HomeMy WebLinkAboutID-2971
City of Palo Alto (ID # 2971)
Regional Housing Mandate Committee Staff Report
Report Type: Meeting Date: 6/26/2012
June 26, 2012 Page 1 of 8
(ID # 2971)
Summary Title: Draft Housing Element (contd. from 6/14)
Title: Review of Draft Housing Element and Recommendation for Authorization
to Submit to the State Department of Housing and Community Development
(HCD) (continued from June 14, 2012 meeting)
From: City Manager
Lead Department: Planning and Community Environment
Staff has prepared responses or actions regarding comments made by Regional Housing
Mandate Committee members at the June 14, 2012 Regional Housing Mandate Committee
meeting.
As a threshold matter, staff has utilized the following guiding principles in preparing the
current Housing Element:
a. Follow prior City Council direction to use a “bottoms up” with an emphasis on higher
densities near transit, no rezoning of commercial, and no increased density in R-1 or
R-2 neighborhoods.
b. Provide maximum local control over zoning and land use issues, despite State’s role
in reviewing the Housing Element of the Comprehensive Plan.
c. The need to promptly certify the Housing Element before closure of the 2007-2014
Planning Period to avoid a “carryover” penalty imposed on the next Housing
Element cycle, which would further exacerbate the City’s housing requirements.
d. The need to promptly certify Housing Element to avoid litigation and preserve local
land use and zoning control.
e. Attempt to comply with requirements without performing major rezonings.
Rezonings would prolong the Housing Element process by requiring additional
environmental review and are impactful on property owners and neighbors of
affected parcels.
The Committee’s comments and staff’s responses are as follows:
1. Include a program that would incentivize the attainment and conversion of existing
multifamily apartments to affordable housing apartments, including incentives.
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Staff Response: Under limited circumstances, the State allows jurisdictions to meet up to
25% of their RHNA requirement though rehabilitation, conversion and/or preservation of
existing structures. Also note that State law (Ellis Act) prohibits cities from enacting
programs designed to prevent the removal of rental housing, but the City may legally
provide incentives to preserve rental units.
The current draft contains Policy H3.4, to: “Pursue funding for the acquisition, construction
or rehabilitation of housing that is affordable to very low, low and moderate-income
households.”
In addition, staff recommends adding the following program: Program 3.4.4 The City will
work with affordable housing developers to pursue opportunities to
acquire, rehabilitate and convert existing multi-family developments to
long term affordable housing units to contribute to the City’s fair share
of the region’s housing needs.
Staff will ensure that each affordable housing development conversion will meet State HCD
requirements to receive RHNA “credit” for the affordable units.
The draft Housing Element already contains a few programs that provide incentives for any
proposed affordable housing development. Some programs include:
Policy H3.3 Support the reduction of governmental and regulatory constraints and
advocate for the production for the production of affordable housing.
Program 3.3.1 Where appropriate and feasible, require all City departments to
expedite processes and allow waivers of development fees as a means
of promoting the development of affordable housing.
Program 3.3.3 Continue to exempt permanently affordable housing units from any
infrastructure impact fees that may be adopted by the City.
Program 3.4.1 Maintain a high priority for the acquisition of new housing sites near
public transit and services, for the acquisition and rehabilitation of
existing housing and the provision for housing-related services for
affordable housing. Seek funding from all appropriate state and federal
programs whenever they are available to support the development or
rehabilitation of housing for very low, low, or moderate-income
households.
Program 3.4.2 Support and expand local funding sources including the City’s Housing
Development Fund, Housing Trust of Santa Clara County, CDBG Program,
County of Santa Clara’s Mortgage Credit Certificate Program (MCC) or
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similar program. Continue to explore other mechanisms to generate
revenues to increase the supply of low- and moderate-income housing.
2. Eliminate or limit the use of City owned parking lots (185 units) and the Creekside Inn (9
units) for housing.
Staff Response: In the Housing Inventory Sites (HIS) list, staff has identified a total of 2,976
housing units. This is a surplus of 116 housing units above the ABAG mandated number of
2,860 units. Removal of the parking lot sites and the Creekside Inn from the HIS would
create a deficit of 78 units, thus requiring identification of additional sites beyond Council’s
initial HIS criteria. To clarify, the Creekside Inn parcel identified in the HIS list is the parking
lot for the Creekside Inn. The inn itself is located on a separate parcel. Under the
Committee’s direction, however, both parcels would not appear in the HIS.
If the Council recommends eliminating the City owned parking lots and the Creekside Inn
from the Housing Inventory Sites, staff has identified alternative sites that would make up
the deficit of 78 units. The replacement sites are shown on the Secondary Housing Sites
table, below.
Secondary Housing Sites
Site*
Current
Zoning Acreage
Potential
Yield with
Current
Zoning
Potential
Net Yield @
20 du/acre Note
587 Maybell Ave.
(Clemo) RM-15/R-2 2.47 32 45
Did not meet 20 du/acre
yield for selection in HIS.
4 existing residences on
site.
980 Middlefield
(Funeral Home) PC-2152 1.16 21
Surrounded by multi-
family development;
owner has expressed
interest in redeveloping
3707 El Camino Real CN 0.18 2 3
Purchased by PAHC with
3705 ECR. 3705 ECR is
on HIS.
VTA Parking Lot PF 0.48 9
Not in Cal Ave.
Neighborhood Area,
pending office project.
Total 78
Please note that all secondary parcels identified will require zoning changes to meet the proposed housing yield.
There are additional sites that are zoned for multifamily residential uses. However they are
located outside of the rail station areas or El Camino Real transit corridor and have existing
commercial uses on the property. Staff evaluated these properties and determined that
their realistic development potential was low, and therefore they were not included on the
Secondary Housing Sites list. They could, however, be listed to add to the total.
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Other Housing Sites
Site*
Current
Zoning Acreage
Potential
Yield with
Current
Zoning
Potential
Net Yield @
20 du/acre Note
4151 Middlefield Rd. RM-15 .93 13 18
Existing Office
Building. 1.5 A/V
725 San Antonio Rd.
(Summerwinds Nursery) CN 1.67 33
Previously zoned
RM-15. Owner
expressed interest
in redevelopment
of the site.
Total 51
In addition, in identifying potential sites for the HIS, staff’s projections conservatively did
not assume maximum density allowed under the existing zone districts based on City’s past
projects that typically did not achieve maximum density. However, because more recently
the Council has approved housing projects at higher densities than previously projected,
staff now believes it would be defensible to increase the density projections at appropriate
locations. Below are some recommendations for increasing unit projections while still
staying below the maximum permitted density.
Housing Inventory Sites Appropriate for Higher Zoning Density
Site
Current
Zoning Acreage
Potential
Yield with
20 du/acre
Potential
Higher
Density Yield
at 30du/acre
Additional
Net Yield Note
130 Sheridan
Ave. GM/PTOD 1.13 23 33 10
Near 195 Page
Mill Rd. (34
du/acre)
3606 El Camino
Real CN .65 13 19 6
Abuts Kendall
Apts.
(38du/acre)
4146 El Camino
Real RM-15 .77 11 23 12
Application
submitted to
rezone from RM-
15 to RM-30
Total 28
Staff suggests that the Committee direct staff to explore these and other potential sites to
present to Council, in order to make up the deficit of 78 units and preferably to include at
least 20-30 units more for a buffer in case some adjustments are requested by HCD.
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3. Strengthen language to protect R-1 zone
While not specifically emphasizing the City’s R-1 zones, Goal H1 states “Ensure the
Preservation of the Unique Character of the City’s Residential Neighborhoods.”
In order to strengthen protections to protect the City’s R-1 zones, staff will include language
that requires new development to “provide appropriate transitions from high density
development to single-family and duplex development, in order to preserve neighborhood
character.”
4. Height limit and density bonus law
Staff Response: Staff has revised Program 2.1.1 to state that future development which
exceeds 50 feet in height will require Site & Design review even if that future development
meets the requirements of Program 2.2.2. (waiving of Site and Design).
The revised language for Program 2.1.1 now reads:
“Consider allowing high density residential in mixed-use projects in commercial areas within
half a mile of fixed rail stations. Explore limited exceptions to the 50-foot height limit for
Housing Inventory Sites within a quarter mile of fixed rail stations to encourage higher
density residential development. In all instances where the height limit exceeds 50 feet,
Site and Design Review is required.”
As part of State density bonus law, an applicant may request certain concessions that must
be granted unless the jurisdiction can find that the concession does not reduce the cost of
providing the affordable housing or that there is a specific adverse impact on the
environment or a State Historical Resource. Therefore, if the applicant requests a
concession to the 50 ft. height limit, the jurisdiction may request evidence from the
applicant that the height concession helps reduce the cost of producing the affordable
housing. Staff is in the process of updating its Density Bonus ordinance to be consistent
with State law. A study session regarding the density bonus ordinance was held with the
Planning and Transportation Commission (PTC) to provide direction to staff. Staff is in the
process of preparing the density bonus ordinance that will further define how concessions
are granted. Staff anticipates that the Planning and Transportation Commission (PTC) will
review the density bonus ordinance in September and City Council will then consider it in
late October.
5. Review large family unit and overcrowding narratives and potential conflicts with
emphasizing smaller units in the City’s programs.
Staff Response: One of the key components of a Housing Element is the housing needs
assessment. State law specifies a series of issues that must be analyzed in the housing
needs assessment. In addition to analyzing the needs of lower income households, State
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law also requires cities to analyze certain categories of households traditionally deemed to
be at risk or under-housed. In particular, Government Code Section 65583 requires “an
analysis and documentation of household characteristics, including level of payment
compared to ability to pay, housing characteristics, including overcrowding, and housing
stock condition.” (Government Code 65583 (a)(2).) Further, Government Code Section
65583(a)(7)) requires “an analysis of any special housing needs, such as those of the elderly,
persons with disabilities, large families, farmworkers, families with female heads of
households, and families and persons in need of emergency shelter.”
In addition, the California Department of Housing and Community Development, the agency
responsible for certifying cities’ housing elements, has issued several publications to assist
cities in preparing effective Housing Elements. While these publications are not legally
binding, they provide insight on HCD’s expectations. One useful and relatively up to date
tool is called “Building Blocks for Effective Housing Elements”. This publication clarifies what
HCD expects to see in an adequate housing needs analysis and contains sample analyses,
tables and even sample Housing Elements representing in HCD’s view “best practices”. It is
common for cities to follow the format prescribed in this publication as well as utilize some
of the sample analysis. While this practice is generally designed to better facilitate HCD
review and acceptance, the HCD publications are purely advisory and precise content
requirements are governed by the statutory requirements set forth above. Indeed, the
publication cautions that “each jurisdiction must consider the unique circumstances of their
community and population in developing appropriate strategies to address identified
needs.”
Much of the analysis and data in the City’s housing needs assessment is taken from the HCD
Building Blocks publication. As this publication is not specially tailored for Palo Alto it
contains general statewide statistical data that, while informative, may not be the most
precise data set for Palo Alto. In most cases, Staff has provided this general analysis and
data as background but supplemented it with local data (primarily local census data). In
some cases where the City has complete and reliable local data, the City has presented just
the local data. From a legal perspective, either approach is acceptable.
The Committee expressed a particular concern about the discussions of overcrowding,
overpayment and homelessness. Staff has reviewed these particular sections and
recommends the following changes:
The analysis of overcrowding beginning on Page 34 of the Housing Element and the
discussion of large households on Page 33 should be modified to reflect the local
data contained in Table 2-21 that shows Palo Alto has a very small percentage of
overcrowded households (as defined by the State), and should conclude by
indicating that overcrowding is much less of a concern in Palo Alto than in nearby
cities, the County, and statewide.
The statute requires Housing Elements to separately analyze female heads of
households due to nationwide statistics that 40% of such households are below
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poverty level. The analysis of single parent and female headed households should be
modified to reflect the local data on Table 2-31 that shows a very small percentage
of female headed households under the poverty level in Palo Alto.
To better document the need for programs encouraging construction of smaller
units, a more detailed analysis of the City’s student population, senior citizen
population and single household employee population should be presented.
Page 37 of the Housing Element stated that the Palo Alto had 178 homeless
individuals as of 2009, reduced to 151 homeless in 2011, 15% of whom lived in
vehicles, encampments, abandoned buildings or parks. In review of the source
documentation, this data came from the 2011 Santa Clara County Census and Survey
Point-In-Time Count. The wording will be revised to better describe the living
situations of homeless in Palo Alto.
Staff will bring the revised language for these sections to the Council for final review and
approval in July or at a subsequent meeting.
6. Program H-29 has been revised to Policy H1.2.1
Staff Response: H-29 has been updated to reflect the Ellis Act (see discussion in #1 above).
Program H-29 was invoked when a subdivision or condominium caused the loss of rental
housing. If a project invoked Program H-29, it could only be approved if two of the following
three circumstances existed:
1. The project will produce at least a 100 percent increase in the number of units
currently on the site and will comply with the City’s BMR program; and/or
2. The number of rental units to be provided on the site is at least equal to the number
of existing rental; and/or
3. No less that 25 percent of the units will comply with the City’s BMR program.
To be consistent with State law Program H1.2.1, only requires that 25% of the replacement
should be BMR units.
7. Hotel Condominiums
Staff Response: As described in Title 18 (Zoning), hotels that include a residential
condominium use and have a minimum FAR of 1.0 may devote no more than 25% of the
floor area and 25% of the units as condominium use. Staff has researched other
jurisdictions that have regulations for hotel condominiums, and none have counted those
units towards their housing allocation as they are not typically in “affordable” ranges and
are frequently operated as transient units (time shares, vacation rentals, etc.). However, at
the Committee’s direction, a program could be added to at least reflect that the City does
permit such residential units. In order to add them to the Housing Inventory Site list, the
Element would need to identify specific hotel locations, and if the Committee so directed,
staff would suggest the Hilton Homewood (Palo Alto Bowl) site and the Hilton Gardens site,
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both on El Camino Real, as they both have planning approvals and are likely to be
constructed within the planning period. The potential (25% of the total rooms) would
amount to about 77 residential units.
8. Other Comments
Staff Response: Staff did not review the proposed inclusion of a Grocery Overlay District
within the Housing Element, but understands that this overlay will be a follow-up zoning
item subsequent to the adoption of the Housing Element. Questions were raised about
whether to lower the BMR threshold and/or considering conducting a study of a cap on
market rate housing. Both of these issues are included as possible programs (See H3.1.1 and
H.3.1.12.) The BMR change was premised on Council action in 2008, and the cap on market
rate housing is not likely to be favorably perceived by HCD, as they tend to take a view that
the more housing (even market rate), the more affordable housing becomes overall. If the
Council wishes to pursue such a study, staff suggests further internal study and
consideration in the next housing element cycle (2015-2022).
Staff recommends that the Committee direct staff to make the changes suggested above to
present to the Council on July 9, plus any other desired modifications. It may be most
appropriate to provide an overview of the document and the changes suggested by the PTC and
the Committee on July 9, then continue for action by the Council in September to move the
document forward to HCD.
Prepared By: Tim Wong, Senior Planner
Department Head: Curtis Williams, Director
City Manager Approval: ____________________________________
James Keene, City Manager