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HomeMy WebLinkAboutStaff Report 14641 City of Palo Alto (ID # 14641) City Council Staff Report Report Type: Action Items Meeting Date: 8/8/2022 City of Palo Alto Page 1 Summary Title: Supplemental Report - 22PLN-00016 Title: PUBLIC HEARING / QUASI-JUDICIAL. 1033 Amarillo Ave [22PLN-00016]: Request for a Preliminary Parcel Map With Exceptions to Subdivide a 20,787 Square Foot R-1 Property Into Two (2) Lots, Where Lot 1 Will be 10,668.50 Square Feet and Lot 2 Will be 10,118.77 Square Feet. Exception is for Minimum lot Width and Maximum lot Size. Zoning District R-1 Single Family Residential. From: City Manager Lead Department: Planning and Development Services Supplemental Report for August 1, 2022 Item 9 CONTINUED DATE: AUGUST 8, 2022 TO: HONORABLE CITY COUNCIL FROM: JONATHAN LAIT, DIRECTOR OF PLANNING & DEVELOPMENT SERVICES SUBJECT: PUBLIC HEARING / QUASI-JUDICIAL. 1033 AMARILLO AVE [22PLN- 00016]: REQUEST FOR A PRELIMINARY PARCEL MAP WITH EXCEPTIONS TO SUBDIVIDE A 20,787 SQUARE FOOT R-1 PROPERTY INTO TWO (2) LOTS, WHERE LOT 1 WILL BE 10,668.50 SQUARE FEET AND LOT 2 WILL BE 10,118.77 SQUARE FEET; THE EXCEPTION IS FOR MINIMUM LOT WIDTH AND MAXIMUM LOT SIZE. ZONING DISTRICT R-1 SINGLE FAMILY RESIDENTIAL. This Memorandum provides brief responses to Council questions of staff during the August 1st public hearing. Council conducted the hearing but continued the hearing for deliberation. City of Palo Alto Page 2 Councilmember Stone asked about references in the City’s Comprehensive Plan (Comp Plan) related to ‘naturally affordable’ or ‘affordable by design’ references in the Comp Plan. Councilmember Stone further asked whether the map approval could be conditioned to require displacement assistance or additional affordability in the event of redevelopment, beyond the City’s existing BMR program. This report contains relevant Comp Plan goals, policies, and programs and provides additional information related to displacement and affordability. Relevant Comprehensive Plan/Housing Element Policies Staff have looked through the Comp Plan to find any additional policies relevant to the Councilmember’s topic, those policies are summarized below: • Land Use Element Policy L-2.7 states, “Support efforts to retain housing that is more affordable in existing neighborhoods, including a range of smaller housing types.” Related Program L2.7.1 states, “Review development standards to discourage the net loss of housing units.” • Land Use Element Policy L-2.3 states, “As a key component of a diverse, inclusive community, allow and encourage a mix of housing types and sizes, integrated into neighborhoods and designed for greater affordability, particularly smaller housing types, such as studios, co-housing, cottages, clustered housing, accessory dwelling units and senior housing.” • Housing Element goal H1 for existing neighborhoods is to “Ensure the preservation of the unique character of residential neighborhoods” and the related policy is “Promote the rehabilitation of deteriorating or substandard residential properties using sustainable and energy conserving approaches.” • Program H1.1.3, “Provide incentives to developers such as reduced fees and flexible development standards to encourage the preservation of existing rental cottages and duplexes currently located in the R-1 and R-2 residential areas”. The five-year objective is to provide 10 rental cottages and duplexes using the city housing fund. • Housing Element goal H3 is to “meet underserved housing needs and provide community resources to support our neighborhoods. Related policies and programs are: o Policy H3.1 is to “encourage, foster, and preserve diverse housing opportunities for very low-, low-, and moderate income households.” City of Palo Alto Page 3 o Policy H1.2 is to “Support efforts to preserve multifamily housing units in existing neighborhoods.” Staff Analysis The Comp Plan encourages the retention of housing that is affordable and housing that supports a diverse community; it celebrates a mix of housing types, including cottage and cluster housing, and seeks to encourage its retention through reduced fees and other development incentives. These policies could be interpreted as lending support toward an interest to retain the subject cottage cluster because of its unique housing layout and, arguably, increased affordability given it represents smaller, older housing stock that would not command the same rents as new construction. Comp Plan policies are intended to be general and provide policy guidance. It is not uncommon for a project to comply with most policies and not others. When staff reviews a project for conformance, it considers the totality of the Comp Plan policies and implementing regulations. The zoning code is the principal tool used to implement Comp Plan land use policies. There are no current zoning regulations or financial or development incentives that implement Comp Plan policies related to cottage clusters in the R-1 zoning district. The 2018 Housing Work Plan included exploration of this topic but other policy work received priority focus. Staff is including work on cottage clusters in the updated Housing Element but anticipates it would still be several years before policies are implemented. Last year, staff met with the applicant’s representative to discuss development incentives that could be used to encourage the retention of the cottage clusters on the subject property. Use of the planned home zoning application was a consideration but the applicant was not sufficiently motivated in this regard and a short time later the City Council clarified that planned home zoning applications were not intended for the R-1 zoning district. The applicant presented a pre-screening application to the City Council on October 25, 2021 to subdivide the property into four lots generally reflecting the layout of the existing cottage clusters but also sought to develop each lot with a two-story building and accessory dwelling. This would have resulted in four net new units, eight total units. The Council expressed some concern with this approach and the applicant subsequently filed the subject application to divide the lot in half. Any redevelopment of the site must restore at least four units to remain in compliance with State law (SB 330). Even if the parcel map application were denied the property owner could still demolish the existing homes and replace it in the same configuration (building footprint, floor area, etc). While smaller, older housing units may demand less rent, delaying redevelopment without financial or development incentives to retain and improve the condition of this housing typology may have down sides as well. City of Palo Alto Page 4 When considering the findings required to approve the subdivision map and exceptions request, staff concludes that the project remains in substantial compliance with the Comp Plan including some of the policies referenced above. However, the map and exception findings are subjective and a majority of Councilmembers could deny the project based on substantial evidence. Displacement and Affordability The Housing Crisis Act (SB 330) created a number of protections for low and very-low income households displaced by the redevelopment of residential rental properties. If a rental unit was actually rented by a low or very-low income household within the past five years, state law requires that the unit be replaced and offered at a rent affordable to such household. If the rental units were rented to higher-income households, however, these restrictions do not apply. The applicant would need to provide the 5-year rental history upon application for replacement units to determine if this is applicable. Staff would need to carefully review any proposed, project-specific conditions relating to displacement and affordability. Project-specific conditions are likely to be closely scrutinized by a court for an “essential nexus” and “rough proportionality” to the impacts created by the project. This is a very difficult standard to meet. Therefore, if the Council is interested in imposing such conditions, staff would request additional time to study a specific proposal.