| Item No. 2. | |
| MEETING DATE: November 9, 2020 |
|
| TO: | PLANNING COMMISSION |
| FROM: | ROY N. RAMSLAND JR., PLANNING MANAGER By: Chris Schaefer, Senior Planner |
| VIA: | ANDREW HO, DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT |
| SUBJECT: | CONSIDERATION OF ZONE CHANGE 20-03 AMENDING TITLE 18 (ZONING) OF THE LA HABRA MUNICIPAL CODE BY ADDING CHAPTER 18.82 "INCLUSIONARY HOUSING UNITS" |
RECOMMENDATION:
It is recommended that the Planning Commission adopt a resolution recommending that the City Council approve Zone Change 20-03 amending Title 18 (Zoning) of the La Habra Municipal Code (LHMC) by adding Chapter 18.82 – Inclusionary Housing Units, as per Exhibit “A”.
DISCUSSION:
An inclusionary housing ordinance has been prepared for Commission and Council consideration, pursuant to the goals and policies of the General Plan. On January 21, 2014, the City Council adopted the La Habra General Plan 2035, which included the 2014-2021 Housing Element. The General Plan contains goals and policies for the orderly growth and development of the City. In many cases, the goals and policies are presented as items for future consideration by the City Council either when timing or funding is appropriate. In this case, the General Plan's Housing Element contained a policy to consider an inclusionary housing ordinance within five years after the adoption of the General Plan.
An inclusionary housing ordinance, requires multi-family housing developers to make available a portion of their units to low-income buyers or renters. These policies tap the economic gains from rising real estate values to create affordable housing for lower income families. Prior to the dissolution of redevelopment agencies, affordable housing was funded through tax set-aside requirements.
The main features of the proposed inclusionary housing ordinance are that it applies to projects of 10 or more residential units, it requires that 15% of the units of the total project count be affordable, and that developers can choose to pay an in-lieu fee instead of providing units. The ordinance is more fully described later in this report.
While inclusionary housing ordinances are not mandatory, they provide cities with a tool to facilitate/encourage the construction of affordable housing units to help the City meet its State-mandated affordable units as contained within the Regional Housing Needs Assessment (RHNA).
An inclusionary housing ordinance, requires multi-family housing developers to make available a portion of their units to low-income buyers or renters. These policies tap the economic gains from rising real estate values to create affordable housing for lower income families. Prior to the dissolution of redevelopment agencies, affordable housing was funded through tax set-aside requirements.
The main features of the proposed inclusionary housing ordinance are that it applies to projects of 10 or more residential units, it requires that 15% of the units of the total project count be affordable, and that developers can choose to pay an in-lieu fee instead of providing units. The ordinance is more fully described later in this report.
While inclusionary housing ordinances are not mandatory, they provide cities with a tool to facilitate/encourage the construction of affordable housing units to help the City meet its State-mandated affordable units as contained within the Regional Housing Needs Assessment (RHNA).
ANALYSIS:
Chapter 8 (Implementation Manual) of the General Plan contains a set of measures to achieve the various goals and policies. The Implementation Manual is arranged by timing on when certain goals and policies should be pursued. This includes “Near Term,” “Annual,” “Continuing,” “Periodic Updates,” and “Mid- to Long-Term” sections. Within the “Near Term" implementation section, we find the following goal regarding the consideration of implementing inclusionary housing:
The specific housing element policy and program are:
Staff began drafting an inclusionary housing ordinance in November 2014; however, work ceased due to litigation occurring in other California cities. This litigation focused on the validity of inclusionary housing ordinances in California and targeted cities with inclusionary housing ordinances. In the landmark case of California Building Industry Association (CBIA) versus the City of San Jose, the California Supreme Court upheld the City of San Jose’s Inclusionary Housing Ordinance. This was the turning point in the state as it determined that such ordinances were legal and appropriate.
History
Current zoning practices, while not intentionally exclusionary, have continued the issue of preventing the production of affordable units. This is especially true in California where land and housing-production costs tend to be the highest in the nation. Cities throughout the US developed inclusionary zoning as a method to provide affordable units when the market wouldn’t normally provide them.
Throughout the last 40+ years, the State of California passed several legislative actions to provide for affordable housing, in addition to allowing for inclusionary housing ordinances, the State enacted the Housing Element Law which requires that all local jurisdictions adequately plan to meet the housing needs of everyone in the community. In 1980, additional legislation was passed that requires that the Regional Housing Agencies forecast the housing needs of their associated cities. This forecast is known as the Regional Housing Needs Assessment (RHNA).
The RHNA, which occurs in 8-year cycles, established the basis for the number of affordable units each municipality is to plan for and provide areas where units can be constructed. The most recent actions by the state has mandated that 3 million new housing units be built in this RHNA cycle. The share of this number that was assigned to SCAG was approximately 1.3 million units. Of this number, La Habra has been allocated 803 new units. The break down by affordability range for La Habra is shown below:
While in the past not meeting the RHNA numbers had no associated penalties, at this time, jurisdictions that fail to "make adequate steps" to meet RHNA numbers may face penalties. The various penalties a municipality could face include:
The City has utilized various tools to provide for affordable housing (see Past City Actions, attachment 3). Generally, this has been accomplished through discretionary permits such as Specific Plans, PUDs, and Development Agreements, where conditions of approval were implemented for the provision of affordable units. Examples of these methods include converting existing market rate units to affordable units, setting aside land for affordable units, or paying an “in-lieu-of” fee to the City's Housing Authority.
Most recently, the City adopted Chapter 18.80 “Affordable Housing Incentives” of the La Habra Municipal Code, which was required for the City to be in compliance with State mandates. This section follows State law and gives concessions to housing developers on zoning development standards. Concessions may include such things as reduced parking, additional units, and deviations on setbacks or building height, for instance. To date, only two projects have taken advantage of this code section which resulted in the approval of eight affordable units.
Our current practices have had mixed results. In most cases, monies have been set aside for affordable housing, but not in the amount that has allowed the Housing Authority to actually provide any affordable units. This method has been determined to be ineffective and should be replaced with a process that actually provides affordable units. Since 2000, we have permitted 66 deed-restricted affordable units within the city.
Inclusionary Housing Ordinance Survey
A survey was conducted to examine other local cities' adopted inclusionary housing ordinances (see Inclusionary Housing Survey, attachment 4). It was discovered that in Orange County, only eight of thirty-four cities have inclusionary housing ordinances. It was also found that the neighboring City of Whittier adopted an inclusionary housing ordinance as well. The outcome of the survey showed that the majority of the ordinances required that a minimum of 15% of new units constructed be affordable, however, the other aspects of those ordinances varied from city to city.
Proposed Ordinance
Based on the review of other cities' requirements, staff prepared a draft ordinance that utilized desirable aspects of those ordinances while tailoring it to our City (see Resolution, attachment 1). The intent of our draft was to make it as simple as possible for the users, while providing the City with enough ability to get fair-market in-lieu payments, should a developer choose to go that route.
The proposed inclusionary housing ordinance includes the following features:
Summary
The adoption by the City of an inclusionary housing ordinance, to be placed within Chapter 18 “Zoning” of the La Habra Municipal Code has both benefits and drawbacks. The proposed inclusionary housing ordinance provides the City with a tool to facilitate the construction of affordable units. Also, the incentives contained within the current Chapter 18.80 haven’t created a groundswell of construction of affordable housing units. Therefore, staff recommends that the Planning Commission pass a resolution recommending that the City Council approve Zone Change 20-03 and adopting an ordinance adding Chapter 18.82 – Inclusionary Housing Units– to the La Habra Municipal Code.
REQUIRED FINDINGS AND CONDITIONS
No specific findings are required as part of a zone change, however the purpose of this action is to fulfill a goal of the La Habra General Plan 2035, specifically Chapter 8 “Implementation Manual”, Section B “Near Term Implementation.”
B11 Inclusionary Housing Ordinance
The City will consider adopting an inclusionary housing ordinance. The City will collect information and conduct research through case study examples and other experiences from similar cities to develop baseline best practice provisions that would require new residential and/or mixed-use developments provide affordable housing units. Analysis should include documentation of the intent and purpose, findings demonstrating the need, key terms and definitions, specific procedures and standards (e.g., percentage of units, affordability levels, duration of affordability requirements), eligibility for exceptions or alternative(s) to the production of the affordable units (e.g., payment of an in-lieu affordable unit fee), and a system for enforcing and monitoring compliance. This information will be provided to City decision makers to determine the feasibility of developing an inclusionary housing ordinance.
The specific housing element policy and program are:
Policy A7: Inclusionary Housing
Explore the development of an inclusionary housing ordinance.
Program A5. Inclusionary Housing
Consider adopting an inclusionary housing ordinance that would require new residential and/or mixed-use developments provide affordable housing units. The City will collect information and conduct research through case study examples and other experiences from similar cities to develop baseline best practice provisions. Analysis should include documentation of the intent and purpose, findings demonstrating the need, key terms and definitions, specific procedures and standards (e.g., percentage of units, affordability levels, duration of affordability requirements), eligibility for exceptions or alternative(s) to the production of the affordable units (e.g., payment of an in-lieu affordable unit fee), and a system for enforcing and monitoring compliance. This information will be provided to City decision makers to determine the feasibility of developing an inclusionary housing ordinance.
Explore the development of an inclusionary housing ordinance.
Program A5. Inclusionary Housing
Consider adopting an inclusionary housing ordinance that would require new residential and/or mixed-use developments provide affordable housing units. The City will collect information and conduct research through case study examples and other experiences from similar cities to develop baseline best practice provisions. Analysis should include documentation of the intent and purpose, findings demonstrating the need, key terms and definitions, specific procedures and standards (e.g., percentage of units, affordability levels, duration of affordability requirements), eligibility for exceptions or alternative(s) to the production of the affordable units (e.g., payment of an in-lieu affordable unit fee), and a system for enforcing and monitoring compliance. This information will be provided to City decision makers to determine the feasibility of developing an inclusionary housing ordinance.
Staff began drafting an inclusionary housing ordinance in November 2014; however, work ceased due to litigation occurring in other California cities. This litigation focused on the validity of inclusionary housing ordinances in California and targeted cities with inclusionary housing ordinances. In the landmark case of California Building Industry Association (CBIA) versus the City of San Jose, the California Supreme Court upheld the City of San Jose’s Inclusionary Housing Ordinance. This was the turning point in the state as it determined that such ordinances were legal and appropriate.
History
Current zoning practices, while not intentionally exclusionary, have continued the issue of preventing the production of affordable units. This is especially true in California where land and housing-production costs tend to be the highest in the nation. Cities throughout the US developed inclusionary zoning as a method to provide affordable units when the market wouldn’t normally provide them.
Throughout the last 40+ years, the State of California passed several legislative actions to provide for affordable housing, in addition to allowing for inclusionary housing ordinances, the State enacted the Housing Element Law which requires that all local jurisdictions adequately plan to meet the housing needs of everyone in the community. In 1980, additional legislation was passed that requires that the Regional Housing Agencies forecast the housing needs of their associated cities. This forecast is known as the Regional Housing Needs Assessment (RHNA).
The RHNA, which occurs in 8-year cycles, established the basis for the number of affordable units each municipality is to plan for and provide areas where units can be constructed. The most recent actions by the state has mandated that 3 million new housing units be built in this RHNA cycle. The share of this number that was assigned to SCAG was approximately 1.3 million units. Of this number, La Habra has been allocated 803 new units. The break down by affordability range for La Habra is shown below:
|
Affordability Range
|
Number of units |
|
Above Moderate
|
365
|
|
Moderate
|
130
|
|
Low
|
116
|
|
Very Low
|
192
|
While in the past not meeting the RHNA numbers had no associated penalties, at this time, jurisdictions that fail to "make adequate steps" to meet RHNA numbers may face penalties. The various penalties a municipality could face include:
- Failure of the State of California to certify the General Plan or Housing Element which may result in fines as per Government Code 65584.08 and loss of local control.
- Lawsuits brought on by the State of California.
- Withholding of Federal and State grant money such as:
- Cal Home Program funds
- Streets, infrastructure, and transportation grants
- Homelessness assistance grants
- Affordable housing grants (SB-2, LEAP, etc…)
- Jobs/Housing Balance Improvement Incentive Grant funds
- Community Development Block Grant Program fund
The City has utilized various tools to provide for affordable housing (see Past City Actions, attachment 3). Generally, this has been accomplished through discretionary permits such as Specific Plans, PUDs, and Development Agreements, where conditions of approval were implemented for the provision of affordable units. Examples of these methods include converting existing market rate units to affordable units, setting aside land for affordable units, or paying an “in-lieu-of” fee to the City's Housing Authority.
Most recently, the City adopted Chapter 18.80 “Affordable Housing Incentives” of the La Habra Municipal Code, which was required for the City to be in compliance with State mandates. This section follows State law and gives concessions to housing developers on zoning development standards. Concessions may include such things as reduced parking, additional units, and deviations on setbacks or building height, for instance. To date, only two projects have taken advantage of this code section which resulted in the approval of eight affordable units.
Our current practices have had mixed results. In most cases, monies have been set aside for affordable housing, but not in the amount that has allowed the Housing Authority to actually provide any affordable units. This method has been determined to be ineffective and should be replaced with a process that actually provides affordable units. Since 2000, we have permitted 66 deed-restricted affordable units within the city.
Inclusionary Housing Ordinance Survey
A survey was conducted to examine other local cities' adopted inclusionary housing ordinances (see Inclusionary Housing Survey, attachment 4). It was discovered that in Orange County, only eight of thirty-four cities have inclusionary housing ordinances. It was also found that the neighboring City of Whittier adopted an inclusionary housing ordinance as well. The outcome of the survey showed that the majority of the ordinances required that a minimum of 15% of new units constructed be affordable, however, the other aspects of those ordinances varied from city to city.
Proposed Ordinance
Based on the review of other cities' requirements, staff prepared a draft ordinance that utilized desirable aspects of those ordinances while tailoring it to our City (see Resolution, attachment 1). The intent of our draft was to make it as simple as possible for the users, while providing the City with enough ability to get fair-market in-lieu payments, should a developer choose to go that route.
The proposed inclusionary housing ordinance includes the following features:
- Applies to projects of 10 or more residential units (for-sale or rental)
- Requires 15% of units of total project count to be affordable
- If for-sale, units must be available to families earning no more than 110% of area median income (in La Habra for a family of 4 the median income is $98,734)
- If rental, 9% of units are for moderate income families and 6% of units are for low and very-low income families
- Units can be provided on the project site or off-site at another location
- Units maintain affordability based on State law (currently 55 years for rental units and 45 years for owner-occupied units)
- Developer can choose to pay in-lieu fee instead of provide units
- In-lieu fee is banked by the City, to be used for future affordable housing projects
- Codifies the requirement within the LHMC
- Takes staff out of the negotiation process
- Sets the in-lieu fee calculation
- Sets consistency for multi-family projects during discretionary permit process
- Provides the City an additional tool in meeting RHNA numbers
- Gives developers known requirements up-front
- Ensures the development of affordable housing units
Summary
The adoption by the City of an inclusionary housing ordinance, to be placed within Chapter 18 “Zoning” of the La Habra Municipal Code has both benefits and drawbacks. The proposed inclusionary housing ordinance provides the City with a tool to facilitate the construction of affordable units. Also, the incentives contained within the current Chapter 18.80 haven’t created a groundswell of construction of affordable housing units. Therefore, staff recommends that the Planning Commission pass a resolution recommending that the City Council approve Zone Change 20-03 and adopting an ordinance adding Chapter 18.82 – Inclusionary Housing Units– to the La Habra Municipal Code.
REQUIRED FINDINGS AND CONDITIONS
No specific findings are required as part of a zone change, however the purpose of this action is to fulfill a goal of the La Habra General Plan 2035, specifically Chapter 8 “Implementation Manual”, Section B “Near Term Implementation.”
FISCAL IMPACT/SOURCE
There are no anticipated fiscal impacts to the City's general fund as all expenses would be borne by the applicants, should an Inclusionary Housing Ordinance be adopted.
NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM (NPDES):
The proposal has been reviewed pursuant to the requirements of the City’s National Pollutant Discharge Elimination System (NPDES) Municipal Permit, the Local Implementation Plan (LIP), and the Model Water Quality Management Plan (WQMP); since the proposal does not entail any actual construction it is exempt from the requirements.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA):
The proposed amendments are exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA guidelines.
On January 21, 2014, the City Council certified Environmental Impact Report 13-01 associated with the La Habra General Plan 2035, the 2014-2021 Housing Element Update, and the La Habra Climate Action Plan (CAP). The proposed action fulfills one of the stated goals of the La Habra General Plan 2035. The goals and policies discussed within this report were analyzed as part of the approved EIR and therefore no additional CEQA review is required. Any future improvement of sites, subject to this proposal, will be required to be reviewed pursuant to the CEQA requirements at such time as development is considered.
On January 21, 2014, the City Council certified Environmental Impact Report 13-01 associated with the La Habra General Plan 2035, the 2014-2021 Housing Element Update, and the La Habra Climate Action Plan (CAP). The proposed action fulfills one of the stated goals of the La Habra General Plan 2035. The goals and policies discussed within this report were analyzed as part of the approved EIR and therefore no additional CEQA review is required. Any future improvement of sites, subject to this proposal, will be required to be reviewed pursuant to the CEQA requirements at such time as development is considered.
GENERAL PLAN RELEVANCE/CITY COUNCIL GOALS & OBJECTIVES:
The proposed amendments to Title 18 “Zoning” of the La Habra Municipal Code are consistent with the goals and objectives of the La Habra General Plan 2035, specifically H 1.1 Support State Housing Policy, H 1.2 Integrated Strategy for Development, H 1.3 Support Private Sector Housing Production, H 1.4 Variety of Housing, H 1.5 Market and Non-Market Housing Production Needs, H 1.7 Inclusionary Housing, H 1.8 Mixed Use Development, H 2.10 Preservation of Affordable Housing, H 3.1 Equal Opportunity Housing, and H 3.7 Additional Housing Assistance Resources of the La Habra General Plan 2035.
Attachments
- 1. Resolution
- 2. Exhibit A to Resolution
- 3. Past City Actions
- 4. Inclusionary Housing Ordinance Survey
- 5. Presentation