effectiveness of the current element's programs and policies. An ad hoc Housing Element Technical Advisory Group (TAG), representing stakeholders and organizations concerned about housing growth and policy, was formed in late 2008 and has met regularly to discuss housing issues and policies, to evaluate housing strategies and programs, to assess impacts of various housing types and locations, and to enable ongoing public involvement in the Housing Element process. The PTC discussed the current Housing Element's vision, goals and key policies at two study sessions last year. Main policy concerns for the commissioners that were not sufficiently addressed in the current Housing Element included: • focusing new housing opportunities on underserved needs; • considering balancing housing needs with city and school resources and traffic capacity; • ensuring preservation of neighborhood character, particularly single family homes; and • changing the paradigm that housing is the preferred land use and should be located in most areas of the City. The latter concern is seen as implicit in the phrase "including converting non-residential lands to residential or mixed use" from the existing Housing Element vision statement. A critical component of the Housing Element is the housing sites inventory that identifies how the City will meet its current Regional Housing Needs Allocation (RHNA). The State requires that housing elements demonstrate how the jurisdiction can accommodate the RHNA allocation by planning and zoning adequate sites, although the RHNA does not assume that the zoned residential lands will be built. The PTC has specifically requested direction from Council regarding criteria to identify sites to include in the RI-INA inventory, and whether the City should attempt to comply with the RI-INA allocation. The City contested the RI-INA process and appealed the resultant RHNA allocation to ABAG in 2008 (Attachment E). Currently the City would need to identify sites for approximately 2,100 units in order to meet its RHNA allocation, as depicted in Table 4. There are approximately 315 units currently in the review process that could be placed on the inventory, which would reduce the RHNA to about 1,800 units. Staff has conducted a preliminary analysis of sites that have redevelopment potential and are zoned for higher density residential uses or are zoned to allow higher density residential development in a nixed use configuration and could be included in the sites inventory without a zone change (Attachment F). This excludes approximately 304 housing units from the Fry's site currently under evaluation as part of the California Avenue Concept Plan, since the site would not be available for redevelopment until after 2014, following the 2001-2014 housing evaluation period. CMR: 152:10 Page 8 of 12 Table 4 Status of Palo Alto's Regional Housing Needs Allocation (RHNA) RHNA for City of Palo Alto (2007-2014 Housing Element) 2,860 units Housing Built or Building Permit Issued (since Jan 2007) 786 Housing currently In Process* 315 Potential Housing on existing Residentially Zoned Sites 369 Potential Housing in Zoning Districts that could accommodate Mixed Use Development 312 Total 1,782 units RHNA Deficiency 1,078 units * In process includes projects entitled without building permits, in the entitlement process or in the preliminary entitlement process. As Table 4 depicts, this leaves a deficiency of almost 1,100 units. Some options that could be considered to address this shortfall include: • Working with Stanford to reassign up to 600 units from the County to the City for housing sites allowed under Stanford's Community Plan and General Use Permit, in conjunction with` or following the Development Agreement for the Stanford University Medical Center expansion; • Increasing housing potential in the California Avenue area as part of the California Avenue Concept Plan; • Developing a concept plan for downtown and focusing higher density housing near the University Avenue multi -modal transit station; and/or • Evaluating other sites throughout the City for rezoning for higher density housing. Lack of a State -certified housing element has several potential implications, including litigation or loss of potential funding for affordable housing or transportation grants. Funding consequences will likely increase over the coming years as SB375 is implemented, but at this time are not seen as highly risky, given the lack of State funds available. Litigation is highly unusual, and is generally not pursued so long as a city is making a sincere attempt to prepare its housing element. Staff anticipates development of alternate housing scenarios and assessment of related impacts for presentation to the PTC and Council in the summer of 2010. 4. Scope of Work In addition to the potential to expand the work scope to provide extensive revisions to the Comprehensive Plan format, policies, and programs, other potential work program elements have been identified that are outside of the original scope of work and could add significant cost and time to the planning effort. These include: 1) providing concept plans for the downtown and/or South El Camino Real areas, 2) evaluating and incorporating High Speed Rail land use scenarios; and/or 3) providing details of potential mitigation of sea level rise impacts. Staff expects to develop general policy level guidance and future study of all of these items within the current work scope, but if a greater level of analysis and discussion is desired, budget and schedule would be affected substantially. Staff estimates that to fully address any one of these work items would require increased budget of $75,000-$100,000 and could be considerably more, depending on the level of CMR: 152:10 Page 9 of 12 technical analysis required. 5. Concept Plans Three neighborhood workshops and stakeholder meetings and interviews have been completed for both the East Meadow Circle (Attachment G) and California Avenue (Attachment H) Concept Plan areas. A preferred land use alternative has been developed for the East Meadow Circle concept plan area and the PTC reviewed and commented on that alternative on February 10, 2010. The preferred alternative focuses on enhancing non-residential development opportunities, limiting housing, and providing for critical pedestrian and bicycle connections to residential areas and to the Baylands. Staff will be returning to the PTC in April or May with additional information and revisions to the alternative based on comments received at that meeting. It is anticipated that a PTC recommendation for the East Meadow concept plan will be forwarded to City Council in late spring. Three potential land use scenarios for the California Avenue area were presented at a third and final community workshop held on February 2, 2010. The alternatives generally include some increased housing density or mixed use development, but with different options regarding the level of intensity and the treatment of the Fry's site. Options are also outlined to provide additional parking and open space opportunities. These three land use alternatives for the California Avenue Concept Plan area will be presented to the PTC this spring for their recommendation of a preferred land use alternative with Council discussion anticipated this summer. The two draft Concept Plans will be incorporated in the Draft Comprehensive Plan Amendment and evaluated in the Environmental Impact Report (EIR). The Concept Plans also have implications for the Housing Element in that they will either provide opportunities for additional housing or further limit housing options. NEXT STEPS Attachment B outlines an anticipated schedule for preparation of the Comprehensive Plan Amendment and the Environmental Impact Report. Concept Plans The PTC is expected to complete its review and recommend to the City Council a preferred land use alternative for both Concept Plan areas by mid 2010. The land use concept plan for each area that is supported by the City Council will then be analyzed in the Environmental Impact Report for the Comprehensive Plan Amendment. Vision Statements, Policies, and Programs The PTC will craft text changes to the goals, policies and programs for each individual element, including developing new policies and programs to address the areas of concern identified in the work program. A major component of work in the next year will be to incorporate sustainability concepts into the existing Comprehensive Plan. Housing Element To encourage broad participation, two community -wide meetings will be held in mid- 2010 to gather input from the general public on housing issues, goals, and policies and programs. Staff will also convene a focus group, consisting of housing developers, commercial "mixed -use" developers, architects and other housing development professionals, to discuss the effectiveness of existing and proposed programs. The City Council will review the draft Housing Element in the summer of 2010, CMR: 152:10 Page 10 of 12 following PTC review. The draft element would then be forwarded to the State for an initial review for compliance with State regulations. Citywide Community Workshops The City will sponsor at least three citywide community workshops to engage the public in the amendment process by presenting information regarding the vision of the Comprehensive Plan, the fundamentals of sustainable growth and the availability of City services to accommodate future growth. In addition, as mentioned above, the City will hold two workshops on the Housing Element. These citywide community workshops will begin in the spring of 2010 and extend throughout the year. Speaker Series In addition to the community workshops, staff will continue over the remainder of the year to invite various experts in land use planning, transportation, and urban design to provide insight and guidance to both decision makers and the public prior to completion of the Comprehensive Plan amendment. The presentations include such topics as recent state legislation regarding climate change, smart growth principles, infill development, urban design, and land use and transportation linkages. Draft Comprehensive Plan Amendment/EIR Staff anticipates PTC and City Council review of the draft Comprehensive Plan Amendment in 2011 with hearings on the Draft Environmental Impact Report (DEIR) in late 2011. The Comprehensive Plan Amendment, including changes to the Housing Element, is scheduled to be adopted by the City Council in mid 2012. PUBLIC OUTREACH As noted above, several community workshops and public meetings will be conducted to discuss the Comprehensive Plan Amendment and the Housing Element update. The City also maintains a website (www.paloaltocompplan2020.org) that provides information about the Comprehensive Plan including the Housing Element. Meeting outreach will include neighborhood associations, business groups, schools, and other interested parties. Staff also intends to integrate the Comprehensive Plan effort into a City Facebook site to allow for real-time updates of Comprehensive Plan information. POLICY IMPLICATIONS Although this study sessions will result in no policy actions, the Comprehensive Plan amendment process enables the Comprehensive Plan to be updated to focus on current City policy and to adequately reflect the City's vision consistent with or modified from the goals of the existing Comprehensive Plan. The updated plan is intended to provide an effective guide for future growth in the City. RESOURCE IMPACTS There are no fiscal impacts resulting from this report. The Council approved a budget of $850,000 in April 2008 for the amendment process. The City Council's adoption of the 2010 budget extended the Comprehensive Plan Amendment work schedule by one year and decreased the Comprehensive Plan Amendment budget by $75,000 for fiscal years 2009/2010 and 2010/2011. Staff expects to complete the Comprehensive Plan Amendment work program within the current staffing structure CMR: 152:10 Page 11 of 12 and revised budget. However, expansion of the work program would require additional resources and would likely lengthen the schedule for completion. ENVIRONMENTAL REVIEW This report to the City Council is not considered a project pursuant to Section 21065 of the California Environmental Quality Act. PREPARED BY: DEPARTMENT HEAD: CITY MANAGER APPROVAL: ATTACHMENTS Attachment A: Attachment B: Attachment C: Attachment D: Attachment E: Attachment F: Attachment G: Attachment H: Senior Planner CURTIS WILLIAMS Director of Planning any unity Environment JAMES `4 E City Manager CMR: 323:08 Regarding Comprehensive Plan Amendment Work Program and the Approved Work Program Work Program Schedule Existing Comprehensive Plan Vision Statements PTC Comments on Vision Statements 2008 City Appeal Letter to ABAG regarding RHNA Allocation Existing Sites Zoned for Housing or Mixed Use East Meadow Concept Plan Area Map California Avenue/Fry's Concept Plan Area Map CMR: 152:10 Page 12 of 12 Approved Comprehensive Plan Amendment Work Program 1. Update Base Conditions and Growth Projections • Incorporate recent planning studies/new data into base conditions • Identify a realistic growth rate for development through 2020 2. Amend Land Use Map and Land Use Designations • Prepare land use evaluation for East Meadow Circle/Fabian Way/ West Bayshore area; identify land use and zoning changes • Prepare land use evaluation for existing Fry's Electronics site and adjacent properties: identify land use and zoning changes • Evaluate existing definitions for non-residential land use designations and determine if housing should be restricted or disallowed under those designations 3. Review Pertinent Policies and Programs • Scan all programs for relevance and clarity • Focus on policies that allow conversion of non-residential land to residential uses • Add or strengthen policies that limit the loss of retail serving uses • Incorporate policies and programs addressing or strengthening provision of services where applicable • Incorporate Sustainability Goal with relevant policies and programs from City's Climate Protection Plan underscoring City's commitment to reduce global warming • Identify general areas for new parks and community facilities • Enhance and integrate a pattern of walkable neighborhoods • Update Housing Sites Inventory/Housing Element • Develop policy regarding design standards for private streets 4. Environmental Analysis • Prepare Environmental Impact Report for amendment •. Provide thorough analysis of service needs to schools, parks and libraries resulting from project growth through 2020 • Integrate CEQA significance thresholds used in EIR in appendix to Comprehensive Plan amendment October 2009 ATTACHMENT B March 3, 2010 Joint PTC/City Council Study Session on Comprehensive Plan Amendment Synopsis Curtis Williams, the Director of Planning and Community Environment, provided an overview of the purpose of comprehensive plans, discussed some of the positives and negative outcomes resulting under the City's 1998-2010 Comprehensive Plan, and recounted the Comprehensive Plan Amendment work program approved by Council in 2006. He outlined four key issues for City Council and Planning and Transportation Commission (PTC) consideration for the Amendment, including: 1) growth projections, 2) the Housing Element, and particularly the housing allocation by the Association of Bay Area Governments (ABAG) and the City's approach to compliance, 3) the Vision Statements, goals, and policies of the Plan and the extent of potential revisions, and 4) possible components of the Amendment (e.g., area plans for downtown and south El Camino Real, high speed rail, and sea level rise) that would be outside the current scope of work. Staff suggested that the Council and PTC ask questions about these topics and then return at a second session to provide direction to staff and the PTC. Six members of the public spoke relative to the study session topics, most with concerns about the (undesirable) type of development approved under the current Comprehensive Plan, the amount of housing the City should plan to build, and the validity of the population projections by ABAG and staff. The Council and Commission discussed the various issues extensively, including but not limited to the following general observations (and not intended to represent a consensus): • Most of the projects built under the current Plan, and those in south Palo Alto in particular, have been "neighborhood resistant;" the City should look at LEED-ND (Leadership in Energy and Environmental Design - Neighborhood Development) as a possible guideline for new growth; and the work effort should be more than an "amendment;" • The City should challenge the ABAG assumptions with respect to impacts on greenhouse gases, water conservation, etc., of increased development, especially for housing; • The City's approach to the housing element should be a "bottoms -up" methodology to define what we can do, building on what is already realistic and zoned, not a directive to find a way to meet the ABAG RHNA housing allocations; • The follow-up session should be treated as an action item (not a study session) so that votes may be taken to provide direction; • The South El Camino Real Design Guidelines and associated Comp Plan policies and zoning codes should be considered and updated in the short term rather than awaiting completion of the Comp Plan effort; • There is a need to reconcile inconsistent vision statements and policies, and for some reformatting to make the Plan more user-friendly; and to provide more practical and "operational" statements and policies; • Area plans should be a more frequently -used tool than has been the case, to guide development; • The City should evaluate the potential for litigation if the City does not comply with housing element law, as well as preemptive measures to challenge those regulations; • The City should deal with the housing element issues before acting on the Stanford project or the concept plans; • The housing element should address the difficulty of providing "moderate income" units and the fact that the City was over its total housing allocation for the prior period with no "credit" for that; and that the City already has provided pedestrian -transit oriented zoning in advance of ABAG projections and SB375; and that ABAG should consider the least - cost methods for meeting greenhouse gas objectives; • The City needs to consider SB375 implications in its housing plans, and should "step up to the bar" to provide adequate housing for the area; and • Staff and the PTC should provide a list of questions for the Council to respond to, at least 2 weeks in advance of the next session. Many other detailed comments and questions were provided for response and direction at the follow-up session. Staff is to schedule a second study session followed by an action item to allow Council to provide direction on a number of these issues. The PTC would be involved in the study session portion of the deliberations. ATTACHMENT C COMPREHENSIVE PLAN AMENDMENT 2020 SCHEDULE & KEY MILESTONES Community Involvement: 2008 2009 2010 2011 2012 Concept Plan Neighborhood Workshops (at least 3 for each Concept Plan Area) January December February -June Citywide Community Workshops (at least 3) April - December Growth Assumptions (PTC Public Hearings) March January - March Draft Comprehensive Plan Amendment / DEIR (PTC Public Hearings) October - December Final Comprehensive Plan and EIR (PTC Public Hearings) January - June Planning & Transportation Commission 2008 2009 2010 2011 2012 Review Work Scope, Work Program, Background Reports July - December January - July Review Programs and Policies September - December January - March Concept Plan Area Land Use Alternatives February -June Growth Assumptions March January - March Draft Comprehensive Plan Amendment / DEIR October - December Final Comprehensive Plan and EIR January - June City Council: 2008 2009 2010 2011 2012 Review Work Scope and Work Program July March Concept Plan Area Land Use Alternatives May - August Growth Assumptions March March Draft Comprehensive Plan Amendment / DEIR October - December Final Comprehensive Plan and EIR January — June March 2010 ATTACHMENT D Brief Summary of SB 375 At the March 3 study session, Council and Commission members had a number of questions about the City's role and responsibilities in the implementation of SB 375, including the implications of potential environmental review exemptions. The following summary has been prepared by staff, consistent with the attached Joint Policy Committee's Policies for the Bay Area's Implementation of SB 375 (September 2009). As reflected by the passage of SB 375, the California State Legislature recognizes the need to curb urban sprawl and to focus on smart compact growth within existing communities to reduce vehicle miles traveled for residents and employees. The bill is intended to implement portions of the State's adopted Assembly Bill 32 (Global Warming Solutions Act of 2006) and mandates an integrated regional land use and transportation planning approach to reducing greenhouse gas (GHG) emissions. SB 375 requires that the California Air Resources Board (CARB) set reduction targets for automobiles and light trucks in each California region for 2020 and 2035. Draft CARB targets will be released by June 30, 2010 with CARB adoption of targets by September 30, 2010. SB 375 also requires that a Sustainable Communities Strategy (SCS) be added to each region's regional transportation plan that specifically identifies areas within the region sufficient to accommodate twenty-five (25) years of future housing demand from all income categories. Before the SCS can be adopted, the reduction in GHG emissions projected to be achieved by the SCS must be quantified and any difference between the reduction and the GARB target must be identified. If the SCS is unable to reduce GHG to the targeted levels, an Alternative Planning Strategy (APS) must be prepared that describes how the GHG targets would be achieved through alternative development patterns, new infrastructure or additional transportation measures or policies. The SCS or APS are expected to be adopted for each region by 2012. Environmental Review (CEQA) Under SB 375, builders would get relief from certain environmental reviews under the California Environmental Quality Act (CEQA) if they build projects consistent with the adopted SCS or APS. CEQA concessions are extended to two types of development projects: 1) a residential or mixed -use project consistent with an SCS or APS or 2) specifically defined "transit priority projects". A transit priority project (TPP) may be entirely exempt from CEQA if it meets several criteria, including: a) At least 50% residential use, with commercial floor area ratio of not less than 0.75; b) A minimum net density of 20 units per acre; c) Within 0.5 mile of a major transit stop of high quality transit corridor included in the Regional Transportation Plan; and d) Consistency with an SCS or ACS (emphasis added). There are further constraints outlined on such transit priority projects, regarding site and project size, availability of utilities, impacts on historic resources, energy and water efficiency, and provision of affordable housing. While projects in Palo Alto and other cities may in some instances comply with virtually all of the TPP criteria, the CEQA exemption still requires that the project be consistent with the SCS or APS, so no exemption is likely if the City hasn't concurred with the regional strategy, and could not be granted at least until the SCS phase is completed in 2012. City Mandates Under SB 375 SB 375 explicitly provides that neither the SCS nor APS will regulate the use of land or supersede the exercise of land use authority of cities and counties. It further stipulates that there is no requirement that a jurisdiction's land use policies and regulations be consistent with the regional transportation plan including the SCS or APS; therefore, alignment of local land use policy with the SCS (APS) is voluntary. There will, however, be strong incentives to adopt plans consistent with the region's SCS. In particular, it is likely that regional and state grants for transportation projects (including bicycle and pedestrian facilities, as well as roadway improvements) will be withheld from cities that do not plan consistent with the SCS. Likewise, cities or developers applying for affordable housing grants may not be eligible for such funding if the city's plans do not conform to the SCS for the region. Attachments: Joint Policy Committee's Policies for the Bay Area's Implementation of SB 375 League of California Cities' "Technical Overview of SB 375 (January 2009) SB 375 Summary Page 2 Association of Bay Area Governments Bay Area Air Quality Management District Bay Conservation and Development Commission Metropolitan Transportation Commission JOINT POLICY COMMITTEE Joseph P. Bort MetroCenter 101 Eighth Street P.O. Box 2050 Oakland, CA 94607-4756 . (510) 464-7942 fax: (510) 433-5542 tedd@abag.ca.gov www. abag.ca.govfjointpolicy Policies for the Bay Area's Implementation of Senate Bill 375 (Adopted September 18, 2009) Introduction SB 3751 (Steinberg) was passed by the California State Assembly on August 25th, 2008, and by the State Senate on August 30111. The Governor signed it into law on September 30111, 2008. The bill mandates an integrated regional land -use -and -transportation -planning approach to reducing greenhouse -gas (GHG) emissions from automobiles and light trucks. Within the Bay Area, automobiles and light trucks account for about 26 percent of our 2007 GHG inventory2 and about 64 percent of emissions from the transportation sector. The bill also expands regional and local responsibilities relative to state housing objectives. It requires that the region identify residential areas sufficient to accommodate all of the Bay Area's population, including all economic groups, for 25 years; and it requires that, within three years of amending their housing elements, local governments enact zoning to implement those elements. SB 375 explicitly assigns responsibilities to the Association of Bay Area Governments (ABAG) and to the Metropolitan Transportation Commission (MTC) to implement the bill's provisions for the Bay Area. Both agencies are members of the Joint Policy Committee3 (JPC). The policies in this document were approved by the JPC and provide guidance to the two lead regional agencies in fulfilling their responsibilities in collaboration with their JPC partners, the Bay Area Air Quality Management District (Air District) and the San Francisco Bay Conservation and Development Commission (BCDC). Bay Area Climate -Protection Context On July 20th, 2007, the JPC approved a Bay Area Regional Agency Climate Protection Program4. This program has as a key goal: "To be a model for California, the nation and the world." Following from this key goal is a supporting goal: "Prevention: To employ all feasible, cost-effective strategies to meet and surpass the State's targets of reducing greenhouse -gas emissions to 1990 levels by 2020 and to 80% below 1990 levels by 2050." In pursuit of these goals, MTC's current Regional Transportation Plan (RTP) update, Transportation 20355, has 1 http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_0351-0400/sb 375 bill 20080930 chaptered.html 2 Bay Area Air Quality Management District, Source Inventory of Bay Area Greenhouse Gas Emissions, December 2008 (http://www.baagmd.gov/pin/documents/regionalinventorv2007 003 000.pdf) 3 The Joint Policy Committee (JPC) is a regional planning consortium of the Association of Bay Area Governments (ABAG), the Bay Area Air Quality Management District (BAAQMD or the "Air District"), the San Francisco Bay Conservation and Development Commission (BCDC), and the Metropolitan Transportation Commission (MTC) 4 http://www.abag.ca.gov/jointpolicy/JPC%20Action%20on%20Climate%20Protection.pdf 5 http://www.mtc.ca.gov/planning/2035j1an/index.htm Policies for the Bay Area's Implementation of Senate Bill 375 2 evaluated transportation strategies and investment programs relative to a target of reducing GHG emissions from on -road vehicles in the year 2035 by 40 percent compared to 1990 levels. ABAG has established the same target for assessing alternative land -use scenarios in the development of the latest iteration of the region's policy -based forecast of population and employment: Projections 20096. The Bay Area's regional agencies have clearly recognized the primacy of the climate -change challenge as a driver of public transportation and land -use policy, and we have embraced the urgency of GHG reduction. The momentum established by our policies and actions to date will carry over into our implementation of SB 375. We do not regard SB 375 as a vexatious new requirement, but rather as an instrument to assist us in continuing and accelerating the climate - protection journey upon which we have already embarked. We are genuinely concerned with making real and measurable progress in reducing the impact which motor -vehicle travel has on the global warming problem. That concern will be paramount in our approach to SB 375 and is reflected in the policies which follow. Policy Subject 1: Setting Targets SB 375 requires that the California Air Resources Board (CARB) set GHG-reduction targets for cars and light trucks in each California region for the years 2020 and 2035. CARB must release draft targets by June 30, 2010 and adopt targets by September 30, 2010. To assist in establishing these targets, CARB is required to appoint a Regional Targets Advisory Committee (RTAC) composed of representatives of Metropolitan Planning Organizations? (MPOs), affected air districts8, the League of California Cities (the League), the California State Association of Counties (CSAC), local transportation agencies9, and members of the public — including homebuilders, environmental organizations, environmental justice organizations, affordable housing organizations, and others. The Advisory Committee is tasked with recommending factors to be considered and methodologies to be used in establishing the targets, not recommending the targets themselves —though MPOs are explicitly permitted to recommend targets for CARB's consideration. In recommending factors to be considered and methodologies to be used, the Advisory Committee may consider any relevant issues, including, but not limited to, data needs, modeling techniques, growth forecasts, the impacts of regional jobs -housing balance on interregional travel and GHG emissions, economic and demographic trends, the magnitude of GHG-reduction benefits from a variety of land -use and transportation strategies, and appropriate methods to describe regional targets and to monitor performance in attaining those targets. The Advisory Committee shall provide a report with its recommendations to CARB no later than September 30, 2009, and CARB must consider the report before setting the targets. After the publication of the Advisory Committee Report, MPOs are required to hold at least one public workshop in their region. In establishing the targets, CARB is also required to exchange technical information with MPOs and associated air districts. 6 http://www.abag.ca.gov/planning/currentfcst/news.html In the Bay Area, the Metropolitan Planning Organization (MPO) is MTC. s In the Bay Area, the Bay Area Air Quality Management District. 9 In the Bay Area, this might include Congestion Management Agencies (CMAs), transit providers, and the transportation planning/streets-and-roads arms of local governments. Policies for the Bay Area's Implementation of Senate Bill 375 3 The prescribed GHG-target-setting process, including the multi -sector RTAC, creates a dynamic between need (i.e., the reduction required to contribute to the state's overall greenhouse -gas - reduction targets) and feasibility (i.e., the perceived probability of satisfying that need through available regional planning and implementation mechanisms.) That dynamic may be premature and limiting. Until one goes through the actual process of producing and evaluating a target - based plan, the feasibility of that plan, and the target to which it responds, is mostly just conjecture. The necessity to limit the target based on an a priori judgment of feasibility is also obviated by the legislation's provision of an escape valve, the Alternative Planning Strategy (APS), which provides a mechanism to identify additional measures if target achievement proves not to be feasible in the initial plan, the Sustainable Communities Strategy (SCS). In the 2009 RTP update and in the Projections 2009 process, ABAG and MTC have established very aggressive GHG-reduction targets, based on the transportation sector's large contribution to the region's GHG inventory and on the science -based need to reduce GHGs to 80 percent below 1990 levels by the year 2050. The Bay Area's regional agencies are committed to achieving a significant reduction in transportation -related GHGs and are reluctant to constrain that reduction by setting targets that are too low and that do not provide sufficient challenge to business as usual. We also want to ensure our efforts are rewarded with observable progress, not just with well-intentioned but unimplemented plans. In addition to GHG-reduction targets, SB 375 effectively requires that the region set target levels for 25 years of housing growth based on accommodating all of the region's population, including all economic segments. These housing -growth targets need to be established early so they can accompany the GHG-reduction process throughout the planning process. Policy 1: The Bay Area regional agencies will fully participate in CARB's regional target -setting process. This participation will occur, to the extent possible, through the RTAC process, through the exchange of data and information with CARB, and through the authority given MPOs to independently recommend targets for their regions. When considering whether or not to recommend targets to CARB and in determining the levels of any recommended targets, primary attention will be given to a scientific assessment of need, noting that feasibility is most accurately judged through the process of producing the Sustainable Communities Strategy itself. In consultation with local partners andwith the state Department of Housing and Community Development (HCD), the regional agencies will establish 25 -year housing -growth targets, by economic group, no later that the release of final GHG-targets in September, 2010. The regional agencies will also seek unambiguous and accurate metrics of target achievement, so that performance relative to the targets can be confidently and unarguably assessed. Policy Subject 2: Modeling the Relationship between Transportation and Land Use Travel models (mathematical simulations of travel behavior relative to the regional transportation system and the distribution of land uses) are used to compare the impact of alternative transportation strategies, alternative investment packages and alternative land -use Policies for the Bay Area's Implementation of Senate Bill 375 4 patterns. The land -use patterns that are fed into the travel models are also, in part, generated by mathematical models of economic and demographic trends. SB 375 requires that the California Transportation Commission (CTC), in consultation with the California Department of Transportation (Caltrans) and CARB, maintain guidelines for travel models. The guidelines must, to the extent practicable within resource constraints, account for: • The empirical relationship among land -use density, automobile ownership, and vehicle miles traveled (VMT); • The impact of enhanced transit service on vehicle ownership and VMT; • Induced travel behavior and land development likely to result from highway or rail expansion; • Mode splits between automobile, transit, carpool, bicycle, and pedestrian trips; • Speed and frequency, days, and hours of operation of transit service. SB 375 also requires that MPOs disseminate the methodology, results, and key assumptions of their travel models in a way that would be usable by and understandable to the public. Models will be key tools in developing and assessing the alternative transportation and land -use strategies required to implement SB 375. MTC is currently replacing its travel model with a new instrument more attuned to the CTC guidelines. ABAG is about to update its land -use forecasting models. This is an opportune time to ensure that the region's models are integrated and can be used in an iterative manner, with not only the land -use models feeding into the travel model but with the travel model also feeding back into the land -use models so that the development impacts and requirements of various transportation measures and investments can be more confidently evaluated and so that a mutually reinforcing land -use and transportation strategy can be constructed. At present, the relationship is very linear and one-way, with the land -use forecast informing the travel model but the travel model only indirectly influencing how we forecast land use. Achieving two-way integration will require a much closer working relationship between ABAG and MTC staff engaged in modeling and forecasting than has heretofore been the case. While the models are very technical and complex, it is also a worthy and responsible objective to aim for more public transparency of model methodologies, assumptions and particularly limitations. Policy 2: The Bay Area regional agencies will continue to work together with local partners and regional stakeholders to construct an integrated modeling system which, to the extent possible within the available time and resources, achieves these essential qualities: • Transparency technical, decision -maker and public understanding of how land -use and transportation decisions can be coordinated so as to reduce GHG emissions, ' facilitated through open disclosure and explanation of assumptions and methodologies, but without over -simplifying complex relationships; Policies for the Bay Area's Implementation of Senate Bill 375 5 Policy 2 (continued): • Comprehensiveness —sensitivity to the many factors that influence individual and collective land -use and transportation choices, including, but not limited to: energy prices, parking prices and availability, transportation usage charges, travel -time comparisons among alternative modes, housing affordability, employment locations, perceived school quality, perceived public safety, and the presence or absence of complementary uses, supportive design and other community amenities or liabilities; • Resolution -Spatial and temporal data and analysis at the highest possible level of detail (e.g., below the census tract level and for additional hours beyond just weekday peak periods), but without making the modeling results so dependent on detail that they become unreliable with small variations in the underlying assumptions; • Uniformity —Full involvement of the CMAs and others who engage in complementary modeling activities to facilitate commonality and compatibility among models and a consistent modeling system which extends beyond the regional agencies; • Appropriate Usage —Explicit recognition of the limitations of models in accurately predicting the future and guiding choice (They are representations of potential reality, not reality itself, and are best employed to help differentiate among alternative strategies, not to predict the precise results of a single strategy. They inform decisions; they do not make decisions.). Policy Subject 3: Preparing a Sustainable Communities Strategy and an Alternative Planning Strategy SB 375 requires that each MPO (MTC and ABAG in the Bay Area) prepare a sustainable communities strategy (SCS). This strategy is to, among other things, constitute the land -use forecast for the Regional Transportation Plan (RTP) and must comply with federal requirements for that forecast, including most importantly that it be judged to be realistically attainable during the twenty -five-year period of the RTP. One criterion for judging realistic attainability is congruence with local -government general plans, specific plans and zoning. The SCS shall be adopted as part of the RTP10 and shall: • Identify the general location of uses, residential densities, and building intensities within the region; • Identify areas within the region sufficient to house all the population of the region, including all economic segments of the population, over the course of the planning period of the RTP (i.e., 25 years), taking into account net migration into the region, population growth (presumably referring to natural increase), household formation, and employment growth; 10 The next RTP update, and the first to which SB 375 will apply, is scheduled to be adopted in March 2013. Policies for the Bay Area's Implementation of Senate Bill 375 6 • Identify areas within the region sufficient to house an eight -year projection of the regional housing need; • Identify a transportation network to service the transportation needs of the region; • Gather and consider the best practically available scientific information regarding resource areas and farmland in the region; • Consider state housing goals; • Forecast a development pattern for the region, which when integrated with the transportation network and other transportation measures and policies, will achieve, to the extent practicable, the targeted greenhouse -gas emission reduction from automobiles and light trucks, while also permitting the RTP to comply with the Clean Air Act; • In doing all of the above, consider spheres of influence that have been adopted by LAFCOs. Some believe that the SCS is just ABAG's Projections under another name and with slightly different prescriptions and constraints. It is much more than that. While the SCS will, in part, play a role similar to Projections in the RTP, it is not just a land -use forecast, but a preferred development pattern integrated with the transportation network and with transportation measures and policies. It approaches in intent and content a comprehensive land -use and transportation plan for the region. As such, it should play a more fundamental guiding role for the RTP than does Projections, which is mostly used now for the Environmental Impact Report (EIR) and for air quality conformity analysis accompanying the RTP. The SCS also performs an important role in housing planning, extending well beyond the current Projections series and the current Regional Housing Needs Allocation (RHNA) process. The SCS must specifically identify areas within the region sufficient to accommodate twenty-five years of future housing demand from all income categories. Before adopting the SCS, we will be required to quantify the reduction in greenhouse -gas emissions projected to be achieved by the SCS and identify the difference (if any) between that reduction and the CARB targets for the region. If the SCS is unable to reduce greenhouse gas emissions to the targeted levels, then we must prepare an Alternative Planning Strategy (APS) showing how the greenhouse -gas targets would be achieved through alternative development patterns, infrastructure, or additional transportation measures or policies. The APS is a separate document from the RTP but may be adopted at the same time as the RTP. In preparing the APS, we are required to: • Identify the principal impediments to achieving the targets through the SCS; • Describe how the GHG targets would be achieved by the alternative strategy and why the development pattern, transportation measures and transportation policies in the APS are the most practicable choices for the achievement of those targets; • Ensure that the APS complies with all the federal requirements for an RTP "except to the extent that compliance with those requirements would prevent achievement of the GHG targets" (i.e., the APS is essentially exempted from the criterion of realistic attainability); Policies for the Bay Area's Implementation of Senate Bill 375 7 • Develop the APS in the same manner and consider the same factors as we would to develop an SCS. The APS is essentially a more aggressive GHG-reduction strategy than would be permissible under the federal requirements for an RTP—i.e., financially constrained and with a realistic land - use forecast. As the SCS is an official part of the RTP, it is required by federal law to be internally consistent with the other parts of the RTP, including the financially constrained transportation investment package. This is what gives the SCS its potential power: transportation projects identified for funding in the RTP investment package must be consistent with the SCS11 As the APS is not included in the RTP and therefore does not influence transportation investment, its potential impact is much more limited. It serves essentially two purposes, the first explicit in the legislation, the second implicit: (1) to provide access to some California Environmental Quality Act (CEQA) concessions for qualifying development projects12, and (2) to provide a means through which the state can be informed of additional powers, authorities or resources required to meet regional GHG-reduction targets. The Bay Area's regional agencies are committed to making a real difference in reducing GHGs. Therefore, it is in our interest to achieve as much progress toward this region's targets in the SCS as possible. Those land -use changes, transportation measures and transportation policies which can only be identified in the APS are essentially those that we have conceded cannot be implemented; that is, we cannot provide the required assurances to the federal government that those changes, measures, and policies meet the realism test —at least not within the current distribution of authorities. If the changes, measures and policies are not real, then the GHG reductions are also not real. We will not attain the on -the -ground improvement we desire and need. Meeting the realism test for the SCS requires two preconditions: (1) alignment of local land -use policy with the preferred land -use pattern in the SCS13 and (2) authority and resources to undertake the required transportation policies and measures. To maximize our probability of 11 The legislation specifically excludes a subset of investment projects from this requirement, including Proposition 1-B projects and projects contained in the 2007 or 2009 Federal Statewide Transportation Program (STP) if programmed for funding on or before the end of 2011, Local funding for projects specifically listed in local sales tax measures approved prior to the end of 2008 is also exempt from the consistency requirement, though state and federal matching funds, if any, are not exempt. Further, the legislation does not require a sales tax authority to change the funding allocations approved by voters for categories in a sales tax measure adopted before the end of 2010. 12 CEQA concessions are extended to two potentially overlapping types of development projects: (1) a residential or mixed -use project consistent with an SCS or APS; and (2) specifically defined "transit priority projects" (TPPs). Subject to incorporating mitigation measures from previous reviews, the EIRs for SCS- or APS-consistent projects will not be required to address growth -inducing impacts, global warming impacts, or regional transportation network impacts. Further SCS- or APS-consistent development projects will not have to prepare a reduced -density alternative to address local traffic impacts. TPPs will be exempt from CEQA review if they are consistent with an SCS or APS and comply with a long list of other mandatory and optional criteria. 13 SB 375 explicitly provides that neither the SCS nor the APS will regulate the use of land or supersede the exercise of the land -use authority of cities and counties. It further stipulates that there is no requirement that a city's or county's land -use polices and regulations, including its general plan, be consistent with the RTP (including the SCS) or with the APS. Therefore, alignment of local land -use policy with the SCS will have to be voluntary. Policies for the Bay Area's Implementation of Senate Bill 375 8 success, we need to be acquiring those preconditions now, building upon the momentum that we have established with the target driven RTP, Transportation 2035, with the performance -based Projections 2009 and especially with the Bay Area's voluntary development and conservation strategy, FOCUS14. Transportation 2035 has been instrumental in introducing climate protection as a core regional transportation planning objective. The Projections 2009 process has initiated a productive discussion with local -government officials on the impact that land -use and development has on transportation GHGs. FOCUS has provided mechanisms, priority development areas (PDAs) and priority conservation areas (PCAs), through which the regional agencies and local governments can partner on achieving a land -use pattern that contributes to lower VMT and hence fewer GHG emissions. The PDAs also provide laboratories through which many of the assumptions underlying our models can be tested. To enable the region to prepare a genuinely effective SCS in association with the 2013 RTP, the cooperative policy discussions begun with the 2009 RTP and with Projections 2009 need to continue and accelerate over the next few years and into the formal beginning of the SCS process. A successful SCS will not be proposed and imposed by the regional agencies, but will be built and owned cooperatively at all levels by all the transportation and land -use authorities in the Bay Area. We also need to make substantial progress on the implementation of the FOCUS PDAs and PCAs, so that local governments have concrete examples upon which to draw when constructing local plans that are consistent with the SCS. And we need to establish trust among local governments that substantial regional and state assistance to PDAs and PCAs is truly forthcoming. Full local -government participation in the PDA and PCA initiatives is conditioned on the provision of incentive funding. In Transportation 2035 MTC established a $2.2-billion15 Transportation for Livable Communities (TLC) account to, in part, assist PDAs and transit - oriented development. Early programming of dollars in the TLC account can set a positive stage for an SCS that enjoys local -government support and, therefore, is more likely to be realistically attainable. In addition to incentives to facilitate supportive development, local governments and other local partners (such as CMAs and transit agencies) will require resources to participate fully and effectively in the process of developing the SCS and to undertake associated planning activities (e.g., specific plans for potential FOCUS PDA areas). The regional agencies have sponsored and advocated for SB 406 (DeSaulnier). If passed by the State Legislature and signed by the Governor, this will enable a small vehicle -license surcharge which will provide funds to regional agencies and local governments to undertake work on the SCS and related plans. With or without SB 406, the regional agencies are committed to advocating for and securing appropriate planning resources for their partners If we are successful in enlisting local governments and other local agencies as genuine partners in the construction of the SCS, then we should also be able to enlist those partners in some positive expression of their participation in the process and their comprehension of the results. While under the law, the SCS can only be adopted formally by ABAG and MTC, explicit council 14 http://www.bayareavision.org/initiatives/index.html 15 As a federal requirement, enumerated in escalated dollars of the day. Policies for the Bay Area's Implementation of Senate Bill 375 9 or board resolutions that acknowledge local implications would be highly appropriate and collectively would constitute one indicator of realism. The resolutions, similar to those required for the designation of PDAs, will need to be crafted in such a way as to not prejudge future local - plan and zoning amendments. However, they should occur in the context of local governments fully understanding their contribution to the realism tests applied by federal reviewing agencies. Policy 3 The Bay Area regional agencies are committed to achieving the region's GHG-reduction targets through the SCS and will prepare an APS only as a last resort. To assist m the preparation of a realistic and attainable SCS, the regional agencies will: • Partner with CMAs, transit agencies, local governments, and other relevant stakeholders to cooperatively prepare an SCS, beginning no later than the end of 2009; • In balance with other programming priorities, begin programming and allocating funds from the current RTP's $2.2 billion TLC account no later than fiscal year 2010-11 so as to demonstrate a tangible commitment to priority development areas that assist in reducing GHGs; • Initiate joint programming of regional -agency funding (e.g., MTC and BAAQMD grants) to achieve synergies and maximize combined impact, beginning with pilot efforts built upon the MTC's new Climate Change fund and the Air District's TFCA program; Consistent with the current RTP and forthcoming discussions on new incentives for priority development areas, give priority consideration to SCS-supportive incentives in the allocation and programming of new funding (e.g., the federal stimulus package) as it becomes available to the regional agencies; • Advocate for early and appropriately directed incentives for PDAs and PCAs from existing state programs which are intended to encourage infill development and land conservation, and advocate for the creation of additional incentive mechanisms through new state legislation in advance of the SCS; • Advocate for the restoration of more stable funding to transit operations, which will be essential to reducing VMT and GHGs; Continue to seek planning resources so that our local -government and CMA partners can share leadership roles with the regional agencies in the SCS process and undertake related planning activities; • Advocate for regional transportation pricing authorities that can contribute to reducing VMT' per capita and related`GHGs so that these authorities can be available to the SCS if required. As a tangible demonstration of partnership and to assist reviewing agencies in assessing the realism of the SCS, the regional agencies will seek council or board resolutions from our local partners affirming that they understand the implications for their jurisdictions in the context of the realism criteria that will be applied to the RTP and. SCS. Policies for the Bay Area's Implementation of Senate Bill 375 10 Policy Subject 4: Achieving Consistency with Adjacent Regions As referenced previously, the SCS will be required to identify areas within the region sufficient to house all the population of the region, including all economic segments of the population, taking into account net migration into the region, natural increase, household formation, and employment growth. This is a substantial departure from present regional -planning practice, which has assumed some spillover of Bay -Area -generated housing and transportation demand into adjacent regions, particularly into the Central Valley. We can plan to accommodate all our population growth, but our plans are unlikely to be realized if they are not consistent with those of our neighboring regions, which may continue to plan on the basis of accommodating exogenous demand from the Bay Area. Early and frequent discussions with surrounding regions to coordinate assumptions, policies and targets are, therefore, required. Policy 4: The Bay Area regional agencies will initiate discussions and consult with our neighboring regions throughout the model -development and SCS planning processes to facilitate consistency in assumptions and policies. Policy Subject 5: Synchronizing and Conforming the SCS and the RTP with the Regional Housing Needs Allocation (RHNA) SB 375 requires that the RHNA/housing element cycle will be synchronized and coordinated with the preparation of every other RTP update, starting with the first update after 2010 (i.e., 2013). RTP updates occur every four years, and housing elements must be adopted by local governments eighteen months after the adoption of the RTP. With a few exceptions, the region will now be on an eight -year RHNA cycle and local governments will be on eight -year housing - element cycles. In addition to synchronizing with the preparation of the RTP and the SCS contained therein, the RHNA allocation must be consistent with the development pattern included in the SCS, and the resolution approving the RHNA shall demonstrate that it is consistent with the SCS. Housing elements and associated local zoning adopted pursuant to the RHNA may be among the most important means for making the SCS real. SB 375 requires that local governments enact implementing zoning within three years of the adoption of their housing elements. The 2008 ABAG RHNA process was the first in the state to explicitly connect the regional housing allocation to the sort of focused -growth and transit -oriented development principles which are likely to be central to the SCS. We, therefore, have a head start on the consistency requirements of SB 375. However, many of jurisdictions that received higher RHNA numbers as the result of the newly applied principles also persuasively argued that they required additional resources to respond to the infrastructure and service requirements of more housing and population. A more intimate connection with the RTP will be required to assist resources to flow in the same direction as housing requirements, noting that those resources must respond not just to an eight -year RHNA but to a 25 -year identification of housing growth areas. Existing law makes MTC responsible for the RTP and ABAG responsible for the RHNA. SB 375 makes both agencies jointly responsible for the SCS, though the SCS will also be adopted as Policies for the Bay Area's Implementation of Senate Bill 375 11 part of the RTP. To ensure coordination and complementariness and to ensure that both agencies are fully cognizant of their commitments to each other and of their joint commitments to other partners and the region, all three instruments —the RTP, the RHNA and the SCS—should be developed and adopted together as a regional -agency partnership. The structure of the SCS, itself, should also facilitate coordination. The fundamental expression of the Sustainable Communities Strategy will be a "vision" of the region we hope to become at the end of the twenty-five year planning period. While responding to the core housing and greenhouse -gas objectives of SB 375, the vision will also need to accommodate many other local and regional aspirations generally categorized under the three sustainability "e"s of economy, environment and equity. All policies, measures, and allocations contained in the SCS, the RTP, the RHNA will need to be at least consistent with the vision and ideally will contribute to its realization. To maximize the ability of the vision to drive coordination, it should be confirmed early in the SCS process. All consequential long-term and short-term decisions directed at both the 2020 and 2035 target years, as well as at the 2040 RTP and housing horizon, can then be tested against this long-term vision. Fortunately the vision need not be constructed from scratch; it can build upon a rich legacy of cooperative regional planning that has occurred continuously for most of the past decade and most recently through the FOCUS program. SB 375 requires nominal consistency among the SCS, RTP and RHNA documents. Genuine consistency on the ground necessitates that we go beyond the law and that we do cooperative follow-up after the adoption of the various documents. Under the law, RHNA housing numbers are still only distributed at the jurisdictional level. As jurisdictional control totals, these jurisdictional distributions are nominally consistent with the SCS. However, to be effective in reducing GHGs, it is essential that actual housing development be distributed to particular sub - jurisdictional locations as identified by the SCS (e.g., in PDAs, near transit stations, employment centers and other activity nodes; and with regard to sub -regional commute sheds as defined by centers and corridors). The regional agencies should use their investments and other programs to assist local governments in ensuring that housing elements, implementing zoning, and actual projects are not only compliant with state housing law and with RHNA control totals, but are also consistent with the detailed SCS growth distribution. Policy 5: The SCS, RTP and RHNA will be developed together through a single and integrated cross - agency work program, developed and implemented in partnership with the other regional agencies, congestion management agencies, local governments, and non -governmental organizations which have a stake in the work and its outcomes. All products in the cross -agency work program will be reported in draft to the JPC for a thorough interagency vetting before being referred with JPC recommendations; for final decision by the committees, board, and commission formally responsible for each of the three policy;. instruments: MTC for the RTP, ABAG for the RHNA and both for the SCS. The JPC and its member agencies will share draft material with partnership groups, consultative committees and advisory councils and with one another to facilitate broadened vetting of significant ideas and initiatives. Policies for the Bay Area's Implementation of Senate Bill 375 12 Policy 5 (continued): From time to time, the JPC may initiate special task forces, widely representative of affected regional and local interests, to assist in the detailed drafting of contentious and consequential policies and measures. To the extent feasible, policy reports and adopting resolutions for each of policy instruments will reference implications for the other instruments so that all decisions are cognizant of interdependencies. The process will begin with the construction and confirmation of a twenty -five-year vision for the Bay Area. That vision will respond to the 2035 GHG target and to the 25 -year housing growth objective mandated by SB 375 as well as to other desired economic, environment, and equity qualities. All long-term and short-term strategic policies, measures, and allocations will be assessed against this long-term vision. After the adoption of the SCS, RTP, and RHNA, the regional agencies will, within the limits of their resources and authorities, assist local governments in achieving housing elements, implementation zoning, and housing projects which, in addition to fully complying with state housing -element law, are consistent with the detailed growth distribution in the SCS. Assistance will include, but not be limited to, resolving infrastructure and service issues related to the provision of housing. Policy Subject 6: Providing CEQA Assistance SB 375 provides various levels of CEQA assistance to housing and mixed -use development projects based on their conformity with a number of criteria, including consistency with an SCS or APS. However, the legislation only vaguely defines "consistency" and then in manner which may not be compatible with current Bay Area regional land -use planning practice. One approach to clarifying "consistency" is the preparation of a programmatic environmental impact review (EIR) for the SCS (and for the APS, if required). Development projects, as well as infrastructure projects, might also be able to "tier off" this EIR, and thus become eligible for additional CEQA assistance in addition to that provided through SB 375. The feasibility of this approach, and of alternatives, requires the resolution of a number of technical and legal issues, including the relationship to the EIR presently prepared for the RTP. Work to resolve these issues needs to occur as soon as possible as it will clearly affect the manner in which we prepare the SCS/APS. Policy 6: In consultation with appropriate CEQA authorities, the regional agencies will develop and. finalize, no later than June 2010, a functional design for the structure and content of the SCS, the APS and associated environmental impact review documents sufficient for these to be confidently employed as the basis for determining eligibility for CEQA assistance as contemplated in SB 375 and, if feasible, to provide additional CEQA assistance for projects which contribute positively to environmental objectives for the region. Policies for the Bay Area's Implementation of Senate Bill 375 13 Policy Subject 7: Aligning Regional Policies While ABAG and MTC develop the region's first SCS, the Air District and BCDC will also be putting together policies and regulations that will affect the region's distribution of land uses and the placement of public infrastructure. Both agencies may, as well, propose projects which could be included in the RTP. In its effort to control criteria pollutants (e.g. ozone precursors and particulate matter), the Air District may, under existing authority, consider an indirect source rule (ISR) that regulates the construction and long-term transportation impacts of land development and requires mitigation or payments in lieu for development which does not meet established standards. Of particular concern is development which is deemed to increase automobile travel and hence vehicle emissions. The Air District may also seek to limit development in certain areas so as to reduce exposure to noxious particulate matter and other localized air toxins. Many of these areas overlap with FOCUS PDAs. BCDC will be preparing an adaptation plan to prepare for inevitable sea -level rise and storm surges affecting areas on and near the Bay shoreline. This will have implications for the location of future development and perhaps for the relocation of present development and infrastructure. It is essential that both the Air District's work and BCDC's be aligned with the SCS so that the regional agencies complement and do not contradict one another. Confusion will not contribute to the multi -level collaboration required to achieve a sustainable communities strategy that works. Policy 7: Starting immediately, and consistent with the JPC's role as defined in state law, all significant regional -agency policy documents affecting the location and intensity of development or the location and capacity of transportation infrastructure will be vetted through the JPC and evaluated against the filter of the emerging SCS. As with all regional -agency policies affecting local land -use discretion or local -level transportation investments, the policy documents will be developed in partnership with the applicable local governments, congestion management and transit agencies and with the participation of other interested stakeholders. The final decision on any regional policy will continue to rest with the responsible regional board or commission to which the JPC is advisory. 1400 K Street, Suite 400 • Sacramento, California 95814 Phone: 916.658.8200 Fax: 916.658.8240 www.cacities.org To: California City Officials From: Bill Higgins' Legislative Representative & Sr. Staff Attorney Date:.. January 23, 20092 RE: Technical Overview of SB 375 (v 1.3)3 I. Introduction SB 375, by Senator Darrell Steinberg, builds on the existing regional transportation planning process (which is overseen by local officials with land use responsibilities) to connect the reduction of greenhouse.gas.(GhG),emissions from cars and light trucks to land use and transportation policy. In 2006, the Legislature passed AB. 32 The Global Warming Solutions Act of 2006, —which requires the State of California to reduce GhG emissions to 1990 levels no later than 2020. Passenger.vehicles account for 31 percent of the state's total emissions. In 1990 greenhouse gas emissions from automobiles and light trucks were 108 million metric tons, but by 2004 these emissions had increased to 135 million ,metric tons, SB 375 asserts that "Without improved land use and transportation policy, California will not be able to achieve the goals of AB 32.'4 AB 32 set the stage for,SB 375 —or at least something like it. The issue was not "if" land use and transportation policy were going to be connected to reducing greenhouse gas emissions but "how" and "when." The issue was not if' .a governmental entity would ' Acknowledgement. The author acknowledges and is grateful for the very significant contributions of the League's special counsel, Betsy Strauss, in preparing this document 2 This version includes mostly minor corrections to the September 19, 2008 version. It updates Section III, subsection 4 related to the setting regional targets and the AB 32 Scoping Plan and the CEQA analysis insofar as it addresses local discretion in using the new CEQA streamlining provisions. 3 Work in Progress Disclaimer, This memorandum is a work in progress; it is not and should not be considered legal advice. It represents our best thinking to date on the scope and major implementation issues related to SB 375. As additional information becomes available, we will update this document. Readers who are aware of issues not addressed here, identify inadvertent errors, or want to make additional comments, should contact Bill Higgins at higginsb@cacities.org or 9I6/658-8250 4 See SB' 375 (2008), Section 1(c) [uncodified]. Technical Overview of SB 375 (v. 1.3) League of California Cities Page 2 regulate the car and light truck sector in order to reduce greenhouse gas emissions — the CARB already has that authority under AB 32 — but "how" and "when." SB 375 has three goals: (1) to use the regional transportation planning process to help achieve AB 32 goals; (2) to use the California Environmental Quality Act (CEQA) streamlining as an incentive to encourage residential projects which help achieve AB 32 goals to reduce GhG emissions; and (3) to coordinate the regional housing needs allocation process with the regional transportation planning process. To be sure, the League remains fundamentally concerned about keeping the line as bright as possible between regional planning and local land use authority. In the end, however, SB 375 answers the questions "how?" and "when?" by choosing regional agencies (controlled by cities and counties) rather than the CARB to lead the effort in this area; and by integrating the Regional Housing Needs Allocation (RHNA) with transportation planning to allow cities and counties to align existing housing element requirements with transportation funding. Those cities and counties that find the CEQA streamlining provisions attractive have the opportunity (but not the obligation) to align their planning decisions with the decisions of the region. H. SB 375 in Context: AB 32, CARE; and Global Warming AB•32 granted CARB broad authority over any "source" of GhG emissions.5 The definition of "source" includes automobiles and light trucks,6 which account for more than 30 percent'of the state's GhG emissions. AB 32 authorizes the CARB•to require "participation". in CARB's program to reduce greenhouse 'gas emissions and to "monitor coimpliance" with the statewide greenhouse gas emissions limit.? SB 375 represents a "program" for the automobile and light truck sector.8 It provides a means for achieving the AB 32 goals for cars and light trucks. • This is important to understanding why the agreement on SB 375 was reached: it provides more certainty for local governments and developers by framing how AB 32's reduction goal from transportation planning for cars and light trucks will be established. It should be noted, however; that SB 375 does not prevent CARB from adopting additional regulations under its AB 32 authority.9 (However, given the degree of consensus that emerged on SB 375, such actions should be politically difficult for CARB at least for the foreseeable future). 5 Cal. Health & Safety Code § 38560 6 Cal. Health &.Safety Code § 38505(i) Cal. Health & Safety Code § 38562 and following 8 Cal. Health & Safety Code § 38562. 9 This is because the scope of authority granted to CARB to regulate any "source" of GHG emissions is very broad. Technical Overview of SB 375 (v. 1.3) League of California Cities Page 3 SB 37.5 requires the CARB to establish the GhG emission reduction targets for each region (as opposed to individual cities or households) and to review the region's determination that its plan achieves those targets. Each Metropolitan Planning Organization (MPO) must include a sustainable communities strategy (SCS) in the regional transportation plan that seeks to achieve targeted reductions in GhG emissions from cars and light trucks if there is a feasible way to. do so. CARB establishes the targets for each region.in accordance with the following: • CARB must take other factors into account before setting target. Before setting a reduction target for the reduction of GhGs from cars and light trucks, CARB must first consider the likely reductions that will result from actions to improve the fuel efficiency of the statewide fleet and regulations relating the carbon content of fuels (low carbon fuels). so • Targets are set regionally. not locally. SB 375 assures that the target.to reduce GhGs from cars and light trucks will be regional. (CARB has received many. comments and suggestions on its Scoping Plan that it should adopt targets and enforce requirement on an agency -by -agency basis). • .:Committee to advise CARB. A Regional Targets Advisory Committee, which includes representation from the League of California Cities, California State Association of Counties, metropolitan planning organizations, developers, planning organizations and other stakeholder groups, will advise the Board on how to set and enforce regional targets: • Exchange of technical information. Before setting the targets for each region, CARB is required to exchange technical information with the MPO for that region and with the affected air district. The MPO may recommend a target for the region. The CARB's role in SB 375 is limited. Although the CARB retains its broad grant of authority to act independently under AB 32, SB 375 provides the framework for reducing greenhouse gas emissions in the car and light truck sectorthrough the tie between land use and transportation planning. Moreover, SB 375 indirectly addresses another longstanding issue: single purpose state agencies. The League, among others, has argued that these agencies often fail to recognize other competing state goals enforced by a different state agency. SB 375 takes a first step to counter this problem by connecting RFINA to the transportation planning process. As a result, SB 375 will require CARB to look at how new climate regulations could affect state and regional transit and housing .policies; likewise, the Department of Housing and Community Development (HCD) will have to consider the effects of housing policy on state and regional efforts to address climate change. 1° Cal. Gov't Code §, b5080(b)(2)(A)(iii). Citations to language in SB 375 is,to the section of the code as it proposed to be amended based on the August 22 version of SB 375 that was approved by the Assembly and concurred with by the Senate. Technical Overview of SB 375 (v. 1.3) League of California Cities Page 4 III. ' Planning for Greenhouse Gas Emission' Reduction within the RTP Regional transportation plans have long been a part of the transportationplanning horizon in California. Federal law requires regional transportation plans (RTPs) to inelude,a land use allocation and.requires the metropolitan planning organizations that prepare RTPs to make 'a conformity finding that the Plan is consistent with the requirements of the federal Clean Air Act. Some regions have also engaged in a regional "blueprint" process to prepare the. land use .allocation. 1. The'. Sustainable Communities Strategy (SCS) SB 375. integrates AB 32's goal to reduce. GhG emissions by requiring that a sustainable communities strategy (SCS) be added to the RTP. SB 375 recognizes that, because of the constraints of federal law and inadequate funding for infrastructure and public transit, an SCS may not be,able to achieve the region's. targets. If the metropolitan planning organization (MPO)11 determines that the 505 cannot achieve the targets, then the .MPO must develop.an.A.lternative Planning Strategy (APS) (see discussion below). The biggest single difference is that the SCS is part of the RTP and the APS is not. To fully understand what an SCS is —and is not —it's worth taking a step back and look at what is required inexisting regional transportation.plans: RTPs are regulated by a conglomeration of, state and federal law. State law requires that an RTP include "clear, concise policy guidance .to local and state officials" regarding transportation planning,12 The federal law requires that RTPs, among other things, work toward achieving the goals of the Clean Air Act. To that end, RTPs must be based upon "current planning assumptions."13, ; A conformity finding is unacceptable if it is based upon planning assumptions which would keep the air clean but which will never occur because they are dependent upon,for example, the extension of public transit. • Thus, current RTPs include a likely or realistic forecasted development pattern for the region for the next 20 to 30 years: This estimate informs the decision -making process for transportation funding. The forecasted growth pattern must be based upon "current planning assumptions" to assure that the air conformity provisions are meaningful. Put another way, if the growth pattern is not realistic, then the accompanying policies to "A metropolitan planning organization (MPO) is "the policy board of an organization created and designated to carry out metropolitan transportation planning." 23 CFR 450.308 12 Cal., Gov't Code. § 65080(a). 13 See 40 CFR § 93.110 (making Clean Air conformity determination in federal actions). Particular attention should be paid to (a) 23 CFR § 450.104 (definitions); (b) 23 CFR 450.308 (MPOs and transportation funding); (c) 23 CFR §450.322 (development and content of transportation plan); (d) 23 CFR § 450.324 (development and content of the transportation improvement program — TIP); (e) 40 CFR § 93.100 (implementation of Clean Air Act in federal actions); and (f) 40 § CFR 93.110 (making Clean Air conformity determination in federal actions). This last reference that is -the source for the language that says that a`SCS is "Subject to [federal law], including the requirement to utilize the most recent planning assumptions considering local general plans and other factors" (65080(b)(2)(B)). Technical Overview of SB 375 (v. 1.3) League of California Cities Page 5 achieve air quality conformity relating to air pollutants from traffic are not likely to work. If the federal government determines that the projected growth development pattern is not realistic, it can withhold federal transportation funding." The contents of the SCS are similarly constrained. SB 375 states that the SCS is "subject to" federal regulations under the Clean Air Act that include the requirement to use "the most recent planning assumptions considering local general plans and other factors.„i5 In addition, the SCS must consider or address several additional factors: 16 • Consider the spheres of influence that have been adopted by the local agency formation commission (LAFCO).17 • Identify the general location of uses, residential densities, and building intensities within the region; • Identify areas sufficient to house all economic segments the population of the region over the long term planning horizon of the RTP; Identify areas within the region suffieient to house an eight -year projection of the regional housing need for the region; •" Identify a transportation network to service the transportation needs of the region; • Gather and consider the best practically available scientific information regarding resource areas and farmland in the region (note, there is no requirement to act on this information); • Set,a forecasted.developrnent pattern for the region, which, when integrated with the ,transportation network and other transportation measures and policies, will reduce the GhG emissions froth automobiles and light trucks to achieve, if there is a feasible way to do so,lg the GhG emission reduction targets approved by the state board: and 14 It is important to be aware that the SCS development pattern must be based upon "current planning assumptions" only because of the requirement that the Clean Air Act imposes on the adoption of a regional transportation plan. It is federal, not state law. It relates to maintaining air quality; not local land use principles derived from the police power. It is not based upon local land use autonomy. The APS, which is not a part of the RTP, is not required to be based on "current planning assumptions." 15 CaI. Gov't Code § 65080(b)(2)(B) (referencing Part 450 of Title 23 of, and Part 93 of Title 40 of, the Code of Federal Regulations). 16 Unless otherwise cited, these requirements are in Cal. Gov't Code § 65080(b)(2)(B). 17 Cal, Gov't Code§ 65080(b)(2)(F). 18 The definition of"feasible" is the same as that used in CEQA. But unlike CEQA, the MPO's determination, of "feasibility" is a quasi -legislative act that is reviewable under the "arbitrary and capricious" standard (CCP § 1085) instead of the "substantial evidence" standard (CCP § 1094.5). As a Technical Overview of SB 375 (v. 1.3) League of California Cities Page 6 Quantify the reduction in GhG emissions projected to be achieved by the SCS and, if the SCS does not achieve the targeted reductions in greenhouse gas emissions, set forth the difference between the amount that the SCS would reduce Ghe emissions and the target for the region.19 Of all these requirements, the one that has generated the most concern is the requirement that the RTP development pattern must achieve the GhG emissions targets. if there is a feasible way to do so. Again, it is important to emphasize that this development pattern must comply with federal law, which requires that any pattern be based upon "current planning assumptions" that include the information in I:ocal general plans arid sphere of influence boundaries. If a certain type of development pattern is 'unlikelyto emerge from local decision -making, it will be difficult for the MPO to say that it reflects current planning' assumptiens.2° Moreover, S]3' 375 provides additional protections when it provides that the SCS cannot in any way supersede or require consistency for a local general plan, local specific plan, or local zoning.2' • 2. The Alternative Planning Strategy In the case where the SCS does not achieve the GhG emission reduction target, the MPO must develop an Alternative Planning Strategy (APS) 22' The APS is a separate document from the RTP23 and therefore does not automatically affect the distribution of transportation funding. The APS must identify the principal impediments to achieving the targets within the SCS. The APS must also include a number of measures ---such as alternative development patterns,24 infrastructure, or additional transportation measures or policies I -=,that, taken together, would achieve the regional target, • The APS must describe how the GhG emission reduction targets would be achieved and why the development pattern, measures, and policies in the APS are the most practicable choices',for the achievement of the GhG targets. Like the SCS the APS does'not directly affect or supersede local land use decisions; nor does it require that a local general plan, local specific plan,' or local zoning be consistent with the APS 25 result, the decision whether or not it is feasible to achieve the regional target within the SCS will be afforded greater deference from courts. 1sCal. Gov't Code § 65080(b)(2)(G). 20 The CEQA changes made by the bill require residential projects to be consistent with the SCS in order to take advantage of streamlined CEQA processing. 21 Cal. Gov't Code §.65080(b)(2)(3). 22 Cal. Gov't Code § 65080(b)(2)(H). 23 Cal. Gov't Code § 65080(b)(2)(H). 24 The development pattern must still comply with the provisions of the SCS that require consistency with the RHNA distribution and other factors. 25 The CEQA changes made by the bill require residential projects to be consistent with the APS in order to take advantage of streamlined CEQA processing. Technical Overview of S13 375 (v. 1,3) League of California Cities Page 7 In addition, SB 375 provides that the APS does not constitute a land use plan, policy, or regulation and that the inconsistency of a project with an APS is not a consideration in determining whether a project may be deemed to have an environmental effect for purposes of the California Environmental Quality Act (CEQA). Soine have asked about the purpose of the APS: Why should an MPO spend the time to develop an alternative planning strategy if there is no requirement to actually implement it? ,The answer is two -fold. First, a general consistency with a CARE approved plan — whether it's an SCS or APS—allows projects to qualify for the CEQA streamlining provisions in the bill (see Part IV, below). Second, it adds a new focus for the regional transportation planning and housing allocation: reductions in GhG emissions. 3. CARB's Role in the Approval of the SCS or APS CARB's role in reviewing the SCS or APS is very limited. It can only accept or reject the MPO's determination that the plan would, if implemented, achieve the regional GhG emission reduction target established by CARB.26 CARB must complete its review within 60 days. It may not issue conditional approvals or otherwise interfere in any way with local decision -making. In addition, the process is designed so that there will be an extended exchange of information between the MPO and CARB about the technical methodology that the region intends to use to estimate the GhG emissions reduction. SB 375 encourages the MPO to work with CARB until it concludes that the technical methodology it intends to use operates accurately. CARB must respond to such consultations in a timely manner. This'type: of communication before the actual submission should reduce the chance that CARB will find a particular plandoes not achieve the regional target. 4. Setting the Regional Target for GhG Emissions SB 375 requires CARB to set regional targets by September 30, 2010 (draft targets will be released to the regions by June 30).27 The target may be expressed in gross tons, tons per capita, tons per household, or in any other metric deemed appropriate by CARB. The Scoping Plan states that 5 million metric tons (MMT) of emissions will be reduced as a result of transportation related planning programs, or almost 3% of the 174 million metric ton reduction needed to achieve AB 32's 2020 target.28 This number, however, is 26 See 65080(b)(2)(1)(ii), 27 Cal. Gov't Code § 65080(b)(2)(A). 28 Cars and light trucks account for approximately 31 percent of all GHG emissions in California. The Scoping Plan outlines programs that will reduce emissions by cars and light trucks by a proportional 33 percent. These policies include reductions from light -duty vehicle standards (31.7 MMT), low carbon fuel standards (15 MMT), vehicle efficiency measures (4.5 MMT) and regional transportation related GHG targets (5 MMT). Together, these measures total 56.2 of the 169 MMT in needed reductions. Technical Overview of SB 375 (v. 1.3) League of California Cities Page 8 more of a placeholder as the Scoping Plan states that the total target "will ultimately be determined during the SB 375 process."29 SB 375 authorized CARB to appoint a Regional Targets Advisory Committee to recommend factors and methodologies to be used for setting these targets.3° The committee is made up of representatives from the League of California Cities, California State Association of Counties, MPOs, affected air districts, planners, homebuilders, affordable housing organizations, environmental justices organizations, and others. The committee will make its report to CARB by September 30; 2009. In addition, prior to setting the target, CARB must exchange technical information with the MPO and air district. The MPO may also recommend its own target for the region. The MPO must hold at least one public workshop within the region after receipt of the report from the Advisory Committee. CARB shall release draft targets for each region no later than June 30, 2010. In setting these targets, CARB must first consider the GhG reductions that will be achieved from improved vehicles emission standards (overall fuel efficiency improvements), changes in fuel composition (such as low carbon fuels) and other Measures that 'CARR has adopted to reduce GhGs from other emissions sources.31 The MPO may The MPO may recommend to the ARB a target for the region. Once set,' the targets must be updated every 8 years, which is consistent with the new RHNA planning cycle and two RTP planning cycles in non -attainment areas. The board can also, at its discretion, revise the targets every four years based on changes in fuel efficiency, use of low carbon fuels, or other factors that GARB can take into account in setting the target.32' Before revising or updating the regional targets, CA1.B must engage the primary stakeholders (Dept. of Transportations, MPOs, air districts, and local governments) in a consultative process: The MPO may, at its discretion, recommend to the ARB a target for the region for CARB's consideration.33 5. 'What SB 375 means for transportation funding SB 375. requires the RTP t� be internally consistent much like the internal consistency requirement of a city or county's general plan. This means that the "action element" and the "financial element" of the RTP must be consistent with the SCS, since the SCS is part of the RTP. (The "action element" and the "financial element" of the RTP, however, do not need to be consistent with the APS, since the APS is'not part of the RTP.) This means that decisions about the allocation of transportation funds must be consistent with the SCS, its land use plan, and its transportation policies. The land use plan must be based upon the most recent planning assumptions. These are taken in part from local city 29 California Air Resources Board, Climate Change Proposed Scoping Plan (October 2008) p 49. 3° Cal. Gov't Code § `65080(b)(2)(A)(i) 31. Cal. •Gov't Code_ § 65080(b)(2)(A)(iii). 32 65080(b)(2)(A)(iv). 33 (65080(b)(2)(A)(ii)). Technical Overview of SB 375 (v. 1.3) League of California Cities Page 9. and county general plans. As cities and counties use the CEQA streamlining in SB 375, their planning assumptions will align more closely with those in the SCS or APS, whichever CARB agrees would achieve the region's GhG target, if implemented.34 SB 375 makes explicit the authority that already exists in the law. MPOs already have authority to impose policies or condition transportation funding. The Metropolitan Transportation Commission, for example, does not fund certain types of transit projects unless they serve areas that meet minimum density standards.35 Even without SB 375, MPOs were likely to take additional steps in the direction of adopting policies related to reducing GhG emissions within their RTPs planning because the California Transportation Commission recently amended its RTP Guidelines to require that MPOs consider GhG emissions as part of the RTP process, It is worth noting that MPO decision -makers are made up of local elected officials. Accordingly, MPOs are not likely to support measures that limit the discretion of cities and counties, particularly in those MPOs where every city and county in the region has a seat on the MPO board. Only. two regions, Southern California. Association of Governments, (SCAG) and Metropolitan Transportation Commission (MTC), do not fit that model. .SE 375 provides an exception for SCAG that allows for sub -regional development of the SCS and APS, where local representation is more broadly reflected. 6. How are Local Officials and the Public involved in Developing the SCS/APS Once the region has its target, the question turns toward developing a regional plan to achieve GhG reductions. SB 375 requires the following public and local official participation processes before the plan can be adopted: • Local Elected Official Workshops. MPOs must conduct at least two informational meetings in each county for local elected officials (members of the board of supervisors'and city councils) on the SCS and APS, or alternatively, only one meeting if it is attended by representatives representing the county and a majority of the cities representing a Majority of the population in the incorporated areas of that county. • General Public Participation. Each MPO must adopt a participation plan consistent with the requirements of the participation plan required, by federal law that includes a broad range of stakeholder groups. These workshops must be sufficient to provide the public with a clear understanding of the issues and policy choices. At least one workshop shall be held in each county in the region. For counties with a population greater than 500,000, at least three workshops shall be held. Each workshop, to the 34 This is because the CEQA streamlining should act to change some of the projects as they are proposed to be built by developers. Assuming that the CEQA streamlining is sufficient to motivate developers to propose projects that are consistent with the SCS or APS, this may impact the "current planning assumptions" for the region. Nothing requires local agencies to approve such proposals, but if local agencies indicate a willingness to support such proposals, the projected development pattern for the region will change accordingly. 35 See MTC Policy 3434 (www.mtc.ca.gov/planningismari_growth/tod/TOD_policy.pdf) Technical Overview of SB 375 (v. L3) League of California Cities Page ID extent practicable, shall include urban simulation computer modeling to create visual representations of the SCS and the alternative planning strategy. The MPO must also provide a prose§s where members of the public can provide a single request to receive notices, information, and updates. • Circulation of Draft SCS/APS, A draft of the SCS and APS must be circulated at least 55 days before the adoption of the RTP. • Public Hearings. The MPO must hold at least three public hearings on the SCS and APS in multiple county regions, and two public hearings in single county regions. The hearings should be in different' areas to maximize participation opportunities. 7. Agencies and Regions Affected by SB 375 SB. 375 applies to the 18 MPOs in the state (including the Tahoe MPO). Together, these organizations cover 37 counties and represent almost 98 percent of the state population. These include four multiple county MPOs, including the Association of Monterey Bay Area Governments (AMBAG - Monterey, San Benito, and Santa Cruz counties), Metropolitan Transportation Commission (MTC - Alameda, Contra Costa, Solano, Marin, Napa, Sonoina, San Francisco, San Mateo, an Santa Clara counties), Sacramento Area Connell of Governments (SACOG Sacramento, Yolo, El Dorado, Placer, Yuba, and Sutter counties) and the Southern California Association of Governments (SCAG— Los Angeles; Ventura, San Bernardino, Riverside, Imperial, and Orange counties). Affected single county MPOs include Butte, Fresno, Kern, Kings, Madera, San Diego, San Joaquin,: San Luis Obispo, Santa Barbara, Shasta, Stanislaus, and Tulare counties. 8. Exempt transportation projects Transportation projects funded by the MPO must be consistent with the SCS except that projects: programmed for funding on or before December 31, 2011 are not required to be consistent if .(1) they are 'contained in the 2007 or 2009 Federal Statewide Transportation Improvement Program; and p) they are funded pursuant to Section 8879.20 of the Government Code; or (3) were listed in a ballot measure prior to December 31, 2008 approving a sales tax measure for transportation purposes. In addition, a transportation sales tax authority need not change funding allocations approved by the voters for categories of transportation projects in a measure adopted prior to December 31, 2010. 10. Exceptions for the SCAG region SB 375 provides a special set of exceptions for the development of the SCS/APS within the region of the Southern California Association of Governments (SCAG).36 Here, a subregional council of governments and the county transportation commission may work together to propose a SCS or APS for the subregional area. Although SCAG may still address interregional issues in the SCS/APS, SCAG must include the subregional SCS or APS to the extent that it is consistent with the requirements of a regional transportation 36 Cal. Gov't Code § 65080(b)(2)(C). Technical Overview ofSB 375 (v. 1.3) League of California Cities Page 11 plan and federal law. SCAG is still responsible for creating an overall public participation plan, ensuring coordination, resolving conflicts and making sure that the plan complies with all applicable legal requirements. 11.E Special Provision for the Eight San Joaquin Valley MPOs In order to encourage regional cooperation among the eight counties in the San Joaquin Valley, SB 375 specifically encourages two or more counties to work together to develop cooperative policies and develop a multiregional SCS or APS. 12. MPOs in Attainment Areas and RTPAs Not Within an MPO There area few counties in the state that are actually in "attainment" for air quality purposes. Federal law requires that these regions update their RTPs at least every five years instead of every four years (the requirement for non -attainment MPOs). In addition, there are a number of other counties that are not included within an MPO at all. Given that SB 375 is based on a eight year cycle that includes one RHNA planning period and two RTP planning periods, the five year requirement would place attainment MPOs out of sync with the non -attainment MPOs. SB 375 solves this by` allowing attainment MPOs, or a regional transportation planning agency (RTPA) not within an MPO, to opt into an 8 year planning cycle.37 In other words, they inay.maintain their status quo with a five-year RHNA planning cycle that may or may not be aligned with their RTP planning cycle. Or they, may opt into the 8 - year cycle upon meeting the following conditions: • Opting to adopt a plan not less than every four years • This election must be made prior to June 1, 2009 or at least 54 months prior to the deadline for the adoption of housing elements for jurisdictions within the region (in order to afford HCD with sufficient time to develop and distribute an 8 year number). • Public hearing 13. ; Rural Sustainability . MPO or county transportation agency must consider financial incentives for cities and counties that have resource areas or farmland. The idea is that to the extent that SB 375 drives more transportation investments to existing urban areas; some consideration should be given to rural areas that nevertheless help address the emissions targets by not building. An MPO or county transportation agency shall also consider financial assistance for counties to address countywide service responsibilities in counties that contribute towards the GhG emissions reductions targets by implementing policies for growth to occur within their cities. 37 Cal. Gov't Code § 65080(b)(2)(L). Technical Overview of SB 375 (v. 1.3) League of California Cities Page 12 IV. . NEW. CEQA EXEMPTIONS AND STR.EAIVILINING The environmental impact report (EIR) prepared for a RTP will consider the impact of the Plan on global warming and the growth -inducing impacts of the Plan. SB 375's CEQA incentive eliminates the requirement to analyze the impacts of certain residential projects on global warming and the growth -inducing impacts of those projects when the projects achieve the, goals of reducing greenhouse,gas emissions by their proximity to transit or by their consistency with the SCS or APS. 1. Two Types of CEQA Streamlining SB 375 includes two types of CEQA strearnlining. One is for residential projects that are consistent with the SCS (or APS) that CARB agrees is sufficient to achieve the iGhG targets for: the region if it was implemented?' The other is for Transportation Priority Projects (which also must be consistent with the SCS/APS). Each of these is discussedin more detail below: 2. Projects Consistent with the SCS/APS A residential or mixed -use project which is consistent with the general use designation, density, building intensity, and applicable policies specified for the project area in either a SCS/APS is not required to reference, describe, or discuss (1) growth -inducing, impacts; or (2) project specific or cumulative impacts from cars and light -duty truck trips on global warming or the regional transportation network if the project incorporates the mitigation ineasiires required by an applicable prior environmental document: In addition, an EIR prepared for this type of project is not required to reference, describe, or discuss a reduced residential density alternative to address the effects of car and light - duty truck trips generated by the :project: 3. .Three Types of Streamlining for Transit Priority Projects SB 375 amends CEQA in three ways for "transit priority projects" (or TPPs). A TPP is a new type of project created by SB 375 that must meet the four requirements: (1) be consistent with an SCS or APS in which CARB has agreed would, if implemented, achieve the region's GhG target; (2) contain at least 50% residential use (commercial use, if any; must have floor area ratio of not less than 0.75); (3) have a minimum net density of 20 units per acre; and (4) be located within one-half mile of a major transit stop or high quality transit corridorincluded in a RTP.39 • Total CEQA Exemption for a Sub -Set of TPPs. A TPP is exempt from CEQA if it complies with a long list of criteria including the following: 3E Cal. Gov't Code § 65080(b)(2)(I) 39 "Major transit stop" is defined at Section 21064.3 of Public Resources Code and in SB 375 in Section 21155(b). "High quality transit corridor is defined in SB 375 in Section 21155(b). Technical Overview of SB 375 (v. 1.3) League of California Cities Page 13 — Not more than 8 acres and not more than 200 residential units — . Can be served by existing utilities Does not have a significant effect on historical resources — Buildings are 15% more energy efficient than required and buildings and landscaping is designed to achieve 25 percent less water usage — Provides EITHER a minimum of 5 acres per 1,000 residents of open space, OR 20 % housing for moderate income, or 10% housing for low income, or 5% housing for very low income (or in lieu fees sufficient to result in the development of an equivalent amount of units). 4° • TPP: Sustainable Communities Environmental Assessment. A TPP that does not qualify for a complete exemption from CEQA may nevertheless qualify for a sustainable communities environmental assessment (SCEA) if the project incorporates all feasible mitigation measures, performance` standards, or criteria from prior applicable environmental impact reports. A SCEA is similar to a negative declaration in that the lead agency must find that all potentially significant or significant effects of the project have been identified, analyzed and mitigated to a level of insignificance. There are four significant differences: Cumulative effects of the project that have been addressed and mitigated in prior environmental impacts need not be treated as cumulatively considerable. — Growth -inducing impacts of the project are not required to be referenced, described or discussed. — Project specific or cumulative impacts from cars and light duty truck trips on global warming or the regional transportation network need not be referenced described or discussed. A SCEA is reviewed under the "substantial evidence" standard. The intent of the author was to eliminate the "fair argument" test as the standard of review for a sustainable communities environmental assessment. • Transit Priority Projects — Traffic Mitigation Measures. SB 375 also authorizes the 'adoption of traffic mitigation measures that apply to transit priority projects. These measures May include requirements for the installation of traffic control improvements, 'street or road improvements, transit passes for future residents, or other measures that will avoid or mitigate the traffic impacts of transit priority projects. A TPP does not need to comply with any additional mitigation measures for the traffic impacts of that project on streets, highways, intersections, or mass transit if traffic mitigation measures have been adopted. 40 This is a partial listing of the criteria. Technical Overview ofSB 375 (v. 1.3) League of California Cities Page 14 4. To Streamline'or Not: Lead Agency Discretion over New CEQA Provisions A city or county that is concerned about the environmental impacts of a project defined by S13 375 as a TPP may elect to complete traditional or modified environmental review. SB 375 allows —as opposed to requiring —a local lead agency to take advantage of the CEQA' streamlining provisions included in the bill. This analysis is most straightforward for projects that are consistent with the SCS/APS: the language states that the lead agency "is not required" to reference, describe, or discuss growthinducing impacts,: project specific cumulative impacts, or a reduced residential density alternative. The language is permissive; nothing prohibits the lead agency from making the decision to address these issues in the environmental documents for projects that are consistent with the SCS/APS. A lead agency also has discretion in determining whether a project meets all of the requirements of a transportation priority project.41 When a project is statutorily exempt from CEQA, the language providing for the exemption begins with "This division does not apply to....s42 SB.375. is consistent with this approach; it invites ("If the. legislative body finds...."), but does not require,. a lead agency to hold a public hearing to determine whether the TPP meets the requirements for a statutory exemption.43 (If a public hearing was required it would state that "the legislative body shall hold a public hearing ...."). Thus; a writ df mandate could not be brought because the determination of whether to holdthepublic hearing is Within the discretion of the local agency. Likewise, nothing in SB 375 requires a lead agency to opt for a sustainable communities assessment or modified EIR. A TPP that has incorporated all feasible mitigation measures, performance standards, or criteria of a prior applicable EIRs and adopted finding§ pursuant to Section 21081, is eligible for either a sustainable communities environmental assessment or a modified EIR.44 The statute does not direct the lead agency to; complete the sustainable communities assessment or modified EIR. Finally, all three provisions (the exemption, assessment,and modified EIR) require that the TPP incorporate mitigation measures, performance standards, and other relevant information from prior EIRs. This means, for example, that if an EIR for a general plan requires certain environmental standards (e.g., traffic generation or air quality standards) for projects within' the jurisdiction,the city or county may need to complete environmental studies to determine whether those standards can be met by the TPP. 41 See Cal. Pub. Res, 'Code § 21155.1. The project must meet all of the provisions of subdivisions (a) and (b) and one of the requirements of subdivision (c). If lead agency finds, based upon substantial evidence, that the TPP meets all of these requirements, then the project is a "sustainable communities project" and exempt from CEQA. 42 See, for example, Cal. Pub. Res. Code §§ 21080.8 to 21080.33. 43 CaI. Pub. Res. Code § 21155.1. 44 Cal. Pub. Res. Code § 21155.2 Technical Overview of SB 375 (v. 1.3) League of California Cities Page 15 V. Changes to the Housing Element Law Before SB 375, federal and state law ignored the fact that in most areas in California, regional transportation plans and regional housing allocation plans are prepared by the same regional organization. Conflicting deadlines policies have historically caused a disconnect between regional transportation planning and regional housing policy. SB 375 eliminates this disconnection by requiring the RTP to plan for the RHNA and by requiring the RHNA plan to be consistent with the projected development pattern used in the RTP. This will make two significant changes in this regard. First, cities and counties in Clean Air Act non -attainment regions will have an eight -year planning period,45 which means that the housing element must be updated every eight years rather than every five years. Second, cities' and counties' RHNA will change because consistency between the regional housing needs allocation plan and the RTP means that the concept of "fair share" will change. Under existing law, the COG adopts the regional housing allocation plan. The plan distributes to each city and to each county its fair share of the regional housing need.46 Under SB 375 the plan must be consistent with the development pattern included in theSCS (although each jurisdiction still must receive an allocation).41 In trying to encourage a growth development pattern for residential housing that would reduce GhGs, SB 375 had to address the potential conflicts with the existing RHNA and housing element goals and process. 1. Establishing an Eight Year Planning Period in Non -Attainment Regions Local governments withina region classified as "non -attainment" under the Clean Air Act and local governments within a region that has elected48 to adopt a regional transportation plan every four years are required to revise their housing element every eight years (instead of the current 5 years) 49 All other local governments remain -on the five-year schedule (see "12. MPOs in Attainment Areas and RTPAs Not Within an MPO" on page 11). A5 SB 375 allows attainment regions to elect to prepare an RTP every four years which will then mean that cities and counties in that region to have an 8 -year planning period. 46 SB 375 changes the methodology that HCD uses to calculate the existing and projected regional need. This number must now reflect "the achievement of a feasible balance between jobs and housing within the region using the regional employment projects in the applicable regional transportation plan" Cal. Gov't Code § 65584.01(d). 47 See Cal. Gov't Code § 65584.04(i).. 48 Cal. Gov't Code § 65080(b)(2)(L). A9 See Cal. Gov't Code §§ 65588(b). and (e)(7) Technical Overview of SB 375 (v. 1.3) League of California Cities Page 16 2. When the Eight Year Planning Period Starts Local governments in non -attainment areas are required to adopt their fifth revision of the housing element no later than 18 months after the adoption of the first RTP adopted after September 30, 2010. Local governments that have elected to adopt the RTP every four years are required to adopt their next housing element 18 months after the adoption of the first regional transportation plan following the election. All local governments within the San Diego' Association of Governments (SANDAG) are required to adopt their fifth revision no more than 5 years from the fourth revision and their sixth revision no later than 18 months after adoption of the first RTP adopted after the fifth revision due date. 3. Timeline'for,RHNA Allocation and the Housing Element In areas where the eight -year planning period applies, the MPO will allocate the RHNA number to the individual cities and counties at approximately the same time it adopts the RTP (which includes the requirement that the SCS must accommodate the 8 year RHNA allocation). Once'the city receives its RHNA allocation, it has 18 months to. prepare its. housing element and submit it to the Department of Housing and Community Development (HCD). All local governments within the jurisdiction of an MPO, except those within SANDAG, shall'adopt its next housing element 18, months after adoption of the first RTP that is adopted after Se'p'tember 30, 2010. 4. Consequence of Failing to Submit a Timely Housing Element Local agencies that fail to submit a housing element to HCD within the 18 month timeline fall out of the eight year housing element cycle and must submit their housing element every four years to HCD.S° Theseagencies must still complete their zoning within three years and 120 days of the deadline'for adoption of the housing element or be subject to the -sanctions. provision described below. 51 5. Timeline to Re -Zone Sites to Meet RHNA Need Each housing element includes an inventory that identifies sites to accommodate the jurisdiction's RHNA. Jurisdictions with an eight -year housing element must rezone sites to accommodate that portion of the RHNA not accommodated in the inventory no later than three years after the date the housing element is adopted or the date that is 90 days after receipt of the. department's final comments, whichever is earlier.52. Rezoning of the sites includes adoption of minimum density and development standards. A local agency that cannot meet the 3 -year requirement may be eligible for a one-year extension if it can prove that it has completed 75 percent of its zoning requirement and 5° Cal. Gov't Code § 65588(6) 51 Cal. Gov't Code § 65583(c)(1)(A) 52 Cal. Gov't Code § 65583(c)(1)(A). Technical Overview of 513 375 (v. 1.3) League of California Cities Page 17 was unable to rezone for one: of the following reasons: (1) because of an action or inaction beyond the control of the local agency, (2) because of infrastructure deficiencies due to fiscal or regulatory restraints, (3) because it must undertake a major revision to its general plan'in order to accommodate the housing related policies of an SCS or APS.53 6. Scheduling Actions Required by the Housing Element Program Current lawalso requires a housing element to include a. program of actions that the local agency intends to undertake. during the planning period to encourage that the needs of all economic segments of the community will be met. SB 375 requires local agencies to develop. a schedule and timeline forimplementation as to when specific actions will have "beneficial impacts" within the planning. period. 54 7. Public Hearing for HCD Annual Report Local governments must now hold a public hearing and provide an annual report on the progress made duringthe;year on the programs within.the housing element. This requirement to make. this report on an official form approved by .HCID has been in the law since, 1995, but has not been, officially applicable because HCD has not yet finalized the form under the administrative rulemaking.process5s 8. Extension of Anti-NIMBY' for Affordable Housing Projects SB 375 extends a strict anti=NIMBY law protection (now called the Housing Accountability Act) for housing development projects, which are defined as projects where at.least 49 percent of the units are affordable to families of lower -income households. S6(In most circumstances, a development that meets the 49 percent threshold is a development where 100 percent of the units are affordable to lower -income households). The new anti-NIMBY provision applies to an agency's failure to zone a site for low- and very low-income households within the three year time limit (four years if an agency qualifies for an extension). If an affordable project is proposed on that site and the project complies with applicable, objective general plan and zoning standards, including design review standards, then the agency may not disapprove the project, nor require a conditional use permit, planned unit development permit, or other discretionary permit, or impose a condition that would render the project infeasible, unless the project would have a specific, adverse impact upon the public health or safety and there is no feasible method to satisfactorily mitigate or avoid the adverse impact. 53 Cal. Gov't Code § 65583(0. S4 Cal. Gov't Code §'65583(c); 55 Cal. Gov't Code § 65400(a)(2)($). 56 Cal. Gov't Code§ 65583(g) Technical Overview of SB 375 (v. 1.3) League of California Cities Page 18 9. Potential "Sanctions" for Failing to Meet Zoning Timeline • Any interested:person may bring an action to compel compliance with the zoning deadline andrequirements for, the new eight -year housing element.57 If a court finds that a local agency failed to complete the rezoning, the court is required to issue an order or judgment, after considering the equitiesof the circumstances presented by all parties, compelling the local government to complete the rezoning within 60 days or the earliest time consistent X'ith public hearing notice requirements in existence at the time the action was filed. The court shall retain jurisdiction to ensure that its order or judgment is carried out. If the court determines.that its order or judgment is not carried.out, the court is ' required to issue further orders to ensure• compliance and may impose sanctions on the local agency,58 but must consider the equities presented by all affected parties before doing so. 10. Adoption or Self Certification of Housing Element Remains.the Same. Although SB 375 changed the housing element planning period from five years to eight years -for some jurisdictions, and added time frames for completing Certain actions which must be taken during the planning period, SB 375 did not change either the way in which the housing element is adopted except to the extent that the regional housing allocation plan must be consistent with the SCS. The RHNA process remains itself. Self - certification of the housing element remains an option (and triggers the three year requirement to zone).. SB 375 did, nothing to alleviate the struggle that some cities and counties face, in trying to plan for their entire.RHNA except that HCD review of the housing element will occur less frequently for jurisdictions that move to an eight year planningperiod. 31 Cal. Gov't Code § 65587. S8 This provision is similar to the requirement to file an annual housing element report on form approved through the state rulemaking process. See Cal. Gov't Code § 65400(a)(2)(B). A local agency that fails to file such a report is subject to sanctions. Most agencies are not familiar with this provision, however, because HCD has not yet formally adopted the forms that would trigger this requirement (though a draft of such a form is posted on the HCD website—it has not yet been formally approved). Technical Overview of SB 375 (v. 1.3) League of California Cities Page 19 KEY DATES IN THE IMPLEMENTATION OF SB 375 December 31, 2008* Projects specifically listed on a local ballot measure prior to this date are exempt from the requirement to be' consistent with the SCS January 1, 2009 CARB adopts Scoping Plan, which will include the total reduction of carbon in million metric tons from transportation planning January 31, 2009 June 1, 2009 CARB shall appoint a Regional Targets Advisory Committee (RTAC) to recommend factors to be considered and methodologiCs to be used for setting reduction targets MPOs in attainment areas and Regional Transportation Planning Agencies not within an MPO may elect to opt into the 8 year planning cycle. September 30, 2009 RTAC must report its recommendations to the CARB June 30, 2010 September 30, 2010 October 1, 2010 December 31, 2010* December 31, 2011 CARB must provide draft targets for each region to review CARB must provide each affected region with a GhG emissions reductions target. Beginning this date, MPOs updating their RTP will begin 8 year planning cycle that includes SCS-APS and alignment for the RHNA process. Transportation sales tax authorities need not change allocations approved by voters for categories of projectsin a sales tax measure approved by voters prior to this date. Federal Statewide Transportation Improvement Projects programmed before this date are exempt from the requirement to be consistent with the SCS * A pr. oject category is different from a specifically listed project insofar as a local initiative may authorize funding for a certain type of improvement without specifying a specific location. Technical Overview of SB 375 (v. 1.3) League of California Cities Page 20 NEW RTP RHA PLANNING CYCLE (Underlined provisions indicates new law. Plain text represents current law). RIINA PROCESS YEAR RTP PROCESS Repeat Process p sir i t 'diaft`1 tA' SG�S' !'Aa a Y#i?4} _lioit5fii�Atlti't:a iii ifs=! ua tt,l li'.ri) O d ya: R cr t q�ii 08! 1n I cb Ilti iij ' e int gimme elks IOt). or date:10iisih :eleiliellt;ad iptti1` :iloOil:R1 eiicy '`3 year tiiiii pe'r'iio torcottiplcteizoiiia :isti ttde'itp ;tyitlilit: ti��tttriryaitglna°;� ; ;' " *IV."j :;1 isj:i1;r(i':i'i %i ;:i' ';g:Jfr i�•_vj�;' ;:rrii?_y_r; j-:.: .S :j _ , htittgal iioiisliig repori.'ilh li rilu to *us :3•'.r.7. .. ia ;.,,:.. ,. ' . . . . ,. . e1104.1 a to.iibn 0. t.C!xoning nt ite )lot':wil.bil-tnvcntori extet)Sloli ppUcs; l�ailt�tctd in ctt Jfltellio oatl trlg:¢x t ! 11 , it ' t,11M8'Y i'cincdv oottri�ii►iiiosed:saliattrnis.aiid n6w'nri'trF 1 1Vi, xi nl_�:III'I. tiiilFI,i!jl��': -C. ilt.((I..,i C. .�.. .. .. N u 1N]Ivfb rbv(g.dY N 1.1. 'kilerai• 0!0.11.0.0).11V :. e,... eint . o "d•ald ttsit es: o'i sls ent ry ...0... dab (i lin°tl�iistties:�:but!>Ilbt!yE;t<�� ' eda_.1 -2 to. -1 lto3 i I r±alati nctcs1 4 5 6 8 tr. 11p c $ ai dei •i}t Iesf`5day;`spror:1 Mr;O i u mtifc. lile:rcdnced G l�Q 1yopldi piib[id h rings • 1 l is epprovcd by p �I may also b pVurov � Ial.uu!i_,f„Iy 1.'•a.;:i,.,�_s?;,i ._i,.l;;iu;y '. 51 ;.. ,F .'ARP'ti ardilligrceq`yv)tiiMpa's.Assessnie. tt pi scss ... .........:. AF$ would i tlie' ih it` niprenienletFiiia ilevb tame - - Retreat Process dn� a iatron it vestttteitis l+e spksICett vritli Ines t pniterrl •In S " rr 1 -n r ie ,.0 #0 consistent wrtti the GAR)1 ppio' d�Altr$18d§ • glpac'tor CEQA'cxernption ntiti streat liitiiig'pror�i�t tip ryiews and up` ntos fpreeksts and assumptions in RTP i r1 S,C;) for: seAndi t.P cycle EtbniitS rI tliiif 1'tir�;elaCi Nil boo Technical Overview ofSB 375 (v. 1.3) League of California Cities Page 21 KEY LEAGUE AMENDMENTS TO SB 375 Over the course of the SB 375 negotiations, the League identified a number of key amendments it required in order for the board to consider supporting it. This table summarizes many of those issues and explains the resulting outcome of the negotiations. Issues Restrictions on Transportation Funding? SR 375 March 24, 2008 Version 58 375 Final Version Transportation investments within the RTP were based upon a set of assumptions about resource lands that did not necessarily reflect the content of local general plans. The requirement for the SCS to identify resource lands is gone. Local officials on MPO boards retain discretion over the funding within RTP. If the SCS cannot achieve the regional GhG target, the region must create an APS that could achieve the GhG target. But the APS is not part of the RTP. Funding for projects must be consistent with the SCS, but not necessarily the APS. Meaningful CEQA Relief? CEQA provisions had several preconditions that made it unlikely that they would broadly applied Contains two forms of CEQA relief. The first exempts residential projects from reviewing the impacts related to cars .and light trucks on projects that are consistent with a plan to reduce GhGs from that source. The second is for defined infill projects near transit choices. Mandatory Growth Allocations in SCS of Regional Transportation Plan? Required MPOs to do mandatory and heavily prescribed growth management within the regional transportation plan (RTP), which came to be known as "concentric circle" planning Mandatory growth management has been removed and the requirement in earlier drafts that a region "identify resource lands" has been changed to "gather and consider the best practically available scientific information about resource lands." Sweeping Resource Land Definitions? Resource definitions included new ambiguous terms. The ambiguous environmental land definitions have been clarified to be consistent with current law. Role for local officials in developing SCS? None MPO must adopt an outreach process that includes workshops for local elected officials in each county. Local Participation Setting Regional GIiG Reduction Targets? Called for a top -down process for setting GHG targets that was unacceptable Bill now contains a fair process for setting regional targets that includes a statewide advisory committee with League representation. CARB must hold workshops requirements in each region. Confusion between existing federal laws and SB 375? It was unclear how the new "Supplement," (now the APS) and the existing federal RTP requirements were related to each other. Connection between the "Supplement" (now called the "Alternative Planning Strategy or APS)" which is required when a region's RTP cannot meet the regional targets) and the RTP; i.e., the land use pattern in the Alternative Planning Strategy will not affect or be part of the RTP or its funding. RHNA Consistency and Extension? The new goal of encouraging infill through transportation investments and the RTP (4 year cycle) directly conflicted with existing RHNA fair share goals (5 -year cycle). The bill achieves a three-year extension of the RHNA process (from 5 — 8 years), making it consistent with the RTP process of two four-year cycles. This achieves a major League goal. ATTACHMENT El. Housing Element Non -Compliance At the March 3 study session, Council and Commission members had questions about the implications of not preparing a Housing Element in compliance with State law, as determined by the Department of Housing and Community Development. The Council also asked about the potential to "self -certify" the City's Housing Element in lieu of State -determined compliance. A list of the status of housing elements in all Santa Clara County and San Mateo County cities is attached (HCD's Housing Element Compliance Report). In Santa Clara County, all cities except Palo Alto and Mountain View have submitted draft or final housing elements for the 2007-2014 timeframe, and 3 cities have received State certification. Staff understands, however, that Mountain View has now also submitted its draft element. In San Mateo County, only the city of Menlo Park and the County have not yet submitted draft elements to the State, and 3 cities have received certification of their housing elements. Non -Compliance Non-compliance with Housing Element law exposes the City to two potential consequences of inaction or action contrary to the law: 1) litigation and 2) loss of funding for housing projects, planning grants, and transportation grants. 1. Litigation for the lack of an approved Housing Element has been an infrequent occurrence, with about a half -dozen California cities having been sued in the past decade. The litigation generally has been initiated by a nonprofit housing group, and has more recently been joined by the State Attorney General. Adverse actions to the cities have included directives to either cease issuing any building permits and/or to create a compliant housing element within, for example, 90 days (or the court will do so). These lawsuits have typically been brought when a city has shown clear disregard for the housing law, has enacted ordinances that prevent compliance, or has denied substantial housing projects. Of particular note is the recent City of Pleasanton case, where a nonprofit housing firm and the Attorney General challenged that city's residential growth cap by arguing they could not achieve a compliant housing element given the prescribed limits on housing. In March, a Superior Court judge in Alameda County ruled in the plaintiffs favor and directed that the cap must be removed, other regulatory barriers to achieving housing goals should be eliminated, and the city must stop issuing non- residential building permits until a compliant housing element is prepared. Two newspaper articles and a State Department of Housing and Community Development (HCD) memo are attached for further background and a link to the court decision is provided in the HCD memo. It appears that there may be substantial repercussions from this case for cities throughout the State. 2. An increasing percentage of grants for affordable housing and smart growth infrastructure, including some transportation funding, are now only provided to cities with State -certified housing elements. This is likely to become a consistent requirement as the SB 375 sustainable community strategies are developed. One affordable housing developer in Palo Alto has already been told by the State that they are not eligible for housing funds since the City does not have a certified housing element. Staff is not aware of any transportation funds that to this point have been withheld for that reason, but staff has heard that some grants (e.g., MTC's Transportation for Livable Communities) are now tied to providing for increased residential densities in transit -related areas of the city, essentially what SB 375 and various other regional directives would prescribe. Self -Certification The process of self -certification of housing elements has changed over time. Currently, the only provisions for self -certification apply to the San Diego Association of Governments (SANDAG), allowing cities in that area to avoid HCD review by setting out affordable housing production goals, rather than just planning and zoning for affordable housing. The 2007-2014 cycle will be the third housing element cycle for which SANDAG cities have used the self -certification process. An "Overview of the SANDAG Pilot Self -Certification Process" is attached. It is notable that about half of the cities that self -certified also then submitted their elements to HCD as well. This is because the State only recognizes HCD certification to qualify for funding for affordable housing and smart growth infrastructure. Attachments: Housing Element Compliance Report, April 2010, HCD Articles (2) re: City of Pleasanton Litigation and Decision April 19, 2010 Memo from HCD re: City of Pleasanton Litigation and Decision Overview of the SANDAG Pilot Self -Certification Process Housing Element Non -Compliance Page 2 SFGatecom Print This Article Gatecom Pleasanton housing cap violates law, judge says Bob Egelko, Chronicle Staff Writer Tuesday, March 16, 2010 Back to Article (03-15) 17:43 PDT PLEASANTON -- Pleasanton's voter -approved cap on the number of residences in the city, a measure intended to limit growth and congestion in the town, violates a state law requiring all cities to take on their share of regional housing needs, an Alameda County judge has ruled. The ruling is the first by a California judge to require a city to change its zoning to accommodate new housing, said attorney Richard Marcantonio of the nonprofit Public Advocates firm, which represented the plaintiffs in a lawsuit seeking to overturn the cap. Those plaintiffs said Pleasanton was welcoming employees to office parks and other businesses, but forcing other cities to house them. ATTACHMENT E a "Pleasanton imports workers to fill thousands of jobs but excludes those workers and their families from a chance to live in the community," Marcantonio said. "Now there's a chance for people to live in the city that they contributed to building." Pleasanton can't comply with the state law requiring it to build its fair share of housing because of a ballot measure, passed in 1996 and reaffirmed by voters in 2008, that allows no more than 29,000 units in the city, Superior Court Judge Frank Roesch said Friday. Pleasanton had 21,18o homes, apartment units and condominiums in 1996 and now has more than 27,000. Its population is 68,00o. Roesch ordered the city to disregard the limit and remove regulatory barriers to construction of about 4,000 new housing units by 2014. At least three-quarters of them must be affordable for low- to moderate -income residents. The affordable housing includes about 800 low-cost units that should have been completed by 2007, according to the regional agency that sets minium housing requirements for Bay Area communities. Roesch told city officials to rezone enough land to build those units quickly. Pleasanton now has 40,000 weekday commuters, and the number is likely to grow because of a revised general plan the City Council approved in July. It calls for more office construction and the creation of 45,00o jobs by 2025. Pleasanton officials were reviewing the ruling Monday and had no comment, said city spokeswoman Joanne Hall. The city's lawyers have argued that the housing limit is a valid exercise of municipal land -use authority. The city could appeal the ruling. The suit was filed in 2006 by the nonprofit Urban Habitat Program and a schoolteacher seeking affordable housing. It was joined last year by state Attorney General Jerry Brown, who said Pleasanton's housing limits added to urban sprawl and led to increased vehicle use, air pollution and greenhouse gas emissions. The Association of Bay Area Governments, the organization of local officials that decides each city's housing allotment, assigned 5,059 housing units to Pleasanton for 1999-2007 and another 3,277 units for 2007-14. Roesch said the city had failed to meet the 2007 total and couldn't comply with the 2014 allotment if its housing limit remained in effect. "The city is in dear violation" of the state housing law, the judge said. He said the City Council took a small step in December to expand housing by approving the rezoning of unused land in the Hacienda Business Park, near the Dublin/Pleasanton BART Station. But the ordinance allows city officials to reject construction plans for "good cause," a vague standard that could discourage development, Roesch said. The city "must implement non -illusory zoning changes," he said. E-mail Bob Egelko at begelko@sfchronicle.com. http://sfgate.com/cgi-bin/article.cg i?f=/c/a/2010/03/16/BABR1CG685.DTL This article appeared on page C - 1 of the San Francisco Chronicle © 2010 Hearst Communications Inc. 1 Privacy Policy 1 Feedback 1 RSS Feeds I FAQ I Site Index I Contact SFG tacom Print This Article SFGatecom Alameda land -use ruling could reshape state John King, Chronicle Urban Design Writer Wednesday, March 17, 2010 Back to Article When an Alameda County judge this month ruled that Pleasanton must loosen its development rules to allow large amounts of new housing for all income levels, he sent a message that could ricochet around the state. The ruling by Superior Court Judge Frank Roesch found the prosperous city of 68,000 at fault for a voter - approved cap on the number of housing units allowed within its borders. Roesch based his decision on a California law that requires cities to make land available to accommodate their share of regional housing needs - and that is a standard that most municipalities don't meet. If the Alameda decision stands, and if other cities face legal challenges, the result could reshape the landscape of California suburbs and small cities - conceivably forcing them to reconsider height limits or increasing the density in their downtowns. "The next few weeks, everyone is going to take a look at this and see what it might mean," said Cathy Cresswell, the deputy director for housing policy development at the state's Department of Housing and Community Development. "Some might want to take another look at how they've addressed this very important state requirement." Cresswell was referring to the Regional Housing Needs Allocation, a formula used since 1980 but, like many state edicts, often ignored. The idea is simple: Likely growth is determined regionally, with housing needs tied to job creation. Regional planners then break up this amount among cities and unincorporated county areas so housing is located near jobs. Local governments then must demonstrate that they can allow such growth to occur. The decision by Roesch faults Pleasanton for capping its number of housing units at 29,000. There are currently more than 27,000, yet the city's general plan clears the way for an additional 45,O0O jobs by 2025. To meet the state requirement, Pleasanton was supposed to make room for 5,059 units between 1999 and 2006. Instead, the city issued 2,156 housing permits - 43 percent of the desired amount. But if the cap on units is unusually blunt, Pleasanton's resistance to housing is typical of the region. Falling short of goal According to a study of housing production between 1999 and 2006 conducted by the Association• of Bay Area Governments, just 24 of 102 cities in the region produced more housing than requested by the state. In terms of housing for lower -income residents - a need also addressed in the formula - the results were even more lopsided: Of the 61,000 moderate -income units that ABAG hoped for in this period, 17,697 were built in the Bay Area. While Pleasanton attorneys have yet to comment on the ruling, plaintiffs are open about the larger message they seek to send. "The bottom line is, it's the law" that local government must respond to state edicts, said Wynn Hausser of Public Advocates, which argued the Pleasanton suit on behalf of Urban Habitat Program, a social equity advocacy group. The suit was joined last year by state Attorney General Jerry Brown. "Everybody has to share in the region's growth, the positives and negatives," Hausser said. "The law doesn't say everything has to be urban, but we're going beyond a point where communities can be enclaves." Concentrate the growth One way to accommodate growth in suburbia is to allow slightly taller apartment buildings and condominiums in the center of town, to concentrate it near BART or bus stops, and loosen zoning so that single-family neighborhoods can sprout cottages and "in-law" units. This sort of strategy has been touted for the past decade by advocates of what is called "smart growth." And, more recently, the message has been taken up by environmentalists who see compact development as a way to get people out of their cars and to preserve open space. "There certainly has been a demand for those sorts of ideas," said Paul Fassinger, the research director for ABAG. "The trouble has been getting (local governments) to understand that this might be a good idea for them, not just for somebody else." If Roesch's ruling is upheld - and is applied elsewhere - those governments might have less wiggle room in the years to come. E-mail John King at jking@sfchronicle.com. http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/03/17/MNGH 1CGQ9H. DTL This article appeared on page A - 1 of the San Francisco Chronicle © 2010 Hearst Communications Inc. 1 Privacy Policy 1 Feedback 1 RSS Feeds 1 FAQ 1 Site Index 1 Contact STATE OF CALIFORNIA -BUSINESS. TRANSPORTATION, AND HOUSING AGENCY ARNOLD SCHWARZENEGGER Governor DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT COMMUNICATIONS 1800 Third Street, Room 450 Sacramento, CA 95811 www.hcd.ca.gov (916) 445-4775 Fax (916) 324-5107 FOR IMMEDIATE RELEASE Date: April 19, 2010 Contact: Jennifer Sweeney Director of Communications (916) 445-4775 jsweeneyna hcd.ca.gov The California Department of Housing and Community Development Comments on the Alameda Superior Court Decision on Housing Caps Sacramento — Last month, Alameda Superior Court Judge Frank Roesch found a voter -approved housing cap in the City of Pleasanton to be a violation of state law. The California Department of Housing and Community Development (HCD) offers the following comments on the decision. State law requires all cities and counties to plan for their share of their regional housing needs. In the ruling, Judge Roesch was clear that state housing law superseded a local voter -approved measure that limited new housing construction in the City to 29,000 units. Judge Roesch ordered the City to remove the cap, to remove other regulatory barriers to construction of new housing units and to stop issuing non-residential building permits. 16The court's decision confirms the preeminence of state housing law," said HCD Director Lynn L. Jacobs. "The ruling also reinforces the importance of each locality's efforts to plan for both its economic development and its residential housing demand." Every local government in California is required to adopt a comprehensive, long-term general plan for the physical development of the community. The housing element is one of the seven mandated elements of the local general plan. Housing element law requires local governments to adequately plan for the existing and projected housing needs of all economic segments of the community. HCD works with every city and county in the state to help them comply with housing element law and address their housing and community development needs. Housing element law is also critical in promoting smart growth and sustainability. Effective housing elements promote development of higher density housing close to jobs and along transportation corridors. The links between a vibrant economy, environmental quality and an adequate supply of affordable housing have never been clearer or more important. This decision will ensure those critical relationships are reinforced and enhanced. "Adherence to state housing law has been an issue in courtrooms before, but this case was the first time the Attorney General's office has been as directly involved," Director Jacobs said. "This shows that there is now a greater understanding of the connection among housing, the environment and local economic issues." For a copy of the ruling, go to http://www.hcd.ca.gov/legal/Document 10.pdf. ATTACHMENT E 3 Overview of the SANDAG Pilot Self -Certification Process In 1995, AB 1715 (Goldsmith), sponsored by the San Diego Association of Governments (SANDAG), created a pilot program that allows jurisdictions in the San Diego region to self certify their housing elements. Jurisdictions that choose the self -certification option are exempt from the HCD review requirement. The use of the self certification process is available only to SANDAG jurisdictions pursuant to Government Code Section 65585.1. The San Diego region's pilot program was born out of earlier statewide discussions and legislative proposals to reform housing element law. The idea of allowing jurisdictions to self certify their housing elements based on meeting some type of affordable housing performance goals was raised during these discussions, but consensus regarding how to set those goals could not be reached. The self -certification pilot program provides an incentive for actual production of affordable housing exempting local governments from state housing element review. This incentive was designed to help achieve the state's housing goals in a more cost effective mariner. Because SANDAG had developed such goals in the past, had experience with self -certification as a part of its regional growth management work, and had a Housing Element Advisory Committee in place, legislation for a pilot self -certification program was pursued. The San Diego region wanted to place the emphasis on results (actual production of housing, especially affordable housing) rather than plan preparation and processes. San Diego jurisdictions view the housing element self -certification option as having three purposes: 1. To give jurisdictions more flexibility in how they meet affordable housing goals, 2. To focus on housing production rather than paper generation, and 3. To allow jurisdictions the option of self -certifying their housing elements, and therefore bypass HCD's review and "certification," based on the achievement of specific affordable housing goals. In addition to preparing a housing element that meets the requirements of state law, a jurisdiction must show that it has met its affordable housing goals, which are defined in the law as the maximum number of housing units that can be constructed, acquired, rehabilitated, and preserved and the maximum number of units or households that can be provided with rental or ownership assistance to meet the needs of low, very low and extremely low income households during the preceding housing element cycle. Ten of the 19 jurisdictions in the region have self certified their housing elements. To self -certify the third housing element revision (due December 31, 1999) jurisdictions must have met their fair share of the regional housing needs during the 1991-99 housing element cycle, as determined by SANDAG. The fair share goals for each jurisdiction were set forth in SANDAG's 1990 Regional Housing Needs Statement. For the housing element due in 2004 (the fourth revision), the bill stated that jurisdictions must meet an affordable housing goal, which is based on available financial resources and regulatory measures. The work of the Housing Element Advisory Committee centered on the development of this goal. In developing the affordable housing goals, the Committee, working with a 9 consultant, took a number of factors into consideration including: the size of the jurisdiction, its financial resources (e.g. availability of redevelopment funds) both past and future, and past and future potential use of regulatory measures such as inclusionary housing programs. The goals set for the 1999-2004 housing element cycle are distributed into three income categories: low, very low, and extremely low as required by the law. Both SANDAG and HCD were required to agree on the methodology for setting the affordable housing goals that, if met, would allow jurisdictions to self -certify their 2004-09 housing elements. HCD Director Richard Mallory testified in support of the methodology and program at the time of adoption by the SANDAG Board in June 1998. In addition to preparing a housing element and meeting its affordable housing goal, jurisdictions must provide a statement with additional information on low-income housing dispersion; for example, they must document that additional affordable housing opportunities will not be developed only in areas where concentrations of lower income households already exist. Finally, to be eligible for self -certification, no local government actions or policies may prevent the development of the sites jurisdictions have identified as available to meet future housing needs. To complete the self -certification process, a jurisdiction is required to: 1. Hold a public hearing; 2. Make findings, based on substantial evidence, that it has met the relevant criteria for housing element self -certification (contained in Section 65585.1 of the Government Code); 3. Adopt the updated housing element; and 4. Submit a self -certification letter of compliance to the Department of Housing and Community Development along with its adopted housing element, for HCD's information, not approval. Not long after SANDAG adopted the self -certification implementation program in June 1998, an issue arose that undermined and seriously threatened the viability of the self - certification pilot program. At the beginning of 2000, SANDAG became aware that eligibility for certain state programs was contingent upon having a housing element found in compliance with state law by HCD. SANDAG brought this issue to the attention of HCD via a letter to Director Julie Bornstein. After meeting with SANDAG staff and Housing Element Advisory Committee members, HCD took the position that a self -certified housing element is not equivalent to an element reviewed and found in compliance with state law by HCD staff. A number of funding sources for affordable housing and smart growth, including some administered by HCD, require applicants to have a housing element that has been found in compliance by HCD, or give priority to cities whose housing elements have been found in compliance by HCD. Such requirements put cities that choose to self -certify their housing elements at a disadvantage for funds compared to those not self -certifying, and reduce their ability to produce affordable housing. The Department of Housing and Community Development's (HCD) position that self certified housing elements are not equivalent to housing elements that are found in compliance with state law damaged the viability of the pilot program. Six of the 10 jurisdictions that self certified their housing elements submitted their self certified elements to HCD for a finding of compliance to preserve their eligibility for state funds. In some cases these reviews took several months to complete, resulted in only minor changes to the housing elements, and required additional environmental review and public hearings. Status of Self -Certification Process In view of the issues surrounding the self -certification pilot program, SANDAG pursued two changes to state law regarding the housing element self -certification program: a) An extension of the sunset date to allow jurisdictions to self -certify their 2009- 14 housing elements (an option that does not exist under the current law), and b) Granting full eligibility for all state funds and programs to jurisdictions that self -certify their housing elements. SANDAG and the Regional Housing Task Force believed that the pilot program should be allowed to operate for another housing element cycle in order to allow a more thorough and complete evaluation of its effectiveness and success. SANDAG prepared a report to the Legislature on the progress of the self -certification program in April 2003. The report makes the following findings and conclusions about the self -certification program: 1. Eleven of the 19 jurisdictions in the region have self -certified their housing elements. These include: Chula Vista, Coronado, El Cajon, Escondido, Imperial Beach, La Mesa, National City, Oceanside, San Marcos, Santee (processing housing element with general plan update), and Vista. 2. Jurisdictions that self -certified their housing elements met a higher percentage of their affordable housing needs during the 1991-99 housing element cycle than jurisdictions that did not self -certify. 3. The self -certification pilot program provides an incentive for actual production of affordable housing: exemption of local governments from state housing element review. This incentive is a powerful tool to help achieve the state's housing goals in a more cost- effective manner. 4. The Department of Housing and Community Development's (HCD) position that self - certified housing elements are not equivalent to housing elements that are found in compliance with state law damaged the viability of the pilot program. 5. Six of the 11 jurisdictions that self -certified their housing elements submitted their self -certified elements to HCD for a finding of compliance to preserve their eligibility for state funds. In some cases these reviews took several months to complete, resulted in only minor changes to the housing elements, and required additional environmental review and public hearings. 6. The process of establishing the self -certification program focused attention on the need for, and the ability, of jurisdictions to provide affordable housing for low income households and families. 7. The self -certification program provides a cost savings for both state and local government, which is important in light of the state's current budget crisis. 8. Continuation of the program would draw attention to an often ignored need: the actual provision of housing for low income households and families. The current status of the program is that it is no longer being pursued by SANDAG. The Housing Element Working Group including the COGS, League of Cities, Local Realtors have not been supportive of the self certification process. The housing advocacy groups prefer the state review process by HCD. The full SANDAG Report is available on the federation website on the new Policy Page: http://www.sandag.org/uploads/publicationid/publicationid 871 2004.pdf ATTACHMENT E 4 HOUSING ELEMENT COMPLIANCE REPORT 04/13/2010 County Jurisdiction Adopted In Process of Review 2007-2014 Housing Element Not Submitted SAN MATEO Atherton X Belmont X Burlingame X Menlo Park X Redwood City X San Carlos X San Mateo X San Mateo County X SANTA CLARA Campbell X Cupertino X Los Altos X Los Altos Hills X Mountain View X Palo Alto X San Jose X Santa Clara X Santa Clara County X Saratoga X Sunnyvale X ATTACHMENT E 5 Regional Housing Needs Allocation (RHNA) Table 2007 - 2014 cycle (rev 03/10) Income Level Need Entitled Building Permit Issued 2007-2014 Unmet Need* Very Low 690 148 57 633 Low 543 18 2 541 Moderate 641 102 91 550 SUBTOTAL 1,874 268 150 1,724 Above Moderate TOTAL 986 744 639 347 2,860 *Unmet need = "Need" minus "Building Permit Issued" 1,012 789 Very Low -Income: Households with incomes between 0 and 50 percent of County median family income. State 2009 limit for a family of 4: $53,050 Low -Income: Households with incomes between 51 and 80 percent of County median family income. State 2009 limit for a family of 4: $84, 900 Moderate Income: Households with incomes between 81 and 120 percent of County median family income. State 2009 limit for a family of 4: $126,600 Above Moderate Income : Households with incomes above 120 percent of County median family income. State 2009 limit for a family of 4: over $126,600 2009 State Santa Clara County Area Median Income (AMI) = $105,500 The City uses State (HCD) Income Limits in determining eligibility for housing -related programs and activities. 2,071 ATTACHMENT F1, City of Palo Alto January 9, 2008 ABAG Executive Board c/o Henry Gardner, Secretary - Treasurer Association of Bay Area Governments P.O. Box 2050 Oakland, CA 94604-2050 Dear Mr. Gardner: Department of Planning and Community Environment The City of Palo Alto thanks you for providing us with the opportunity to review and comment on the revised Draft Regional Housing Needs Allocation (RHNA), which was adopted by the ABAG Executive Board on November 15, 2007. The City acknowledges ABAG's modification to. Palo Alto's RHNA to address the City's Sphere of Influence circumstance with the County of Santa Clara and Stanford University. ,;However, our City Council, the Planning and Transportation Commission and staff have all determined that the RHNA of 2,860, even after the reduction of 645 units, is completely unachievable in Palo Alto given the lack of available land, the high cost of land acquisition, and the impacts of that amount of growth on the . City's neighborhoods and infrastructure. Setting these requirements that cannot be achieved threatens the credibility and viability of important public institutions and becomes simply an exercise 'in futility. Palo Alto has an extensive and long history of leading and implementing affordable housing in an area highly impacted by the high cost of housing. We were the first to implement inclusionary zoning in this region and Palo Alto Housing Corporation was established back in 1970 as a non-profit affordable housing provider. Although the ;City Of Palo Alto has adopted zoning and programs supporting core concepts behind the allocation method such as smart growth, infill development, protection of open space and rural areas, restricting urban sprawl, and transit oriented development, there should be a reasonable expectation of success in meeting goals when assigning allocations to cities. Factors such as essential infrastructure needs and service requirements also need to be taken into consideration. Many components of the City's infrastructure are -already at capacity and another critical factor is the capacity limitations of the Palo Alto Unified School District. The current school population has already pushedthe present facilities beyond capacity so that every elementary school now has multiple portables. Students from an additional 2,860: housing units simply cannot be accommodated with the existing facilities and budget. - Given that the school district is at capacity, and there is no ..available funding to accommodate the increased student population from the allocation, these requirements would amount to an unfunded mandate for Palo Alto. Planning Transportation Building 250 Hamilton Avenue 250 Hamilton Avenue 285 Hamilton Avenue P.O. Box 10250 P.O. Box 10250 P.O. Box 10250 Palo Alto, CA 94303 Palo Alto, CA 94303 Palo Alto, CA 94303 650.329.2441 650.329.2520 650.329.2496 650.329.2154 650.617.3108 650.329:2240 Mr. Henry Gardner Page2of4 January 9, 2008 As staff has indicated previously in transmittals to ABAG, the population and household growth projections for Palo Alto will not be realized and should be adjusted to reflect a population growth rate of approximately 3.0 % over the next RHNA period within our jurisdictional boundary. ABAG's Projections 2007 assumes a population growth rate of approximately 7% during the next 7 years in our jurisdictional boundary. Historically, the City of Palo Alto's population has grown only by approximately 4.7% over the last thirty years. We understand that the methodology uses Sphere of Influence population projections but we believe that the population trend within our Sphere of Influence is proportional to the historic jurisdictional boundary population trends. Although the City has experienced a growth rate of approximately 8% during the last seven years, this has been a period when Palo Alto has constructed significant new housing development well in excess of historic averages and that rate cannot be sustained given Palo Alto's limited land availability and redevelopment potential. Therefore, it's very likely that the City's population growth will remain far below ABAG's projections since it will be very difficult for Palo Alto to continue the housing development it has experienced in the last seven years. During the last RHNA period, the City's population growth was largely attributable to a single development of approximately 1,000 units on the City's only remaining vacant large residential site. This City's housing growth occurred during a temporary period of substantial decline in the market for commercial development and increasing demand for housing. Taking this anomaly and extrapolating this into the future is not appropriate. By using its own overestimated Projections 2007 population numbers, the RHNA methodology compounds this error by assigning a 45% weight to the population projections that ABAG itself created. This logic appears circular in that the driver behind this growth appears to be the mandate from ABAG. Additionally, the City should receive credit in this RHNA cycle for the 1,036 units that were built during that last RHNA period that exceeded the City's assigned allocation. The City exceeded its above moderate allocation by 1,282 units and its low allocation by 14 units with a deficit of 51 units in the very low category and 208 in the moderate category. Palo Alto has also protected and retained existing units that are more affordable and should receive further credit to offset the City's RHNA requirements. The City also continues to oppose the inclusion of an additional Transit Oriented Development (TOD) factor in the allocation methodology t� the extent that it would disproportionately assign housing to cities like Palo Alto that have shown a commitment to TOD, in effect penalizing cities that have developed smart growth policies. Additional growth requirements for built out cities like Palo Alto should be predominantly TOD housing, not the core ABAG allocation plus TOD housing. The emphasis of transit use in the methodology is unrealistic at least for Palo Alto. Transit at the University and California Avenue stations is used more efficiently by commuters and not Mr. Henry Gardner Page 3 of 4 January 9, 2008 so efficiently by residents; many more people take transit TO Palo Alto than FROM Palo Alto. A greater concentration of jobs in the vicinity of transit will promote mass transit in Palo Alto more effectively than the concentration of housing. Furthermore, Palo Alto has been assigned additional units based on transit access from the San Antonio Avenue station. However, this station is located in and serves primarily Mountain View, not Palo Alto. Also, Caltrain only services the San Antonio Caltrain station once per hour during rush hours further reducing its TOD effectiveness. Palo Alto has promoted smart growth in its Comprehensive Plan policies and its Pedestrian and Transit Oriented Development (PLOD) zoning all in the midst of VTA reducing bus services to Palo Alto neighborhoods and with little or no projected additional funding for transit to support the TOD aspects of RHNA. However, Palo Alto's diligence and success in implementing smart growth policies appear to have led ABAG to assume that the City has no limit to further intensifying with infill development. Given the RHNA mandate to provide housing for all income levels, it is impossible for the City to provide the 1,875 units assigned for below market rate income levels. Palo Alto prioritized affordable housing as one of the City's top five goals and built over 90 percent of the City's very low and low income housing allocation for the last RHNA cycle. However, the current RHNA methodology uses 2000 Census income distribution data for allocating housing based on affordability, and does not reflect the City's success in building affordable housing over the last seven years. Instead, the current methodology allocated more affordable housing to Palo Alto compared to the region as a whole. Additionally, due to the extraordinary cost of land in Palo Alto, all very low and low income rental housing that has been developed recently has required significant City subsidy. The cost of low and very low income projects in Palo Alto are averaging $400,000 to $500,000 per unit. Recently the City has had to subsidize approximately 50% of the project cost for most low income and very low income projects. . This is in large part due to the exorbitant land costs in Palo Alto which average $10 million an acre but have been as high as $16 million an acre. In order to develop the assigned 1,234 units of low and very low income housing under current funding conditions, the City would be expected to provide a subsidy of approximately $245 to $310 million, which is clearly unrealistic and unattainable as the City struggles to maintain revenues adequate to support basic services to its residents and businesses. Given state subsidy restrictions, and because of the high land costs in Palo Alto, moderate income units are achieved only through the City's inclusionary zoning program, which requires 15 — 20% affordability. As a result, approximately 70% of the ABAG allocation would need to be subsidized by Palo Alto. In order to provide the assigned 641 moderate income level units, the City would have to develop 3,205 — 4,272 market rate units. The high cost to the City of providing this housing as well as supporting services and facilities, schools, transit and parks, is an unfunded state mandate. There may also be insufficient water resources available to serve this additional population. Until there is state Mr. Henry Gardner Page 4 of 4 January 9, 2008 subsidy available for affordable units, identifying adequate sites to meet proposed RHNA housing for lower income levels in communities like Palo Alto will be a paper exercise. The City requests that you confirm that the job growth anticipated with the proposed Stanford Shopping Center and Medical Facility expansions are included in ABAG's projections for the City's job growth for the 2007-2014 period, and the City will not be assigned these jobs a second time in a future RHNA regardless of those projects' occupancy dates. Finally, much discussion has occurred about the impact of commute emissions on climate change. Palo Alto has just concluded a comprehensive climate change impact analysis. A significant finding of that report is that 11% of Palo Alto's CO2 emissions are attributable to trips into Palo Alto. Consequently, the report indicates that even an additional 2,860 units with similar commuting characteristics would impact Palo Alto CO2 emissions by less that 0.1% or 1/1000`h Palo Alto's total CO2 In closing, the City requests that ABAG revise Palo Alto's RHNA to reflect a 3% population growth over the seven-year RHNA period, exclude the San Antonio station from our transit factor, adjust the transit factor to eliminate any "double counting" and credit the City with the 1, 036 units the City built in excess of our last RHNA assignment. The City also urges ABAG to consider factors such as land costs and availability as well as community needs to provide adequate open space and essential services in developing a realistic RHNA. Given that there was no representative from the 250,000 residents of North Santa Clara County on the Housing Methodology Committee, we were not adequately represented and, therefore, unique factors prevalent in our area were not sufficiently considered in the ABAG allocations. If ABAG adopts more realistic and achievable RHNA allocation goals, this will enable cities to focus on actually providing adequate housing for a diverse population, a goal strongly supported by the City Council and the Palo Alto community. The City of Palo Alto appreciates your consideration of our appeal of the assigned allocation. Sincerely, Larry Klein Mayor cc: Paul Fassinger, ABAG Research Director February 21, 2008 Ira Ruskin 5050 El Camino Real Suite 117 Los Altos, CA 94022 Dear Assemblyman Ruskin, This is a follow-up letter to our discussion on January 25th regarding state housing element law and possible legislative amendments. As we emphasized at the meeting, Palo Alto's assigned Regional Housing Needs Allocation (RHNA) of 2,860 units is clearly unachievable given the lack of available land, the very high cost of land acquisition, and the negative impacts of that amount of growth on the City's neighborhoods, schools and infrastructure. The City believes that emphasis in housing elements should be placed on cities' support of core smart growth concepts such as encouraging infill development and transit oriented development, protection of open space and rural areas and restricting urban sprawl, and not on an arbitrary number. If the RHNA is to be used it should be a goal rather than a requirement for cities' compliance with the housing element law. Palo Alto staff has identified the following potential changes to housing element law that would address several of the issues and concerns raised by our citizens and decision makers. • Make RHNA a goal not a requirement • Adequate water availability demonstrated to serve increased demand from additional housing should be a factor • Whether there is sufficient vacant or underutilized land available for new housing must be considered • Adequate provision of supporting infrastructure such as schools and parks must be available • Guaranteed state subsidy for affordable housing projects I appreciate the time you spent with us and your commitment to consider potential legislation to address our issues. Please feel free to contact me or Steve Emslie, our Planning Director, at (650)329-2354 if you or your staff would like to discuss these issues further. Sincerely, Larry Klein Mayor City of Palo Alto City of Palo Alto Department of Planning and Community Environment September 13, 2007 ABAG Executive Board c/o Henry Gardner, Secretary - Treasurer Association of Bay Area Governments P.O. Box 2050 Oakland, CA 94604-2050 Dear Mr. Gardner: Thank you for providing us with the opportunity to review and comment on the Draft Regional Housing Needs Allocation (RHNA), which was adopted by the ABAG Executive Board on July 19, 2007. The City of Palo Alto (City) supports the main concepts behind the draft allocation method such as smart growth, infill development, protection of open space and rural areas, restricting urban sprawl, and transit oriented development. The City also appreciates ABAG staff's recent recommendation to modify Palo Alto's RHNA to address the City's unique Sphere of Influence circumstance with the County of Santa Clara and Stanford University which is outside the City boundaries but within its Sphere of Influence. ABAG staff's recognition that the City of Palo Alto does not have "land- use permitting" authority outside its boundaries and the resultant determination that 645 dwelling units are outside the City's boundaries and should be assigned to the County is very much appreciated. The City, therefore, request that ABAG adjust the City of Palo Alto's Regional Housing Needs Allocation to 2,860 units and transfer the remaining 645 units to the County of Santa Clara. The City would also like to comment on circumstances specific to Palo Alto we believe should be taken into consideration both in the Projections 2007 figures and in the allocation methodology. Comments on Projections 2007 As you know, the Projections 2007 forecast was critical in determining the RHNA for individual jurisdictions. City staff has discussed with your staff on several occasions constraints on future housing production within Palo Alto. As we have stated in various email correspondence and on response to ABAG's Survey of RHNA Data, we believe that the population and household projections for the City of Palo Alto are not achievable. Projections 2007 assumes a growth rate of 26.6 % by 2035 in our sphere of influence while historical Census data shows the City of Palo Alto's population has only grown by approximately 4.7% over the last 30 years. Although in the last 7 years, Palo Alto has experienced significant new housing development resulting in approximately an 8% increase in population, this is still far below ABAG's projections and this growth cannot be sustained given Palo Alto's limited land availability and redevelopment potential. 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 650.329.2441 650.329.2154 Mr. Henry Gardner Association of Bay Area Government Page 2 of 3 During the last RHNA period, the City made significant efforts to identify lands that could convert to housing and to encourage that conversion, Palo Alto approved approximately 2,550 units including a single project that added about 1,000 units on one of the City's last undeveloped lands. In a memo to the ABAG Executive Board from Paul Fassinger dated last November, Mr. Fassinger explained the household, population, and employment revisions to the Projections 2007 and why ABAG chose to revise the projections for several jurisdictions. ABAG staff revised and lowered ABAG Projections 2007 household and population projection for the City of San Leandro because they "pointed to the fact that its recent success in developing housing could not be sustained..." Similar to the City of San Leandro, it would also be very difficult for Palo Alto to continue the housing development Palo Alto has experienced in the last 7 years given Palo Alto's very limited land available for new development . ABAG's revised technical document states that; "Household growth in ABAG's Projections is most influenced by local land use plans and policies, including planned and protected agricultural lands, open space and parks, city centered growth policies, urban growth boundaries, and any physical or geological constraints." Yet Projections 2007 does not reflect the City's Comprehensive Plan anticipated population growth or recognize that Palo Alto has approximately 65 percent of its 26 square mile land area dedicated to protected open space, parks and preserves and the City's boundaries are fixed on all sides by neighboring cities, hence, no "new" lands are available. Atherton's household and population projection were also revised and lowered in Projections 2007 because ABAG staff agreed that "Atherton has no capacity to expand beyond it's existing town limits. The town has almost no vacant lots." Palo Alto also does not have any capacity to expand beyond its existing jurisdictional boundary and has less than 0.5 percent vacant land, yet the City's population and household projections in Projections 2007 remain unrevised. Comments on Allocation Methodology The City opposes the inclusion of an additional Transit Oriented Development (TOD) factor in the allocation methodology to the extent that it would disproportionately assign housing to cities like Palo Alto that have shown a commitment to TOD. Palo Alto recently adopted the California Avenue Pedestrian and Transit Oriented Development Combining District, which is intended to allow higher density residential dwellings within a walkable distance of the California Avenue Caltrain Station. ABAG staff revised and lowered the City of Larkspur's population and household projections for Projections 2007 because "The city implemented smart growth concepts when the ferry terminal was developed and the density in that area is much higher than the remainder of the city." Palo Alto's circumstances are very similar. Over half of all residential approvals and construction in the City of Palo Alto (approximately 1400 dwelling units) within the last 5 years are within a mile of either the University Avenue or California Mr. Henry Gardner Association of Bay Area Governments Page 3 of 3 Avenue train station. A majority of the remaining residential entitlements or construction is along El Camino Real, which is served by major bus routes. The remainder of the City, which consist mainly of developed and established single-family neighborhoods or approximately 16,000 detached single-family homes, cannot support the higher densities. Nonetheless, the City of Palo Alto's population and household projections were not revised for Projections 2007. Furthermore, we understand that the draft Projections 2007 already takes into account likely development along transit lines through its underlying assumptions and imposing an additional TOD factor penalizes cities that have developed smart growth policies. The City would also appreciate a detailed explanation on how the methodology addresses household and employment growth near transit if the fixed transit station is at or very near its jurisdictional boundary. In the case of Palo Alto, a Caltrain station is located at the Mountain View/Palo Alto jurisdictional boundary. The revised technical document does not clearly explain how the methodology reapportions the 5% household and employment growth within a half mile radius of the transit station if the half mile radius crosses jurisdictional boundaries. In conclusion, the City urges ABAG to consider factors such as adequate open space provision, lack of land availability and suitable sites, and sufficient service provision and availability in developing a realistic RHNA. If ABAG adopts more achievable goals, this will enable all cities, including Palo Alto, to focus on the provision of adequate housing for a diverse population. The City of Palo Alto appreciates your consideration of our requests. Sincerely, 4414 STEVE EMSLIE Director of Planning and Community Development cc: Paul Fassinger, ABAG Research Director January 17, 2007 ABAG Executive Board c/o Henry Gardner, Secretary - Treasurer Association of Bay Area Governments P.O. Box 2050 Oakland, CA 94604-2050 Dear Mr. Gardner: Thank you for providing us with the opportunity to review and comment on the draft Regional Housing Needs Allocation methodology, which was authorized for release by the ABAG Executive Board on November 16, 2006. The City of Palo Alto supports the main concepts behind the draft allocation method such as smart growth, infill development, protection of open space and rural areas, restricting urban sprawl, and transit oriented development, but would like to comment on circumstances specific to Palo Alto we believe should be taken into consideration both in the Projections 2007 figures and in the allocation methodology. Comments on Projections 2007 City staff has discussed with your staff on several occasions constraints on housing production within Palo Alto. As we have stated on our email correspondence and Survey of RHNA Data sent to ABAG, we believe that the population projections for the City of Palo Alto are not achievable. Projections 2007 assumes a growth rate of 26.6 % resulting in a population increase of 20,100 by 2035 in our sphere of influence. The City of Palo Alto's population has only grown by approximately 4.7% over the last 30 years resulting in a net population increase of approximately 2,600 people from 1970 to 2000 according to historical Census data. Even though Palo Alto has very limited land available for new development, during the last RHNA period the City made significant efforts to identify lands that could convert to housing and to encourage that conversion. Between 1998 and 2010, the City anticipates adding 2,700 units to its housing stock; 2,550 units have been approved to date. In the future it will be even more difficult to identify appropriate housing sites since the City is almost fully developed and has almost no vacant land available for new development and limited underutilized property for redevelopment. Palo Alto is approximately 26 square miles but approximately 40 percent of this area is in parks and preserves. Another 15 percent consists of open space uses. About 25 percent of the remaining land area consists of developed and established single-family neighborhoods or approximately 16,000 detached single-family homes. As the City's boundaries are fixed on all sides by neighboring cities, no "new" lands are available. Mr. Henry Gardner Association of Bay Area Governments Page2of3 Comments on Allocation Methodology The City opposes the inclusion of an additional TOD factor in the allocation methodology to the extent that it would disproportionately assign housing to cities like Palo Alto that have shown a commitment to TOD. Palo Alto recently adopted the California Avenue Pedestrian and Transit Oriented Development Combining District, which is intended to allow higher density residential dwellings within a walkable distance of the California Avenue Caltrain Station. This district will allow multifamily residential development of up to 40 dwelling units per acre. Over half of all residential approvals and construction (approximately 1400 dwelling units) within the last 5 years are within a mile of either the University Avenue or California Avenue train station. A majority of the remaining residential entitlements or construction is along El Camino Real, which is served by major bus routes. We understand that the draft Projections 2007 already takes into account likely development along transit lines through its underlying assumptions and to impose an additional TOD factor would be considered "double counting". The methodology also does not distinguish between newly constructed transit stations and older transit stations where the surrounding areas are well developed with established commercial and residential uses. Palo Alto's University Avenue Caltrain Station is adjacent to a fully developed area whereas an area such as the Baypoint BART Station has acres of parking lot and vacant land surrounding the BART station yet both of these areas are evaluated under the proposed methodology equally. The other area that the methodology does not adequately address is the jobs/housing ratio. Although the term "jobs/housing balance" implies a relationship between jobs and housing units within a community, the key relationship is between jobs and the number of employed residents within a community. The City of Palo Alto would like ABAG to take into consideration the jobs/employed residents ratio as opposed to the jobs/households ratio as a better measure of the relationship between jobs and housing within a jurisdiction. For example, the City of Palo Alto has a 2.77-jobs/employed residents ratio compared to a 3.45 jobs/household ratio. The City of Palo Alto continues to be committed to the provision of affordable housing and has adopted numerous policies supporting this commitment. Palo Alto's Housing Element was revised in 2002 to encourage affordable housing and the provision of higher density housing. As mentioned above, the City's zoning ordinance was revised this year to include a transit oriented zoning district to maximize housing development along transit corridors. The City has worked hard to implement these policies by funding non-profit housing developers to acquire sites and develop affordable housing. Mr. Henry Gardner Association of Bay Area Governments Page 3 of 3 Please consider factors such as adequate open space provision, lack of land availability and suitable sites, and our shared goal of creating a balanced community in developing a realistic RHNA. If ABAG adopts achievable goals, this will enable all cities, including Palo Alto, to focus on the provision of adequate housing for a diverse population. The City of Palo Alto appreciates your consideration of our requests. Sincerely, STEVE EMSLIE Director of Planning and Community Development cc: Paul Fassinger, ABAG Research Director Association of Bay Area Governments Survey of RHNA Data September 2006 Jurisdiction: City of Palo Alto Name/Title: Roland Rivera/ Planner Instructions: The draft Projections 2007 forecast includes information pertaining to each jurisdiction's households and employment, its jobs -housing relationship, and housing sales price information. This data relates to the factors with an asterisk (*) below. We are requesting that local governments review this information and provide feedback to ABAG. Also, please send ABAG any additional data related to these issues as well as any data related to the other factor(s) outlined below. If you prefer, this survey can be filled out electronically and returned to RHNA@abag.ca.gov. The form can be downloaded from ABAG's website at http://www.abag.ca.gov/planning/housingneeds/method2.html. (1) Your jurisdiction's jobs and housing relationship.* Although the term "jobs/housing balance" implies a relationship between jobs and housing units within a community, the key relationship is between jobs and the number of employed residents within a community, because some households have no workers and many have more than one worker. The City of Palo Alto would like ABAG to take into consideration the jobs/employed residents ratio as opposed to the jobs/households ratio as a better measure of relationship between jobs and housing within a jurisdiction. For example, the City of Palo Alto has a 2.77- jobs/employed residents ratio using the ABAG 2005 projections and Census 2000 data compared to a 3.45 jobs/household ratio using the ABAG 2005 projections. (2) Constraints due to sewer, water, land suitability or preservation. ✓ The City of Palo Alto has approximately 16,627 acres, or about 26 square miles. Approximately 40 percent of this area is in parks and preserves including special conservation areas such as the Baylands east of Hwy 101 and the Foothills Open Space area west of I-280. Another 15 percent consists of agriculture and other open space uses. ✓ Palo Alto has a rich stock of historic buildings and identifies approximately 400 buildings protected under our historic preservation ordinance. Palo Alto also has two protected Historic Districts (Professorville and Ramona St) with a combined area of approximately 66 acres. RHNA Survey September 2006 Page 2 Palo Alto has sufficient water supply to accommodate anticipated growth under the current Comprehensive Plan;• however, there may not be adequate water supply to accommodate additional housing development for an overall population exceeding a projected buildout population of 64,000. (3) The distribution of household growth that provide opportunities to maximize the use of public transportation and existing transportation infrastructure. Palo Alto recently adopted the California Avenue Pedestrian and Transit Oriented Development Combining District, which is intended to allow higher density residential dwellings within a walkable distance of the California Avenue Caltrain Station. The PTOD District is approximately 64 acres and will allow multifamily residential development of up to 40 dwelling units per acre. (4) The market demand for housing. * Indications from the Real Estate Infolink and Dataquick show a slowing trend in market demand for housing in Palo Alto. According to REInfolink, Single Family Homes stayed on the market for an average of 49 days for September of 2006 compared to as low as 20 days in early 2005. Dataquick, on a recent article, reports sales of homes in the Bay Area were at their lowest in five years. According to the article, 2,689 homes were sold in Santa Clara County for the month of September last year compared to 1,867 homes sold in Santa Clara County for the month of September this year, or about a 30.6% decrease from last year. (5) Agreements between a county and cities in a county to direct growth toward incorporated areas of the county. The Stanford University Community Plan adopted in 2000 and supported by the City of Palo Alto identifies the unincorporated Stanford campus area adjacent to Palo Alto should provide student housing for Stanford University. The Plan called for 3,000 units to be developed to accommodate housing needs of the university. (6) The loss of units contained in assisted housing developments. There are no loss of units contained in assisted housing developments in the City of Palo Alto. All Section 8 contracts in the City remain in place. (7) High housing cost burdens.* Housing Costs continues to increase in Palo Alto but shows signs of becoming more stable. The median price for a Single Family Home through June of 2006 is $1,395,000, a slight increase from the median price of a Single Family Home the same time last year at $1,350,000. The median price of a housing unit in Palo Alto was $811,800 according to the Census 2000 data. RHNA Survey September 2006 Page 3 (8) The housing needs of farm workers. n/a Palo Alto has no discernible agriculture industry or farm worker population. (9) Any other factors that you believe should be considered. ✓ Historical Data The City of Palo Alto's population has only grown by approximately 2,632 people from 1970 to 2000. The Census Bureau's population data for the City of Palo Alto was 55,966 for 1970, 55,225 for 1980, 55,900 for 1990 and 58,598 for the year 2000. ✓ Approved and Projected Housing from 2000 - 2020 The City of Palo Alto has approved/entitled approximately 677 dwelling units from 2000 - 2005. The City of Palo Alto also has approximately 1,270 new dwelling units either approved or currently processing for the 2005-2010 timeframe. It is anticipated that approximately 750 dwelling units will be processed/entitled between the years 2010 through 2020. This totals approximately 2,700 new dwelling units approved and projected for the 2000-2020 timeframe. Using an average of 2.3 persons per household, 2,700 new dwelling units would be equal to about 6,210 growth in population through the year 2020 or a population projection of approximately 64,808 for the City of Palo Alto (2000 census population of 58,598 + 6,210 growth through 2020 = 64,808 population for 2020). ✓ City Council's recent policy changes and current direction of protecting commercially zoned sites from developing at 100% residential. The current direction of the City Council is to restrict housing in non-residential zones as opposed to allowing "stand alone" housing by right in these zones. Housing will still be allowed in some of these zones within mixed use projects. These proposed policy changes are predicated on the limited availability of commercially -zoned property in the City and the need for retail - serving uses in the community. Last October, Council members changed the "General Manufacturing" zones to prohibit housing. Staff has also been directed to return to Council with changes to the City's commercial zones that would allow housing only in mixed use projects. The recent policy changes and current City Council direction will most likely affect future housing production since much of the new housing development the City approved from 2000- 2006 was "strictly residential" developments on commercially zoned sites. ✓ Almost Zero Vacant Land Inventory The City of Palo Alto is fully developed and has almost no vacant land inventory. RHNA Survey September 2006 Page 4 If you have additional comments, please add pages as needed. Return survey to: Kenneth Kirkey ABAG P.O. Box 2050 Oakland, CA 94604-2050 Background information on the 4th RHNA revision: http://www.abag.ca.gov/planning/housingneeds/. Original Message From: Rivera, Roland Sent: Wednesday, August 30, 2006 2:55 PM To: Patricia Perry (E-mail) Subject: City of Palo Alto comments on the upcoming Projections 2007 Ms. Perry, Thank you for the opportunity to comment on the data which will be used in your upcoming Projections 2007. The City of Palo Alto would like to have the following information taken into consideration for your upcoming Projections 2007. 1) Do the 2020 population and job estimates seem reasonable for your city? - per our phone conversation, you mentioned utilizing the Projections 2005 data for our jurisdiction and giving you feedback on whether or not the projections are reasonable for the year 2020 and 2030. - ABAG Projections 2005 projects the City of Palo Alto (jurisdictional boundary) to have a population of 70,900 by the year 2020 and 75,500 by the year 2030. - The City of Palo Alto Planning Department believes that the ABAG Projections 2005 projections for the year 2020 and 2030 are high for four reasons. a) Historical Data The City of Palo Alto's population has only grown by approximately 2,632 people from 1970 to 2000. The census bureau's population data for the City of Palo Alto was 55,966 for 1970, 55,225 for 1980, 55,900 for 1990 and 58,598 for the year 2000. b) Approved and Projected Housing from 2000 - 2020 The City of Palo Alto has approved/entitled approximately 677 dwelling units from 2000 - 2005. The City of Palo Alto also has approximately 1,270 new dwelling units either approved or currently processing for the 2005-2010 timeframe. We also expect approximately 750 dwelling units to be processed/enttitled between the years 2010 through 2020. This totals to approximately 2,700 new dwelling units approved and projected for the 2000-2020 timeframe. If we used the average of 2.3 persons per household, 2,700 new dwelling units would be equal to about 6,210 growth in population through the year 2020 or a population projection of approximately 64,808 for the City of Palo Alto (2000 census population of 58,598 + 6,210 growth through 2020 = 64,808 population for 2020). c) City Council's recent policy changes and current direction of protecting commercially 1 zoned sites from turning over to 100% residential. The current direction of the City Council is to restrict housing in non-residential zones as opposed to allowing "stand alone " housing by right. Housing will still be allowed in some of these zones within mixed use projects. These proposed policy changes are predicated on the limited availability of commercially -zoned property in the City and the need for retail -serving uses in the community. Last October, Council members changed the "General Manufacturing" zones to prohibit housing. Staff has also been directed to return to Council with changes to the City's commercial zones that would allow housing only in mixed use projects. The recent policy changes and current City Council direction will most likely affect future housing production since much of the new housing development the City approved from 2000-2006 was "strictly residential" developments on commercially zoned sites. d) Almost Zero Vacant Land Inventory The City of Palo Alto is fully developed and has almost no vacant land inventory. The City of Palo Alto would appreciate ABAG Projections 2007 to take into consideration the information above and project the City's population to a lower estimate more consistent with the City's historical growth patterns. We believe a projection of 65,000 - 66,000 total population for the year 2020 and 67,000 - 68,000 for the year 2030 would better reflect a population projection based on the best available information for the City. Please don't hesitate to contact me if you have any questions. Thank you very much for your consideration of our request. The City of Palo Alto appreciates the opportunity to collaborate with ABAG for Projections 2007. Sincerely, Roland Rivera Planner City Of Palo Alto (650) 329-2541 2 ATTACHMENT F 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: OCTOBER 15, 2007 CMR: 389:07 SUBJECT: STUDY SESSION REGARDING ABAG REGIONAL HOUSING NEEDS ALLOCATION FOR PALO ALTO AND HOUSING ELEMENT REQUIREMENT. This is an informational report and no Council action is required. BACKGROUND Periodically (usually every seven years), the state requires all ju isdictions in the state to update their General Plan (Comprehensive Plan) Housing Elements. W thin its Housing Element, each jurisdiction must plan for its share of the region's housing need r residents of all income categories. The amount of housing cities and counties must plan for is determined by state housing policy. The Regional Housing Needs Allocation (RHNA) is each jurisdiction's assigned share of the region's total housing need based on a methodology developed by individual Councils of Government. The State Department of Housing and Community Development (HCD) determined that the Bay Area needs to plan for 214,500 housing units during the 2007 — 2014 planning period. HCD also determined how many of these units are needed across four income categories: very low, low, moderate, and above moderate. With this assignment of the overall regional need by the state, the Association of Bay Area Governments (ABAG) was responsible for allocating the total regional need to all jurisdictions in the Bay Area as mandated by state law. The RI-INA methodology developed by ABAG, working with a Housing Methodology Committee (comprised of members representing the entire ABAG region) was approved by the ABAG Board in January, 2007. It used the following factors and weights to develop the allocation: • Household growth (45%) • Existing employment (22.5%) • Employment growth (22.5%) • Household growth near existing transit (5%) • Employment growth near existing transit (5%) Household growth, existing employment and employment growth assumptions were derived from ABAG's regional household and employment forecasts, Projections 2007. CMR:389:07 Page 1 of 3 On September 26, 2007, City staff met with the Planning Commission to discuss the ABAG numbers, allocation methodology and Housing Element process. DISCUSSION On July 19, 2007, ABAG's Executive Board adopted the draft RHNA allocations for jurisdictions in the San Francisco Bay Area by income category for the 2007 — 2014 RHNA cycle. Palo Alto's current total draft allocation is 3,505 units, including 846 very low, 666 low, - 786 moderate, and 1,207 above moderate income units. Jurisdictions had until September 18, 2007, to request revisions to their allocations. Palo Alto sent the attached letter (Attachment A) to ABAG on September 13, 2007, requesting adjustments to the City's assigned allocation based on several factors. The City requested that the allocation should be based on projected growth within Palo Alto's jurisdictional boundary not its sphere of influence, since the City does not have land use control over unincorporated properties within Santa Clara County. Staff has met with ABAG, County and HCD staff to discuss this possible adjustment. ABAG staff has indicated willingness to support a reduction of 645 units to Palo Alto's allocation and reassign those units to the County based on projected growth on the Stanford campus. The City also contested the population forecasts for Palo Alto in Projections 2007. Given Palo Alto's limited remaining vacant land and the City's historic growth rates, the Projections 2007 growth rate of 26.6% by 2035 is unrealistic. The City also objected to the allocation methodology that penalizes jurisdictions that have implemented smart growth policies by assigning additional growth to transit -oriented areas where increased growth has already been factored in long range plans. ABAG staff has 60 days to respond to the City's requests for revisions. After receiving ABAG's response, the City will have an additional 60 days to further appeal the RHNA numbers. In early 2008, ABAG will hold a public hearing on any appeals regarding the assigned allocations. Based on state requirements, the final RHNA will need to be adopted by ABAG's Executive Board prior to June 2008 Also attached is the publication A Place to Call Home (Attachment B), prepared by ABAG, that provides an overview of the Bay Area housing situation and on pages 8-12 summarizes the RHNA process and methodology for the 2007-2014 RHNA cycle. This publication also provides on pages 35 — 39 an overview of the performance of each city in the Bay Area in meeting its allocation for the 1999 — 2006 RHNA cycle. This should provide the Council with background information that should be helpful in the study session discussion. PREPARED BY: Julie Caporgno Chief Planning and Transportation Official CMR:389:07 Page 2 of 3 DEPARTMENT HEAD: Steve Emslie Director of Planning and Community Environment CITY MANAGER APPROVAL: Emily Harrison Assistant City Manager ATTACHMENTS Attachment A Attachment B Letter to ABAG dated September 13, 2007 A Place to Call Home, ABAG, 2007 (for Council members only) CMR:389:07 Page 3 of 3 ATTACHMENT G City of Palo Alto's Existing BMR Profile BMR Rental Units by Unit Types • 189 Rental BMR units in the City for seniors and families. Three types of BMR Units, Studio, 1 -Bedroom, 2 -Bedrooms and 3 -Bedrooms. Studio 1 -Bedroom 2 -Bedrooms 3 -Bedrooms 12 Senior units 17 Senior Units 74 Family Units 14 Family Units 4 Family units 68 Family Units • Affordability of Rental Units 1 unit affordable to very low income households (35%-50% Area Median Income) 167 units affordable to low income households (50-80% Area Median Income) 21 units affordable to moderate income households (80%-120% Area Median Income) BMR Ownership Units by Unit Types • 237 total ownership BMR units in the City of Palo Alto. Studio 1 -Bedroom 2 -Bedrooms 3 -Bedrooms 4 -Bedrooms 1 53 89 86 8 • Affordability of Ownership Units Affordable to moderate income households (80%-120% Area Median Income) BMR Waitlist Information by Household Size • Total Number of Households on waitlist for BMR Ownership Units: 495 1 -person households 2 -person households 3 -person households 4 -person households 5 -person households 6 -person households 19% 22% 25% 23% 9% 2% BMR Wait Period • 3 months to 3 years for rental units • 5 years average for ownership units Breakdown by Household Income Levels for Ownership Units • 332 Households (67%) earning less than 80% Area Median Income • 99 Households (20%) earning 80% - 100% Area Median Income • 50 Households (10%) earning 100% - 120% Area Median Income • 15 Households (3%) earning more than 120% Area Median Income Santa Clara County Income Limits - 2009 Very Low Low Income Moderate Income Household Income Size Up to 100% AMI Up to 120% AMI Up to 50% AMI Up to 80% AMI (Lower) (Higher ) 1 $37,000 $59,100 $73,900 $88,600 2 $42,200 $67,500 $84,400 $101,300 3 $47,500 $76,000 $95,000 $113,900 4 $52,800 $84,400 $105,500 $126,600 5 $57,000 $91,200 $114,000 $136,700 6 $61,200 $97,900 $122,400 $146,900 7 $65,400 $104,600 $130,800 $157,000 8 $69,700 $111,400 $139,300 $167,100 Notes: AMI = Area Median Income for Santa Clara County is $105,500 for a 4 -person household as of 4/03/09 as published by State HCD; all income limits are derived from $105,500 rounded to nearest $100. 2 30 .00% 10 .00% 0 .00 % No veh icle avail able Household Vehicle Availability Comparison 1 vehicle available 2 or more vehicles available 8 Palo Alto Households in Block Groups within 2,000 ft of Transit Station .AII Palo Alto Households 1---11 DAII Santa Clara County Households The percentage of Palo Alto households with one or no vehicles available tends to be higher in Palo Alto households near transit. Source: Table H44 -Tenure by Vehicles Available Census 2000 Summary File 3 (SF 3) ~ ~ (") :::I: :!: m z -t :::t ..... Effects of TOD on Housing, Parking, and Travel PB PlaceMaking Robert Cervero PhD Center for Transit Oriented Development Urban Land Institute TCRP Transit Cooperative Research Program Limited Use Document Final Draft 08/01/2008 TCRP Report 128 Effects of TOD on Housing, Parking, and Travel Effects of TOD on Housing, Parking, and Travel Literature Review and Case Studies 1. Executive Summary This research helps confirm what had been intuitively obvious: in the four metropolitan areas studied, TOD- housing produced considerably less traffic than is generated by conventional development. Yet most TODs are parked on the assumption that there is little difference between TOD and conventional development with respect to the traffic they generate and the parking spaces they are built with. One likely result of this fallacious assumption is that fewer TOD projects get built. Those TOD developments that do get built are certainly less affordable and less sustainable than they might be, because they are subject to incorrect assumptions about the traffic impact they generate. Therefore many of the hoped for benefits (i.e., less time stuck in traffic and lower housing costs to name two), from the nearly $75 billion in public dollars invested in rail transit over the past 11 years, are not being realized. TOD-housing generates considerably less traffic than conventional housing ITE Trip Manual 6.67 trips per unit Detailed counts of 17 residential TODs 3.55 trips per unit i The policy value of transit -oriented development (TOD) projects (e.g. less automobile travel) is well understood. Those potential benefits are muted since most U.S. TODs are parked oblivious to the fact that a rail stop is nearby. This study looks at the most recent literature on the subject and the actual transportation performance of 17 built TOD projects. The report is divided into two sections: • Section 1 - Literature Review • Section 2 - Research Findings 4 TCRP Report 128 Effects of TOD on Housing, Parking, and Travel Literature Review We now know a lot more about the travel performance of TODs. Whereas the first generations of TOD focused primarily on advocacy and assisting early adopters, there is now increased measurement and understanding of TOD travel outcomes. Some key findings in this literature review include: • Between 1970 and 2000, transit ridership for work trips increased in TOD zones, whereas ridership declined markedly in the metro areas surrounding TODs. • TOD households are twice as likely to not own a car, and own roughly half as many cars as comparable households not living in TODs. • Among the factors that attract households to TOD, households consistently place high value on neighborhood design, home prices and perceived value, and transit proximity. • Access to high quality transit is becoming increasingly important to firms trying to attract "creative class" workers in the knowledge economy. The literature review focused on nine questions related to TOD travel characteristics, transit system and land use influences, TOD ridership strategies and TOD resident/tenant characteristics. The most current knowledge on TOD was analyzed. The following is a summary of the key conclusions for each question. TOD Travel Characteristics i) What are the travel characteristics (e.g., frequency of travel by different modes) of people who live or work in a TOD? ii) What was the travel pattern of the TOD resident prior to moving to the TOD? TOD commuters typically use transit 2 to 5 times more than other commuters in the region. TOD transit mode share can vary from 5% to near 50%. The findings are similar findings for non -work trips: transit share is 2 to 5 times higher, although mode shares are typically lower than commute trips (2% to 20%) The primary reason for range is that transit use is heavily influenced by relative travel times with automobile and extensiveness of transit service, which can vary markedly across regions. As the transit network links to more job centers, educational opportunities and cultural facilities, transit use increases. From this perspective, TOD type (e.g., suburban neighborhood versus suburban center) is less important than specific location within the region and the quality of connecting transit service. Although one could reasonably infer the approximate transit mode share of a hypothetical new TOD by comparing it to similar TODs in the same, existing system, there is no rule of 5 TCRP Report 128 Effects of TOD on Housing, Parking, and Travel thumb or single mode share number that can be easily applied to a hypothetical new TOD along a new rail or bus system. This is due to widely varying local travel conditions and employment distributions. A primary reason for higher TOD transit use is self selection. Current transit users and those precluded to use transit seek out TOD. The travel pattern of TOD residents prior to moving to the TOD depended on their previous access to transit. When work location was unchanged, often a significant percent (e.g., 50%) were transit users. Among commuters with no previous transit access, transit use increased (up to 50%). Transit System and Land Use Influences i) What levels of transit connectivity to desired origins and destinations are required to promote transit ridership at TODs? ii) What TOD land -use and design features (e.g., mixed land -use, traffic calming, bus bulbs, short blocks, street furniture) have had an effect on travel patterns, transit ridership, or the decision to locate in a TOD? Research shows that system extensiveness is positively correlated with transit ridership. Extensive transit networks are also most often found in cities with worse traffic congestion (i.e., slow auto trip times) and higher parking costs, and these 3 factors work together to increase TOD transit ridership. The general consensus is that transit service headways of 10 minutes is ideal to support a transit lifestyle. There is no single, definitive threshold for connectivity, and measures such as "track miles" and "number of transit stations" are not the best predictors of ridership on their own. What matters is transit travel times relative to auto travel times. For example, an extensive but very slow transit system will likely attract few riders if highway congestion is not severe. Conversely, a single fast rail corridor adjacent to a highly congested auto corridor will likely attract high ridership. The location of jobs accessible by transit influences transit ridership. Systems that generate the highest commute ridership have a high percentage of regional jobs accessible by fast transit. For work trips, proximity to rail stations is a stronger influence on transit use than land use mix or quality of walking environment. Thus, the most effective strategy to increase TOD ridership is to increase development densities in close proximity to transit. Employment densities at trip ends have more influence on ridership than population densities at trip origins. It is critical to locate jobs near transit in order to attract households to TODs. However, Relative travel time (transit v. auto) is still more important than any land use factor (density, diversity of uses, design) in ridership. 6 TCRP Report 128 Effects of TOD on Housing, Parking, and Travel Mixed uses in TODs allow the transit service to be used for a variety of trip purposes throughout the day and week, but as a travel benefit, this is not a primary consideration for prospective TOD residents. Employment access is a primary consideration. Mixed uses (e.g., local restaurants) and urban design treatments (e.g., pedestrian pathways) are important for their amenity and design value in attracting residents and visitors/customers. TOD residents highly value "good" neighborhood design in addition to transit access to work. Urban design and the local land use mix may influence which TOD prospective residents choose to live in. Good design may also make a TOD a more desirable location to travel to. TOD Ridership Strategies i) What motivates or impedes transit ridership in a TOD? ii) What strategies have been effective in increasing transit ridership at TODs? iii) What steps should transit agencies take in supporting TODs to maximize transit ridership? Factors that most influence transit ridership are station proximity, transit quality and parking policies. Fast, frequent, and comfortable transit service will increase ridership, as will high parking charges and/or constrained parking supply. The availability of free or low-cost parking is a major deterrent to transit ridership. Successful ridership strategies include: TOD transit pass programs, parking reductions, and car -sharing programs TOD transit programs will be similar to other transit programs. That said, because TOD residents and households are by definition the nearest to transit, TODs should be among the first locations that transit agencies implement specialized programs. TOD (e.g., mixed uses, high densities, reduced parking) is still "illegal" around station areas in many cities and transit districts, creating a barrier for development. Steps that transit agencies are taking to promote TOD include: reconsidering replacement parking requirements at park and rides, advocating for zoning changes with TOD entitlements, land assembly, joint development, and educational efforts (e.g., producing TOD guidebooks). TOD Resident/Tenant Characteristics i) What are the demographic profiles of TOD residents and employers? ii) What motivates residents or employers to locate in TODs? Examples of motivators may include the quality of schools, access to jobs, housing affordability, presence of transit services, neighborhood services and amenities, and community perception. 7 TCRP Report 128 Effects of TOD on Housing, Parking, and Travel The majority of TOD residents along new transit systems are childless singles or couples. The age spectrum is wide: often younger working professionals, or older "empty -nesters". TOD residents may have low, medium or high incomes; this is driven by the design and price of the specific TOD housing, and TOD developers will target/be able to predict their market. More higher incomes are being served as the US continues to go through a robust construction phase of denser urban residential product. TOD households typically own fewer cars because they have smaller households, and because they may forgo "extra" cars due to transit's proximity. TOD households are almost twice as likely to not own any car, and own almost half the number of cars of other households. The top 3 reasons households give for selecting a TOD are housing/ neighborhood design, housing cost, and proximity to transit. TOD Housing Transportation Performance The actual transportation performance of 17 built TOD projects was assessed by counting the passage of motorized vehicles using pneumatic tubes stretched across the driveways of 17 transit -oriented housing projects of varying sizes in four urbanized areas of the country: Philadelphia/N.E. New Jersey; Portland, Oregon; metropolitan Washington D.C.; and the East Bay of the San Francisco Bay Area. To help understand the physical implications of the research, 8 residential TOD site plan case studies were developed to test some of the physical implications of reducing residential parking ratios at a range of potential densities on a theoretical 8 acre TOD. One motivation for this research was to provide original and reliable data to help seed an update of the Institute of Transportation Engineers (ITE) trip generation and parking generation rates from which local traffic and parking impacts are typically derived, and impact fees are set. Some analysts are of the opinion that there is a serious "suburban bias" in the current ITE rates. Typically the empirical data used to set generation rates are drawn from suburban areas with free and plentiful parking and low -density single land uses. Moreover, since ITE's auto trip reduction factors, to reflect internal trip capture, are based on only a few mixed -use projects in Florida; there has been little or no observation of actual TODs. The end result is that auto trip generation is likely to be overstated for TODs. This can mean that TOD developers end up paying higher impact fees, proffers, and exactions than they should since such charges are usually tied to ITE rates. The results of this research clearly show TOD-housing results in fewer trips in the four urbanized areas that were studied. The research confirms the ITE trip 8 TCRP Report 128 Effects of TOD on Housing, Parking, and Travel generation and parking generation rates underestimate automobile trip reduction for TOD housing. The ITE manual presents "weighted averages" of trip generation. The weighted average vehicle trip rates for this study were computed for all 17 projects combined for weekday, AM peak, and PM peak. Over a typical weekday period, the 17 surveyed TOD-housing projects averaged 44% fewer vehicle trips than that estimated by the ITE manual (3.754 versus 6.715). The weighted average differentials were even larger during peak periods - 49% lower rates during the A.M. peak and 48% lower rates during the P.M. peak. To the degree that impact fees are based on peak travel conditions, one can infer that traffic impacts studies might end up overstating the potential congestion -inducing effects of TOD-housing in large rail -served metropolitan areas, such as Washington D.C., by up to 50%. One implication of the research is that parking ratios for residential TODs are also likely to be overstated by the same order of magnitude since they are also based on ITE data. Some of the cumulative impacts of over -parking TODs are illustrated in the site plan case studies. The TOD site plan case studies help to demonstrate that under the right conditions lowering residential parking ratios by 50% for TODs in station areas with quality transit service can result in: ■ An increase in the potential density of a residential TOD by between 20 to 33% depending on the residential building type ■ Savings on residential parking costs ranging from 5 to 36%, after accounting for increases in the number of units to be parked resulting from increased residential density, and ■ Potentially greater developer profits and/or increased housing affordability coming from achieving higher densities, lower capital costs for parking, and reduced traffic impact fees. Right -sizing parking ratios and traffic generation to the actual performance of TOD is likely to result in some important implications on the physical form and performance of TOD developments: ■ Local officials and neighborhoods may be more apt to support increases in residential densities near transit if they are shown proof fewer trips result from TODs than in conventional development. ■ TOD developers will have easier development approvals and the benefits of TOD will not be compromised away. ■ TOD developers would likely pay lower traffic related impact fees and exactions. Those savings can be passed on to consumers in the form of lower housing costs. ■ With lower levels of traffic being generated from TODs it can be argued it simply makes no sense to construct roadway improvements for TOD related traffic that is likely not to materialize. 9 TCRP Report 128 Effects of TOD on Housing, Parking, and Travel • Right -sizing new road and intersection improvements to reflect the actual transportation performance can result in more compact development patterns and a higher quality pedestrian environment since less land may be used for road improvements. • The potential for higher densities in TODs because of the decreased amount of land dedicated to parking and the reduced cost of parking. Smart growth requires smart calculations, thus impact fees, parking ratios and road improvements need to account for the likely trip reduction effects of TOD. The research study results indicate that residential TOD parking ratios can be tightened and, thus, fees lowered to reflect the actual transportation performance of TODs. Given that TODs have historically been over -parked, the incorporation of the research results into revised parking ratios is an important next step toward national recognition of the expected community benefits of TOD. 2. Literature Review For the TCRP H -27A project, the panel identified a number of fundamental questions pertaining to transit ridership and TOD. For this literature review, the research team has taken the liberty to divide these questions into four general areas: 1) TOD Travel Characteristics; 2) Transit System and Land Use Characteristics; 3) TOD Ridership Strategies; and 4) TOD Resident/Tenant Characteristics. Findings related to these topic areas and specific questions follow. To briefly summarize, the existing research provides a largely complete story about transit ridership and TOD. There is significant and very detailed information about specific TOD projects in places such as Portland, Oregon, Arlington County in suburban Washington, D.C., and the San Francisco Bay Area, where a significant amount of travel behavior data has been collected via resident surveys (and as the product of academic research). At the "macro level", US Census data has also been thoroughly analyzed to reveal differences between TOD households and other households with respect to travel behavior and demographics. All of these findings are consistent with each other, and consistent with economic and behavior studies that explain why people travel as they do. For many cities there still remains a lack of detailed primary (survey) data. That said, it is reasonable to assume that the transportation and economic forces that shape TOD residency and travel behavior in California, for instance, would also apply to other settings (e.g., Dallas). 10 Income Leve l Need (units) Potential Student Entitled (units) Generation of RHNA Potential Student Unmet Need Potential Student Potential Student Generation of Generation of Entitled Generation of Entitled Projects and Unmet RHNA Projects Unmet Need need Very Low Low Moderate 690 543 641 148 18 102 36 13 69 542 525 539 148 368 404 184 380 474 SUBTOTAL 1,874 268 118 1,606 920 1,038 Above M oderate 986 744 431 242 182 613 TOTAL 2,860 1,012 549 1,848 1,101 1,650 1N3WH3VIIV ATTACHMENT J 1 A review of LEED-ND (Leadership in Energy and Environmental Design for Neighborhood Development) Rating System and its compatibility to existing Green Building Regulations and Comprehensive Plan. The U.S. Green Building Council (USGBC) released a pilot program for Leadership in Energy and Environmental Design for Neighborhood Development, LEED-ND, in July 2007. LEED-ND recognizes development projects that successfully protect and enhance the overall health, natural environment and quality of life in communities. Specifically, LEED-ND is designed to certify exemplary development projects that perform well in terms of smart growth, urbanism, and green building. There are a few ways LEED-ND could be applied during City planning and development activities as discussed below, but first it is important to note some characteristics of LEED-ND's current use. LEED-ND is a rating system, with accompanying 3rd part certification for projects with a "boundary". A projects boundary may constitute whole neighborhoods, portions of neighborhoods, or multiple neighborhoods. Projects are often mixed -use, though small single -use projects that complement existing neighborhood uses may also use the rating system. The rating system remains a pilot with over 200 projects nationally. The average project size is 298 acres; the median project size is 30 acres. The rating system has three key sections: • Smart Location and Linkage encourages communities to consider location, transportation alternatives, and preservation of sensitive lands while also discouraging sprawl. • Neighborhood Pattern and Design emphasizes vibrant, equitable communities that are healthy, walkable, and mixed -use. • Green Infrastructure and Buildings promotes the design and construction of buildings and infrastructure that reduce energy and water use, while promoting more sustainable use of materials, reuse of existing and historic structures, and other sustainable best practices. Can LEED-ND be incorporated into the City's Comprehensive Plan? Given the background above, there are two main differences between LEED-ND and the City's Comprehensive Plan. • LEED-ND is designed to be implemented by a single responsible party for an individual project with a "boundary". The Comprehensive Plan is designed to be a general City planning tool with multiple responsible parties. • LEED-ND is designed in most cased to be quantitatively verifiable, therefore goes into much greater detail per strategy on exactly what constitutes achievement and how to show compliance. The Comprehensive Plan while outlines program and implementation procedures, is not intended to be quantified or verified for compliance. What portions of LEED-ND is already addressed in existing Comprehensive Plan For the majority of the strategies in LEED-ND which are covered in the Comprehensive Plan, the primary consideration will be the degree to which the strategy should be defined and quantitatively measured. LEED-ND includes greater detail per strategy since the "project" must be verifiable, as opposed to an overarching City goal. The remaining strategies in LEED-ND which are not addressed in the Comprehensive Plan will need to be reviewed for applicability in the Plan. Can LEED-ND be incorporated into the Green Building Regulations? Since LEED-ND was designed for use on specific development projects it may be applicable to include LEED-ND in the City's Green Building Regulations. As discussed at the ARB meeting, if the City was to require LEED-ND, it would need to provide the regulatory framework to support it (i.e. zoning and parking requirements and policies may need to be adjusted). In addition support areas where the projects needs go beyond the scope of its boundary, or the control of an individual developer, such as access to public transportation. An ARB member supported the idea of using LEED-ND in the Green Building Regulations and beyond, as a tool to measure progress at achieving goals in the Comprehensive Plan and to limit new unconnected developments. Since the City is already largely built out, to comply with the LEED-ND rating system the project would need to be mixed use, and the green building trigger points would need to be considered carefully. The ARB discussed possible trigger points for a project that covered a certain amount of land, or that was at a certain scale (such as 30 dwelling units) or that was located in a particular part of the City. An ARB member mentioned the idea of having a voluntary pilot program for projects that were triggered by certain requirements as a starting point to make the community more aware of the goals, noting that a similar approach was followed when the City's green building program was initiated. PREPARED BY: Kristin Parineh Sustainability/Associate Planner LEED for Neighborhood Development Pilot ATTACHMENT Ja Draft Project Checklist Project Name: Project City: Project State: *Note: Registration for the LEED for Neighborhood Development Pilot Program is closed; registration for the fully launched program is planned to open in late 2009, pending USGBC member ballot approval. Yes ? No Project Totals (Pre -Certification Estimates) 106 Points Certified: 40-49 points Silver: 50-59 points Gold: 60-79 points Platinum: 80-106 points Yes Yes Yes Yes Yes Yes Yes No Smart Location & Linkage 30 Points Prereq 1 Smart Location Prereq 2 Proximity to Water and Wastewater Infrastructure Prereq 3 Imperiled Species and Ecological Communities Prereq 4 Wetland and Water Body Conservation Prereq 5 Farmland Conservation Prereq 6 Floodplain Avoidance Credit 1 Brownfield Redevelopment Credit 2 High Priority Brownfields Redevelopment Credit 3 Preferred Location Credit 4 Reduced Automobile Dependence Credit 5 Bicycle Network 1 Credit 6 Housing and Jobs Proximity 3 Credit 7 School Proximity 1 Credit 8 Steep Slope Protection 1 Credit 9 Site Design for Habitat or Wetlands Conservation 1 Credit 10 Restoration of Habitat or Wetlands 1 Credit 11 Conservation Management of Habitat or Wetlands 1 Required Required Required Required Required Required 2 1 10 8 Pow ,.. i by Adobe LiveCycle- Last Modified: May 2008 1 of 3 Yes Yes Yes LEED for Neighborhood Development Pilot Draft Project Checklist 7 No Neighborhood Pattern & Design 39 Points Prereq 1 Open Community Prereq 2 Compact Development Credit 1 Compact Development Credit 2 Diversity of Uses Credit 3 Diversity of Housing Types Credit 4 Affordable Rental Housing Credit 5 Affordable For -Sale Housing Credit 6 Reduced Parking Footprint Credit 7 Walkable Streets Credit 8 Street Network Credit 9 Transit Facilities Credit 10 Transportation Demand Management Credit 11 Access to Surrounding Vicinity Credit 12 Access to Public Spaces Credit 13 Access to Active Public Spaces Credit 14 Universal Accessibility Credit 15 Community Outreach and Involvement Credit 16 Local Food Production Required Required 7 4 3 2 2 2 8 2 1 2 1 1 1 1 1 1 . 0be LiveCycle- Last Modified: May 2008 2 of 3 Yes Yes LEED for Neighborhood Development Pilot Draft Project Checklist ? No Green Construction & Technology 31 Points Yes ? No Prereq 1 Construction Activity Pollution Prevention Credit 1 LEED Certified Green Buildings Credit 2 Energy Efficiency in Buildings Credit 3 Reduced Water Use Credit 4 Building Reuse and Adaptive Reuse Credit 5 Reuse of Historic Buildings Credit 6 Minimize Site Disturbance through Site Design Credit 7 Minimize Site Disturbance during Construction Credit 8 Contaminant Reduction in Brownfields Remediation Credit 9 Stormwater Management Credit 10 Heat Island Reduction Credit 11 Solar Orientation Credit 12 On -Site Energy Generation Credit 13 On -Site Renewable Energy Sources Credit 14 District Heating & Cooling Credit 15 Infrastructure Energy Efficiency Credit 16 Wastewater Management Credit 17 Recycled Content for Infrastructure Credit 18 Construction Waste Management Credit 19 Comprehensive Waste Management Credit 20 Light Pollution Reduction Required 3 3 3 2 1 1 1 1 5 1 1 1 Innovation & Design Process 5 Points Credit 1.1 Innovation in Design: Provide Specific Title Credit 1.2 Innovation in Design: Provide Specific Title Credit 1.3 Innovation in Design: Provide Specific Title Credit 1.4 Innovation in Design: Provide Specific Title Credit 1.5 Innovation in Design: Provide Specific Title Credit 2 LEED° Accredited Professional Adobe ° LiveCycie"" Last Modified: May 2008 3 of 3