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Item No. 1. 
MEETING DATE: July 26, 2021
 
TO: PLANNING COMMISSION
 
FROM: DAVID CRABTREE, INTERIM DIRECTOR
By:

 
SUBJECT:
DULY NOTICED PUBLIC HEARING TO REVIEW THE 2021-2029 DRAFT HOUSING ELEMENT (6TH-CYCLE) WITH A RECOMMENDATION TO THE CITY COUNCIL TO AUTHORIZE STAFF TO FORWARD THE DRAFT HOUSING ELEMENT TO THE CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (HCD) FOR REVIEW AND COMMENT

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA):


CEQA:
This project is exempt from the California Environmental Quality Act pursuant to section 15061(b)(3) of the CEQA guidelines.

RECOMMENDATION:

That the Planning Commission Approve:
 
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LA HABRA RECOMMENDING THAT THE CITY COUNCIL AUTHORIZE STAFF TO FORWARD THE DRAFT HOUSING ELEMENT TO THE CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (HCD) FOR REVIEW AND COMMENT.

DISCUSSION:

Each city and county in California, including charter cities, are required to adopt a General Plan. The General Plan is a comprehensive, long-term plan for the development of a city, it is at the top of a city’s or county’s land use regulation hierarchy. The General Plan consists of seven mandatory Elements and any optional Elements that the local government chooses to adopt.  One of the seven mandatory Elements is a Housing Element.
 
The detailed statutory requirements for preparing a Housing Element are codified in the California Government Code, Sections 65580 to 65589. As stated therein, the Housing Element must contain an identification and analysis of its existing and projected housing needs. A Housing Element must also be consistent with the entire General Plan and its preparation must also include public participation. The City’s Housing Element covers an eight-year period, from 2021 to 2029.

Statutory Requirements
All local governments are required to develop housing programs to meet their "fair share" of existing and future housing needs for all income groups. The Housing Element must contain proactive goals, policies, and programs to facilitate the development, improvement, and preservation of housing commensurate with their housing need as established by the City, regional government, and the State of California. The "fair share" for La Habra based on the Regional Housing Needs Assessment (RHNA) is 804 units. The Housing Element must contain five basic parts (Chapters) which include: an Introduction, a Needs Assessment, a Constraints Analysis, a Housing Resources Inventory, and a Housing Plan.

The 2014-2021 Housing Element update coincided with the General Plan 2035 update, affording the opportunity to coordinate issues of community growth, land use, housing, and transportation. The City’s 2021-2029 Housing Element update does not propose changes to the land plan (i.e General Plan Amendments or Zone Changes) articulated in the 2014 General Plan update. The goals, policies, and programs of the 2021-2029 Housing Element is consistent with the goals and policies of all General Plan Elements. The existing sites designated for housing can accommodate the City’s entire regional housing needs allocation and are consistent with the land use plan in the General Plan, associated Specific Plans, and growth projections in the Environmental Impact Report. 

To meet the State requirements for a "diligent effort " to be made to achieve public participation, the City Council reconstituted the General Plan Advisory Committee (GPAC). The GPAC is made up of 11 members including representatives from the City Council, Planning Commission, Community Services Commission, the Chamber of Commerce and citizens at large. Over the course of a year, the GPAC met five times and discussed Housing Element basics, community needs, housing sites, and housing goals, policies and programs. Because of protocols required during the COVID-19 pandemic, all meetings were held via Zoom. To inform the GPAC’s deliberations and provide more representative input to guide the update of the Housing Element, 14 additional stakeholders were directly contacted by phone, mail, and email. These included developers, fair housing agencies, advocacy groups, health care agencies, and local organizations. These groups played an active role in the GPAC meetings to refine the priorities for the Housing Element. During the update process the City also created a Housing Element website to inform residents of the updates and the venues for participation. Included were PowerPoint presentations to the Advisory Committee, notes and comments from the public for each meeting, planning reference documents, review letters from the California Department of Housing and Community Development (HCD), and other materials germane to the Housing Element update. Finally, the draft Element was posted on the City's website 10 days prior to this meeting and a legal notice was posted in the newspaper, posted outside City Hall, and courtesy notices were emailed to the GPAC members and advocacy groups.  

Draft Housing Element
As noted above, the Draft Housing Element consists of five chapters: 1) Introduction, 2) Community Profile (Needs Assessment), 3) Constraints Analysis, 4) Housing Resources, and 5) Housing Plan. The information in Chapter 1 is discussed above. Chapters 2 through 4 contain all the analysis and data that forms the basis for Chapter 5, the "Housing Plan".  Chapter 2 identifies and discusses the City's demographics and housing profiles along with special needs and assisted housing. Chapter 3 analyses the market constraints, land use policies and fair housing requirements, pursuant to AB 686 in 2019, consistent with the requirement of the Federal Affirmatively Furthering Fair Housing Final Rule. Please see the attached Draft Housing Element for the in depth discussion of all of thees topics. 

Chapter 4 addresses the Regional Housing Needs Assessment (RHNA), provides an inventory of sites suitable for providing housing to meet the RHNA requirements, and the sources available to implement the proposed housing programs in Chapter 5.

RHNA
The RHNA Allocation is a State-mandated process that determines the amount of future housing growth that each city must plan for in their Housing Elements. This process seeks to ensure that each jurisdiction accepts responsibility for the housing needs of not only its resident population, but also for its projected "fair share" of regional housing growth.

The 2021-2029 RHNA process began with the Department of Housing and Community Development’s projection of statewide housing growth based on population projects from the California Department of Finance. HCD is responsible for the apportionment of the statewide need to regional councils of governments. For this present Housing Element cycle, the southern California region has been allocated a total of 1.34 million housing units. As southern California’s designated council of governments, SCAG, develops a methodology to allocate, by income level, the region’s share of statewide needs to cities. La Habra's allocation is 804 as shown in table HE-4.1
 
Table HE-4.1   2021–2029 Regional Housing Needs
Household Income Levels Definition (Percent of County MFI)1 Total Units Percent of Units
Extremely Low2 0-30% 96 12%
Very Low2 31% to 50% 96 12%
Low 51% to 80% 116 14%
Moderate 81% to 120% 130 16%
Above Moderate Over 120% 366 45%
Total   804 100%
Source:  Adopted Regional Housing Needs Assessment, SCAG, 2021
Note:     1. MFI = Median Family Income as determined by the federal government.
2. HCD requires that the very low income RHNA requirement be divided equally between extremely low and very low income units.

HOUSING SITES INVENTORY
It is important to note that local governments are not required to build housing or financially subsidize for development of new housing. However, cities are responsible for ensuring that adequate sites are available during the planning period that are suitable for housing to be built at the affordability levels of the RHNA. State law allows cities to use the following strategies to address the RHNA:
  • Housing Production. Housing units built and occupied (received a certificate of occupancy) after the planning period for the Housing Element begins on July 1, 2021. Proposed housing projects can also be included if they are likely to be approved and built from July 2021 to October 2029.
  • Accessory Dwelling Units. While HCD has historically allowed accessory dwelling units to count toward the RHNA, changes to state law have expanded the use of this strategy for the Housing Element. Cities may count ADUs in accordance with administrative guidance from HCD.
  • Available Land. Most cities do not have projects in the development pipeline to meet the RHNA. Therefore, Housing Element law allows cities to count development capacity on vacant and underutilized sites for housing provided certain HCD guidance and documentation are provided.
  • Alternative Credits. Cities may, in certain cases, use alternative credits to achieve the RHNA. These include qualified projects that involve the rehabilitation, preservation, and conversion of nonaffordable units to affordable units, subject to stringent conditions and affordability levels.
CREDITS
The City has approved and entitled residential projects that are anticipated to be built and receive their certificate of occupancy after July 1, 2021, during the 6th-cycle planning period. These include condominiums, single-family homes, apartments, and mixed-use and live-work condominium units. These units are affordable to lower, moderate, and above moderate income households. Table HE-4 lists projects that are approved, pending, or proposed that will be developed after July 1, 2021, during the Housing Element planning period. Following the table, a sample of key residential projects are described.
 
Table HE-4.2   Housing Production/Planning Credits
Project Address Project Detail Affordability Level  
Prior Use New Use Zone Low Mod Above  
104-118 E. Electric1 Industrial uses Condos R-4 * 0 58  
508 S. Walnut1 Vacant Condos R-4 0 0 3  
431 W. Lambert1 Church structure Apartments R-4 0 5 0  
1101 N Harbor1 Vacant SFRs R-1 0 0 7  
700 N Harbor2 Comm. Building Mixed Use C-2 0 0 48  
301-51 W Imperial2 Comm. Building Live-Work R-4 0 12 105  
970 N. Walnut2 Duplex Condos R-4 0 0 6  
331 S. Cypress3 Contractor Yard Condos R-6 0 0 17  
318 E. Cypress3 Contractor Yard Condos R-6 0 0 11  
Total   Total R-4 0 17 283  
Source:  City of La Habra, 2021.
Notes:
1.  Approved projects that are authorized for building permits and construction.
2.  Pending projects, where applications have been submitted for review.
3.  Projects anticipated to submit applications in 2021.
 

Accessory dwellings are a key strategy for the City to meet its share of the region’s housing needs for low and moderate income households. ADUs are an attractive housing option in La Habra, particularly for households seeking to augment their income or provide housing for family members. ADUs can provide housing options for family or extended family members, seniors, or students.  Accessory dwelling units are permitted in any zone where single-family or residential multi-family dwelling uses are allowed or as part of any proposed residential development.  ADU permits in La Habra have increased from five permits in 2018 and 2019 to more than 40 permits for 2020.
 
Table HE-4.3   Characteristics of ADUs Permitted in 2020
Bedrooms Type of Units Size and Rent Max. affordable rent for lower income housing
Total
ADUs
No. of
ADUs
No. of
JADUs
Average
Sq. ft.
Average
Rent
All 42 34 8 632 $1,110 --
1-bdrm 25 20 5 466 $950 $1,794
2-bdrm 11 8 3 775 $1,175 $2,050
3-bdrm 6 6 0 1,065 $1,500 $2,314
Source:  City of La Habra, Building Permit Records for ADUs, 2020.
Note:     Affordability threshold is the maximum rent affordable to a lower income household. Therefore, the maximum affordable rent threshold is higher than stated above. Refer to Table HE-14 for a description of affordable limits for household income groups.
 
The City has seen a significant increase in ADU production in the past few years. In 2020, the City updated its ADU ordinances to reflect more permissive regulations allowed in State law (Ordinance 1813). During 2020 alone, the number of permitted ADUs increased from five in 2019 to 43 new ADUs in 2020. In 2021, the pace of ADU applications continues to increase as homeowners realize the opportunity for these units. Based on the first quarter of 2021, 50 ADUs are anticipated to be permitted annually through 2029.  

POTENTIAL HOUSING SITES
The 2014 General Plan established the vision for La Habra and the land use designations necessary to accommodate a range of housing types and products. It is recognized that the majority of new housing will be developed on underutilized corridor sites, underperforming or obsolete retail and industrial sites, and other areas. Based on the General Plan build out in 2014, the General Plan created development capacity for more than 5,000 units through the build out of the City.  While sufficient development capacity exists to address its overall RHNA number of 804 units, it is recognized that new multiple family housing and mixed uses will be developed incrementally, starting with the most feasible sites, then proceeding to more difficult sites. To that end, the City carefully reviewed parcels and selected only the parcels most ripe for development during the 2021 to 2029 time frame. Sites were included that met at least five criteria:
  • The site(s) must be relatively free of environmental or infrastructure constraints that would limit its development.
  • The site(s) must have General Plan land use designations and zoning in place and residential or mixed use must be allowed by right.
  • The site(s) must have received repeated inquiries and interest from realtors, builders, and the broader development community.
  • The site(s) must be of adequate size and not need significant consolidation with adjacent parcels owned by different property owners.
  • Sites affirmatively further fair housing.
Combined with the credits identified above, 23 sites have been identified in table HE-4-.5 to address the City's 2021-2029 RHNA numbers.
 
Table HE-4.5   RHNA Production and Sites Credits
Site Address/APN Acre GPLU Zone Current Use Density Range Max DU Allowed Actual Units RHNA Affordability
Approved/Planned Projects
1 104-18 E. Electric Av 2.92 Res MF 1 R-4 Industrial 15-24 70 58 Above
2 508 S. Walnut St 0.20 Res MF 1 R-4 Vacant 15-24 5 3 Above
3 431 W. Lambert Rd 0.34 Res MF 1 R-4 Closed Church 15-24 8 5 Moderate
4 1101 N. Harbor Bl 2.70 Low Density R-1 Vacant 0-8 12 7 Above
5 700 N. Harbor Bl 2.83 Corridor MU 1 C-2 Commercial 15-24 68 48 Above
6 301-51 W Imperial Hwy 4.91 Res MF 1 R-4 Commercial 15-24 118 117 105 AM;12 M
7 970 N. Walnut St 0.37 Res MF 1 R-4 Duplex 15-24 9 6 Above
8 331 S. Cypress St 0.70 Res MF 3 R-6 Contractor yrd 31-36 25 17 Above
9 318 S. Cypress St 0.64 Res MF 3 R-6 Contractor yrd 31-36 23 11 Above
10 471 S. Harbor Bl 3.50 Res MF 3 R-6 Vacant 31-36 126 75 Above
Vacant/Underutilized Sites
11 330 S. Monte Vista St
298-022-56 & -57
0.94 Res MF 1 R-4 Vacant 15-24 22 18 Moderate
12 201 N. Harbor Bl
303-113-13, -14, -04
1.80 MU Center 3 SP-1 Vacant Site: Old Burch Ford 37-50 90 72 Moderate
13 1000 Block E. Stearn
303-113-01 thru -03
0.93 MU Center 3 SP-1 Vacant Site: Old Burch Ford 37-50 46 37 Moderate
14 400 S. Cypress St
022-200-01
0.87 Res MF 3 R-6 Vacant 31-36 31 25 Lower
15 525 E. La Habra Bl
303-125-18
0.27 Corridor MU 2 SP-1 One SFD 31-36 10 8 Above
16 1451 W. Lambert Rd
298-145-22 022-211-11
1.99 Res MF 2 R-5 Fire Sprinkler Company 25-30 60 48 Above
17 2271 W. Whittier Bl
017-044-23, -26, -27
1.75 Corridor MU 1 C-2 Strip Commercial 15-24 42 34 Above
18 504 S. Walnut St
298-071-36
0.23 Res MF 1 R-4 Vacant 15-24 6 4 Above
19 115 N. Harbor Bl
303-114-23
1.64 MU Center 3` SP-1 Old Burch Ford 37-50 82 66 Moderate
20 1601 W. La Habra Bl
018-070-10
1.88 Res MF 2 SP-1 Church 25-30 56 45 Lower
21 100-140 E. Whittier Bl
022-501-26 thru -27
1.21 Corridor MU 1 C-2 Commercial 15-24 29 23 Above
22 310-370 E .Whittier Bl
022-503-20 thru -21
3.66 Corridor MU 1 C-2 Bowling Alley 15-24 88 70 Above
23 1701 W. La Habra Bl
018-070-11
0.95 Res MF 2 SP-1 Masonic Lodge 25-30 28 23 Lower
Source:  City of La Habra, 2020.
Notes:    The project counts above do not assume inclusionary units. However, pursuant to Ordinance 1833 (enacted in 2021), projects with 10 or more units must fulfill inclusionary housing obligations through the construction or dedication of fees commensurate to 15% low income units for apartments and 15% moderate income inclusionary units for single-family residential projects.


Summary of RHNA Compliance

As summarized in the prior analysis and below, the City of La Habra’s strategy for addressing its 2021-2029 RHNA requirement takes into account three credits:  1) approved and pending projects; 2) accessory dwelling units; and 3) vacant and underutilized sites that can accommodate the RHNA.
  • Approved and pending projects. This includes 272 units of single- and multiple-family housing projects in the pipeline (Table HE-4.2).
  • Accessory dwelling units. This includes a projected 400 ADUs based on citywide trends and affordability patterns (Table HE-4.3).  
  • Site inventory. This includes 574 units of development capacity on vacant and underused sites, not counting inclusionary units (Table HE-4.5). 
Taken together, the City has a surplus among its lower, moderate, and above moderate income RHNA goals for the 2021-2029 RHNA. The surplus is intended to address the no net loss provisions of State Housing Element law.
 
Table HE-4.6   Summary of RHNA Strategy
RHNA Credit Housing Affordability
Very Low Low Lower Moderate Above  
 RHNA Credits            
¾ Residential projects in the pipeline (units) 17 255  
¾ Accessory dwelling units projected by 2029 100 172 272 120 8  
¾ Unit capacity on available sites 194 194 193 187  
 Balance            
¾ 2021-2029 RHNA (dwelling units) 192 116 308 130 366  
¾ Total credits (units) 100 366 466 330 450  
¾ Balance (units) -92 250 158 200 84  
¾ Surplus (Balance/RHNA) deficit 215% 51% 154% 55%
Source:  City of La Habra, 2020.
Note: Lower income represents the sum of very low and low income together.

To ensure that sites are available at all times during the planning period, as required under State law, the Housing Plan contains a program for monitoring progress (including the construction of ADUs) made toward the RHNA and committing to adjustments in the land inventory should a shortfall in sites occur.

Chapter 5
As noted above, Chapters 2, 3, and 4 of this Housing Element establish the housing needs, opportunities, and constraints in La Habra. Chapter 5 evaluates the accomplishments under the City’s adopted 2014 Housing Element; describes the public outreach process, and identifies the Goals, Policies and the Programs. Please see the attached Draft Housing Element for the detailed discussion of these topics. Generally, there are four goals with seven to eight policies associated with each goal and 23 housing programs.

GOAL HE-1: HOUSING AND NEIGHBORHOOD QUALITY
Well-maintained housing in decent, safe, and sanitary condition and quality neighborhoods, where adequate public facilities, infrastructure, and services are provided, and the quality of life is protected from encroachment of other uses or environmental hazards.

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.
 
In summary, staff believes that the Draft Housing Element prepared with input and guidance of the General Plan Advisory Committee and the public, provides for the needs of the current and future residents of La Habra and complies with State housing laws.

FISCAL IMPACT/SOURCE OF FUNDING:

There are no impacts to the City's general fund as a result of this action.

NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM (NPDES):

There are no NPDES requirements for this action.

GENERAL PLAN RELEVANCE:

Each city and county in California is required to adopt a General Plan.  The General Plan consists of seven mandatory Elements including the Housing Element. 

Attachments