That the City Council:
APPROVE THE FIRST READING OF ORDINANCE NO. _______ ENTITLED:  AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LA HABRA, CALIFORNIA, APPROVING ZONE CHANGE 21-02 FOR AMENDMENTS TO TITLE 18 "ZONING," INCLUDING MODIFICATION OF SECTION 18.04.030 “TERMS DEFINED,” MODIFICATION OF TABLE 18.06.040(A) “LAND USE MATRIX,” REPLACEMENT OF SECTION 18.12.150 “ACCESSORY DWELLING UNITS,” MODIFICATION OF SECTION 18.30 “SPECIAL NEEDS HOUSING,” AND MODIFICATION OF SECTION 18.52.040.B AS PER EXHIBITS "A," "B," "C," "D" AND "E."

CEQA:
This project is exempt from the California Environmental Quality Act pursuant to Section 15061(b)(3) of the California Environmental Quality Act Guidelines which covers activities with no possibility of having a significant effect on the environment, and pursuant to California Public Resources Code § 21080.17 and CEQA Guidelines §§ 15282(h) which exempt from CEQA accessory dwelling unit ordinances. The ordinance is also exempt under CEQA Guidelines 15303 [new construction or small structures] and 15305 [minor alterations to land].

Accessory Dwelling Units, commonly referred to as "ADUs," are a type of housing unit that in the past have been referred to as secondary dwelling units, garden homes, or "granny flats."  An ADU is typically a second small dwelling located on the same property as a primary single-family home.  Under current law, an apartment over a garage, a garage conversion to a living space, or a "tiny house" (on a foundation) in a backyard can all also be considered to be ADUs. Because of their utility and relatively low cost to construct, ADUs have become a topic of growing interest for the public, as well as within the California Legislature and among housing advocates throughout the State. 
 
ADUs are built for a variety of reasons, but the two most common reasons are the creation of housing space for extended family members, such as elderly parents or college age children, or to create a rental income stream.  Recent changes to State law have made it easier and less expensive to construct ADUs.  For example, in the past ADUs were subject to conditional use permits (CUP) with the requirement to provide adequate parking for both the main house and the new ADU, and cities had more control over design standards and other development regulations.  Recent changes to State laws; however, have required that cities amend their codes whereby ADUs are now approved without the need for a CUP or public hearings.  The State also now allows ADUs, and accessory buildings such as garages that are converted to ADUs, to forego any onsite parking requirements.  Furthermore, junior accessory dwelling units (JADUs) can be created within existing habitable spaces and non-habitable spaces, such as laundry rooms and carports, within existing buildings.

In an effort to assist cities to meet their Regional Housing Needs Assessment (RHNA) allocation for low and moderate income housing, the State has agreed to allow ADUs to count towards a local jurisdiction's housing allocation numbers, which can help in the provision of affordable housing for low and very low income levels.  What is becoming more apparent as ADU construction has expanded is that cities are experiencing different levels of demand for ADUs in their respective jurisdictions.  Communities that are home to colleges and universities or near major tourist attractions have typically experienced higher demand than those cities without those features.  For example, the City of Fullerton, which has four colleges and/or universities, processed approximately 35 ADU applications in 2019, while during that same period of time La Habra processed a total of six ADU applications; however, the volume of construction is accelerating as a result of changes in State law and the very competitive housing market in Southern California. In 2020 the number of ADU applications received by the City of Fullerton doubled to nearly 80; and La Habra's volume of ADU applications increased nearly seven-fold, growing to 40 during the same period.  Over the next eight years, staff projects that approximately 250 ADUs may be built within La Habra, especially since the recent change in State law prohibits cities from requiring a property owner to live at a property where an ADU is constructed.

It should be noted that the processing and approval of an ADU application does not necessarily result in the construction of an ADU.  In some instances, a property owner may process an application, but not immediately actually construct the unit.  Staff believes that while the projected growth in both ADU applications and actual construction of units is manageable, consistent with the City Council approved Goals and Objectives and Legislative Platform, staff will continue to advocate for local control at the State level.  In order to comply with changes in State law regarding the application and construction of ADUs, staff is proposing the attached amendments to the La Habra Municipal Code (LHMC) to ensure consistency with applicable State laws.

Updates to LHMC Title 18 "Zoning" are proposed at this time with the main effort centered on updating the code related to Accessory Dwelling Units.  Staff is also recommending updates to other relevant code sections as a house-keeping items since changes in State law have affected certain terms, definitions, or code requirements.  Each proposed update is outlined below:

Section 18.12.150 Accessory Dwelling Units
On January 1, 2020, multiple new housing bills relating to accessory dwelling units (ADUs) became law.  This included Senate Bill (SB) 13, Assembly Bill (AB) 68, AB 881, AB 587, AB 670 and AB 671.  Pursuant to these laws, municipal regulations which were inconsistent with State law were preempted effective January 1, 2020.  In addition, AB 3182, which became effective January 1, 2021, added new provisions, such as not requiring fire sprinklers for ADUs, not requiring parking when an ADU is within 1/2 mile of a public transit line, and setting maximum height and size standards for an ADU.

To preserve the limited authority that the City had remaining to regulate ADUs, on December 2, 2019, the City Council adopted Urgency Ordinance 1813.  That action was taken to protect the City's ability to enforce design or other development standards.  Absent that action the City could have been required to approve ADUs that are directly inconsistent with the development standards that apply throughout the City.  Also, had the City not taken that action, it could have been subject to litigation.  Since that time, cities throughout California have drafted their own ADU ordinances, attempting to address the requirements of the aforementioned State laws.  Using those drafts as examples, staff worked with the City Attorney's office to craft an ordinance at that time.
 
Since the adoption of Urgency Ordinance 1813, Planning staff has been using LHMC Section 18.12.150 to review and approve ADUs.  There have been occasions where the language in the ordinance was not consistent internally which left decisions open for interpretation.  In addition, sections of the Code that did not have complete development standards also left decisions open for interpretation, creating difficulty for uniformity and enforcement.  Staff has also learned that different cities had different interpretations of ADA requirements for ADU units.  The California Department of Housing and Community Development (HCD) gathered ADU ordinances from every jurisdiction in the State and reviewed them during this past year, comparing them to State law, gauging their effectiveness, and working to apply each one with a "grade."  Some of these grades were posted on the HCD website to allow jurisdictions the ability to see where they fell; however, no grade has yet been assigned to the City of La Habra.

The revised ADU ordinance reorganizes requirements into sections that are placed into a sequential manner and adds the required language to meet AB 3182 (see Exhibit A).  It also clarifies information that was missing in the current ordinance and includes information that was excluded in the related Assembly and Senate bills, such as information related to front setback and streetside setback requirements.  The proposed change will replace the whole section as per Exhibit A.

Section 18.04.030 Terms Defined
Section 18.04.03 provides a list of terms and definitions that support and clarify various sections found throughout Title 18 "Zoning."  The list of terms includes those terms that require a definition to ensure that zoning is enforced uniformly throughout the City and to reduce ambiguity.  Additionally, some special sections such as Chapter 18.22 "Commercial Cannabis Activity" or 18.62 "Wireless Communication Facilities" have their own list of definitions, which are normally updated at a time when that section is amended.  Terms and definitions can change over time, and as part of the Housing Element Update process, it was determined that some terms were out of date or were missing (please see Exhibit B). 

The following terms were addressed as part of this update:
Accessory building - modified
Accessory dwelling unit - added
Child care facility - added
Day nursery - deleted
Director - added
Factory-built housing - added
Manufactured home - added
Mobile home - added
Secondary dwelling unit - deleted
Trailerhouse - deleted

The proposed changes in Exhibit B show new language as bolded and removed language as strikeouts.

Table 18.06.040.A - Land Use Matrix
The Land Use Matrix provides a graphic reference for determining land uses that are permitted by right, require planning permits (i.e. Conditional Use Permit, Special Event Permit, or Home Occupation Permit), or are not permitted.  The chart is organized into general categories, such as residential, commercial-recreational, commercial-institutional, commercial-office, industrial, etc.  The chart is further delineated by specific uses listed on the left side in rows and zoning designations on the top in columns.

At this time, updates are being made to the residential section of the chart as a result of previous changes in State laws (see Exhibit C).  This includes the addition of residential care facilities for the elderly (also referred to as assisted living facilities), the addition of congregate living facilities, the addition of small family homes, and various clean up items.

Additionally, upon review by the Planning Commission an additional change was suggested so that, consistent with guidance provided by the Department of Housing and Community Development (HCD), certain land uses including "supportive housing" and " transitional housing" were required to be listed separately as permitted uses in all residential zones.  Staff made this change and the City Attorney's office reviewed this and found it to be acceptable without additional review by the Planning Commission.
 
The "residential" section of the table is the only portion being replaced while the remaining sections are unchanged.

Chapter 18.30 Special Needs Housing
The Special Needs Housing section of the LHMC was last updated in 2010.  Since then, amendments to State law have occurred which modified language contained within Chapter 18.30.  Definitions have been added to this section including "congregate living health facility," "congregate housing for the elderly," and "residential care facility for the elderly," which links directly to the Land Use Matrix.  Additionally, HCD guidance required updates to "emergency shelter," "supportive housing," "target population," and "transitional housing," all of which have been reviewed by the City Attorney's office and found to be acceptable without additional review by the Planning Commission.  Changes in this section are shown as bolded for new language or strikeouts for language being removed (see Exhibit D).

Section 18.52.040 Applicability
Updates are being recommended to Section 18.52.040 within Chapter 18.52 PUD Planned Unit Development Overlay Zone (see Exhibit E).  Currently, PUD requirements affect any project within the PUD overlay zone, other than the construction of one single-family residence on a lot.  An owner/developer of a property within the PUD zoning section is subject to preparing an economic analysis of the costs and benefits of the proposed use and the projected cost to provide City services to the project, preparing a plant materials booklet, a landscape maintenance schedule, a landscape design plan including a site elevation scheme accurately showing projected landscape heights at the time of development and a second design showing tables that show the total number of acres and their distribution by use, and the percentage of the whole designated for dwellings of different types, nonresidential uses, streets, off-street parking, public uses and open spaces landscape heights five years after development.  The costs for preparation of these studies and exhibits can be a significant expense for a small project.

Recent legislation passed by the State of California encourages local jurisdictions to reduce impediments to residential construction.  The intent of PUD requirements is to provide flexibility and ensure quality development for large scale projects.  In this case, removing requirements for costly and time-consuming studies and exhibits for small projects would be beneficial by providing the City with units needed to meet RHNA.  Specifically, language is being added which allows a developer of six or fewer units on small to medium lots to be exempt from those PUD requirements noted above.  Similarly, small projects of six or fewer units are currently exempted by the California Environmental Quality Act (CEQA) as per categorical exemption 15303.

Summary
In conclusion, each of the proposed Zoning Code amendments are consistent with the goals and objectives of the La Habra General Plan.  Therefore, it is recommended that the City Council adopt an ordinance approving these miscellaneous amendments to LHMC Title 18 Zoning.

This action was reviewed and approved by the Planning Commission at the April 12, 2021, meeting by a 4-0 vote (Commissioner Manley had an excused absence).   There were no speakers in favor of or against the proposal.

There is no impact to the City's General Fund.

H 1.1 Support State Housing Policy
H 1.4 Variety of Housing
H 2.1 Maintain Residential Character
H 2.5 Adequate Housing sites through Land Use and Zoning