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CC 05-14-2024 Item No. 1. Housing Element_Updated Final Staff Presentation1 City Council May 14, 2024 6th Cycle Housing Element Update Adoption Agenda Housing Element Overview Outreach Summary RHNA/Priority Sites Policies and Strategies HCD Review and Comments Environmental Review Associated GP amendments Planning Commission Recommendation Staff Recommendation Project Update/Next steps 1 2 2 Housing Element OverviewHousing Element Overview What is a Housing Element? Why Update it? What is a Housing Element? State-mandated Element of City’s General Plan Why update it now? Required to be updated every 8 years by law Update by when? By Jan. 31, 2023 (deadline passed) Update it?How? Study and plan for housing needs in community between 2023-2031, across all income levels Who certifies compliance? CA Dept of Housing and Community Development (HCD) 3 4 3 HE Contents Housing Needs Assessment Housing Needs Assessment Demographic Trends Housing Market Trends Special Needs Groups Constraints to Housing Development Constraints to Housing Development Resources and Sites Inventory Resources and Sites Inventory Policies and Programs Policies and Programs Governmental and Non- Governmental Market Trends Environmental Infrastructure Zoning and Capacity ADUs and Mobile Homes Inventory of Sites Review of Previous Housing Element Implementation Identify 2023- 2031 Programs Assessment of Fair Housing Assessment of Fair Housing Outreach Fair Housing Issues Site Inventory Analysis Contributing Factors Other updates Conforming General Plan changes: Land Use and appendices – Internal consistency Mobility and appendices – address environmental assessment/mitigations Conforming Rezoning - map and text State law requirements – Health and Safety Element Other – necessary to implement HE programs (e.g. Objective design standards for housing developments) 5 6 4 6th Cycle vs. 5th Cycle RHNA 4x higher in Cupertino--4,588 vs. 1,064 Few remaining undeveloped sites, reliance on redevelopment to meet RHNA 62 properties, 36 development sites 70% of properties 50 units/acre or more New legislation adds requirements in: Developing policies/programs Greater accountability to produce housing Site selection Less discretion approving housing developments Affirmatively Furthering Fair Housing (AFFH) More outreach and inclusion Noncompliance WhatcanhappenifCitydoesnothaveacertified Housing Element? Loss of local land use and zoning control – Builder’s Remedy projects Lawsuits and attorney fees Ineligibility for grant funding Financial penalties, court issued fines Streamlined ministerial approval of projects Court receivership appointing an agent to bring City’s Housing Element into compliance 7 8 5 Affirmatively Furthering Fair Housing (AFFH) AB 686 (2018) defines AFFH as: “taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics.” Cupertino -High or Highest Resource for Access to Opportunities Housing anywhere in City would regionally further AFFH Must look to accommodate persons who currently do not reside in City Meeting RHNA alone does not equate to satisfying AFFH (HE-1.3.6: Missing Middle Strategy) Three community meetings focused on AFFH held May- September 2022 Outreach SummaryOutreach Summary 9 10 6 Outreach SummaryOutreach Summary 2021 Jt. Study Sessions (Apr, May) Comm. Mtgs (Aug, Dec) CC Mtg (Sept) HC Mtg (Dec) Jan – Jun 2023 Jul – Dec 2022 CC Mtgs (Aug, Nov) PC (July) CEP-SAC mtgs (Jul, Sep, Oct) Comm. Mtg (Jul, Sep) Jan – Jun 2022 PC mtgs (Jan, Feb, Apr, May, June) CC mtgs (Mar) HC mtg (Jun) CEP-SAC mtgs (Mar, Apr, May, Jun) Comm. Mtg (May) Jan –Mar 2024 CC Mtg (Jan) 1st Draft to HCD (2/3) Comments from HCD (5/4) CC Mtg (Jul) Comm. Mtgs (Aug, Sep) 3rd Draft to HCD (2/26) Revised 3rd Draft to HCD (3/28) Conditional Certification letter from HCD (4/10) Jul – Dec 2023 2nd Draft to HCD (10/16) Revised 2nd Draft to HCD (11/30) Comments from HCD (12/15) RHNA/Sites InventoryRHNA/Sites Inventory 11 12 7 ABAG RHNA State-wide Housing Needs Determination made by HCD for each region within State Cupertino in 9 County ABAG region City’s RHNA ~1% of ABAG region’s RHNA and ~3.5% of county RHNA % of totalUnitsIncome Group 26.01,193Very Low Income (<50% of AMI) 15.0687Low Income (50%-80% of AMI) 16.5755Moderate Income (80%-120% of AMI) 42.51,953Above Moderate Income (>120% of AMI) 1004,588Total Affordable Units = 2,635 City’s 6th Cycle RHNA Buffer ~ 20-30% particularly for lower income levels recommended to ensure city does not have to update sites inventory before next HE update for “no net loss” purposes. Current RHNA + Buffer accommodates over 6,200 units. 13 14 8 Pipeline State law allows credit for approved projects, referred to as pipeline Cupertino allowed ~2,450 units as pipeline Lower income: 633 Moderate income: 49 Above moderate income: 1,770 Identify sites to accommodate balance of RHNA plus buffer Pre-HE Submittal Inventory Started with all potential sites throughout the City which: Met HCD size criteria: 0.5 – 10 acres Outside of fire hazard and geologic hazard zones –more environmental impacts Owner interest a factor, but not required by HCD Due to recent development approvals, allow: More housing west of De Anza Blvd & south of 85 Less housing east of De Anza Blvd Locate housing sites to counteract declining school enrollment Avoid displacement of existing residents through redevelopment of residential properties 15 16 9 Policy Framework State laws: link land use and transportation (AB 32 and SB 375) Regional plans (Plan Bay Area 2050 and Regional Transportation Plan) align with state law AB 2011 (eff. July 1, 2023): Allows Residential development on Commercial-Office Corridors regardless of Zoning: Density and building height varies depending on lot size and width of transportation corridor Identifies min. development standards Ministerial, exempt from CEQA Current Site selection strategy With Council direction in July 2023, site selection strategy adjusted based on: New State law realities – AB 2011/SB6 Proximity to transportation – AB32/SB375 Aligning with regional plans – PBA2050 & RTP City’s existing policies – LU-1.1 & Climate Action Plan Consultant experience based on likelihood of site acceptance by HCD Size of sites – 0.5 acres (min.) to 10 acres (max.) Development potential of site 17 18 10 Current Housing Element Priority Housing Sites Capacity compared to RHNA SurplusTotal Capacity Projected ADUs Mixed Use Site Capacity with Rezone Residential Site Capacity with Rezone Pipeline Capacity 2023-2031 RHNA RHNA Category 2982,178116596833633 1,193Very Low 687Low 1549095743636049755Moderate 1,2133,166196956621,7701,953Above Moderate 1,6386,2261921,7271,8552,4524,588Total 19 20 11 Capacity compared to RHNA Valley Church removed (4 parcels) SurplusTotal Capacity Projected ADUs Mixed Use Site Capacity with Rezone Residential Site Capacity with Rezone Pipeline Capacity 2023-2031 RHNA RHNA Category 1572,037116596692633 1,193Very Low 687Low 928475743630549755Moderate 1,0442,997196955131,7701,953Above Moderate 1,2945,8811921,7271,5102,4524,588Total Programs and PoliciesPrograms and Policies 21 22 12 Required Programs and Policies Programs to provide Adequate Housing Sites Programs to Assist Lower-Income Housing Development Programs to Address Housing Constraints Programs to Conserve, Improve and Expand Housing Stock Programs to Affirmatively Further Fair Housing Programs to Preserve ”at risk” Units Programs for ADUs/Second Units Housing Policy Areas Programs to provide Adequate Housing Sites: Identify sites to accommodate RHNA Create new land use designations to ensure RHNA can be accommodated Programs to Assist Lower- Income Housing Development: Support Grant applications; Provide technical support; Issue NOFA for BMR Affordable Housing Funds 23 24 13 Housing Policy Areas (cont.) Programs to Address Housing Constraints: Adopt Objective standards, Continue fee waivers for affordable units and/or 100% affordable projects; Evaluate Parking standards Programs to Conserve, Improve and Expand City Housing Stock: Create new R4 Zoning District; Promote options for multi- generational households & house sharing; Continue to implement a BMR program Disallow conversion of multi- family to Single Family homes; Use CDBG funds for conservation/ improvements Housing Policy Areas (cont.) Programs to Affirmatively Further Fair Housing: Upzone sites adequately to allow accommodation of RHNA; Support teacher housing and ELI projects; Continue to support the development of ADUs and adopt "missing middle" housing policies, which offer opportunities with modest increases in density (HE Strategy-1.3.6) 25 26 14 Housing Policy Areas (cont.) Programs to Preserve ”at risk” Units: Programs to meet with affordable housing operators annually Programs for ADUs/Second Units: Continue to offer streamlined pre-approved plans; Evaluate and participate in local and regional efforts on ADU programs HCD Review and CommentsHCD Review and Comments 27 28 15 Process with HCD February 3, 2023: 1st submittal to HCD May 4, 2023: 16 page letter #1 received October 16, 2023: 2nd submittal to HCD Informal meeting with HCD resulted in Revised 2nd draft submitted to HCD on Nov. 30, 2023 December 15, 2023: 5 page letter #2 received February 26, 2024: 3rd submittal to HCD Informal meeting with HCD staff resulted in Revised 3rd draft submitted to HCD on March 28, 2023 April 10, 2024: CONDITIONAL COMPLIANCE LETTER RECEIVED FROM HCD Revisions to address HCD comments Second draft (Oct/Nov) –substantial rewrite of first draft based on HCD comments from May All analysis (review of prior housing element, fair housing, needs and constraints analysis) revised Sites inventory updated based on Council direction and consultant advice Existing policies and strategies revised New policies and strategies added in first draft revised or replaced/added to address state law, HCD comments, AFFH Third draft (Feb/Mar) –targeted edits to second draft based on HCD comments Related to sites and sites inventory Refinements to missing middle strategy 29 30 16 Environmental AssessmentEnvironmental Assessment Settlement/Environmental Assessment February 2023: California Housing Defense Fund/YIMBY Law sue City for noncompliant HE by adoption deadline January 2024: Stipulated Judgment entered into Established schedule to complete HE update in compliance with State law Gov’t Code Sec. 65759(a) All actions related to adoption of HE and rezoning are exempt from CEQA 31 32 17 Environmental Issues Analyzed Aesthetics Air Quality Biological Resources Cultural and Tribal Cultural Resources Energy Geology and Soils GHG Emissions Hazards and Hazardous Materials Hydrology and Water Quality Land Use and Planning Noise Population and Housing Public Services, Parks, and Recreation Transportation Utilities and System Services Wildfire Any significant environmental impacts are avoided, minimized, rectified, reduced or eliminated, and/or compensated. The General Plan and Muni Code incorporates policies and strategies to protect, preserve, and/or enhance environmental resources. The following topics were evaluated in environmental assessment: Environmental Assessment Conclusions Program-level significant and unavoidable impacts for air quality, greenhouse gas emissions, and transportation (vehicle miles traveled). Possible to have less-than-significant impacts in these areas for future projects that meet project-level thresholds. No additional mitigation measures are available at this phase of project approval (i.e. adoption of HE and associated amendments) 33 34 18 Associated General Plan Amendments Associated General Plan Amendments Other General Plan Amendments Chapter 3, Land Use and Community Design Element and Appendix A, Land Use Designations: Text changes to address state law requirements & Housing Element requirements Figure changes – reflect density and heights reqd. for developing Priority Housing Sites Chapter 5: Text changes to minimize environmental impacts resulting from development General Plan Land Use Map – conforming changes 35 36 19 Planning Commission Recommendation Planning Commission Recommendation Planning Commission Recommendation April 29, Planning Commission recommended adoption of draft resolution on a 3-2 vote with minor change to remove a site (Dish n Dash) not allowed as a Priority Housing Site by HCD Missing middle strategy and parkland dedication fee study discussed. HCD requirements to address AFFH and housing constraints 8 members of public spoke – topics included validity of RHNA numbers, missing middle strategy and parking impacts, income restrictions for BMR AHF Funds for residential rehabilitation projects, programs for seniors, prevailing wage requirements environmental review 37 38 20 Staff RecommendationStaff Recommendation Recommendation Adopt Resolution: Remove Site 48 (Dish n Dash) and Sites 13-16 (Valley Church) (desk item) Adopt Chapter 4 (Housing Element), Appendices B (Housing Element Technical Report) and G (Environmental Assessment) Changes to Chapters 3 (Land Use and Community Design) and 5 (Mobility), and Appendix A (Land Use Definitions) Changes to Land Use Map (desk item) 39 40 21 Next StepsNext Steps Timeline and Next StepsTimeline and Next Steps April 2024 Letter from HCD – 4/10 HC Study Session – 4/25 PC rec. – 4/29 Summer 2024 Fall 2024June 2024 CC First rezone reading – 7/2 May 2024 CC adoption –5/14 PC rec. On zoning – 6/11 Mar 2025 Complete rezoning Prepare objective design standards Adopt objective design standards APR submitted 41 42