Loading...
HomeMy WebLinkAboutStaff Report 4286 City of Palo Alto (ID # 4286) Regional Housing Mandate Committee Staff Report Report Type: Meeting Date: 12/12/2013 City of Palo Alto Page 1 Summary Title: Work Plan for 2015-2022 Housing Element Title: Work Plan for 2015-2022 Housing Element for the 2014-2022 Regional Housing Needs Allocation Cycle From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the Regional Housing Mandate Committee (RHMC) review and provide direction to staff regarding the workplan for the 2015-2023 Housing Element Update. Background The City of Palo Alto is required to update its Housing Element on a regular basis per State Housing Element Law (Government Code Section 65580 et seq.). The State deadline to update the Housing Element for the time period from 2015-2023, is January 31, 2015. For this update cycle, the State legislature has enacted legislation that imposes a strict penalty if certification is not approved by the deadline (although there is a six month grace period). If the Department of Housing and Community Development’s (HCD’s) certification is not received on time, jurisdictions must update their Housing Element every four years instead of on an eight year cycle. California State Housing Element law requires each city and county to update its housing element to ensure that all localities provide adequate development sites for sufficient new housing to meet their fair share of the regional housing need. As part of the 5th cycle of the Regional Housing Needs Allocation (RHNA) process, as overseen by the Association of Bay Area Governments (ABAG), the City of Palo Alto was assigned a quantified goal of 1,988 units, which represents the City’s “fair share” of projected housing need for the 2014-2022 planning period, distributed among the following income groups: very low (691 units), low (432 units), moderate (278 units) and above moderate (587 units) income categories. (As a point of clarification, the RHNA projection period is from January 1, 2014 to October 31, 2022 while the Housing Element planning period is from January 31, 2015 to January 31, 2023 therefore the slight difference in City of Palo Alto Page 2 time periods.) Housing Element law is the State’s primary strategy to increase housing supply, choice and affordability. Housing elements identify the existing and projected housing needs of all economic segments of a community, including the homeless and persons with disabilities, and promote a variety of housing types, including multifamily rental units, transitional and other types of supportive housing. Housing elements also define the policies and programs that a community will implement to achieve the goals and objectives it develops and adopts to address housing needs. While State law prevents the City from considering school impacts in addressing its RHNA obligations, historically, the City has been extremely cautious when designating additional housing sites, due to increased demand on city services in general. It is important to note that Housing Element law only requires the City to provide residential zoning opportunities to accommodate its RHNA allocation. The law does not require the City to approve or construct housing, although there is a requirement that the City actively monitor housing production and adopt and implement programs to further housing objectives. Discussion On August 15, 2013, HCD issued a letter stating that the City was in full compliance with State Housing Element law, indicating that it had “certified” the City’s Housing Element for the period 2007-2014. In the Element, the City had proposed a number of programs in order to receive compliance from HCD, and many of the programs need to be completed within a year of Housing Element approval. Thus, the City must undertake a number of actions to implement its 2007-2014 Housing Element at the same time it prepares an updated Housing Element for 2015-2023. The City must also monitor housing production. Implementation of Housing Element 2007-2014 Some of the programs required in the 2007-2014 Housing Element are relatively straightforward to implement and on December 11, 2013, the Planning and Transportation Commission (PTC) reviewed an ordinance that would implement the following HE programs: 1. Modify the Commercial Neighborhood (CN) zone to allow 20 dwelling units per acre rather than 15 dwelling units to meet the adequate sites requirement; 2. Create emergency shelter standards in the Research, Office, Light Manufacturing zoning district, east of Embarcadero Ave. (ROLM)(E) so that any emergency shelter application City of Palo Alto Page 3 submitted would be a ministerial action, no discretionary review is required; 3. Revise Title 18 definitions for transitional and supportive housing that clearly defines them as a multi-family residential use, and 4. Adopt of a City-wide Reasonable Accommodation policy. Adoption of these programs into the zoning code is particularly significant because these specific programs must be implemented in order to meet HCD requirements for a Streamlined Review for the 2015-2023 Housing Element. (The Streamlined Update option is discussed below.) Other programs required in the 2007-2014 Housing Element will be more challenging to implement, and staff anticipates bringing them forward for PTC review in approximately six months. Those programs include lot consolidation incentives and implementation of a small residential unit overlay district to allow for higher densities in the Pedestrian Transit Oriented Development (PTOD) zone district. Annual Monitoring State law and the City’s Housing Element require the City to monitor housing production and program implementation. Staff prepares an annual report regarding implementation of their general plans (the Comprehensive Plan in Palo Alto), and provides copies of that report to the Governor’s Office of Planning and Research (OPR) and HCD. The deadline for submittal of this report is in April, and staff will begin preparing the report as soon as complete data for calendar year 2013 is available. 2015-2023 Housing Element Update As stated earlier, the HCD Certification deadline for the 2015-2023 Housing Element is January 31, 2015. Because HCD certified the 2007-2014 Housing Element so recently, many of the housing sites and programs it identifies can be carried forward in the update for 2015-2023. However, the City will still need to update the Housing Element’s demographic information, identify new sites for approximately 700 units, make adjustments to its objectives and programs, and conduct required CEQA review – all in a relatively short timeframe. As staff develops ordinances to implement programs in the 2007-2014 Housing Element, it can begin the process of identifying new sites for approximately 700 additional units needed to meet the 2014-2022 RHNA requirements. In the 2007-2014 Housing Element, the list of sites identified sufficient sites to accommodate 1,680 units. Of those sites, a number have been developed and therefore are not available to apply towards the 2014-2022 RHNA. Staff estimates that sites accommodating about 1,500 units can be carried over from the current list. City of Palo Alto Page 4 Thus, approximately 488 additional units will be needed to meet the meet the minimum 2014- 2022 RHNA requirements. Also, based on the small sites on the current list, HCD required that the City have a surplus of sites/units in order to guarantee that the City could realistically meet its RHNA requirements. Staff believes that HCD will apply the same requirement for the Housing Element Update, and therefore a surplus of 150-200 units will be necessary to satisfy HCD on top of the 488 units referenced above (for a total of about 640-690 units). Unlike last cycle where the City had a carryover penalty due to failure to take certain zoning actions it had promised in the previous Housing Element, staff does not anticipate a carryover penalty this cycle. In order to inform development of a workplan for the Housing Element Update, staff conducted a quick and very preliminary analysis to determine whether the City could possibly identify additional housing sites without rezoning. The two areas that could provide a significant amount of units without rezoning are the Service Commercial (CS) zoned parcels along San Antonio Avenue, between Middlefield Road and Charleston Road, and the Fry’s site, located at 430 Portage Ave. CS zoning allows for mixed use developments with a maximum density of 30 units per acre. Using what HCD refers to as a “realistic capacity” of 20 units per acre, the San Antonio Avenue parcels could accommodate 159 units, although the City would have to demonstrate that the parcels are realistic for mixed use developments. The Fry’s site is included in the current inventory of housing sites, but with an assumption of substantially fewer units than would be permitted. In the update to the Housing Element, this assumption could be changed to accommodate an additional 90 units. With additional analysis, it is possible staff can identify some additional sites that could accommodate a portion of the City’s RHNA via mixed use development without rezoning. However, It does appear that it will be necessary to rezone sites to meet the RHNA requirements and to provide a surplus of sites. This poses a significant challenge, and not just because rezoning sites for additional housing is potentially controversial. Specifically, the January 2015 deadline for the Housing Element Update means there is likely insufficient time to undertake actions requiring preparation of an Environmental Impact Report (EIR) under the California Environmental Quality Act (CEQA). It is possible, however, that the City could designate sites within its Housing Element Update and commit to completing the associated rezoning of those sites or alternate sites within one year. Again, there would be significant penalties if the City were to miss this deadline. On a positive note, HCD has developed a Streamlined Update review process. This streamlined review process reduces the overall HCD review period down to a total of 60 days. Previously, HCD’s review timeline commenced when the jurisdiction submitted a draft Housing Element for HCD review. HCD had 60 days to review and submit comments regarding the draft. The jurisdiction would respond to the comments and revise the draft to address HCD comments. Once the revised draft was submitted to HCD for final review, HCD had another 90 days to City of Palo Alto Page 5 respond with comments or certify the document. For the 2007-2014 Housing Element the total time needed for the review process was over 13 months once back-and-forth negotiations with HCD were included. With the extremely short time period to prepare the updated Housing Element for 2015-2022, the ability to use the streamlined update process will be crucial. Jurisdictions may be eligible for this voluntary streamline review process if the jurisdiction has completed the following items: 1. Rezone of adequate sites have been completed; 2. Approval of zoning to permit emergency shelters without discretionary action; 3. Zoning to permit transitional and supportive housing as a multi-family residential use; 4. Policies, ordinances or procedures established to allow reasonable accommodation for persons with disabilities, and 5. Adoption of the density bonus ordinance. Eligibility for the Streamline Update is significant, not only for the reduced review schedule but also the entire Housing Element document would not need to be revised. Only certain sections of the HE would need to be updated. Those sections include: 1. Housing Needs Assessment 2. Person with Special Needs 3. At-Risk Units 4. Potential Governmental and Non-governmental Constraints. 5. Sites Inventory and Analysis 6. Analysis of Internal Consistency of the General Plan If a jurisdiction is not eligible for the Streamlined Update, the standard review process would apply. Proposed HE Update Timeline The deadline date for HE certification is January 31, 2015. Assuming the City is eligible for the Streamlined Update, the following rough timeline has been prepared. City of Palo Alto Page 6 Date Task 1. December 2013  RHMC HE Workplan presentation  PTC Review of Zoning Update Package #1  Release HE Consultant RFP 2. January 2014 Council Consideration of Zoning Update Package #1 and Density Bonus Ordinance 3. March 2014 Public Outreach and present draft Housing Needs Assessment 4. April 2014 Submit HCD Housing Element Annual Performance Report 5. May 2014 PTC initial review of draft HE Updates and Streamlined Update Checklist 6. June 2014 PTC review of Zoning Update Package #2 7. July 2014 PTC final review of draft Updates and CEQA review 8. August 2014 RHMC review of draft HE Updates and Streamlined Update Checklist 9. September 2014 Council review of Zoning Update Package #2 10. October 2014 Council review of CEQA and HE Updates 11. November 2014 HCD Submittal of HE Update 11. January 31, 2015 HCD Certification Deadline City of Palo Alto Page 7 12. March 2015 Begin rezoning process within one year of HE Certification Resource Impact The State and the region (ABAG/MTC) are continuing to place a greater importance on a certifed housing elements and now require a certified housing element for agencies to be eligibile for receiving funding. This year, the City received over $4.0 million in competitive and non-competitive One Bay Area Grant (OBAG) transportation funds. The City would have been ineligible for these funds if the City did not have a certified Housing Element. The State’s sustainable communities law (known as SB 375) to reduce greenhouse gases contains further incentives for cities to submit compliant housing elements by conditioning key transportation grants to compliant elements and by extending the housing cycle for cities with certified elements. Substantial staff time will be necessary to implement the remaining programs of the 2007-2014 Housing Element, to complete the annual monitoring report in April 2014, and to update the Housing Element for the 2015-2023 period. Activities associated with the update include assembling updated data about housing and housing needs in Palo Alto, conducting required public outreach meetings, and preparing draft and final documents for review and adoption. Staff expects to use a consultant to assist with the data collection and analysis, as well as public outreach efforts. The City attorney may also have costs associated with retaining outside legal counsel with specific expertise in Housing Element law. Staff is reviewing the feasibility of using existing housing-related funds for these anticipated one-time expenditures. Policy Implications Cities and counties which do not meet the statutory deadline for their upcoming housing element update will be faced with the requirement to update their housing elements more frequently in the future. Also, without compliant housing elements, jurisdictions may be faced with costly legal challenges pursuant to housing element law and/or fair housing law. Also, if the City fails to identify or make available adequate sites to accommodate its RHNA assignment within a given planning cycle, the City may be required to carry those units over into the next planning cycle, thus increasing the number of sites to be identified in the upcoming cycle.