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HomeMy WebLinkAboutFebruary 24, 2009CITY OF ARCADIA JOINT MEETING OF THE ARCADIA CITY COUNCIL /REDEVELOPMENT AGENCY AND PLANNING COMMISSION MW I T, 1 -0 TUESDAY, FEBRUARY 24, 2009 AGENDA 6:00 p.m. K 3 4. Location: Arcadia Police Department, Emergency Operation Center 250 W. Huntington Drive ROLL CALL City Council /Redevelopment Agency Members: Amundson, Chandler, Kovacic, Wuo and Harbicht Planning Commission Members: Baderian, Baerg, Hsu, Parrille and Beranek SUPPLEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS TIME RESERVED FOR THOSE IN THE AUDIENCE WHO WISH TO ADDRESS THE CITY COUNCIL /REDEVELOPMENT AGENCY (FIVE MINUTE TIME LIMIT PER PERSON) Discussion and /or direction on a. Affordable Housing options and strategies. b. General Plan update and Land Use. ADJOURNMENT The City Council /Redevelopment Agency will adjourn this meeting to March 3, 2009, at 6:00 p.m. in the City Council Chamber Conference Room located at 240 W. Huntington Drive, Arcadia. Pursuant to the Americans with Disabilities Act, persons with a disability who require a disability related modification or accommodation in order to participate in a meeting, including auxiliary aids or services, may request such modification or accommodation from the City Clerk at (626) 574 -5455. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to the meeting. Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection in the City Clerk's office located at 240 W. Huntington Drive, Arcadia, California, during normal business hours. oo❑ STAFF REPORT Arcadia Redevelopment Agency February 24, 2009 To: City Council and Planning Commission .From: Jason Kruckeberg, Development Services Director 'JUG By: Jerry Schwartz, Economic Development Manager j 03 Subject: Study Session: Discussion of Affordable Housing Options and Strategies BACKGROUND Affordable housing is an issue for every city in the San Gabriel Valley. For built -out cities, like Arcadia, finding locations for affordable housing developments is challenging. In addition, increasing and improving the supply of affordable housing is one of the fundamental goals of Redevelopment Agencies in California. Providing housing at different price and income levels is also required for certification of the Housing Element of the General Plan. In fact, the Housing Element has to be recertified every five years, more frequently than other General Plan updates are required in California. The Housing Element is required to address the Regional Housing Needs Assessment (RHNA) numbers, the total housing units assigned by the Southern California Association of Governments (SCAG) that cities are required to plan for in the General Plan. The RHNA numbers (for Arcadia, a total of 2,149 units) reflect housing that must be provided at various income levels. If the RHNA numbers are not adequately addressed, the Housing Element may not be certified. It is important to discuss affordable housing requirements and opportunities as part of the priorities for the Arcadia Redevelopment Agency and the General Plan update. DISCUSSION There are many types of affordable housing in communities. Affordable housing can be owner or renter occupied, it can be single family homes or multiple family units, and it can be new construction or remodeling of existing units. It can be oriented toward families, seniors, developmentally disabled, mobility restricted, or some combination. These projects are also funded through a variety of sources, often including multiple funding mechanisms. The Arcadia Redevelopment Agency sets aside 20% of its tax increment for the development and /or improvement of housing for low and moderate incomes. Successful past affordable housing projects by the Agency include the Heritage Park low income senior citizen rental project on Las Tunas Avenue and the Alta Street condos that were sold to moderate income first time homebuyers. Working toward providing additional affordable housing is one of the priorities for the Agency. In addition, the General Plan will address future development in Arcadia, including housing at different levels. The Agency hired Beth Stochl, a consultant with significant experience working with redevelopment agencies on affordable housing, to prepare an Affordable Housing Options Report for the Agency Board. Beth's report is included with this staff report. The report provides the percentage of Agency affordable housing expenditures that can be spent at the various income levels, including the portion that is eligible to be spent on senior citizen housing. The expenditures available at these income levels are based on the percentage of housing that is to be provided by income level as part of the RHNA numbers. The report provides a table that shows that the Agency will have as much as $12.7 million to spend on affordable housing between now and 2014, including repayment by the Agency of $4,045,715 that is owed to the housing fund. This represents a significant amount that can be invested to improve and increase the supply of affordable housing in Arcadia. Recognizing the availability of these funds plus the City's annual CDBG allocation, the report offers a possible scenario for expending these funds in various ways to provide affordable housing at different income levels. The actual use of Agency low /mod housing funds will be based on direction from the Agency Board. The Affordable Housing Options Report includes five attachments that provide additional information about affordable housing. Attachment A includes a definition from the California Health and Safety Code of affordable owner and rental housing costs, and includes tables for state and Los Angeles County income levels. Attachment B is an extensive list, with summaries, of financial resources available for affordable housing. Many of these resources involve a competitive application process, but it demonstrates the potential to leverage Agency affordable housing dollars. During the study session, Beth Stochl will make a presentation about affordable housing and the opportunities and obligations in Arcadia. Finally, staff has been investigating possible sites for affordable housing throughout the City based on some of the options presented in the report. Based on direction from the Agency Board on options or strategies of interest, staff will continue its work to build on the Agency's successes with its first two affordable housing projects. In addition, it is a goal of the Agency to encumber low /mod housing monies in this fiscal year to meet our obligations on expenditures. RECOMMENDATION Provide direction. Approved: Penman, City Manager /Executive Director Attachment: Affordable Housing Options Report February 24, 2009 Page 2 Memorandum Date: October 9, 2008 i _ ROCSIved Development Services Economic Development Division To: Jason Kruckeberg, Development Services Director Arcadia Redevelopment Agency From: Beth Stochl, Principal Beth Stochl Associates Subject: Report on Affordable Housing Options The City of Arcadia is embarking on a General Plan update, including an update of the required Housing Element for 2008 -2014. In preparation for this, Beth Stochl Associates (BSA) has been hired to prepare a report outlining various options for the City related to housing affordable to very low, low and moderate income households. This report presents the financial resources available for affordable housing in Arcadia; reviews housing fund expenditure requirements; proposes an allocation of housing funds through 2014; and examines other strategies to encourage affordable housing. BACKGROUND Why should a City focus significant efforts on the development of affordable housing? From a local perspective, a variety of housing types, including more affordable housing is necessary to support local economic development. The provision of affordable housing enables local employers to recruit from a wider employee pool; allows employees to live closer to work, cutting the cost of commuting and adding to quality of life; reduces housing payments, freeing up more discretionary income that can be expended locally; and assists with air quality issues by reducing commute times. The State of California has found that the production of housing is vital to the state. The goal of early attainment of housing for all requires the cooperation of all levels of government as well as the private sector. State legislation affecting the provision of housing at a local level includes redevelopment law; Housing Element statutes; and, more recently, regulations affecting greenhouse gas emissions. In 1968 the City of Arcadia established a Redevelopment Agency which adopted the Central Redevelopment Plan in 1973 to generate tax increment in order to ' For purposes of this report, housing affordable to very low, low and moderate income levels is defined in the State of California Health and Safety Code Section 50052.5 (affordable housing cost) and Section 50053 (affordable rents). These definitions along with the current income levels for Los Angeles County are provided in Appendix A. Affordable Housing Options Page 1 September 26, 2008 eliminate blight in the Central Redevelopment Project Area. The Redevelopment Agency is governed by State law, which requires that at least 20 percent of the tax increment must be "set- aside" to increase and improve the supply of low and moderate income housing. If these funds are not expended in a timely manner, expenditures of all other redevelopment funds can be suspended until the surplus is spent for affordable housing. State Housing Element statutes require local jurisdictions to offer opportunities for the development of a variety of housing types, and more explicitly, the development of housing affordable to lower income households. A jurisdiction must provide programs to address its fair share of housing needs or Regional Housing Needs Allocation (RHNA) as established by the regional governments. Arcadia's RHNA was established through the Southern California Association of Government's (SCAG) process. Table 1 shows Arcadia's RHNA for 2008 -2014 planning period. This quantification of housing need in the City is also the base for allocation of locally controlled housing revenues, including the redevelopment housing fund. Table 1 Regional Housing Needs Assessment 2008 -2014 Income Level Percent' of AMI" 'Units ; Percent z Very Low 0 -50% 549 25.5% Low 51 -80% 340 15.8% Moderate 81 -120% 368 17.1% Above Moderate 120 %+ 892 41.5% Total 2,149 100% Source: htto:l /SCAG.ca.aov.00v /Housing /rhna.htm AMI —Area Median Income In 2006, the State legislature passed the Global Warming Solutions Act (AB 32 Nunez) which requires the State of California to reduce greenhouse gas (GhG) emissions to 1990 levels by the year 2020. In 2008, the legislature passed SB 375 Steinberg that further connects the reduction of greenhouse gas (GhG) emissions from cars and light trucks to land use and transportation policy. SB 375 will in turn affect the RHNA and encourages cities to develop housing near transit corridors. FINANCIAL STRATEGIES The California Community Redevelopment Law establishes certain expenditure percentages over a 10 year term of housing production. The current 10 year Y The Housing Element update will explore additional areas of the community's housing need as required by State regulations. Affordable Housing Options Page 2 September 26, 2008 period is FY 2005 through FY 2014. The Agency is currently in the fifth year of this period. There are two types of expenditure targets established in Section 33334.4. One is related to minimum expenditures for very low and low income households; the other is related to maximum expenditures for seniors over the 10 year term of housing production. The income level targeting is based on the jurisdiction's Regional Housing Needs Allocation (RHNA). Expenditures for very low and low income households must be at least the same percentage as their percentage' of very low to moderate income need as defined in the RHNA. Table 2 presents the percentages of each of those income categories based on the 2008 -2014 RHNA. Appendix A provides the State definition of affordable houisng cost and the current Los Angeles County income limits. Table 2 Redevelopment Housing Income Targeting 2008 -2014 Ilncome Level P rcerit I lmmts `Percent c •AML* Very Low 0 -50 % 549 43.7% Low 51 -80% 340 27.0% Moderate 81 -120% 368 29.3% Total 1,257 100% Source: httD7//SCAG.ca.gov.qov/Housinq/rhna.htm AMI —Area Median Income The law also establishes a maximum percentage of expenditures for senior housing. The regulations define that percentage as the percentage of lower income senior households to lower income households In the 2000 Census, the number of lower income senior households was 1,714 compared to 5,033 lower income households or 34 percent. Arcadia Housing Funds These percentages are then applied to all "locally controlled" government assistance over which the community has discretion and authority to determine the recipient and amount of assistance, including both Federal and State funds. In Arcadia, this includes both the Redevelopment Housing Set -Aside funds and Federal Community Development Block Grant funds fot the period from FY 2005 to FY 2014. 3 Previously the maximum amount for expenditures on senior housing was defined as the proportion of senior persons compared to the community's total population. Arcadia's previous expenditure percentage was limited to 15.5% based on this definition. The law changed in 2005. Affordable Housing Options Page 3 September 26, 2008 1. Redevelopment Housing Set -Aside Revenues (2009 -2014) The primary source of funds available to Arcadia for the financing of affordable housing is the Redevelopment Housing 20% Set - Aside, also known as the Low /Moderate Income Housing Fund (Agency Housing Fund). The Arcadia Redevelopment Agency (Agency) generates tax increment, of which 20 percent must be set -aside to increase and improve affordable. housing. The use of these funds is governed by California Community Redevelopment Law. The Agency budget indicates that approximately $4 million was available in the Agency Housing Fund at the beginning of the fiscal year and that an additional $903,000 will be generated in FY 2009. These amounts plus projected revenues, less administrative costs, total approximately $8.7 million available for projects and programs through 2014. In addition, the Agency owes the Housing Fund $4,045,715, a deficit in payment between 1985 and 1996. Staff anticipates that sufficient funds will be available between 2009 and 2014 for the Redevelopment Agency to repay this amount to the Housing Fund. This brings the total Redevelopment revenues available for housing projects and programs to approximately $12.7 million, shown in Table 3. Table 3 Redevelopment Housing Revenues 2009 -2014 2. Redevelopment Funds Expended (2005 -2008) The Agency expended approximately $2.2 million on the Alta Street Condominiums between FY 2005 and FY 2008. These expenditures are added Affordable Housing Options Page 4 September 26, 2008 Anticipated Less Available for Fiscal Year Revenues Administration P Programs Beginning Balance $ 3,971,000 $ 3,971,000 ( 7/1/08 ) 2009* 903,000 195,200 707,800 2010* 969,000 200,200 768,800 2011 ** - 989 206,200 782,800 2012 ** 1,008,148 212,400 795,748 2013 ** 1,028 311 218 809,511 2014 ** 1,048,877 225,300 823,577 Totals . $ 9 $ 1,258,100 $ 8,658,615 Plus Agency $ 4,045,715 Repayment TOTAL $ 12,704,330 ' 2009 and 2010 Revenues and Administration from 2009 budget " 2011 -2014 Revenues includes a 2% annual increase; Administration includes a 3% annual increase 2. Redevelopment Funds Expended (2005 -2008) The Agency expended approximately $2.2 million on the Alta Street Condominiums between FY 2005 and FY 2008. These expenditures are added Affordable Housing Options Page 4 September 26, 2008 to the available revenues ($12.7 million) in order to allocate total housing funds by income category and seniors for programs and projects from 2005 -2014. Therefore, the total Agency Low /Moderate Housing Funds available from 2005- 2014 is approximately $14.9 million. 3. Community Development Block Grant (CDBG) Funds The other source of housing funds for Arcadia is the Federal Community Development Block Grant (CDBG) revenue distributed through the Los Angeles Urban County Community Development Block Grant program. The County allocates the CDBG funds to participating cities on the basis of total population, number of persons living in poverty, and number of persons in overcrowded conditions. Upon allocation, the City has the flexibility to use the funds to meet local needs in compiiance with federal regulations. The City's CDBG allocation was almost $397,000 for FY 2009. The majority of the City's allocation, approximately $267,000 is budgeted for housing rehabilitation. The remaining funds are budgeted for senior and youth social service programs; sidewalk accessibility; and administration. The estimate of CDBG funds available from 2005 -2014 is $2,517,000 based on an annual housing allocation of $250,000, plus the $267,000 allocated to housing in 2009. Table 4 provides an estimate of locally controlled housing funds available in the City of Arcadia from 2005 -2014. This includes an estimated $12.7 million in the Agency Housing Fund; $2.2 expended for the Alta Street Condos between 2005- 2008; and approximately $2.5 million in CDBG funds for a total of just over $17.4 million. Table 4 Total Housing Funds gnns -2nIa Source of Housing Funds Amount Agency Housing Fund 2009 -2014 $ 2,704,330 Plus Agency Project Expenditures 2005 -2009 $ 2,226,930 Plus CDBG Funds 2005 -2014 $ 2,517,000 Total Housing Funds 2005 -2014 $ 17,446 Affordable Housing Options Page 5 September 26, 2008 Targeted Expenditures for 2005 -2014 Table 5 shows the targeted expenditures for all "locally controlled" funds; funds already expended; and the allocation of remaining funds by income level. The majority of remaining funds must be expended to assist very low income households. Redevelopment FY Table 5 Expenditures Very Low 43.7% $ 7,624,900 — $ 7,624,900 Low 27.0% $ 4,711,000 — $ 4,711,000 Moderate 29.3% $ 5,112,300 $ 2,226,930 $ 2,885,370 Total 100% $17,448,200 $ 2,226,930 $15,221,270 Since FY 2005, no funds have been expended for senior housing. Therefore, the Agency can expend up to $5,932,400 for senior housing through FY 2014. Using Housing Funds Redevelopment housing funds can be used to acquire property; construct buildings; provide onsite or offsite improvements; rehabilitate buildings; pay a portion of principal and interest on bonds for affordable housing; preserve subsidized housing; maintain the community's supply of mobile homes; and provide subsidies. CDBG funds are generally restricted from use in new construction, but can be used for acquisition, rehabilitation, offsite improvements, and conversion of structures for housing. Arcadia has used affordable housing funds in the past for single - family owner - occupied housing rehabilitation (CDBG funds); new construction of senior housing (Heritage Park — 54 apartments); and new construction of for -sale condominiums (Alta Street Condos — 6 for -sale units). Long -term affordability covenants of at least 55 years (rental) and 45 years (for -sale) were placed on the new construction developments. . The Agency has adopted goals and objectives related to the primary Agency purpose of eradicating the blight identified in the Project Area. It is important, given the limited resources available for affordable housing, to also establish goals and objectives related to the Housing Fund. In order to be strategic in the use of housing funds, the following goals and objectives were considered in establishing the allocation of funds to various programs. Affordable Housing Options Page 6 September 26, 2008 1. Use the Agency Housing Fund (Redevelopment set -aside funds) to address the Regional Housing Need Allocation to the greatest extent feasible. Leverage housing funds to the greatest extent feasible for both renter and ownership projects. 3. Encourage use of non - financial strategies to address housing needs. 4. Work with the developers to create housing development that is well - designed. In order to address the community's. RHNA, particularly the lower income housing need (889 units), the City will need to focus a majority of housing funds on new construction. However, the City may now address up to 25 percent of its lower income housing need through alternative methods — preservation of at -risk units, substantial rehabilitation, or conversion of market rate units to affordable units. Only one apartment development, Naomi Gardens with 100 senior apartments, is eligible for preservation of at -risk units in the City. It is unlikely to be converted to market by 2014. Though most residential buildings in Arcadia are in good condition, there may be a few opportunities to assist with substantial rehabilitation to create affordable housing. There may also be opportunities to convert market rate units to affordable units. If this option is of interest, potential projects for consideration will need to be identified and explored in the City's updated Housing Element. Table 6 presents a potential use of housing funds allocated to meet the State targeting requirements by income category and for seniors. The allocation also focuses on meeting the community's housing needs (RHNA) with an emphasis on new construction for the lower income categories. Affordabie Housing Options Page 7 September 26, 2008 Table 6 Arcadia Housing Funds Potential Allocation 2005 -2014 ProgramsforTargeted incomes Senior; and Poltuta3ori0 City Ae$Stance PerUni!` Funs ANocaed Assisted Units Very Low Income $ 7,624,900 Rehabilitation $ 15,000 $ 11000,000 67 Rehab Grant - Senior /Disabled $ 10,000 $ 500 50 New Construction - Rental $ 200,000 $ 6,124,900 31 Total Very Low Income $ 7,624,900 147 Low Income $ 4,711,000 Rehabilitation $ 15,000 $ 1,017,000 68 Rehab Grant - Senior /Disabled $ 10,000 $ 500 50 New Construction - Rental $ 200,000 $ 2 13 New Construction - For -Sale $ 200,000 $ 600 3 Total Low Income $ 4,711,000 134 Moderate Income $ 5112 300 New Construction - For -Sale Alta Street Condos $ 372,000 $ 2,226,930 6 Rehabilitation $ 15,000 0 Home Buyer Programs $ 100,000 $ 2,885,370 29 Total Mod Income $ 5,112,300 35 Senior Housing $ 6,932,400 Rehab Grants $ 10,000 $ 1,017,000 102 New Construction - Rental $ 200,000 $ 4,915 400 25 Total Senior Housing $ 5,932,400 127 The focus for very low income households is affordable rental housing. This may include transitional (temporary housing for the homeless — usually six months to two years) and supportive housing (permanent affordable housing with on -site resident services). There is some potential to assist very low income homeowners with a housing rehabilitation program, particularly senior households who may have deferred maintenance. The focus for low income households is also affordable rental housing. However, there may be an opportunity to work with an organization like Habitat for Humanity to provide for -sale homes to low income households. Rehabilitation programs are also effective for this income group, particularly using CDBG funds. The focus for moderate income households is home ownership. The Agency has already used funds to assist in the development of six for -sale units at Alta Street Affordable Housing Options Page 8 September 26, 2008 Condominiums. The remaining funds for moderate income households may be used to establish a home buyer program to purchase either existing housing or new market units developed privately or with assistance from the Agency. Though rehabilitation programs could be useful for this income group given the difficulty in obtaining financing for housing rehabilitation in the current lending market, the last Housing Element indicated that most housing in Arcadia is in fairly good condition. Seniors are in need of rental units that are affordable, and can also benefit from owner - occupied rehabilitation programs. Many senior households are reluctant to enter into a loan agreement, so grants to assist with accessibility and minor repairs can be very useful. Leveraging Opportunities With the high cost of housing, the City's affordable housing funds will assist only a small number of new units. Therefore, it is essential for the City to leverage those funds to the greatest extent feasible. Historically, there are a number of sources for financing rental housing: tax credits, bond financing, multi family housing program, HOME funds, City of Industry funds, transit oriented development funds, infill funds, and mental health services act funds. Developers are accustomed to layering these public funds and the sometimes conflicting regulations in order to achieve affordable rental housing. The Heritage Park Senior rental development is an example of this type of layering. The project was funded with an Agency Housing Fund loan of $1,850,000; a federal HOME loan from the County of Los Angeles of $1,350.000; and a multi - family housing bond allocation from the State of California. There are more funding sources for ownership development than in the past. The State offers programs such as BEGIN, CalHome, CaIHFA loans, and bond financing. The County offers City of Industry, HOME funds, CDBG funds and other home buyer programs. Developers of for -sale housing are becoming more proficient at layering these funds to create a mix of affordability. The goal is to provide a variety of programs that will help increase the pool of potential home buyers. A synopsis of various funding sources available for affordable housing is provided in Attachment B. Affordable Housing Options Page 9 September 26, 2008 NON - FINANCIAL STRATEGIES Arcadia can also provide non - financial assistance to encourage the development of affordable housing. Most of these options fall within the land use regulations of a city and reduce the cost of development by providing governmental incentives and removing governmental constraints to the development of affordable housing. Greater certainty for a development can be created by decreasing the number of required discretionary zoning approvals; providing a review of the project by all City agencies early in the pre - development phase; instituting the zoning necessary before the development is proposed; and /or establishing a plan for the area. The cost per unit can be reduced by allowing a greater number of units on a property by right; providing a density bonus .consistent with the SB 1818 legislation; reducing the required parking spaces, particularly if the site is served by transit. Listed below are specific options for the City of Arcadia and the Arcadia Redevelopment Agency to consider in encouraging the development of affordable housing. 1. Density Bonus The Arcadia Zoning Ordinance establishes a density bonus that increases density by at least 25 percent if the development (of five or more units) provides one of the following criteria: • At least 20 percent of the units are designated for lower income households; • At least 10 percent of the units are designated for very low income households; or • At least 50 percent of the units are designated for senior citizens. This ordinance met the State regulations for density bonuses at the time it was adopted. However, the State legislature made major changes to the density bonus requirements, effective January 2065. The new requirements significantly reduce the number of affordable units a developer must provide to receive a density bonus. In addition, the jurisdiction must provide one or more incentives — financial or zoning concessions. Arcadia will need to update its Zoning Ordinance to meet the new State density bonus requirements. A summary of the new requirements are provided in Appendix C. 2. "Default Density" Zones The highest density currently allowed by the Arcadia Zoning Ordinance is 24 units per acre. This density is located adjacent to major or secondary streets, shopping areas, or other intense land uses south of the downtown area. Affordable Housing Options Page 10 September 26, 2008 Housing Element statutes now provide for the use of "default densities" to assess affordability when evaluating the adequacy of sites to address the affordability targets established by the RHNA. Due to its population and location within Los Angeles County, Arcadia falls within the default density of 30 units per acre for providing sites affordable to very low and low income households. Most cities have included a program in the updated Housing Element to revise their zoning ordinance to provide sufficient densities to encourage and facilitate the development of lower income households. These higher densities are appropriate for transit corridors and serve as buffers between commercial and lower density residential neighborhoods. 3. Inclusionary Housing In 2006, 170 jurisdictions in the State of California (32 percent of California jurisdictions) had an inclusionary housing policy or ordinance, in which a new development is required or encouraged to provide a percentage of units (usually 10 to 20 percent) affordable to low and/or moderate income households. This is an increase from the 107 jurisdictions with some form of inclusionary housing in 2003. In addition, many of the jurisdictions with inclusionary housing policies or ordinances updated their policies and ordinances during the last five years. Many redevelopment agencies have a production requirement mandating that a percentage of all housing developed in a project area must be affordable to low and moderate income households. This obligation applies to an entire project area over a 10 year period and does not need to be met on a project by project basis. The Arcadia Redevelopment Agency is not subject to this requirement since the Agency was formed prior to January 1, 1976. Though the City does not currently have an inclusionary housing policy or ordinance, this is something that can be considered to assist in the development of new housing. The City may want to establish such a policy for larger housing developments that can more easily incorporate affordable units. The Agency may also want to establish an inclusionary housing policy for new housing development. receiving Agency incentives. Inclusionary housing is a way to provide housing for a mix of incomes, usually within one development. A report issued jointly by the Home Builders Association of Northern California and the Non -Profit Housing Association of Northern California (NPH) provides recommendations for basic inclusionary requirements and options that both builders and affordable housing advocates can agree to. For example, the report recommends that the builder can provide units on -site, off -site, or provide an in- lieu fee based on the number of units in the proposed development. In addition, the report recommends establishing a minimum number of units before requiring inclusionary housing, providing options for off -site provision of inclusionary units, and allowing payment of an in -lieu fee. The copy of the report, "On Common Affordable Housing Options Page 11 September 26, 2008 Ground: Joint Principles on Inclusionary Housing Policies" is included as Appendix D. 4. Review Process A city's review process can place additional time and uncertainty on a project, adding to a development's overall cost. Though Arcadia's review process is similar to that of surrounding cities, it could be improved with the addition of 'a pre - development site review. This site review provides information to the developer of potential issues from all City departments at an early phase of the development process. This information can help the developer determine the true costs of the project before finalizing construction drawings and cut both time and costs. 5. Second Units The State has found that second units provide an important source of affordable housing. Effective January 1, 2003, State law requires ministerial approval of second units and has adopted standards that apply unless a City adopts its own standards. The State's standards allow second units up to 1200 square feet if detached from the existing single- family dwelling or up to 30% of the existing living area for an attached structure. The second unit must meet building code. Arcadia's Zoning Ordinance currently permits second units only in multi- family zones. However, State law does provide flexibility for a local government to adopt a local second unit ordinance establishing standards such as parking, height, setback, lot coverage, architectural review, maximum size, and standards related to historic places. By adopting a second unit ordinance, the City will have more control over the development of second units within the community. 6. Identifying Sites Appropriate for Housing and /or Mixed -Use As stated in the last Housing Element, the City should continue to identify development sites appropriate for housing and mixed -use. Housing Element statutes now require identification of speck sites for housing development. This information, combined with City and Agency incentives for development of those sites, will assist developers interested in building in the City. 7. Fee Reduction Arcadia can continue to reduce City development fees for residential development with a fixed percentage of affordable units. Affordable Housing Options Page 12 September 26, 2008 8. Modifications to Development Standards As part of the density bonus ordinance, Arcadia should consider establishing incentives related to residential development standards. Examples from other cities include parking reduction or modification, reduction in minimum unit size; an increase in building height; or modifications to private open space. Zoning standards will also need to be reviewed to ensure that they do not constrain development in the default density zones. 9. Housing the Homeless Arcadia will be required to address the requirements of recently adopted SB 2. This bill requires California jurisdictions to allow development of an emergency shelter by right and allow transitional housing and supportive housing in appropriate residential zones subject to the same conditions as other multi - family developments. Because the Arcadia zoning ordinance does not currently define or allow these uses, the Housing Element will need to establish programs to address these requirements and implement them within one year of adoption of the element. 10. Reasonable Accommodation The Housing. Element update will also review Arcadia's reasonable accommodation of housing for persons with disabilities. This may include a process for reasonable accommodation requests such as extension of a ramp into the front setback. A rehabilitation grant for seniors and the disabled is included in the potential funding allocations to assist with such projects. 11. Code Enforcement Code enforcement is another key component to address housing need within the community. Maintaining decent, safe and sanitary units is important for the residents and long -term quality of the City's housing stock. Code enforcement can be both pro- active, focusing efforts in older areas of Arcadia that are more likely to show deterioration, and reactive, responding to complaints from the community. Code enforcement should be linked to the rehabilitation program so that lower income households have funds to address the need. OTHER CONSIDERATIONS In preparation of this report, BSA also considered other issues and housing programs that might be pertinent to the City's use of housing funds. Specifically, BSA considered the current foreclosure situation in Arcadia; the potential for establishing an employer assisted housing program; and using New Market Tax Credits to develop for -sale housing in Arcadia. Generally, Arcadia is not experiencing a high rate of foreclosure; has potential for working with local Affordable Housing Options Page 13 September 26, 2008 employers to encourage employer assisted housing; and is not eligible for New Market Tax Credits. More information on each of these issues is presented in Appendix E. CONCLUSION Housing development is difficult and costly in the current market. There is uncertainty about for -sale housing due to the financial crisis; rents continue to increase; and the costs of land and construction are high. However, in order to maintain economic stability and meet State requirements, cities are encouraging affordable housing using both financial assistance and other incentives. Some cities, like Arcadia, have Redevelopment funds available to financially assist in the development of affordable housing. These funds, along with other locally controlled funds, must be expended proportionately to the regional housing needs. Cities also create incentives through streamlining development processing; modifying development standards; increasing densities; and establishing inclusionary housing policies and ordinances. Arcadia is beginning a General Plan update, including an update of the Housing Element for 2008 -2014. In preparation for this update, this report reviews available funding, other governmental incentives, and current housing issues. A recommendation for the allocation of approximately $17.4 million in.housing funds includes programs for very low, low and moderate income households, with an emphasis on addressing the City's regional housing needs. Other ideas related to non - financial incentives are also provided. Hopefully, these options are beginning points for further discussion and refinement. Attachments A. Affordable Housing Costs and 2008 Los Angeles County Income Levels B. Financial Resources Available for Affordable Housing C. Density Bonus Requirements (AB 1818) D. Inclusionary Housing Report E. Other Considerations Affordable Housing Options Page 14 September 26 2008 Appendix A Definition of Housing Cost Los Angeles County Income Limits 2008 APPENDIX A Definition of Affordable Housing Cost and 2008 Income Limits for Los Angeles County California Health and Safety Code' defines affordable owner and rental housing costs as follows: Affordable Ownership Housing Cost — lower income ➢ Housing costs consist of mortgage debt service, homeowner association dues, insurance, utility allowance and property taxes. ➢ Affordable costs for extremely low and very low income households are up to 30% of the defined household income. ➢ Affordable costs for low income households are up to 30% of 70% of the Area Median Income (AMI) or, optionally, up to 30% of the gross income for a household size equal to one more person than the number of bedrooms in the unit ➢ Affordable costs for moderate income households is not less than 28% of the gross household income and not more than 35% of 110% of Area Median Income (AMI) for a household size equal to one more person than the number of bedrooms in the unit. Affordable Renter Housing Cost ➢ Housing costs include rent plus utilities paid for by the tenant. ➢ Affordable costs are up to 30% of the defined household income. ➢ Affordable rents are based on a standard of 50% of AMI for very low income households; 60% of AMI for low income households; and 110% of AMI for moderate income households for a household size equal to one person more than the number of bedrooms in the unit. ' Health and Safety Code Section 50052.5 establishes affordable housing cost, and Section 50053 establishes affordable rents. State Income Categories Income Level Percent of County Area Medlan Income of Persons in Household Extremely Low 0 -30% AMI 3 Very Low 0-50% AMI 6 Low 51 -80% AMI 18,200 Moderate 81 -120% AMI 24,550 Above Moderate 120 %+ AMI 26,550 Source: Section 5000093 of the California Health and Safety Code State Income Limits for 2008 Los Angeles County Income Category Number of Persons in Household 1 2 3 4 5 6 Extremely Low 15,950 18,200 20,500 22,750 24,550 26,400 Very Low 26,550 30,300 34,100 37,900 40,950 43,950 Low 42,450 46,500 54,600 60,650 65,500 70,350 Moderate 50,300 57,400 64 600 71,800 77,500 83.300 Source: State Department of Housing and Community Development, February co, zuuo Appendix B Financial Resources Available for Affordable Housing Attachment B Financial Resources Available for Housing Activities City of Arcadia, California Program Name bescriptlon Eligibia Activlfiies Mi 1 Federal Programs Community Development As a participating City in the LA Urban • Acquisition Block Grant (CDBG) County CDBG program, grants are . Rehabilitation allocated directly to the City on a . Homebuyer Assistance formula basis for housing and Economic Development community development activities primarily benefiting low and moderate Homeless Assistance income households. Public Services HOME Funding used to support a variety of New Construction County housing programs that the City Acquisition can access for specific projects. Rehabilitation Funds are used to assist low income • Homebuyer Assistance (80% AMI) households. • Rental Assistance Section 8 Rental Rental assistance payments to owners • Rental Assistance Assistance of private market rate units on behalf of low- income (50% AMI) tenants. Administered by the Housing Authority of the County of Los Angeles. Section 202 Grants to non - profit developers of • Acquisition supportive housing for the elderly. . Rehabilitation • New Construction Rental Assistance Section 811 Grants to non - profit developers of • Acquisition supportive housing for persons with . Rehabilitation disabilities, including group homes, . New Construction independent living facilities and • Rental Assistance intermediate care facilities. Financial Resources Available for Housing Activities City of Arcadia, California Progrm Description„ ` < lElfible Activities f1 ry , #, x Pf0 rslr�i$ � ` "� .State t v Low - income Housing Tax Tax credits are available to persons • New Construction Credit (LIHTC) and corporations that invest in low- . Acquisition and income rental housing. Proceeds from Rehabilitation the sale are used to support the creation of affordable housing. Multi- Family Housing Deferred payment loans to non - profit • New Construction Program (MHP) and for - profit developers for new . Rehabilitation construction, rehabilitation and . Preservation preservation of permanent and • Conversion of transitional rental housing for lower nonresidential to rental income households. Two funding rounds annually through 2009. Social services Usually coupled with bonds. coordination within p roject Multi- family Housing Deferred payment loans for rental • New Construction Program - Supportive housing with supportive services for . Rehabilitation Housing the disabled who are homeless or at . Preservation risk of homelessness. Two funding • Conversion of rounds annually through 2009. Can nonresidential to rental be coupled with either low income housing tax credits or bonds. • Social services coordination within p roject Building Equity and Grants to cities to provide • Homebuyer Assistance Growth in downpayment assistance (up to Neighborhoods (BEGIN) $30,000) to low and moderate income first -time homebuyers of new homes in projects with affordability enhanced by local regulatory incentives or barrier reductions. One funding round annually through 2009. CalHome Grants to cities and non - profit • Predevelopment, site developers to offer homebuyer development, site assistance, including downpayment acquisition assistance, rehabilitation, acquisition/ . Rehabilitation rehabilitation, and home buyer • Acquisition /rehab counseling. Loans to developers for • Downpayment property acquisition, site development, assistance predevelopment and construction period expenses for homeownership • Mortgage financing projects. One funding round annually . Homebuyer counseling through 2011. Financial Resources Available for Housing Activities City of Arcadia, California ry. if a � < ..��. 3.. r4 � 4s ', i .2:. � 3 sti v- n3.5. � ipy. i�� �.P } d.�tY,ril 1, % .'Fv'} Yr'7{:+1(1 .El�grb, Transit - Oriented Funding for housing and related • Capital improvements Development Program infrastructure near transit stations. required for qualified (Prop 1C) One funding round annually through housing developments 2009. • Capital improvements enhancing pedestrian or bike access from qualified housing development to nearest transit station • Land acquisition Affordable Housing Funding for pilot programs to • Regulations pending Innovation Fund demonstrate innovative, cost - saving (Prop 1C) ways to create or preserve affordable housing Infill Incentive Grant Funding of public infrastructure (water, • Development of parks Program sewer, traffic, parks, site clean -up, etc) and open space (Prop 1C) to facilitate infill housing development. . Water, sewer, or other One funding round annually. utility service improvments • Streets, roads, parking structures, transit linkages, transit shelters • Traffic mitigation features • Sidewalks and streetscape improvements CalHFA Residential Low interest, short term loans to local • Site acquisition Development Loan governments for affordable infill, . Pre - development costs Program owner- occupied developments. Links with CaIHFA's Downpaymenf Assistance Program to provide subordinate loans to first -time buyers. Two funding rounds per year. Financial Resources Available for Housing Activities City of Arcadia, California Lbe ;a'r�kt�i q ° "' ad`. t iPI tlh work s �hr.+.n .w - ..E NO .,, = u.kq 4 W i CaIHFA Homebuyer's CaIHFA makes below market loans to • Homebuyer Assistance Downpayment first -time homebuyers of up to 3% of Assistance Program sales price. Program operates through participating lenders who originate loans for CaIHFA. Funds available upon request to qualified borrowers. �A i d=t b # Pt y 2f a� ` a ftPY `J' °i A 4 N yryX 423 V p. F4S r t �(P �ti � � i s fi ,��� a�� t:�.,. y f .�'7 nt 09.x. •P3 City of Industry Funds Industry funds are redevelopment tax • Acquisition increment funds administered by the . Rehabilitation Housing Authority of the County of Los . New Construction Angeles (HACoLA). Loans for rental • Homebuyer Assistance housing, special needs housing, and for -sale housing (acquisition and permanent financing). One funding round annually. Southern California Loans to first -time homebuyers in the First -Time Homebuyer Home Financing County, provided through participating Assistance Authority lenders Redevelopment Housing State law requires that 20% of • Acquisition Fund Redevelopment Agency funds be set . Rehabilitation aside for a wide range of affordable . New Construction housing activities governed by State law. The Arcadia Redevelopment Agency estimates that $900,000 to $1,000,000 will be contributed to the Low /Mod Housing Fund annually through 2014. Tax Exempt Housing The City can support low- income • New Construction Revenue Bond housing by issuing housing mortgage . Rehabilitation revenue bonds requiring the developer . Acquisition to lease a fixed percentage of the units to low- income families at specified rental rates. The bond amount is allocated at the State level and issued at the local level. Financial Resources Available for Housing Activities City of Arcadia, California Program Name] Description Eligible Activities 5: Private Resources/Fnancing:Programg Federal Home Loan Direct Subsidies to non - profit and for • New Construction Bank Affordable Housing profit developers and public agencies Program for affordable low- income ownership and rental projects. Savings Association Pooling process to fund loans for • New construction of Mortgage Company Inc. affordable ownership and rental rentals, cooperatives, housing projects. Non - profit and for self help housing, profit developers contact member homeless shelters, and institutions. group homes Source: Beth Stochl Associates; Karen Warner Associates Appendix C Density Bonus Requirements AB 1818 SCANPH Southern California Association of Non- Profit Housing Density Bonus Ranges: a new law from the former SB 1818 SB 1818 amended Density Bonus Law (Government Code, Section 65915) in several ways. The bill creates a sliding scale in which developments with less affordable units now qualify for a density bonus, and the density bonus increases as the percentage of affordable units increases. This new density bonus system also increases the maximum allowed density bonus to 35 %. Under SB 1818 applicant are also eligible for the new "land donation density bonus ", and localities are required to offer one to three incentives instead of just one. SB 1818 is controversial, and some cities are having a hard time adopting it and /or implementing it. Range of Density Bonuses Existing density bonus law offers a flat 25% density bonus for developments with: • 20% low- income units, or 10% very low- income, or 50% seniors. • And, a 10% density bonus is available to condominiums with 20% moderate income units. Under SB 1818, a 20% density bonus is evailalable to developments with: • 10% low- income units, with a 1.5% density increase for every percentage increase in low- income units above 10 %. The maximum density bonus allowed is 35% 5% very low income units, with a 2.5% density increase for every percentage increase in very low- income units above 5 %. The maximum density bonus allowed is 35% Also, a flat 2M density bonus is offer to all senior developments • In addition, a 5% density bonus is available to condominium /PUD developments with 10% moderate income units, with a 1% density increase for every percentage increase in moderate income units above 10 %. The maximum density bonus allowed is 35% *lo calculate density bonus ranges see chart on back - from the California Housing Law Project. Land Donation Density Bonus SB 1818 also creates a new land donation density bonus for applicants who donate land for very low- income housing to local governments and housing developers. If an applicant donates land that can accommodate at least 40 units per acre and is sufficiently zoned to allow the construction of 10% very-low income units in a proposed development, they are entitled to a 15% density bonus on a different project. The density bonus increases by 1% for every percentage of very-low income units above 10 %, up to a cap of 35 %. Required incentives Under existing density bonus law, localities are required to offer one incentive or concession in addition to the density bonus at the request of the applicant. SB 1818 requires localities to offer 1 -3 incentives depending on the percentage of affordable units. This aspect of SB 1818 is not to preempt local inclusionary housing ordinances. SB 1818 Density Bonus Ranges For the low - income density bonus, SB 1818 gives a 20% 24 25 19 20 bonus for developments with 10% low - income units and 7 25. increases that by 1.5% for every percentage of low - income 26 21 units above 10 %, up to a cap of 35 %. 27 28 22 23 % Low- Income Units % Density Bonus 29 30 24 25 10 20 31 26 11 21.5 32 27 12 23 33 28 13 24.5 34 29 14 26 35 30 15 27,5 29 25 16 29 36 31 17 30.5 37 32 18 32 38 33 19 33.5 39 34 20 35 40 35 For the very low- income density bonus, SB 1818 gives a 20% bonus for developments with 5% low- income units and increases that by 2.5% for every percentage of low - income units above 5°/ %, up to a cap of 35 %. % Very Low - Income Units % Density Bonus 5 20 6 22.5 7 25. 8 27.5 9 30 10 32.5 11 35 For the senior housing density bonus, SB 1818 gives a 20% bonus for any senior development, rather than a 25% density bonus for housing with at least 50% seniors. For the moderate income condo/PUD density bonus, SB 1818 gives a 5% bonus for condo/PUD developments with 10% moderate income units and increases that by 1% for every percentage of low- income units above 10 %, up to a cap of 35 %. % Moderate Income Units % Density Bonus 10 5 11 6 12 7 13 8 14 9 15 10 16 11 17 12 18 13 19 14 20 15 21 16 22 17 23 18 SB 1818 also creates a new land donation density bonus for donation of land to local governments and housing developers for very low- income housing. If an applicant donates land on which zoning is sufficient to permit construction of 10% of the units in a proposed development for very-low income households, the applicant is entitled to a 15% density bonus. The density bonus is calculated as 15% of the maximum allowable density for the entire development site. For example, an applicant for a 1,000 unit development gets a 15% density bonus for donating 5 acres of land (if it was zoned for 100 units), permitting the applicant to build 150 additional units on the undonated land. The density bonus increases by 1% for every percentage of very low - income units, up to a cap of 35 %. % Very Low - Income Units %•Density Bonus 10 15 11 16 12 17 13 18 14 19 15 20 16 21 17 22 18 23 19 24 20 25 21 26 22 27 23 28 24 29 25 30 26 31 27 32 28 33 29 34 30 35 Appendix D Inclusionary Housing, Report "On Common Ground:. Joint Principles on Inclusionary Housing Policies" A Joint Policy Brief by Home Builders Association Northern California and the Non -Profit Housing Association of Northern California 1 B r ove -.. xr � yy C 1 _1 An 1 I I l i i i f � J B r ove -.. xr � yy An I I l i i i f � J in B r ove -.. xr � yy 65-M- Door Aftdable HOLWffig SWP O (NPH) and ft i 2004. tM Nlwfm* 'IOU** cd Macm 01 (H&MC) bwrtm W"M BuMmi Aawd tie h%Wry t hw.WM 94 Aw, to lrdud& a Im a wtraW housire dOWWWW" and vnodQMW4nww hwjWft"l pM WMjs mqLftfto of hdUSJM b"r p at hDfW how S" ~ w Q ft hawtocreaw Akhough OW mebwd 201 *9 Shared BOM krWSr" cry hwidrq. ng8 jj*wcwlwML "W"a affoldO Glq j is effica to buWa 6d nw V q SSh to hwft NM Old HN at* that am =* ftm IXD&WMM IS 04WI jUM"&WCw&Mbardft,wllwaaMwft agre"Ing ft - ftV glowd- Samas to young brriaw, NPH il'W r, wd Who geoWs to ho roaft us broadar 9MMMTOOK tom Ow P L61 , reft, cuffw oftft in M d h WWI modest hwOM& F waU§h,Vft=.VftW OurnalmereaA $up* 0 , d , W " d hoLq wd our hw� in Ab r&blu 1W.Ong to Wave a low IMPROL end Whami be lld ta wo nwd 10 At iM h"L I* Jol" P Mwas to wem oftvftbb tho bow 'jv wjMO& thatwo hwAhg t Rmn "w tadWffW WRY Of IRVIV haushOln"Ma W m produft Ow "OM hon a ' nw" vw pow I O bn not hS MO 0 " % " Most afford" FOes- to W. lbbift Stud are a MM aftad" and skommu PM ," M . sawd on that p row4S*4 dMwffMw Acn and MMr_dWlhollwM ypw*w0Aw mastletcurreitybava tha NPH pogrom tr cwN WwaWn byjtNi'6 Idolowi hridrig a k* puldes w waaftestotwuhthoprow"Ofedop" Polk* IVH "MB" kwk lonno to Ww Wro w1h boib ihO PLt" OW caft SW p w d bxnrds a WW nd iho cxmtfY- Pr K q o lectors 10 offor 001915 in mia N ww�h PaMns KEY PRINCIPLES OF INCLUSIONARY HOUSING In Its most basic terms,,inclusionary housing requires or encourages market -rate housing developments to include a percentage (usually 10 to 20 percent) of homes affordable to lower- and moderate - income households. Incusionary poll- 11- cies take the form of either a local ordinance, a General Plan policy, or a permit approvals process that requires or rewards affordable housing projects. While NPH and HBANC hold differing views on the merits of inclusionary housing, the following are key principles upon which our organizations agree:- • Providing an adequate supply of housing is a societal responsibility. . • Local communities with inclusionary housing programs have a responsibility to contribute tangible and substantial resources so that the cost of providing affordable housing is spread fairly across the community. • Affordable housing policies that maximize resources by providing more hous- Ing opportunities or deeper levels of affordability at the same or less cost t should be encouraged. .n • Traditional inclusionary housing policies that require the development of "like- for-like" units distributed uniformly throughout the market -rate development are often not the most effective or efficient way of providing affordable housing. • To increase effectiveness and efficlency, inclusionary housing programs should provide flexibility and allow a range of alternative methods of providing affordable units. RECOMMENDATIONS FOFk JURISDICTIONS WITH INCLUSIONARY HOUSING PROGRAMS Market -rate builders should be provided with a choice of several options for producing the affordable homes. The builder should not be required to demonstrate the financial infeasibility of traditional inclusionary requirements in order to use one of these options and, so long as the relevant criteria for a particular option are met, the builder should not be required to obtain approval by the local jurisdiction on a case -by -case basis. Housii4G TYPE AND DEsiGN FLExmiLtrY Market -rate builders should be able to satisfy an inclusionary requirement by providing alternative for -sale housing types, such as duets, townhouses, or condominiums. Builders should have the option of clustering the units onsite or building offsite (see Offslte Construction, page 4). Market -rate builders should be able to satisfy an inclusionary requirement by providing rental housing, provided that the project meets the inclusionary percentage and income targets applicable to rental projects. Again, the builder should have the option of clustering the units on the project site or providing for the units offsite (see Offsite Construction, below). LAND DEDICATION Market -rate builders should be able to satisfy an inclusionary requirement by donating land to the local government or a non- profit housing developer, subject to the following: • The builder and city should ensure that through an upzoning or density bonus the dedicat- ed site will accommodate more affordable units or units at a deeper affordability level than the inclusionary requirement would have provided; • Where rental housing is to be constructed on the dedicated site, the site should accommo- date at least 40 affordable units; • If the dedicated site is such that it requires "extra" construction costs —such as the need to do podium _ AI Cerauo Ranch In Petaluma, CA, tire morkef -mte budder provided d land development or steel construction—in order to accom- ra Fdrn Housing instead of directly developing the inclusimnry homes, modate the required number of units, the market -rate raking it possible to creole 74 apartments affordable to families coming builder should bear the extra cost, including any offsite below 60 percent of area median income ($28,000 $53,000), offering rents ranging from $427 to $861 per month (IBR -48R). Improvements, environmental remediation or provision of utilities. In most other situations, the land ded Itself will satisfy the incluslonary requirement; The dedicated site is located within the same ju tion as the project or within a defined subregion The dedicated site should have all land -use entl ments secured prior to completion of the Markel units: If the local jurisdiction unreasonably refuses to approve the necessary entitle- ments, the builder should be able to pay in -lieu fees. DFrSITE CONSTRUCTION Market -rate builders should be able to choose to satisfy an inclusionary requirement by pro- viding for the units to be constructed outside the project, location, subject to the following: • The offsite location is either comparable to the project she or will result in either greater levels of affordability or a greater number of affordable units than the Inclu- sionary requirement would have provided; • The affordable units should be developed concurrently with the market -rate homes. FOOLING AND CREDIT TRANSFERS • Two or more market -rate builders should be able to pool resources to satisfy their - Inclusionary requirement through a single affordable housing project, • Market -rate builders that build "extra* affordable housing units (i.e., more than required by the Incluslonary ordinance) should be able to use the additional units as credits for meeting future inclusionary requirements In the jurisdiction or a defined subregion; • Market -rate builders that build "extra" affordable housing units should be able to sell the additional units as credits to other builders in the same jurisdiction or a defined subregion; • The `extra" units should be built before they can be treated as credits; • Non= profit builders should also be able to sell credits to market -rate builders for projects and/or units that are not being funded by the local government. The affordable homes should be entitled before or concurrently with the market -rate development acquiring the credits; • Non -profit builders should be able to acquire and improve existing market -rate develop- ments and restrict future rents to very-low income households and sell the units as credits to other builders in the same jurisdiction or a defined subregion. This option should only be allowed If: a) households served are at or below 50 percent of median Income; b) the property undergoes extensive renovations; c) number of units acquired and renovat- ed is at least double that of the standard inclusionary requirement; d) affordability is guaranteed for a period of at least 55 years; and e) tenant relocation is appropriately addressed. DFFSFFE QNS0U912N ff_W Vila Loma Apartments was made possible because the City of Carlsbad, CA allowed the homebuifder to partner with the non -prorn BRIDGE Housing to develop the inclusionary homes offiite, but near the market -rate homes. BRIDGE Housing created 1, Z, 3 and 4 bedroom apartments for 344 house -i holds earning at or below 50 and 60 percent of the area median income. iN -Lieu Fus E At 014 Elm Village, the City a(Petal provided non -profit Burbank Hot Oevelopmcnt Corporation with finm made possible by in -lieu fees goth from various market -rate d"eiopm It resulted in deeper offordability required by the ordinance. Old Din Vi provides 87 affordable homes rar from studios to 4- bedroom duplex t houses for a mix of households eat 30, 40, 50, 60, and 70 percent of area median income, affordable to single persons with incomes as low as $13,000 all the way up to families of six with incomes of about $59,000. It incorporates a belt of commercial space and two- thirds of the space is devoted to a subsidized child care facility sere - ing ramifies from Old Elm and the surrounding neighborhood. IN -Lieu. FEES. Market -rate builders of projects with 50 units or fewer should be able to choose to satisfy an inclusionary requirement by paying a fee in lieu of directly developing the units. This option should be available to the developer without having to demonstrate that other options are infeasible.* RECOMMENDED LOCAL COMMUNITY CONTRIBUTIONS Local governments fulfill a crucial role In the creation of affordable housing. Below are some key actions that local governments should take to demonstrate a broader commitment to addressing the affordable housing shortage. 1. Funding • Make consistent efforts to pass local affordable housing assistance bonds or other meas- ures to meet the existing community's fair share of the burden of providing affordable housing. • Either waive development impact fees and processing fees for Inclusionary units or pay for them through discretionary local funds such as redevelopment funds or the general fund. * HBANC and NPH do not have a canmon posidan on in rteu fees for prefects with mare than SO units. m o or to atomt ou oercent the tax Increment ..: -r . , a sam a zu oerceht low- to moaer- :;gut OT sttorame rousing regwrea. u> :;ctuelanaty Urine from building lding permit Ca and nrilURh allnnannn nrnraacae • Proactiv "pre- entitle" (general Dian and zoning) the sites identified in the housino ele- mom as atromaoie muss Q antes. • Make appropriate surplus pubficly owned [and available for affordable housing. S. Mgram Aatianrstranon • Local governments snomo provwo o nr mntma t with a rnmoatant antity in do M • r nrs resuunstumty stuuues up-irom assistance to nomebuiiaers ana prospecuve buyersirenters in the sales /rental process as well as lonq -term monitoring of the inclusion - ary hnmRr in the case 61 for -sofa inclusionary units, In which the developer makes a good faith effort to self the unit but It remains unsold after 90 days, the local government should either. a) purchase the unit at the restricted price and take over marketing; or b) give permission to sell the unit at market -rate and capture the difference. For optior, k trio iuwi yuvmtmna must close on the unit within tzu Days trom completion. t•or option o, file prugiant anuwu be structured so that there will be an incentive to obtain true market value for the unit. • Tire uusi ui piugrarn administration should not come from fees or other exactions Imposed on builders. Ae32 Throughout California, public officials and private citizens are struggling to find ways to address the affordable housing crisis. Together, NPH and HBANC want to insure that tha dialogue about solutions Is being informed by a eel of principles effective and efricieni ai iihaping public policies that will work for builders, allies and residents. California has long led the nation in innovative approaches to addressing the affordable housing crisis, and, by working together, NPH and HBANC believe that we can find common ground to help solve the problem in the near future. Appendix E Other Considerations APPENDIX E OTHER CONSIDERATIONS In preparing this report, BSA reviewed other issues and programs. Some of these items will be part of the Housing Element update, and some are programs that are being implemented in other jurisdictions. 1. Foreclosures The Federal Housing and Economic Recovery Act of 2008 (HR 3221) was signed into law on July 25, 2008. This Act established various programs to address, among other housing issues, the foreclosure crisis. One component of the Act is an appropriation of Neighborhood Stabilization Funds, totaling $3.92 billion in grants to states and localities for the redevelopment of abandoned and foreclosed homes. These funds will be distributed by a formula to be determined by the Federal Department of Housing and Urban Development (HUD). The formula must be established by September 28, 2008. HUD has indicated that they will consider the number and percentages of the following for the allocation formula: 1. Home foreclosures in each state or locality 2. Subprime mortgages in each state or locality 3. Homes in default or delinquency in each state or locality Table 6 provides a comparison of various San Gabriel Valley and California cities and their current foreclosures (including pre - foreclosures) compared to both occupied housing units and single - family units within the community. Based on the information available, Arcadia is unlikely to be competitive for the federal funds. Table 6 Foreclosure Activity Selected California Cities city County Total Occupied Housing units Number of Units in Foreclosure Process Foreclosures as a Percentage of Occupied Housing Foreclosures as a Percentage of Single Famil Units Alhambra Los An eles 29,252 191 1.2% 0:7% Arcadia Los Angeles 19 468 160 0.8% 1.2% Duarte Los Angeles 6,775 1361 2.6% 2.0% Monrovia Los Angeles 13,727 1951 2.1% 1.4% Lancaster Los Angeles 44,843 6,360 14.2% 18.2% Long Beach Los Angeles 166,282 4,389 2.6% 6.3% Los Angeles Los Angeles 1,334,539 14,372 1.1% 2.3% Pasadena Los Angeles 54 658 2.2% 1.2% Riverside Riverside 93 7,745 8.2% 11.8% Sacramento Sacramento 181,538 17,194 9.5% 13.6% Stockton San Joaquin 92,450 11,523 12.5% 16.6% Sources: Department of Finance, 111 108 Estimates; Reairy i rac.com, 9112 /08 However, the City may want to consider distributing informational materials regarding the NeighborVVorks Counseling Center which can be reached at 1 -888- 995 -HOPE (4673) or at the website www.995hoae.org This is a national foreclosure hotline with a coalition of organizations including the Los Angeles based Neighborhood Housing Services, Consumer Credit Counseling, Fair Housing Council, and Legal Aid Foundation. In addition to local counseling, the client can be referred to local legal services if needed. Services are provided in a variety of languages. The site also has an ad campaign with ads that can be printed for local distribution. 2. Employer Assisted Housing Another area the City may want to explore is employer assisted housing. Larger employers often have difficulties attracting and retaining employees due to the high cost of housing. Some employers offer financial assistance for housing costs to employees. The assistance can be in the form of a loan or grant, usually provided to home buyers. These programs can be coupled with city assistance to assist home buyers. Some employers with available land develop employee housing. This often takes the form of a land trust in which the employee buys the residence and leases the land from the land trust (usually run by the employer or a subsidiary). Some local universities have used this approach for both faculty and staff. Lease agreements contain a provision related to employment so that the housing is available for employees in the future. 3. New Market Tax Credits The cities of Glendale and Pasadena recently worked together to obtain New Market Tax Credits (NMTC) to develop for -sale housing in both cities. This relatively new tax credit program is primarily designed to generate capital for commercial development, but can be used for ownership housing. The primary deterrent is the requirement that funds are invested'for a seven year period. The developer Heritage Housing Partners, worked with Clearinghouse CDFI to devise a means for funds to be re- invested in other housing projects, meeting the timing requirement. The projects in Pasadena and Glendale will provide housing for a mix of income levels, from low income to market rate. However, NMTC can only be used in census tracts in which more than 50 percent of the households are low income and there are no low income census tracts in Arcadia. • STAFF REPORT Development Services Department February 24, 2009 TO: City Council and Planning Commission FROM: Jason Kruckeberg, Development Services Directory I` Prepared By: Lisa Flores, Senior Planner SUBJECT: Study Session: General Plan Update and Land Use Plan 2030 SUMMARY The objective of tonight's study session is to provide the City Council and Planning Commission with an update of the General Plan project by: 1) presenting the Guiding Principles of the document; and 2) discussing new land use designations and recommendations for the Land Use section of the Plan. BACKGROUND • Like all cities in California, the City of Arcadia relies on its General Plan to guide decisions with respect to land use, development and related policy matters. The General Plan addresses the physical development and redevelopment of the City and a variety of topics that ultimately affect the quality of life in Arcadia, including traffic circulation, community design, open space, conservation, parks and recreation, housing, public safety, noise, and economic development. The City's existing General Plan was last updated in 1996 and the Housing Element updated in 2001. Given that thirteen years have passed since the plan was last updated, it is critical that the plan be updated in a timely manner to ensure it is in compliance with the State's requirements and reflects the values and priorities of the community. • The City retained the consulting services of Hogle- Ireland, Inc., and executed an agreement last year to complete the project within a two -year period. Additionally, a General Plan Advisory Committee (GPAC) was established which consists of thirteen (13) members that are comprised of representatives of one City Commission, key stakeholders, and residents of the community (refer to Attachment No. 1 — GPAC Roster). The focus of the GPAC was to provide the varied perspectives of the community. The group has met monthly and played a critical role in assisting Staff and the consultant with the development of the Plan's goals, objectives and policies. The GPAC also developed the Plan's Guiding Principles (Attachment No. 2), which are the foundation of the document. February 24, 2009 Page 1 f Several outreach efforts have been made to the community to retain feedback and gain • insight on existing and proposed development projects, redevelopment efforts, traffic, housing, and conservation. Specifically, Staff along with the consultant held a community workshop during the Police Department's Open House and Safety Fair, which was attended by 150 residents. The feedback received at that workshop has been extremely valuable as has input received at a second workshop regarding the Downtown. The Downtown Workshop, which was held at the Arcadia Women's Club, helped define a desired "look and feel" for the downtown area and identified the outstanding concerns of the community. DISCUSSION At the most recent GPAC meetings (January 29 and February 5, 2009) the group reviewed several new land use designations and evaluated alternative land uses for thirteen "underdeveloped" study areas (refer to Attachment No. 3). The group explored the possibility of alternative housing types, mixed uses, and opportunities to redevelop the City's major key corridors. The land use ideas and alternatives outlined below represent some of the many ideas that have come from the community through the interviews and workshops, and the General Plan Advisory Committee. The primary focus of the joint meeting is to review the alternative land uses recommended by the GPAC and provide the necessary direction that will allow Staff to move forward. The key consideration is that no changes are recommended to any of the City's Single - Family areas. The focus of the Land Use Element will be to address changing trends in the community and regionally and selectively review areas where additional density of units and /or intensity of development are recommended. The proposed changes are listed below. Proposed Changes: 1. Residential Densities The Land Use Element is an opportunity to reassess the effectiveness of the current densities, as expressed in the various land use designations, and make any necessary changes. Additionally, the City also needs to address the Regional Housing Needs Allocation (RHNA) of 2,149 housing units required to be planned for within the Housing Element planning period of 2008 -2014. The proposed land use designations are a. Add a High Density Residential designation that raises the maximum dwelling unit per acre in a residential land use from 24 to 32. b. Mixed Use (MU): There are three proposed Mixed Use designations: MU- • 1, which allows for stand alone residential and commercial uses and has a February 24, 2009 Page 2 density range of 22 -32 dwelling units per acre with a Floor Area Ratio of 2.0; MU -2, which requires a commercial component in all mixed use developments and allows a density range of 22 -32 dwelling units per acre with a Floor Area Ratio of 2.0; and a Downtown Mixed Use designation, which allows for stand -alone residential and commercial and has a density range of 30 -50 dwelling units per acre. The Downtown Mixed Use is designed to set the stage for a potential Downtown Specific Plan or follow - up zoning effort. 2. Update the Commercial land use section since the current General Plan only has one commercial land use designation and it is truly not representative of the existing uses and future desired uses. The proposed changes are: a. Neighborhood Commercial — for local serving businesses b. General Commercial — for the majority of commercial uses serving Arcadia and nearby cities c. Regional Commercial —Westfield shopping center area 3. Additional changes to the land use designations include: a. Commercial -Light Industrial — The Commercial -Light Industrial designation replaces the Industrial land use designation because most of the existing uses are not considered heavy industrial, and future uses are not desired to be heavy industrial. b. Horse Racing — The Horse Racing designation will remain the same. The General Plan team agreed that future desired uses should be addressed by the Plan, but that this should be done through policy rather than by changing the designation. c. Public Facility — Has been divided into three new designations: Public/institutional, Open Space — Outdoor Recreation, and Open Space — Resource Protection. The General Plan Potential Areas of Change Map is included as Attachment 3 and shows the areas where some of these changes would occur. Attachment 4 provides the GPAC recommendations for land use changes. RECOMMENDATION Provide direction as to the land use recommendations presented. Approved By: Donald Penman, City Manager • February 24, 2009 Page 3 Attachment 1: GPAC Roster Attachment 2: Guiding Principles Attachment 3: Potential Areas of Change Map Attachment 4: GPAC Summary — January 29 and February 5, 2009 Attachment 5: Tentative Project Schedule i C � February 24, 2009 Page 4 Generals Plan Advisory Committee C� • 1. Chris Atkinson 2. Ed Beranek 3. Ralph Bicker 4. Richard Dilluvio 5. Mary Dougherty 6. Scott Hettrick 7. Ed Huang 8. David Lee 9. Robert Lum 10. Gail Marshall 11. Henry Nunez 12. Sandhya Ravi 13. Sonia Williams Roster Attachment No. 1 0 Arcadia General Plan Draft Guiding Principles — As refined by the general Plan advisory committee September 25, 2008 "A state without some means ofchange is without the means of its conservation. " -- Edmund Burke What Are Guiding Principles? Guiding Principles provide the foundation for the goals, policies, and implementation actions to be included in the updated Arcadia General Plan. These Principles reflect community values; they provide a statement — a Vision - of future conditions in Arcadia. Each Principle provides clear direction to policy makers, City staff, residents, and the business community regarding decisions and actions that affect how the City functions and how development occurs. One Principle is not more important than another; they all work together. Decisions and actions related to land use, circulation, housing, public safety, open space, conservation, and community noise issues will be checked against these Guiding Principles to • ensure that such decisions and actions respond to the community Vision. While no proposal can be expected to embody all of the principles, one that does not embrace these Principles shall not be approved. Guiding Principles Balanced Growth and Development The General Plan establishes a balance and mix of land uses that promote economic growth and maintain a high quality of life for Arcadia residents. Our development decisions reflect Smart Growth principles and strategies that move us toward enhanced mobility, more efficient use of resources and infrastructure, and healthier lifestyles. Connectivity Arcadia has a balanced, integrated, multi -modal circulation system - which includes streets, sidewalks, bikeways, and trails - that is efficient and safe, and that connects neighborhoods to jobs, shopping, services, parks, and open space areas. Neighborhood Character Arcadia's single - family and multi- family residential neighborhoods have given the City its identity as a "Community of Homes." The City protects and preserves the character and quality of its neighborhoods by requiring harmonious design, careful planning, and the integration of sustainable principles. Schools Our schools are a valuable community asset. The quality of the schools draws people to our City. We remain committed to working with the school district to achieve mutually beneficial goals. . Attachment No. 2 • Cultural Diversity We embrace and celebrate the cultural diversity of Arcadia. Our lives are enriched by the many cultures that contribute their arts, food, values, and customs to our community. We promote activities and programs that strengthen these community bonds. Environmental Sustainability We are committed to environmental sustainability, which means meeting the needs of the present while conserving the ability of future generations to do the same. We take actions that work toward achieving regional environmental quality goals, including those related to climate change. Arcadia leads the way to a healthy environment by providing local government support, encouraging partnerships, and fostering innovation in sustainable principles. City Services The high quality services the City provides are a source of civic pride and bring us together as a community. We adjust service needs in response to demographic changes, and we take actions to provide funding to support these services. Changing Housing Needs The City encourages the retention, rehabilitation, and development of diverse housing that meets people's needs in all stages of their lives. Economic Health A healthy economy requires a diversified employment and fiscal base. Our priority is to create a resilient and thriving local economy, accessible to local residents and responsive to local needs, with a balance of regional - serving businesses that attract additional regional income. We are business friendly. ® Preservation of Special Assets Arcadia's quality of life is enhanced by special places and features such as Santa Anita Park, the County Arboretum and Park, a vibrant Downtown, the urban forest, attractive streetscapes, diverse parks, historic buildings and places, and nearby views of the mountains. These assets are preserved and enhanced so they continue to contribute to our City's character. • 0 Proposed Land Use Study Areas Q A. Potential Open Space/Recreation Resource ® F Downtown Arcadia - - ® K. Live Oak Avenue Corridor ® B. Foothill Blvd/I -210 Residential Neigborhoods ® G. Duarte Road/Rrst Avenue ® L. Potential Annexation Opportunity 0 C. Foothill Blvd. Commercial and Residential Areas Q H. Baldwin Avenue/Ouarte Road Commerical District 0 M. Lower Azusa Road Reclamation Area ® D. Baldwin Avenue Multi- Family Neighborhood 0 I. Holly Avenue Residential Neighborhood 0 L Santa Anita Park 0 J. Las Tunas Drive Residential and Commercial Areas • Mapped by: Hgla miand Inc. oea Sources: City cf Arcadia, 2008. ® ®c 1,000 2.000 a,000 4,000 Feet POTENTIAL AREAS OF CHANGE Arcadia General Plan Update - November 3, 2oo8 Attachment No. 3 Sierra Madre A j Gineddr, A, 1 -Cli ®u ID - .I e nr7runn; n Cc � E \ l \ • . x 111: D �.�� '®' _' _ M �t-� o� RM �..�L_ t e 0 Proposed Land Use Study Areas Q A. Potential Open Space/Recreation Resource ® F Downtown Arcadia - - ® K. Live Oak Avenue Corridor ® B. Foothill Blvd/I -210 Residential Neigborhoods ® G. Duarte Road/Rrst Avenue ® L. Potential Annexation Opportunity 0 C. Foothill Blvd. Commercial and Residential Areas Q H. Baldwin Avenue/Ouarte Road Commerical District 0 M. Lower Azusa Road Reclamation Area ® D. Baldwin Avenue Multi- Family Neighborhood 0 I. Holly Avenue Residential Neighborhood 0 L Santa Anita Park 0 J. Las Tunas Drive Residential and Commercial Areas • Mapped by: Hgla miand Inc. oea Sources: City cf Arcadia, 2008. ® ®c 1,000 2.000 a,000 4,000 Feet POTENTIAL AREAS OF CHANGE Arcadia General Plan Update - November 3, 2oo8 Attachment No. 3 CITY OF ARCADIA GPAC MEETINGS #4 & 85 JANUARY 29, 2009 FEBRUARY S. 2009 SUMMARY ...................... ............................... MEETING INFORMATION' On January 29 and February 5, 2009, the City of Arcadia General Plan Advisory Committee (GPAC) convened for the fourth and fifth in a series of meetings related to the City's General Plan Update. The objective of the meeting was to introduce the proposed land use designations and to review land use alternatives for the General Plan Study Areas. • The Study Areas were chosen and discussed at prior GPAC meetings. PROPOSED LAND USE DESIGNATIONS To begin the meeting, Diana Gonzalez of Hogle- Ireland reviewed with the Committee the distinction between the land use designations and zoning, as well as between intensity and density. The land use designations proposed for the new General Plan were described. Ms. Gonzalez explained that for the most part, the new residential land use designations mirror the current designations, but highlighted two points in which they differed. Specifically: ■ The new High Density Residential designation raises the maximum dwelling unit per acre in a residential land use from 24 to 32. The new Medium High Density designation has 22 du /acre as its maximum whereas the current Multiple Family Residential designation tops out at 24 du /acre. In 1 NOTE: This is a draft document. The land use ideas and alternatives presented in this document represent some of the many ideas that have come from the community and through the General Plan Advisory Committee. They are not planned to be implemented at this time; these alternatives are designed to provoke discussion and the generation of ideas for the future development of Arcadia. • 11 City of Arcadia General Plan: GPAC Meeting 0 4 and 9 5 Attachment No. 4 practice, however, the de facto maximum density under the current scheme is 22 t du /acre, with 24 only achievable with the use of a density_ bonus. The new designation simply makes this explicit. In discussing commercial designations, the General Plan consultant explained that the current General Plan has only one Commercial land use .designation, while three are proposed to replace it in the new General Plan. The'new designations are: • NC - Neighborhood Commercial for local- serving businesses • GC - General Commercial for the majority of commercial uses serving Arcadia and nearby cities ■ RC - Regional Commercial for the Westfield property Additional land use designation discussion included: • Horse Racing: The Horse Racing (HR) designation will stay the same. The GPAC asked whether Horse Racing should not be subsumed under another, more general category. The GPAC indicated that this would address future desired uses in the General Plan, should the racetrack go away at some point. The General Plan team agreed that future desired uses should be addressed by the Plan, but that this should • be done through policy rather than by changing the designation. ■ Commercial- Light - Industrial (C -LI): The Commercial -Light Industrial designation replaces the Industrial land use designation because most of the existing uses are not considered heavy industrial, and future uses are not desired to be heavy industrial either. • Mixed Use (MU): There are three proposed Mixed Use designations: MU -1, which allows for stand -alone residential uses and commercial uses and has a density range of 22 -32 du /acre; -MU-2, which requires a commercial component in all mixed use developments and has a density range of 22 -32 du /acre; and Downtown Mixed Use, which allows for stand -alone residential and commercial and has a density range of 30 -50 du /acre. All three designations allow an FAR of up to 2.0 which is applied to the non - residential component of a project. • Downtown Mixed Use is designed to set the stage for a potential Downtown Specific Plan or follow up zoning effort. 2 1 City of Arcadia General Plan: GPAC Meeting #4 and 4 5 • • The existing Public Facility designation has been divided into three new designations: Public /Institutional, Open Space- Outdoor Recreation, and Open Space - Resource Protection. STUDY AREA LAND USE ALTERNATIVES The GPAC discussed the proposed land use alternatives for each of the study areas, with the objective of identifying a consensus opinion for each area. Detailed maps of the preferred alternative are included at the end of the summary. The General Plan team presented the following alternatives for Study Area A: Land Use Alternative I Open Space - Resources Protection: Alternative 1 maintains the current function of the basin as a flood control and debris retention facility through the new designation of Open Space - Resources Protection (OS -RP). The OS -RP designation is intended for areas which require special management or regulation because of unusual environmental conditions such as earthquake fault zones, steep slopes, flood zones, high -risk fire areas, and areas required for water quality protection. While alternative uses of such constrained areas may be allowed, the unique character or constraints of the area and /or the functions it serves must be adequately addressed. Land Use Alternative 2 Open Space - Potential Future Outdoor Recreation: Alternative 2 allows for the possibility of future recreational uses with an Open Space - Outdoor Recreation (OS -OR) designation. Though the property is currently used by the Los Angeles County Department of Pubic Works as a debris basin, is flood prone, and is not publicly accessible, it represents the only potential, new, large open space area left in the City; thus the possibility for some form of passive recreational use - in the long term - should be left open. Recreation uses are not expected nor encouraged within the foreseeable future due to the critical function this site serves for regional flood control. Nonetheless, the General Plan horizon extends 20 years and beyond, and the possibility of reuse of this site in the event that the County consolidates flood control functions system wide should be examined. • 3 1 City of Arcadia General Plan: GPAC Meeting *4 and 05 0 PROPOSED LAND USE STUDY AREAS Q A. Los Angeles County Debris Basin ® F. Downtown Arcadia ® K. Live Oak Avenue ® B. Foothill Boulevard Residential Areas ® G. Duarte RoadlFirst Avenue ® L. Potential Annexation Opportunity 0 C. Foothill Boulevard Q H. Baldwin Avenue/Duarte Road Q M. Lower Azusa Road Reclamation Area ® D. Baldwin Avenue Multi - Family Neighborhood 0 I. Holly Avenue Residential Areas Q E. Santa Anita Park ©J. Las Tunas Drive Mapped by Hogle- Ireland Inc. Date Sources: City W Arcadia. 7009. ® 0 ,,000 7 ®0o Feet GENERAL PLAN STUDY AREAS Arcadia General Plan Update January 22, 2009 I w�� e - :_ 1 = } {1,° `'- �. 1>-°ec rl r�� ,. : r � r i i• 1F L.9` - lil F � G 1� MW EIJI t (K lk ,f 0 PROPOSED LAND USE STUDY AREAS Q A. Los Angeles County Debris Basin ® F. Downtown Arcadia ® K. Live Oak Avenue ® B. Foothill Boulevard Residential Areas ® G. Duarte RoadlFirst Avenue ® L. Potential Annexation Opportunity 0 C. Foothill Boulevard Q H. Baldwin Avenue/Duarte Road Q M. Lower Azusa Road Reclamation Area ® D. Baldwin Avenue Multi - Family Neighborhood 0 I. Holly Avenue Residential Areas Q E. Santa Anita Park ©J. Las Tunas Drive Mapped by Hogle- Ireland Inc. Date Sources: City W Arcadia. 7009. ® 0 ,,000 7 ®0o Feet GENERAL PLAN STUDY AREAS Arcadia General Plan Update January 22, 2009 • GPAC Discussion The GPAC asked whether, since the County was likely to be using the land as flood control and as a debris site for a long time to come, could the City not simply postpone any land use changes until after the County decides it no longer needs the property? The General Plan team responded that the City could do this, but that it would be a reactive measure. A better approach is to proactively determine what future uses the City would like on the site. After some discussion, the consensus of the GPAC was to support Alternative 2 because the site offers the last large undeveloped open space in Arcadia, as long as the Plan includes strong measures limiting the public use of the site (to hikers, small school groups for education purposes, etc.) and ensuring that public safety was maintained (requiring two vehicular entrances, etc.). A concern was stated regarding the likelihood that neighbors of the site would be very strongly against public recreational use of the property. It was also noted that the Highlands HOA Board of Directors met on November 29, 2008 to review and discuss the GPAC's proposal to consider land use designation changes in this study area. The Board of Directors voted unanimously to formally oppose any change in the land use designation for this area. Study Ar ea is — Foothill Boulevard Pesidential Areas • No Land Use Alternatives Proposed As this area is an established single - family residential neighborhood, the General Plan team recommended removing it as a study area. Land use designation changes were not recommended and the GPAC agreed to remove the area from consideration. The General Plan team presented the following alternatives for Study Area C: Land Use Alternative 1 Lower Intensity Commercial Uses This alternative effectively maintains commercial uses along Foothill Boulevard at varying intensities. On the north side of Foothill, lower- intensity Neighborhood Commercial uses are proposed at the northwest corner of Santa Anita Avenue, while General Commercial uses are proposed from Santa Anita Avenue to 5th Avenue. On the south side, the majority of the corridor is designated Neighborhood Commercial due to smaller lot sizes and adjacency of single - family neighborhoods. From Santa Anita Avenue to just west of 1st Avenue, the • 4 1 City of Arcadia General Plan: GPAC Meeting 0 *4 and 05 General Commercial designation would apply. The Neighborhood Commercial designation • acknowledges existing uses and constraints posed by smaller lot sizes. In areas of the corridor where location and lot sizes allow for more intense development, the General Commercial designation is proposed. With the intent of having residential designations reflect well - established development patterns, the proposed residential land use designations accurately mirror current uses and zoning designations. For example, properties on Country Oaks Circle are currently designated for 24 dwelling units per acre and zoned R -2. The current actual density of this single - family development is between b and 9 units per acre. Thus the Medium Density Residential designation (6-12 dwelling units per acre) is proposed. Open space uses in the southern part of the study area are designated to reflect their current use. Land Use Alternative 2 Nigher Intensity Commercial Uses Alternative 2 is comparable to Alternative 1 with the following changes: Frontage properties on the north side of Foothill Boulevard (from just east of Highland Oaks • Avenue to 5th Avenue) would be designated Mixed Use 2. The properties have been recommended for gradual transition due to the underutilized character of key properties and the larger lot sizes. The Mixed Use 2 designation will provide an opportunity for property owners to build housing combined with commercial uses, with the incentives consisting of higher FAR and residential densities of up to 32 units per acre. Because stand -alone residential uses are not allowed in Mixed Use 2, the designation ensures that this area will remain a commercial corridor. It also allows for change over time that will be guided by property owners and market forces without pinpointing exact locations for future change. GPAC Discussion GPAC discussion focused on Alternative 2, with members encouraging expansion of the mixed -use designation in certain areas. Specifically: ■ In the block on the north side of Foothill Boulevard bounded by 2 nd Avenue to the west, Valencia Way to the east, and Sycamore Avenue to the north. The GPAC debated whether, in order to provide as great a flexibility as possible to developers and to take advantage of a rare opportunity for lot consolidation, mixed use should be extended all the way to Sycamore (excluding the row of single family homes fronting Valencia, but including the four single family parcels currently taking their access via an.easement across the commercial properties fronting Foothill). The 5 1 City of Arcadia General Plan: GPAC Meeting 0 4 and 0 5 • • GPAC agreed that they would like to see only residential uses along Sycamore, but disagreed whether this should be mandated, with some members saying that no one would ever build commercial in that area anyway. Some members disagreed in maintaining single - family residential along Sycamore, while others said that it was an ideal location for higher density, as any children who lived there could walk across the street to the school, easing some of the traffic congestion that is such a problem around schools in Arcadia. In the end, the GPAC came to a consensus that mixed use should be extended north to encompass the island lots and the first row of flag lots on Sycamore Avenue directly across from Foothill Junior High School. The GPAC also felt that the Neighborhood Commercial designation proposed for the north and south corners on the west side of the intersection of Foothill and Santa Anita should be changed to General Commercial, and that the block between Santa Anita and l st Avenue on the south side of Foothill should be changed to Mixed Use 2. The GPAC agreed that the residential areas should be designated as proposed in both alternatives. Study Area D - Baldwin Avenue - Multi Family Neighborhoods The General Plan team presented the following alternative for Study Area D: 0 Land Use Alternative 1 No change of intensity Land Use Alternative 1 maintains current residential densities allowed by the General Plan with the designation of Medium High Density Residential (12 -22 dwelling units per acre). This area is comprised of well- maintained, courtyard multi- family housing on the west side of Baldwin Avenue. The current General Plan designation is MPP -24 (Multiple Family Residential 24 du /ac), and the zoning designation is R -l. Proposed policies will set direction to address this zoning inconsistency and maintain a valuable source of more - affordable housing. While increasing the density on these properties was examined, traffic and neighborhood considerations led staff to recommend that the current designation is appropriate. GPAC Discussion The GPAC agreed that this alternative of no change of intensity was the best option. • 6 1 City of Arcadia General Plan: GPAC Meeting 0 4 and 05 • The.General Plan team presented the following alternative for Study Area E: Land Use Alternative 1 Alternative 1 maintains the current Horse Racing Designation on the Santa Anita Park property and the current Commercial designation on the southern 85 acres of the property. The Arcadia City Council approved the Shops at Santa Anita Project in April 2007. This approval included a Specific Plan and changed the General Plan Land Use Designation for the entire site to "SP -SA "- Specific Plan, Santa Anita Park. This project is currently in litigation and the judge has "stayed" the approvals, thus the maps show the alternative as the current General Plan Map depicts it. The current General Plan lists specific goals for the area shown as commercial. This vision was articulated and expanded through the Shops at Santa Anita Park Specific Plan approval process. The vision for this area remains one of commercial entertainment. For the Horse Racing component of this map, while the City has no reason to believe the • race track would cease operating within the next 20 years, the importance of planning for an alternative future for Santa Anita Park was raised by community participants. GPAC Discussion Staff indicated that while land use designations were not likely to change because of the legal situation, this General Plan update should address the future uses on the site, should the Shops at Santa Anita project and /or the racetrack go away. Some of the GPAC commented that the possibility of the racetrack going out of business was not as remote as many of the City's residents would like to think, given falling attendance and the financial state of the horseracing industry in general. Everyone in Arcadia loves the racetrack, they said, but it really might not be there for very long. The GPAC generally agreed that the property, taken as a whole, would represent a "world class" development opportunity, and said that whatever the future use it would have to generate income for the City at least comparable to what the racetrack has been producing. GPAC members did have competing .visions for what sort of development would be desirable, with some saying that it should be high -rise buildings and others wanting hotels, campus, a sports venue, and low -scale residential uses, perhaps tied to the medical center. 7 1 City of Arcadia General Plan: GPAC Meeting 0 4 and *5 • • The GPAC agreed that horse racing was the preferred use as long as it remains. If horse racing does eventually go away, the resulting project is of major local and regional importance and a citywide process of planning and approval would be crucial. The GPAC said that whatever development happened, it would be important to preserve as much of the existing historic buildings associated with the racetrack as possible. Study Area F - Downtown Arcadia The General Plan team presented the following alternatives for Study Area F: Land Use Alternative 1 This alternative proposes a Mixed Use 1 designation for the area west of Santa Clara Street on the north side of Colorado Place. Mixed Use 1 allows for stand -alone residential development. The Santa Anita Boulevard corridor north of Huntington Drive on the west side of the street is proposed to be designated General Commercial with a height overlay to 2.0 FAR. The properties on the west side of Polyn Place maintain their current use as Commercial /Light Industrial. Commercial /Light Industrial designation will be used to preserve and enhance existing • industrial neighborhoods for: • The block- and -a -half bounded by 1st Avenue to the east, Saint Joseph Street to the south and the north side of La Porte Street to the north, with the exception of the parcels along Santa Anita Avenue. • For the two blocks to the south of Colorado Boulevard between I't and 2 nd Avenues and the north side of the block to the south of Saint Joseph Street between 1" and 2 " Avenues. The remainder of the core downtown area, including the blocks surrounding the future Gold Line Station, along the east side of Santa Anita Avenue, along -both sides of Huntington Drive as well as south of Huntington along 1s to Diamond Street (with the exception of the school) are designated Downtown Mixed Use. The Downtown Mixed Use designation provides opportunities for complementary service and retail commercial businesses, professional offices, and residential uses to locate within the City's downtown. Arcadia's Downtown is envisioned as the commercial and civic center of the City, recapturing the role that it had in the early 20 century when City Hall was located at the corner of lst Avenue and Huntington Drive. • 8 ' City of Arcadia General Plan: GPAC Meeting *4 and 45 Land Use Alternative 2. As with Alternative 1 this alternative proposes a Mixed Use 1 designation for the area west of Santa Clara Street on the north side of Colorado Place. The Santa Anita corridor north of Huntington Drive on the west side of the street and north of Wheeler Avenue on the east side, is General Commercial with a height overlay to 2.0 FAR. The properties on the west side of Polyn Place maintain their current use as Commercial /Light Industrial. This alternative proposes to maximize residential opportunities by implementing Downtown Mixed Use for entire area surrounding future Gold Line station, bounded by Santa Anita Avenue to the west and 2 nd Avenue to the east. Potentially, the area that is currently occupied by light industrial uses could be integrated with loft and other appropriate residential uses as part of a second phase of Downtown development, following successful buildout of the portion to the south of the Gold Line station. Current existing uses will be maintained on the southwest, northwest, and northeast corners of Colorado Blvd. and I" Avenue by re- designating the properties as High Density Residential. GPAC Discussion • There was general consensus among the GPAC that Alternative 2 was the preferred choice, • and that the Downtown Mixed Use category should to cover the entire study area, with the exception of the stretch of Mixed Use 1 along Colorado Place. This proposal assumes that the City will prepare new zoning regulations and /or a specific plan to address exactly what kind of development is desired in which parts of the Downtown. GPAC members also expressed a desire to focus a portion of a subsequent meeting on specific policy recommendations they would like the General Plan to include regarding Downtown and the integration of the future Gold Line station. The General Plan team presented the following alternatives for Study Area G: Land Use Alternative 1 Duarte Road Mixed Use Land use Alternative 1 proposes to continue current designation (but allow for stand -alone residential) with Mixed Use 1 along I" Avenue between Diamond Street and Lucille Street. This designation would complement current development patterns and allow for stand -alone residential uses in a location where commercial development has not thrived. 9 1 City of Arcadia General Plan: GPAC Meeting 0 4 and 05 The alternative will also allow for potential higher density residential development with Mixed Use 2 for the properties facing Duarte Road between Santa Anita Avenue and 3r6 Avenue. Mixed Use 2 requires the inclusion of a commercial component for all projects; stand -alone residential uses are not allowed. This designation ensures that the corridor will remain a predominately commercial corridor and the higher FAR and the opportunity to add residential uses could encourage property owner investment and improvements and create a more pedestrian- oriented district. Land Use Alternative 2 Duarte Road Commercial Uses Similar to Alternative 1, this alternative proposes to continue the current designation (but allow for stand -alone residential) with Mixed Use I along 1s Avenue between Diamond Street and Lucille Street. The alternative proposes maintaining the current conditions with General Commercial designation along Duarte Road between Santa Anita Avenue and 3` Avenue. GPAC Discussion • The GPAC raised the question of whether an FAR of 0.50 was appropriate for General Commercial. Staff responded that this was an issue that needs to be considered citywide. The GPAC asked why the City would not want the option of both residential and commercial everywhere. Staff responded that the City needs to determine whether it wants mixed use everywhere and let the market completely dictate what gets developed where, or whether it wants to focus on several areas where it wants to encourage that mixed use development happens through incentives. Some members of the GPAC said that this study area was one of the better locations for mixed use because of its proximity to several bus lines, the high school, the middle school, the library and the Downtown corridor. The GPAC reached a consensus that Alternative 1 was preferred, but requested the General Plan team come back to the group with the total number of potential units in the mixed use areas already approved by the group in case a scaling back of mixed use seems appropriate. The General Plan team presented the following alternatives for Study Area H: • 10 1 City of Arcadia General Plan: GPAC Meeting #4 and 05 Land Use Alternative 1 • Maintain Current Land Uses Consistent with the current General Plan policy, Alternative 1 maintains the General Commercial designation along Baldwin Avenue and Duarte Road, while the surrounding residential area is designated Medium High Density Residential (12 -22 dwelling units per acre). Land Use Alternative 2 Intensification at Key Commercial Location /Residential Neighborhoods Consistent with the current General Plan policy, Alternative 2 maintains the General Commercial designation along most of the frontage properties on Baldwin Avenue and Duarte Road. Alternative 2 proposes the addition of a Mixed Use 2 designation along the frontage properties on Baldwin Avenue south of Naomi Avenue (on the west side of Baldwin) and south of Duarte Road (on the east side of Baldwin). These portions of the study area are currently developed with a mix of small -scale commercial uses. This portion of the study area was chosen because it has the potential for revitalization and redevelopment to attract the volume of visitors and customer as the commercial offerings in the northern part of the study area (along Baldwin Avenue). While this part of the study area functions well, a higher FAR • and the opportunity to•add residential uses could encourage property owner investment and improvements and create a more pedestrian- oriented district. Mixed Use 2 requires the inclusion of a commercial component for all projects; stand -alone residential uses are not allowed. A High Density Residential designation (22 -32 dwelling units per acre) is proposed for the surrounding residential area (roughly from Golden West Avenue to La Cadena Avenue). While the General Plan currently designates this area for Medium High Density Residential (12 -22 dwelling units per acre), many of the apartment and condominium developments are aging and in need of revitalization or replacement. Providing a higher density residential designation creates an incentive for property owners to achieve additional unit yield through private redevelopment efforts. Land Use Alternative 3 Intensification at Key Commercial Location /Residential Neighborhoods Alternative 3 refocuses possible mixed use development north of Duarte Road along the Baldwin Avenue frontage. While maintenance and aesthetic issues exist along the Baldwin Avenue corridor, the businesses in this study area attract a significant clientele. The Mixed 111 City of Arcadia General Plan: GPAC Meeting *4 and 0 5 0 • Use 2 designation would incentivize reinvention of this stretch of Baldwin Avenue as a lively pedestrian district, where patrons could park once and visit several businesses, or even live in higher- density housing along the corridor. Because stand -alone residential uses are not allowed in Mixed Use 2, the designation ensures that this area will largely remain a commercial corridor. It also allows for change over time that will be guided by property owners and market forces without pinpointing exact locations for future change. The High Density Residential designation (22 -32 dwelling units per acre) is proposed for the surrounding residential neighborhoods (roughly from Golden West Avenue to La Cadena Avenue), the some as Alternative 2. GPAC Discussion The GPAC was divided about whether residential uses were appropriate on Baldwin, with some members saying that they could not imagine them there and others disagreeing, saying that high density mixed use had a particular appeal for Asians (who also own the majority of the businesses in the area). After some discussion, the GPAC came to a consensus around Alternative 2, but with mixed use only south of Naomi Avenue and with an increase in density from 22 to 32 dwelling units • per acre in the multifamily residential neighborhoods north of Duarte. Study ' Area I - Holly Avenue Pesidential Areas No Land Use Alternatives Proposed While the residential uses in this study area were examined for potential land use changes, due to the good quality and character of the neighborhoods, land use designation changes were not recommended and the GPAC agreed to remove the area from consideration. The General Plan team presented the following alternatives for Study Area J: Land Use Alternative I Maintain Existing Commercial Uses This alternative effectively maintains the commercial designation (General Commercial) at the corners at Las Tunas Drive and Baldwin Avenue to complement existing uses (restaurants, gas station, and discount store). • 12 1 City of Arcadia General Plan: GPAC Meeting 4 4 and 05 While the adjacent residential areas were examined for potential land use changes, due to • the good quality and character of the neighborhoods, land use designation changes are not recommended. Land Use Alternative 2 Mixed Use Alternative 2 proposes a land use designation of Mixed Use 2 at all four corners of Las Tunas 'Drive and Baldwin Avenue. The Mixed Use 2 designation is intended provide incentives for redevelopment and revitalization by offering higher PARS than commercial uses and the opportunity to integrate residential development. Mixed Use 2 requires the inclusion of a commercial component for all projects; stand -alone residential uses are not allowed.. This small commercial area is located at a high profile and highly traveled intersection. Revitalization and intensification of uses would not only help the City achieve economic development goals (increased revenue) but also offer expanded commercial services to the surrounding neighborhoods. Neighborhoods in the south part of Arcadia have limited commercial services, so it is important to create incentives and opportunities for broader commercial use. The southeast corner of this intersection (Big Lots center) is in particular • need of revitalization. GPAC Discussion The GPAC generally agreed that residential would not be appropriate in this area. They came to a consensus around Alternative 1, but wanted to see FAR increases and design guidelines so as to help facilitate the creation of a better gateway into the City at this location. The General Plan team presented the following alternatives for Study Area K:' Land Use Alternative i General Commercial Uses Alternative 1 proposes General Commercial uses on most of properties along Live Oak Avenue. The corridor is currently comprised of a mix of commercial and light industrial uses. While new development has occasionally occurred, overall the corridor suffers from underutilization and lack of investment. This highly traveled corridor has the capacity and 13 1 City of Arcadia General Plan: GPAC Meeting 4 4 and 9 5 • • potential to be a strong commercial corridor in an area of the City where commercial uses are more limited than in the northern portions of the City. Although there are also some healthy light industrial uses, the mix of industrial and commercial uses along Live Oak have contributed to a disjointed appearance and function. The General Commercial designation reflects the City's desire to concentrate commercial development in this area. Policy direction in the General Plan will address incentives for redevelopment and design, landscape, and maintenance issues. Properties that are currently developed with residential uses are proposed to be designated High Density Residential (22 -32 units per acre). Most of these properties are currently developed with high- density uses, and this designation would ensure that in the future they are rebuilt or renovated at comparable densities. On properties designated at lower densities, the High Density Residential designation is also applied to acknowledge the corridor's capacity for intensification and investment. The additional density provides an incentive to achieve higher unit yields. Land Use Alternative 2 Mixed Use ® Alternative 2 proposes the Mixed Use 1 designation for the entire Live Oak corridor. The Mixed Use 1 designation provide opportunities for commercial and residential mixed -use developments that take advantage of easy access to transit and proximity to employment centers, and that provide complementary mixes of uses that support and encourage pedestrian activity. Mixed Use 1 allows for stand -alone residential and commercial uses as well. This alternative avoids pinpointing locations for mixed use or stand -alone commercial or residential development, but instead will allow it to grow organically based on individual property owners' desires. Due to limited economic tools, the City is unable to actively pursue revitalization of key locations. Establishing a complete Mixed Use corridor acknowledges that new development has been sporadic and future redevelopment will need to be led by market forces and interested property and business owners. GPAC Discussion The GPAC came to a consensus around Alternative 2, agreeing that it is better to provide as much flexibility as possible in this area, which has historically suffered from a lack of quality development. The idea of a Business Improvement District (BID) was raised as a potential policy for this area. • 14 ' City of Arcadia General Plan: GPAC Meeting *4 and *5 • No Land Use Alternatives Proposed While this study area was examined for potential future changes, staff has determined that this area is not an appropriate candidate for further study. The area is not located within the City; as such, annexation would be required. Annexation of this area is not economically advantageous to the City, as annexation of residential areas is generally accompanied by significant costs associated with provision of public services. The GPAC agreed to remove the area from consideration. The General Plan team presented the following alternative for Study Area M: Land Use Alternative 1 Commercial /Light Industrial Alternative 1 expands opportunities for light industrial business activity in Arcadia while allowing ancillary commercial uses with the designation of Commercial /Light Industrial. This significant piece of property is partially a landfill and partially compacted fill (20 acres), which means portions of it can. be re -used for other purposes. The area is an inert debris landfill (concrete, asphalt and dirt); over the life of the General Plan, larger portions of the landfill will be filled and available for development. The Commercial /Light Industrial designation provides for uses create,skilled labor jobs. By providing areas for a complementary mix of light manufacturing businesses, limited auto service and repair, office, and ancillary retail uses, the designation recognizes the importance that small -scale industrial and quasi - industrial businesses have in the community in terms of jobs provision, access to needed goods and services, and revenue from point -of- sales operations. Industrial uses are expected to be in high demand due to the increasing conversion of industrial lands throughout the San Gabriel Valley. GPAC Discussion The GPAC felt that this was a site - with its location for removed from Arcadia residential areas and in close proximity to a freeway off -ramp - that has enormous revenue potential for the City. They came to a consensus that Alternative 1 was the right choice for now, but that the City should look to future use of the site as a potential location for big box retail or other high tax revenue - generating businesses. 15 1 City of Arcadia General Plan: GPAC Meeting 0 4 and *5 CJ E GPAC PREFERRED LAND USE ALTERNATIVES MAPS • 16 1 City of Arcadia General Plan: GPAC Meeting °4 and 05 ;_r; �. . ii �. ;, 0 0 • W O 2 d 0 0 J m Z j J f 6 0 .J 0 LL C d W 7 ' . V Q Q u � C E. 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LM �§ 2 a� �§ i ■ 2 � � ® ■ ) i! : \(z { / ® ƒ \k {k \$ •]#£ !|ƒ)020 (� | || |�| | |!f|!!\ 2\`222!!! !�}mfk|) | , # \ !\ )) |)j\ | | |[ || \ / \ }/ \ \ \ | | §| � . � � § � W General Plan Project Schedule (2008 -2009) Work Completed To Date: February 2008 Contract executed with Hogle- Ireland, Inc. to update the General Plan March 2008 General Plan Kick -off Meeting with Staff and the consultants May 2008 Community Workshop #1 — Police Department's Open House and Safety Fair May -June 2008 Stakeholders Interviews July 2008 Formed the General Plan Advisory Committee (GPAC) GPAC Meeting #1 1] August 2008 • Consultant attended the Chinese Association Meeting and spoke about General Plan Update September 2008 GPAC Meeting #2 October 2008 Downtown Workshop November 2008 Consultant attended "Asian Business Night" to have a focused discussion with the group leadership to understand why Chinese businesses prefer to locate on Baldwin and Duarte instead of the Downtown area. GPAC Meeting #3 January 2009 GPAC Meeting #4 0 Attachment No. 5 a 0 Tentative Schedule 2009 February 2009 GPAC Meeting #5 Joint CC /PC Study Session to Discuss Land Use Issues and Ideas May 2009 Community Workshop #2 June 2009 Preliminary Draft General Plan August2009 Public Review of Draft General Plan September 2009 Public Review of Draft EIR October 2009 Planning Commission hearings on the Draft General Plan /EIR • November 2009 City Council /Planning Commission Study Session #2: Draft General Plan /EIR December 2009 Adoption of the Final General Plan Attachment No. 5 0 11 0