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Reso 19008.1,003o8(b) q RESOLUTION NO. 1900 - A.RESOLUTION,OF THE PLANNING COMMISSION OF THE CITY OF CUPERTINO APPROVING AND RECOIMNDING ADOPTION OF AN AMENDMENT TO THE HOUSING ELEMENT .OF THE GENERAL PLAN WHEREAS, the Planning Commission,.as a part of its comprehensive General Plan.study, has held public hearings ,and considered testimony from representatives of interested; groups and members of the general public. NOW, THEREFORE, BE IT RESOLVED* 1e That the Planning Commission hereby approves an _amendment: to the Housing Element of the General Plan as set forth in the document labeled 9PThe Housing Element -1 City of Cupertino 1978`° attached hereto and made a. -part hereof. 2. That the Planning Commission hereby authorizes its Chairperson to endorse _said 'amendment -and forward saidamendmentto the City Council for adoption. PASSED AND ADOPTED this 27th day of November, 1978,,at a regular -meeting of the Planning Commission of the City of Cupertino; State of California, by the following roil call vote: AYES: Commissioners Adams, Claudy, Gatto; Koenitzer, ChairpersonBlaine NAYS* None ABSTAIN None ABSENT.* ' None APPROVED: /s/ Sharon. Blaine Sharon Blaine, Chairperson Planning Commission ATTEST* III Tobyamen Assis .Planner lanner THE HOUSING ELEMENT -City of Cupertino 1978 TABLE OF CONTENTS Introduction Goals and Objectives THE HOUSING PROBLEMS Housing Characteristics Land Use Mix Condition Market Characteristics Homeownership Rental Housing Population Characteristics Age Income Handicapped and -Elderly Employment Characteristics Government Constraints THE HOUSING POLICIES Goal A - Increase Housing Supply - Increase Land Availability - Increase Permissible Density Levels - Innovative Techniques Goal B. Housing Range - Local Actions - Other Government Programs - Section 8 - Development Cost Underwriting - Condominium Conversion Goal C- - Housing and `-Neighborhood Preservation - Neighborhood Maintenance - Housing Preservation - Housing Rehabilitation - Energy Conservation Goal D - Fair Housing Practices - Housing Discrimination - Age Discrimination 3 3 3 4 4 6 6 7 8 8 9 9 11 12 12 13 13 13 13 14 14 15 15 16 17 17 18 19 20 20 20 Introduction For most families.the purchase of a home is the largest financial invest- ment, and quite possibly the largest emotional investment, which they will make. When choosing a home, families consider the quality of construction, neighborhood integrity, availability of public and private services, quality of schools and geographic location before committing themselves to a specific community. Accordingly, housing is a crucial factor in estab- lishing the character of the City. The type, age, cost and location of shelter will influence the composition of population, as well as the degree of visual interest, and the social amenities which the community offers. The San Francisco Bay Area housing market has been impacted by a drastic surge in demand and cost, symptomatic of recent nation-wide trends. During the five year_ period 1973 to 1978, the cost of purchasing a home doubled, bringing the sale price of a represen- tative single-family unit in Santa Clara County to $69,100. This price range, already beyond affordability for the average household or first-time buyer, will probably continue to climb as demand remains at or above the present level. The housing demand spiral reflects the discrepancy between the dramatic increase in employment opportunity which the County has experienced , and a housing supply which has not kept pace with the expanding job market. Previous trends in Santa Clara County favored new construction of one -family units at relatively low density; disproportionate to the number of jobs created by the expanding industrial sector. If these past development policies continue, the County will experience a severe housing shortage by 1990. A County -wide housing shortage implies a decline in the quality of life for residents throughout the Bay Region. She.lte.r cost will continue to rise as unfulfilled demand bids prices 1 on a limited supply, thus restricting family mobility. Commute activity w7"' increase as more fami 1 ies seek afforL_.,le housing in outlying areas, resulting in more traffic congestion, degraded air quality and further depletion of energy supplies. By State mandate, individual cities must prepare and adopt a General Plan Housing Element which identifies short- term and long-term housing needs, and which presents policies and strategies intended to fulfill those needs. Cupertino recognizes that certain housing related issues extend beyond City boundaries, and encompass regional phenomena which must be taken into account at the local level. For example, the State Housing Element Guidelines suggest a procedure called the "Fair Share Allocation Plan" which ... is intended to identify the housing needs within a region and then allocate each community's fair -share for providing below-market housing. At this time, however, the Association of Bay Area Governments has not defined a Fair Share Allocation Plan for the Bay Area; accordingly, local government must define its own market and handle its own needs within the constraintE imposed by local policies and physical limitations. For purposes of this plan, then, the Sphere of Influence Boundary will define the Cupertino community, and solutions presented herein anticipate housing - related concerns through 1990. Gams & Objectives As previously stated, a city's housing stock has a direct and dramatic influence on the desirability and attractiveness of the community. The housing problems that Cupertino faces in 1978 are typical of a community which has passed its initial growth years and must now balance high demand for housing against contrary market pressures and 1 imited physical space. Only 34% of land within the Urban Service Area i.s available for develop- ment, and 43% of that available land is within the hillside planning area of the community. The hillside lands, due to topographic, geologic, and environmental sensitivities, will most probably continue to build out in a low density form. Several factors contribute to Cupertino's desirability as a residential community: the City's location in the cosmopolitan San:- Francisco Bay Area; the school system; the high standard of urban design and development visible in the streetscape; and, perhaps most important, Cupertino's steady growth as an employment center. Most of the new employees attracted to this commun i ty 'nave mode rate and m i dd 1 e - incomes; however, rapidly escalating housing prices and diminishing selec- tion will hinder their ability to . locate in the City. Accordingly, the first objective of the General. Plan is to increase housing supply in response to demand created by the City's expanding employment base. 2 The second is to stimulate a range of choice in available housing -types, to suit the varying economic a-nd life-style preferences of the population. A third ob ective of the General Plan Housing Flement is to maintain the character and integrity of the residential neighborhoods. Relative to other cities in Santa Clara County Cupertino is young in terms of growth. The fourth.. objective of the General Plan Housing Element i s to �-ro rl; toe -,a rd the elimination of discriminatory housing practices. P-ccessibility and availability of Housing to the physic- ally.handicapped, families with young children, the elderly and the various racial minorities i; essential to solidifying the social fabric of the C1 ty. The. Housing Prob!ern The first section of the Housing Element analyzes in more detail the components of the housing market, population and employment characteristics contributing to the housing problems facing Cupertino in 1978. Housing Characteristics LAND USE MIX The 1977 Land Use Survey for Cupertino indicated a total of 12,241 dwelling units within the Urban Service Area of the City. Approximately 69% of the units are single-family and 31% are multi- family dwellings. The rate of single- family ownership is higher relative to the County which is 63% single-family, 37% multi -family. 1c) -p Hp4J5ru6 1?4V6 TC,%Z1.( cuPeZnNO uR84k AREA . r •" r c �,uu a R..n. i� i,crt nen �Y tri rt Fsc .YiP"�IfafTs ltCUr 06�KTt�S In 1968, the City experienced a boom year for multi -family construction; a total of 668 units versus 466 for single- family were built. Since that time, multi- family construction has been negligible while single-family and cluster develop- ments have increased. The supply of multi -family housing is threatened even further by pressures from developers interested in condominium conversions.- Such onversions:Such conversions would displace a significant number of existing residents within the community and 9 deplete our much needed rental housing stock. If current trends continue, the disparity, between single-family and the supply of multifamily housing will increase. HOUSING CONDITION The City of Cupertino housing stock is relatively new, 62% of which was con- structed after 1959. Approximately 53% of all the single-family dwellings, and 92% of the multi -family dwellings in the City were constructed after 1959• The condition of the newer housing is relatively uniform. an& in good repair due to the high development standards and enforcement of strict building codes by the City. Most of the physically -deteriorating units in town are found in older neighborhoo.ds built prior to the City's incorporation under County jurisdiction. These older neighborhoods are composed of a variety of housing types and quality, some of which have begun to decline. These neighborhoods, however, still retain a distinct character which the City wishes to maintain. Since 1974, the City of Cupertino has participated in the Urban County Housing and Community Development Block Grant Program (HCD). The intent of the program is to make Federal funds available to local jurisdictions to address their housing and community development needs. The major emphasis of the HCD Program in Santa Clara County is to preserve existing residential struc- tures, particularly those within neighborhoods having a substantial portion of low and moderate -income households. In 1975, the average cost of shelter for a Cupertino family was $280 a month. Meanwhile, in unincorporated neighborhoods such as Monta Vista, families paid only $160 a month. While these unincorp- orated neighborhoods provided a significant portion of low-cost housing, they suffered from a variety of forms of decline NEIGHBORHOOD PROFILE Housina & Population Monta Garden City Character Vista Gate Limits 5 Single Family 895 34% 48% 5 Multi Family 115 665 525 Household Size 3.06 2.66 ::2.92 Median Income $15,471 $16,714 $20,212 Median Monthly Cost of Shelter $169 $242 $279 Source: April 1975 Census, Cupertino Data Base These neighborhoods contained the larger concentration of low-income families. Median income for a Monta Vista family of four was $13,837 in 1975, compared to $20,212 for a City family. In most instances, these lower-income families did not have adequate budget reserves for routine maintenance and household improve- ments. mprove- menis. al The high proportion of non-resident owners (50% in Monta Vista), poor initial subdivision layout and lack of basic public works facilities contribute to the dis- interest in neighborhood conditions and an aura of decline. Cupertino has designated the majority of its Housing and Community Development funds for use in programs to mee the problems of the unincorporated neighbor- hoods. The planning process for these activ- ities entails citizen participation for selection and prio�i,ti.zation of activities. Participation by residents in Monta lista and Garden Gate has resulted in greater neighborhood awareness and pride. Newly activated homeowners associations are taking steps to expand Cupertino's pre- servation efforts in these neighborhoods, and to ensure that the established character of these communities is main- tained. Market Characteristics - HOME OWNERSHIP The phenomenal increase in the price of single-family homes in the Bay Area is well documented. Between 1970 and 1977 the median price of homes has doubled and in some cases tripled in value. In 1977, the real estate listing for Cupertino showed that homes averaged approximately $70,000. New homes now under construction in the City start at $100,000 and range upwards. MEDIAN PRICED HOME 1970 1977 COUNTY $23,200 $69,100 CUPERTINO $34,100 $70,000 Some of the increase in price can be attributed to the increased cost of constructions. Material costs account for 26.1% of the increase in home sale prices in the area. The price of raw land has increased considerably over the past few years as land has become more scarce. Higher prices also reflect a surge in profits and marketing expenses. Profits have jumped from 9.0% in 1-967 to 22% of the' total selling price of the completed units;' according to a study published in the California Builder. The high cost of housing is particularly relevant when compared to the purchasing power of the median income family. From 1971 to 1977 housing prices rose approximately 150% while the median income only 43%,-in'Santa Clara -County. The 1978 median family income for persons living in Cupertino is approx- imately $26,300 a year projected from HUD data for Santa Clara County. Assuming that a family spends one- fourth of their income on housing they could afford to make montly payments equal to approximate $580 a month. Homes in Cupertino which are selling for $100,000 usually require monthly payments approximating $1,000 including taxes and interests. The disparity between what families can afford and what housing costs is extreme. MEDI&K HcaSa4OLZ AND MEDIAN VALLIS OF N W 140d5ES OCZ1FTED IN SAMA C.AKA GDuKT`( :5 loaoo +`—MeDVUA rAMAL`( tt+ca.a2 +w. IK(lXdAcs (ro rrn Im ltrs Im MIS Its ITR scute: HAdM1M&=*A µ X1-.1,9, Mr_-_&Ar134 4.wT1. e_Lxg� emb#ry PiPT- In the past, older homes were selected by first-time buyers. These homes generally became available as their occupants move -up to newer more costly units. More recently, this "filtering" process has been severely curtailed since price increases through- out the market spectrum are forcing current homeowners to retain their present holdings for longer periods than might otherwise be the case if housing costs were not subject to current trends of accelerated demand. RENTAL HOUSING As the price of single-family homes has skyrocketed, the demand for rental units has increased; yet, the supply has changed very little since 1972. Most of the apartment units built recently in the City are duplexes and tri- plexes rather than large multi- family projects similar to those built prior to 1972. 91sas IN PR1Gr_- INbICF-S Fp2 Ajl CQMSLWr_1_ liLMs, HOME OWNest'SHIP A140 We-SIDEKTIAL REAiT, -AM - cw0.AND SMSA, 1960 - (97I:'{ IaaG ISY1.0 180.0 - MUAt Cw++vC�r ••• feYSUMR rMC.1 IMOD( CALL ITV440) #tr_*D4!1,T7AL EMIT i- 16D.a 10.0 110.0 �,• i f 10.0 !� Sao 1960'LI G2. G9 G4 '6S G4 L7 GS G9 '70 '71 72'73 '7+ 'IS 'X '71 souaa: SAWM GLA&A 4ouarr rUMwwe- oerf. Apartment development activity has been slow in recent years because construction and financing costs have r increased faster than rents and because investor return has been higher from ownership units. Rental charges rose 20% to 28% from 1973 to 1976, compared to the cost of construction which rose 180%. Financing requirements for multi -family housing have also become stricter and the interest rate for borrowing money to construct apartment units has been higher than the rate for single-family units. Some apartment management corporations fear that rent controls will be imposed if rental prices are set to reflect the true cost of construction. Further, low rental prices of the existing units make it difficult for new rental stock to compete at the higher prices. A survey of apartment complexes in Cupertino made in 1978 indicated a vacancy rate of 0.57t. More rental hous- ing is needed as an alternative to high priced home ownership, as well as a way of providing lower cost housing for those sectors of the community who need it. MEDIAN RENTS FOR .APARTMENTS IN CUPERTINO, SEPTEMBER 1977 SIZE RENT Studio $195 1 Bedroom $245 2 Bedroom 5290 3 Bedroom $325 Source: San Jose State University Apartment Survey Population Characteristics • The City of Cupertino experienced a 45% increase in population from 1966 to 1975. Since that time, the rate of increase has diminished due to shifts in the size of households, reduced numbers of children per house- hold and a lower housing construction rate. Z 0 C Gr-ry OF 4:11YSK71N4=) MrJLA.TtOK GFOW to 14ISTCM'( ��53'Si:s�'sYsi(.o'i�i2Ct�S�LL.�7LsGt'7oi� •TL7S74'jS'74 YFJ►R In 1966, there were approximately 3.7 persons per household in Cupertino, while in 1975 there were 2.92. fnr(1aTiC&I n r L l "a UIZ56.A sMv1c1__ A :S. 7 According to ABAG , in 1990 the average household size for Cupertino will be approximately 2.35• This reflects th nationwide trend of fewer births and more single person households. The projected population for Cupertino's Sphere of Influence may be approxi- mately 37,700 people at the time of full build -out of the amended General Plan. This projection is lower than those made prior to 1975 and could make a difference in the type of services that the City needs to offer. G�PeRTINO KAUAI. l-OMPOstTIoN 1375 CENSLI-S • AMMv_M 441 W.RICJ,� s 4* In terms of racial mix, Cupertino is a very homogeneous community, with a very small minority population. AGE The age distribution of the population has also undergone a change. The per- centage of school age children has been decreasing while the percent of persons over 45 and 65 has been'in- creasing. This trend will continue ---- due to the lower fertility rates and aging of the existing population in the City. The enrollment of school age children has dropped 27% in the Cupertino Unified School District from a peak of 23;120 in 1971 to 16,804 in 1978. 3r,it{ C - ! i 7 According to ABAG , in 1990 the average household size for Cupertino will be approximately 2.35• This reflects th nationwide trend of fewer births and more single person households. The projected population for Cupertino's Sphere of Influence may be approxi- mately 37,700 people at the time of full build -out of the amended General Plan. This projection is lower than those made prior to 1975 and could make a difference in the type of services that the City needs to offer. G�PeRTINO KAUAI. l-OMPOstTIoN 1375 CENSLI-S • AMMv_M 441 W.RICJ,� s 4* In terms of racial mix, Cupertino is a very homogeneous community, with a very small minority population. AGE The age distribution of the population has also undergone a change. The per- centage of school age children has been decreasing while the percent of persons over 45 and 65 has been'in- creasing. This trend will continue ---- due to the lower fertility rates and aging of the existing population in the City. The enrollment of school age children has dropped 27% in the Cupertino Unified School District from a peak of 23;120 in 1971 to 16,804 in 1978. ►9�G1., 197s G1=Mus• 1994o r JeCrJor4 Com! Y1CS, 15.9 zT.ax .: .1.4 Y. ZO.b Y. 204A Yrs. L_ The tight, high priced housing market may cause many families with young children to seek housing else- where. By 1982, the elementary schools will be operating at 58% of capacity and the high schools at 65% if present trends continue. The possibility of school closures will increase, which will present the City as well a.s the District with the problem of what to do with the school sites. An ob- vious alternative would be to con- vert unnecessary school sites to residential use. I NCOME Cupertino is fifth in the County lin terms of median family income. Al- though the median income for Cupertino is high relative to the rest of the County, the relationship that is im- portant is income -to -housing costs. Renters in the lower income cate- gories are spending more than 25% of their income on shelter relative to homeowners in the lower income categories. Rental housing currently provides the only alternative for lower income families to obtain housing in Cupertino. By 1980, as rents increase and rentals become scarce, families who wish to rent may not have opportunity to locate here. 6:34000 ZT, 54C MF_-DL4K HOUS9HOI-D I M X &Ae, 17,4500 14.000 1t, 640 ,0.oao 5,000 Z.so4 1965, 1974-1 1976, I• !;66 c is aTY armrr�rlMo i �q_W e_r Nws STA aACA CoumTy L..J i. 194OmE esT1MATE DY HUO HANDICAPPED AND ELDERLY There are two special population groups which have particular needs with re- gard to shelter: The handicapped, approximately 2.8% of the population, and the elderly, 65 years and older, approximately 5% of the Urban Service Area population. 1Q1�{ titEDIAN INCDMf_� 1911S GF.N Si1S .r •'f c,Nr E S� Persons in these categories generally have an income below the e median and have difficulty entering the housing market either for rental or ownership. Also, conventional home design techniques may not fit the physical needs and limitations of these persons. Consideration should be given to provide housing for this segment of the population which will meet their economic means. Employment Characteristics T'.ne relationship between employment and housing plays a major role in the future housing plans for Cupertino as well as the entire County. If the community or the region is unable to provide enough housing for the number of workers ,vho are employed in the area then those workers will have to come frnm outside of the community, resulting in longer commute distances, more air pollution, and the social and economic problems associated with t.�e fiscal imbalance between com- munities. The jobs/housing imbalance issue is a regional problem which cannot be delt with on a jurisdiction by juris- diction basis. Existing development patterns which have established indus- trial centers must be taken into consider- ationin analyzing which communities supply jobs and which supply housing. The fiscal inequities hetvieen communities, particularly those who must spend a. great deal of money to service res%i:- dential, must be resolved. Those corrmun- ities which do provide employment should make efforts -to -increase their `sous i na potential to address the needs of the workers in their community. 1,9, 2b, -I,4 G,CMMeW_ CA%L C�lAhtERt�>L. i4,96o 9� 545 � NDUSTRIN- 1 NOf1ST�lAI. 19-T-1 EwLDYme:NT i"o e_%krU` mmr S ec-r_- 1911 50V_VB`( 4 LANA U�JE �91'(M/lTe,. GllftxT1N0 i'1ANM1N% o ",►RTMt raT 0 Cupertino is one of tie communities which provides a large employment base i.. the West Valley Area. T'ie re �,ie re approx- imately 19,349 commercial and industrial employees in 1977. Ey lgcr.there is a potential for an additional Q417 employees based on the build out of the General Plan. Government Constraints Cupertino is in a stage of develop- ment which could be termed as infill- - ing. The rapid residential growth that the City experienced in the 1960's has slowed down considerably, and the City is left with small scattered sites within the core area of the community and low-density residential develop- ment in the hillside. The only large parcels which offer flexibility are those associated with Vallco Park and the Town Center. The City's past policies have reflected a desire for low -intensity, low profile development, meaning single-family homes of no more than two -stories and multi -family of no more than three - stories. Deviations from the estab- lished development pattern must take into consideration the impacts on surrounding neighborhoods and the community character. Any new higher intensity development adjacent to low intensity residential development should be made compatible in terms of use and design. The City has always maintained a high development standard for all of " its land uses. Regulations for residential development contain specific restrictions with regard to setbacks, open space, parking, and privacy intrusion within a development complex as well as to adjoining properties. Present zoning ordinances allow for a range of development up to IE un;ts per acre; although higher densities up to 35 units per acre are permitted by the General Plan. Development standards for the higher densities need to be established to provide direction for developments of 20 units or more to the acre. Such standards may require devia- tions from the restrictive height and parking requirements that presently exist. The most restrictive land use policies of the City apply to the hill- sides where development is limited because of the geologic and slope conditions of the land. Low-inten"sity development is the goal whereby the City care maintain a feeling of open space, as well as preserve the safety of the future residents in the hillside area: The "Hillside Plan" deals directly with guidelines for development of the hillsides. Most of the policies and programs dealing with increasing housing supply and providing a range of type and price apply to the Urban Core Area. 10 The Housing Policies The housing problems, as identified in the previous section, formed the basis of information used to evaluate the City's Land Use Amendment in August of 1978. Awareness of the City's need to provide housing for the expanded employment base of the community prompted the City to increase housing density on key properties within the Core Area of the community. In order to deter- mine suitability for higher densities: individual properties were evaluated particularly with regard to neighbor- hood character, traffic constraints and design compatibility. The Land Use Amendment resulted in an additional 1,060 units over the previous General Plan build -out forecasts. A summary of the key findings relating to the need for providing housing and the constraints impinging on the City's ability to provide additional units are. - listed below: NEED 1. Employment projections for Cupertino by 1990 will reach approximately 28,776 jobs. EMPLOYEE PROJECTIONS Cupertino Urban Service Area New !: Current Positions Tdtal 1977(l) 1977-1990 1990 Industrial 10,004 3,802 13,806 Commercial 9,345 5,615 14,960 Total 19,349 9,417 28,776 (1) 1977 Employment Survey, Cupertino Planning Department 2. At the rate of 1.3 workers per household the new jobs may result in approximately 7,244 new households who are in need of housing in the Cupertino area. 3. Based on the income levels of the new jobs approximately 40%, or 2,898 housholds, will be earning less than the countywide median income ($20,000). Currently households making under $20,000 are unable to afford the average home being sold in Cupertino at $70,000. 4_. Most of the new households will be able to afford only $400-$600 a month for shelter, and those below the median can afford less. 5. There are 2,225 households in the City now earning less than 80% of the County median. Of these households 50% are spending more than 25% of their income on shelter which means 1,112 households are in need of assistance. 6. Combining the existing households and households generated by new jobs in Cupertino there will be 4,010 households by 1990 who will be unable to afford market rate housing. CONSTRAINTS 1. The development pattern and City form has been established.in terms of the street network and scale of buildings. 2. The integrity of existing residen- tial neighborhoods are of primary importance in the evaluation of higher density developments. 3. Land suitable for high density residential development is limited, therefore high density development must be confined to the Core Area of the community which provides the basic service and transportation facilities associated with higher densities. 4. The General Plan build -out will result in an additional 3,416 dwelling units between 1977 and 1990, even with the August 1978 Land Use Amendment.