That the City Council:
A.  APPROVE AND ADOPT RESOLUTION NO. ____ ENTITLED:  A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA HABRA APPROVING GENERAL PLAN AMENDMENT 22-01 ADOPTING THE 2021-2029 (6th CYCLE) HOUSING ELEMENT OF THE LA HABRA GENERAL PLAN 2035, AS PER ATTACHMENT A; and

B.  Authorize staff to forward the City's Revised Draft 2021-2029 Housing Element to the California Department of Housing and Community Development (HCD) for review and certification.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
Adoption of the updated Housing Element is exempt under State CEQA Guidelines §15061(b)(3) common sense exemption, because the Housing Element includes updated policies, programs, and actions that advocate for housing at all economic levels and meet the state legal requirements for a Housing Element. A key component of the updated Housing Element is the identification of existing sites in the Land Use Element that are designated for housing. These sites show that the City can meet their Regional Housing Needs Allocation (RHNA) without a general plan amendment or rezoning of property. All future construction must comply with policies in the General Plan, many of which are intended to address potential environmental impacts.

Furthermore, all projects are subject to the adopted City ordinances, regulations, and policies that regulate and direct development of individual projects. The updated Housing Element does not change any of the development requirements in the City that are designed to mitigate or avoid environmental impacts. Based on these factors, it can be seen with certainty that there is no possibility that the proposed 6th Cycle Housing Element Update would have a significant effect on the environment; therefore, the 6th Cycle Housing Element is exempt from CEQA under the common sense exemption.

State law requires every city and county to adopt a comprehensive, long-term General Plan for the physical development of that jurisdiction. The General Plan is the City's blueprint for the future. It expresses community goals and embodies public policy that serves as the basis for all land use decisions. The last comprehensive update of the City's General Plan, including an update of the Housing Element, occurred in 2014. The Housing Element is one of seven State-mandated elements of the City’s General Plan. The Housing Element is a policy document that plans for current and future housing needs within the City, as well as identifies strategies for expanding housing opportunities and services for all household types and income groups. The Housing Element is the only element of the General Plan that has State-mandated timeframes for updating (every eight years) and requires review and certification by the California Department of Housing and Community Development (HCD) for compliance with State law.

On July 26, 2021, following nine months of public outreach and input, which included five General Plan Advisory Committee (GPAC) meetings, the Planning Commission held a public hearing on the 2021-2029 draft Housing Element ("Element").  Consistent with State law, the draft Element was posted on the City's website for more than 30 days prior to the Planning Commission hearing and notices for the public hearing were sent to all those who participated in the GPAC meetings, which included the GPAC members, housing advocacy groups and interested residents. At that meeting, no one addressed the Commission either for or against the proposed Element's contents; however, a letter was sent to the City by the Kennedy Commission commenting on the draft Element. Staff noted that they had reviewed the comments in the letter and that the issues raised were already addressed in the draft Element. The Planning Commission also reviewed the letter and did not have any questions or suggested modifications to the Element. 

The Planning Commission's discussion centered on the use of Accessory Dwelling Units (ADU) as part of a strategy for the City to help meet its Regional Housing Needs Assessment (RHNA) allocation to facilitate the development of 804 new housing units. There was concern that the 400 ADUs projected to occur over the next eight years was an unrealistically high amount and that HCD would reject the City's draft Housing Element. There was also discussion regarding the proportionality between the level of ADUs and the overall RHNA numbers. Staff noted that there was flexibility, based on the numbers of units identified in the other categories, that would give the City the overall potential to meet its RHNA obligation. The Planning Commission passed a resolution recommending that the City Council authorize staff to forward the draft Element to HCD for review and comment.

On August 16, 2021, the City Council held a duly noticed public hearing, to review the draft Element and take public comments. The City Council was also in receipt of the aforementioned Kennedy Commission letter, had an opportunity to review it before the public hearing started, and had no comments or questions.  The City Council discussed the RHNA numbers in general terms and there was a question about whether the recently adopted Inclusionary Housing Ordinance was a constraint to housing development. There were no additional concerns raised by the City Council and, when the public hearing was opened, there was no public comment. Subsequently, City Council adopted a resolution authorizing staff to forward the draft Element to HCD, which staff did on September 2, 2021. Pursuant to state regulations, HCD was required to respond within 60 days. A comment letter from HCD was received by staff on November 1, 2021.

On March 21, 2022, the City Council held a public hearing to review the modifications that had been made to the draft Element in response to HCD's comments. The draft Element was posted on the City's website for more than 30 days prior to the Planning Commission hearing and notices for the public hearing were sent to all those who participated in the GPAC meetings, which included the GPAC members, housing advocacy groups and interested residents. 

The primary areas of concern raised by HCD were regarding ADU projections, feasibility of the sites identified to meet the City's RHNA allocation, concerns with regulatory constraints regarding housing development, and compliance with “Affirmatively Furthering Fair Housing” requirements.  The comments provided by HCD primarily asked for more information and analysis. Staff addressed the comments and presented the revised draft Element to the Council for review. The City Council adopted a resolution to forward the revised draft Element to HCD for review and certification, which staff did on March 23, 2022. On May 23, 2022, the City received a comment letter from HCD regarding the revised draft Element, which sought additional information regarding housing needs, resources, and constraints, and about the City's housing programs. 

On March 24, 2022, July 19, 2022, and August 5, 2022, the City received correspondence from Californians for Homeownership noting that the City had not yet adopted its Housing Element and threatened litigation over the matter. The correspondence, along with the City's responses, are attached. No other public correspondence has been received regarding the City's draft Housing Element, other than the aforementioned Kennedy Commission letter, which is also attached. 

Since receipt of the last comment letter from HCD on May 23, 2022, City staff have been working closely with HCD staff on another update to the Housing Element and believe that, with certain changes, the document is ready for adoption by the City and certification by HCD. On August 22, 2022, the Planning Commission reviewed the draft Element and recommended City Council approval (see Planning Commission Action section below). With the adoption of the Housing Element, State law also requires that the City update the Safety Element of the General Plan to address fire hazards, climate adaptation and resiliency, and to include an Environmental Justice Element or related environmental justice goals, policies and objectives integrated into other elements. These updates are underway and will be forthcoming for review by the Planning Commission and City Council at a later date.

Below is a summary of the changes requested by HCD, along with the City's response.  Adoption of the draft Element requires approval of a General Plan Amendment; the requirements for said amendment are also summarized below and are listed in the attached resolution.

HCD provided comments on five areas of the Housing Element:

1) Inventory of sites and housing production needed to address the 2021-2029 cycle;
2) The use of accessory dwelling units (ADUs) to meet a portion of the City’s RHNA;
3) Affirmatively furthering fair housing;
4) Select City codes that require amendments to facilitate housing production; and,
5) Additional details on timeframes for implementing programs. 

To address these comments, staff recommend the following revisions to the draft Housing Element:

1. Inventory of sites. The draft Element was revised to include additional details on the existing uses on each parcel, history of past land uses that were recycled from nonresidential uses to residential uses, and discussion of the City’s history with mixed use developments.

2. Accessory dwelling units. The draft Element includes a revised estimate of anticipated ADU production and the results of a survey of property owners who indicated the rents they anticipate charging for ADUs when complete.

3. Affirmatively furthering fair housing. The draft Element includes revisions regarding additional information about the City and contributing factors to current fair housing issues.

4. Select City codes. The draft Element includes proposed revisions to design review, municipal code definitions, parking space requirements and structure heights limits, and other miscellaneous revisions, as required by state law.

5. Program information. The draft Element includes greater detail on certain City housing programs and timeframes for implementation of the programs.

Adoption of the draft Element requires approval of a General Plan Amendment pursuant to the requirements of State law, which includes public hearings before the Planning Commission and City Council. The Planning Commission is required to make a written recommendation of the amendment to the General Plan to the City Council, which is procedurally completed through the adoption of a resolution. The requirements for the Housing Element are contained in Article 10.6 of the California Government Code, commencing with Section 65580. Staff believes that the proposed Housing Element meets all State law requirements and recommends City Council concurrence with the Planning Commission recommendation and approve the attached resolution.

The Planning Commission held a duly noticed public hearing on August 22, 2022, to consider General Plan Amendment 22-01 approving the Draft 2021-2029 Housing Element to the La Habra General Plan 2035. Notices were specifically sent to all individuals who had previously commented on the earlier drafts, either through Zoom meetings or correspondence, as well as the members of the General Plan Advisory Committee (GPAC). There were no members of the audience that wished to speak either for or against the proposed Housing Element and no correspondence was received.  After a brief questions and answers session with staff, the Commission voted to adopt the resolution recommending that the City Council approve GPA 22-01. The Planning Commission minutes and resolution recommending Council approval are attached.

Since the Commission meeting, staff has continued to work with HCD to further refine and address any concerns they have raised. The modifications to the posted draft document are identified on the attached errata page. 

The consultant costs associated with the update of the Housing Element have been primarily funded by the SB2 and grants from HCD in the amount of $238,000. The consultant contract to assist staff with the update of the City's Housing Element is for a "not to exceed" amount of $299,541. The additional funding necessary to pay for this expense is allocated from the General Plan Update reserve account, which is composed of fees assessed on building permits. City staff costs are included in the General Fund budget for the Community and Economic Development Department.

California law requires that all local governments develop housing programs to meet their "fair share" of existing and future housing needs for all income groups. La Habra, along with all local governments in California, must prepare a Housing Element to meet its local housing needs. The Housing Element must contain proactive goals, policies, and programs to facilitate the development, improvement, and preservation of housing commensurate with its housing needs as established by the City, regional government, and the State of California.

This Housing Element covers the planning period of 2021-2029. Requirements for the content of the Housing Element are found in Article 10.6 of Chapter 3 of Planning and Zoning Law, commencing with Government Code Section 65580. Housing Elements are typically the most complex chapter in the General Plan, and the only element that is required to be completely updated on a fixed schedule and subject to receiving a letter of compliance from the State of California.

This request implements City Council Goal 5- Development Activity and Business Assistance, Objective "O"- Update the General Plan Housing Element in compliance with State law and process related Zoning amendments or reclassifications.