That the City Council consider and approve the first reading of the following ordinances:

The City Council adopted the 2021-2029 (6th Cycle) General Plan Housing Element ("Housing Element") on September 19, 2022, by Resolution No. 6085, after a lengthy multi-year public process. As part of the adoption of the Housing Element, the City Council found that the document was substantially compliant with State law. The California State Department of Housing and Community Development (HCD) later certified the City’s Housing Element on April 21, 2023, following some non-substantive administrative changes. The certified Housing Element is available for public review on the City's website. The City Council's adoption of the Housing Element initiated the Zone Changes that are the subject of this staff report.

Since the City Council's adoption of the Housing Element, city staff has been working to implement the Housing Programs contained in the Housing Element, which require the Zone Changes that are summarized below:

• Zone Change 23-03 would amend various chapters and sections of Title 18 to streamline and/or facilitate housing as required by the State;
   
• Zone Change 23-04 would add new objective design standards for multi-unit residential and mixed-use development; and,
   
• Zone Change 23-05 would streamline the review and approval of eligible affordable housing projects by providing a ministerial approval process and exempting such projects from environmental review under the California Environmental Quality Act (CEQA).

All of the above Zone Changes are in response to State law requirements for local jurisdictions to do their part in addressing California's housing shortage by streamlining the housing construction process and adding housing reforms to promote affordability and affirmatively further fair housing, as summarized below:

• Senate Bill 35 (SB 35) allows qualified multi-unit residential and/or mixed-use infill projects that provide lower income housing units, meet certain labor provisions, and are consistent with local planning standards to go through a simplified and expedited housing approval process.
• Assembly Bill 2339 (AB 2339) amends State Housing Element Law requirements for the identification of zones and sites for emergency shelters, transitional, and supportive housing, and expands the definition of “emergency shelters” to include other interim intervention facilities such as “low barrier navigation centers.”
• Assembly Bill 139 (AB 139) requires cities to review the effectiveness of the Housing Element goals, policies, and related actions to meet the community’s special housing needs.
• Government Code Sections 65915-65918 (Density Bonus Law) include State-mandated provisions for density bonuses, incentives/concessions and waivers/reductions in development standards for qualified affordable housing projects.
• The Department of Housing and Community Development’s (HCD’s) Group Home Technical Advisory memorandum, dated December 19, 2022, requires cities to remove constraints on group homes; prohibits policies and practices that discriminate against owners, operators, and residents of group homes; and requires cities to align housing definitions and permitting processes with State laws. 

A draft ordinance for each of the above Zone Changes is provided under Attachments 1-3, which show the proposed text as it will appear in the La Habra Municipal Code (LHMC). Attachment #4 provides a red-line version of the Zone Changes to show how the code language is being changed by identifying proposed new text in bold blue typeface and deleted text with a strike through. Attachment #5 provides a table detailing the Housing Programs that the subject Zone Changes are intended to implement, all of which were projected in the Housing Element to be completed within the first year after the adoption of the Housing Element. The attached ordinances have been reviewed by the City Attorney's office to ensure compliance with State law.

This ordinance would also repeal and replace Chapter 18.10: (Reasonable Accommodations in Housing to Disabled Individuals) to further reduce housing barriers for people with disabilities. The updated Chapter 18.10 would:

• Remove the application fee for processing a reasonable accommodation request; 
• Include protective measures to guard the privacy of applicants; and,
• Establish a ministerial application and appeal process to simplify and expedite the process.

In addition, the ordinance would amend Chapter 18.14 (Off-Street Parking Requirements) to remove parking constraints for certain housing types in compliance with State housing law. The amendments are as follows:

• Clarifying that the parking requirements for two-unit dwellings (duplexes) are the same, per unit, as for a single-unit dwelling;
• Removing the requirement for covered garage parking for studio units; 
• Adding and amending parking standards for special needs housing, such as group homes, transitional housing, supportive housing, and emergency shelters under Table 18.14.060.A.4; and,
• Amending housing terms to be more inclusive and consistent with revised definitions in Chapter 18.04.

The Zone Change would increase maximum height limits for the R-3 and R-4 Zones from 26 feet to up to 36 feet, which would enable a floor height of at least 12 feet per story and would allow more design flexibility for higher density developments.  

In accordance with State housing law requirements, Chapter 18.30 (Special Needs Housing) is proposed to be revised to help the City affirmatively further fair housing for people with special needs by removing constraints to the development and operation of such housing for people experiencing homelessness and people with disabilities. The amendments include:

• Removing constraints on congregate housing and domestic violence shelter uses, as State housing law has deemed these types of uses to be the same uses as residential and emergency shelter uses;
• Removing operational and development constraints for emergency shelters, transitional housing, and single-room occupancy housing (SROs); and,
• Adding development standards for new special needs housing types, such as low barrier navigation centers and supportive housing.

Chapter 18.54 (Mixed-Use Overlay Zones) is proposed to be revised to remove existing constraints on the development of mixed-use and multi-unit residential projects within Mixed-Use (MX) Overlay Zones that will further enable housing production in the City. The following changes are proposed:

• Remove the minimum of 20% nonresidential uses cap and the one-acre site lot size for mixed-use projects;
• Add a floor area ratio of 1.5 for all mixed-use projects within the MX Overlay Zones;
• Revise the permitted density for dwelling units to be consistent with the maximum densities described within the General Plan;
• Provide clarity on the applicability of the MX Overlay Zones regulations;
• Ensure the parking standards are consistent with Chapter 18.14 (Off-Site Parking Requirements);
• Simplify the open space requirements for both private and common spaces; and,
• Eliminate existing subjective design standards and the MX development permit application that contained subjective findings, and now require compliance with new objective design standards under Chapter 18.09 of the LHMC and the Design Review application, which is a more efficient and objective review process.

The proposed Zone Change would repeal and replace Chapter 18.80 (Affordable Housing Requirements) to bring this chapter into compliance with State Density Bonus Law (Government Code Sections 65915-65918) and make the process for developing affordable housing easier, by:

• Removing the Conditional Use Permit (CUP) application requirement and instead requiring an Affordable Housing Application to be processed concurrently with an entitlement application; and,
• Referring applicants to Government Code Section 65915 et seq. ("Density Bonus Law") rather than repeating the specific density bonus, incentives, concessions, waivers, and parking requirements contained in State law within the LHMC.

Finally, Chapter 18.82 (Inclusionary Housing Units) would be amended throughout, in accordance with State housing law, for a number of "clean-up" items including:

• Replacing the term "permit" with "application", 
• Relocating the definitions to Chapter 18.04 (Definitions), and,
• Removing the requirement of a homeowner's association for rental units.

Zone Change 23-04
This Zone Change would create a new chapter 18.09 (Objective Design Standards for Multi-unit Residential and Mixed-Use Development) that would establish straight-forward, measurable design standards to be used on either multi-unit residential or mixed-use development projects. Staff developed this chapter using the Objective Design Standards Toolkit for Multi-unit and Mixed-use development, which was provided by the Orange County Council of Governments (OCCOG) for Orange County cities. The toolkit includes a Model Objective Design Standard Ordinance that was prepared by PlaceWorks, Inc. to provide all Orange County cities with baseline strategies that are deemed sufficiently "objective" per the States requirements. The proposed chapter provides standards pertaining to site planning, orientation, entries, frontages, roofs, windows, materials, etc.; and, it includes a variety of building types (podium, town homes, and wrapped buildings) and seven architectural styles (Spanish Revival, Craftsman, Tuscan, East Coast Traditional, Farmhouse, Modern, and French Influence). 

Zone Change 23-05
Staff is proposing to add Chapter 18.84 (Multi-Unit Residential and Mixed-Use Development Ministerial Review Process) to Article IV (Administrative) of Title 18 (Zoning) pursuant to Senate Bill 35 (SB 35) by establishing an efficient entitlement process, with objective design standards, and streamlined environmental review, for eligible housing projects. This new chapter would:

• Allow qualified multi-unit residential and/or mixed-use infill projects that provide lower income housing units to go through a simplified and expedited housing approval process;
• Require consistency with local planning standards, Government Code Section 65913.4, and HCD's SB 35 Guidelines; and,
• Include section headings (i.e., purpose, applicability, development eligibility, ministerial procedures, etc.) that clearly outline the required processes in the LHMC for a potential developer to follow.

Conclusion
The proposed Zone Changes will help ensure that the City complies with new and updated state housing laws, and is on-track to complete the Housing Programs that were proposed and approved as part of the adoption of the 2021-2029 Housing Element. In addition, these amendments will help the City meet its General Plan goals to enable housing opportunities for all residents of the City, by accommodating a variety of housing types and high quality designs. Therefore, staff supports the Planning Commission's recommendation for the City Council to approve Zone Change 23-03, 23-04 and 23-05. 

On November 13, 2023, staff presented Zone Changes 23-03, 23-04 and 23-05 to the Planning Commission. No public comments were received regarding any of the proposed zone changes. After deliberation, the Planning Commission unanimously voted 5-0 to recommend approval to the City Council.  The Planning Commission staff report and draft minutes are provided as Attachments #6 and #7, respectively.  The draft minutes will be reviewed by the Planning Commission on December 11, 2023.

Staff costs associated with the subject zone changes were included as part of the Planning Division's annual budget. The City also received technical assistance from the consulting firm, Interwest, through an allocation of the State's Regional Early Action Planning (REAP) grant to the Orange County Council of Governments (OCCOG).

The proposed zone changes will implement the General Plan Housing Element and the following land use and housing-related goals of the Community Development Element:

Goal LU-7: Livable Neighborhoods. A City composed of neighborhoods with a variety of housing types that are desirable places to live, contribute to the quality of life, and well maintained.

Goal LU-9: Multi-family Neighborhoods. Multi-family residential neighborhoods that provide ownership and rental opportunities, are well designed, exhibit a high quality of architecture, and incorporate amenities for their residents.

Goal HE-2: Housing Opportunities. Well-designed housing opportunities throughout the city that are diverse in type, tenure, location, and affordability levels; that minimize environmental health hazards and incompatible land uses; and that enhance the quality of life for residents.

Goal HE-3: Provision of Affordable Housing. Assist in the development, provision, and retention of long-term affordable housing opportunities for extremely low, very low, low, and moderate-income households, including individuals and families with special needs.

Goal HE-4: Affirmatively further fair housing. Ensure housing opportunities are available to all without regard to race, color, ancestry, national origin, religion, marital status, familial status, age, gender, disability, source of income, sexual orientation, military status, or other arbitrary factors.


The proposed zone changes will also achieve the following Fiscal Year 2022-2023 City Council Goals and Objectives:

Goal 5 - Development Activity and Business Assistance

• Objective C. Work closely with commercial and residential property-owners to improve and maintain the appearance of their properties.
• Objective E. Continue to evaluate and improve the City's development review process and continue to foster a "business friendly" environment within all City departments.
• Objective M. Update, implement and provide annual performance reports for the General Plan in compliance with State law.
• Objective O. Review the Zoning Code on an on-going basis and process amendments that ensure compliance with recent State legislation, streamline project processing, remove unnecessary regulations, and/or make the Zoning Code easier to implement.
• Objective Q. Facilitate the development of high-quality housing, at a variety of income levels, to help meet projected demand, as set forth in the Regional Housing Needs Assessment (RHNA).