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HomeMy WebLinkAboutItem 09a - Urgency Ordinance DATE: December 21, 2021 TO: Honorable Mayor and City Council FROM: Dominic Lazzaretto, City Manager By: Jason Kruckeberg, Assistant City Manager/Development Services Director Lisa Flores, Planning & Community Development Administrator SUBJECT: URGENCY ORDINANCE NO. 2385 AMENDING DIVISIONS 2 AND 5 OF CHAPTER 1, ARTICLE IX, OF THE ARCADIA MUNICIPAL CODE RELATED TO URBAN LOT SPLITS AND TWO-UNIT PROJECTS AND DETERMINING THE ORDINANCE TO BE STATUTORILY EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT Recommendation: Adopt SUMMARY Governor Newsom signed Senate Bill 9 – Housing Development: Approvals (“SB 9”) into law on September 16, 2021. This bill was one of at least 31 bills signed by the Governor related to housing during this past legislative session. Among other provisions, SB 9 requires local governments to ministerially approve housing developments containing two residential units on single-family zoned parcels, and to ministerially approve subdivisions of single-family zoned parcels into two parcels. SB 9 goes into effect on January 1, 2022. Because the new law dramatically changes how development can occur in single-family zones, the Development Services Department has been working with the City Attorney to develop an Urgency Ordinance to put allowable regulations in place related to SB 9 prior to the effective date of January 1. It is recommended that the City Council adopt Urgency Ordinance No. 2385 related to urban lot splits and two-unit projects and determine the project to be statutorily exempt from the California Environmental Quality Act (“CEQA”). BACKGROUND On December 7, 2020, State Senators Atkins, Caballero, Rubio, and Wiener introduced SB 9, which would require local governments to ministerially approve housing developments containing two units and urban lot splits in single-family residential zones. This would essentially allow, by right, up to four units where a single home exists today. On February 22, 2021, the City submitted a letter to the California State Senate opposing Urgency Ordinance No. 2385 Urban Lot Splits and Two-Unit Projects (SB 9) December 21, 2021 Page 2 of 5 SB 9 unless amended to address items in the bill that would undermine local control. Subsequently, at the August 17, 2021, regular meeting, the City Council approved a Resolution opposing both Senate Bills 9 and 10 prior to these two bills being considered during the fall legislative session. The City also signed letters of opposition from the San Gabriel Valley Council of Governments. Despite these efforts, and the opposition of many other cities and jurisdictions throughout the State, SB 9 was signed into law on September 16, 2021. Since that time, the Development Services Department has been working with the City Attorney to react to the new rules within SB 9. While the law requires urban lot splits and two-unit projects in single-family areas to be approved ministerially, it also allows cities to establish objective development standards to regulate new projects that fall under SB 9 processes. Unfortunately, this does not allow the City’s current design review process, utilized by both the Planning Division and Architectural Review Boards within the City’s five Homeowners’ Associations because design review is a discretionary action and is not ministerial. Despite this, the law does allow some regulatory control of new projects. An Urgency Ordinance is necessary to enable the City to put standards in place to react to SB 9 applications as of January 1. In the absence of such standards, all developments under the SB 9 banner would be allowed by right with little to no oversight. To this end, the Development Services Department has been contacted by many individuals interested in building under the new law. It is anticipated that a regular Ordinance will likely follow Urgency Ordinance No. 2385 early in 2022. Much is not known regarding how cities (and residents and homeowners) will react to SB 9 and what elements of the new law may change, be re-legislated, or be litigated. As such, it is advisable to adopt an Urgency Ordinance now to allow the City to adequately react to newly submitted projects. DISCUSSION SB 9 would require local governments to ministerially approve two-unit residential developments on any single-family zoned lot of at least 2,400 square feet, which is virtually every single-family zoned lot in the City. SB 9 would also override the City’s minimum setback requirements and require only a four-foot side-yard and rear-yard setback when it can be shown that a greater setback would prohibit the reasonable development of two residential units, each with a minimum area of 800 square feet. SB 9 also specifies that a maximum of one off-street parking space may be required for each new residential unit. However, for parcels located within one-half mile of a high-quality transit corridor or a major transit stop, no parking spaces may be required by the City as a development requirement 1. 1 A high-quality transit corridor is defined as one with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours. A major transit stop is defined as an existing rail or bus rapid transit station. Urgency Ordinance No. 2385 Urban Lot Splits and Two-Unit Projects (SB 9) December 21, 2021 Page 3 of 5 SB 9 would also require the City to ministerially approve any request to subdivide a single- family zoned property into two separate parcels, provided that each new parcel is not less than 1,200 square feet in area and contains not less than 40% of the original parcel area. Given that most single-family residential properties in the City meet these minimum subdivision requirements, under SB 9 most of Arcadia’s single-family properties would be eligible to be subdivided into two separate parcels. Each of the new parcels could then be developed individually with two residential units resulting in a total of four units on each qualifying single-family property. As ministerial actions, both the subdivision and the two- unit residential developments would be exempt from CEQA review. SB 9 does include a provision stating that local governments are not required to permit an accessory dwelling unit or junior accessory dwelling unit on any new parcel created under the SB 9 subdivision authority which is then developed with two residential units. There is also a provision in SB 9 that allows a local government to impose an owner occupancy requirement on an applicant for an urban lot split. Specifically, it states that the applicant must intend to occupy one of the units created under the provisions of this bill for three years after the approval of an urban lot split, or that the applicant must be a qualified nonprofit corporation. The attached Urgency Ordinance is structured to provide regulations that address the new law while at the same time providing safeguards and balance to the process. Because the process is to be ministerial, the Ordinance is very clear in what it does and does not permit. Since design guidelines are not permissible in this process, a set of “Objective Development Standards” has been added to provide surety for developers and staff members alike. Below are the primary tenets of the Ordinance. For the full text of the new regulations, please see Exhibit “A” to the Urgency Ordinance, included in the attachments. • The regulations are divided into two sections, one specifically dealing with Urban Lot Splits and one for Two-Unit Projects. Fees for Urban Lot Splits will be set at the same cost as Lot Line Adjustments ($1,770) and fees for Two-Unit Projects will be set at the same cost as Preliminary Plan Review for Multi-Family Projects ($1,617). The costs of these processes are very similar in scope and effort and these two existing processes. • Urban lot splits will not be allowed in areas that are not zoned Single-Family Residential, are in a historic district, have an impact on protected housing (such as existing low-income housing or will impact existing tenants), or result in a lot that contains more than 60% of the frontage or area of the original lot or less than 40% of the frontage or area of the original lot. Urgency Ordinance No. 2385 Urban Lot Splits and Two-Unit Projects (SB 9) December 21, 2021 Page 4 of 5 • The allowable unit size of a unit built following an Urban Lot Split OR for units built as a second unit of a two-unit project is no greater than 800 square feet. This is the size of unit that is specifically mentioned in the text of SB 9. • All new units are subject to height, setback, lot coverage, floor area ratio, and parking requirements within the Code as well as objective development standards related to architecture and appearance, landscaping, fences and walls, and parking. All of these standards are enforceable to the extent they do not prevent the development of two 800 square foot units on a qualifying lot. In a case where an 800 square foot unit cannot be built, the standards must yield to the extent that the unit could be built. • Units created through these processes may not be used for commercial purposes or used as short-term rentals, and owners must live on the property for three years after the units are completed. As mentioned above, a regular Ordinance will be developed and presented to the City Council in the upcoming months. Since the law was written with some very vague components, it is anticipated that the trailing regular Ordinance will include additional “clean-up” language as necessary as well as any best practices gleaned from implementation of the new law. One of these issues is how to deal with extremely deep lots such as the various horse properties in Arcadia. The City Council discussed this issue and agreed it would likely be better to allow flag lots for these very deep parcels as opposed to Urban Lot Splits that would create awkward, long, narrow lots. In these situations, a flag lot may create a better streetscape and development pattern. However, there are many ramifications for lots throughout Arcadia in allowing flag lots and this is an issue that needs careful study and review to develop an adequate regulatory structure. As such, this issue will be returned to the City Council at a later date. It is recommended to adopt the Urgency Ordinance now, to put the requisite rules in place. ENVIRONMENTAL ANALYSIS Under California Government Code Sections 65852.21(j), and 66411.7(n), the adoption of an ordinance by a city or county implementing the provisions of Government Code Sections 66411.7 and 65852.21 and regulating urban lot splits and two-unit projects is statutorily exempt from the requirements of the California Environmental Quality Act (“CEQA”). Therefore, the proposed ordinance is statutorily exempt from CEQA in that the proposed ordinance implements these new laws enacted by SB 9. FISCAL IMPACT The financial impacts to the City, if any, are unknown at this time. While additional development may result in increased property taxes, it is not known if those increases Urgency Ordinance No. 2385 Urban Lot Splits and Two-Unit Projects (SB 9) December 21, 2021 Page 5 of 5 would be offset by additional service costs or other impacts to the community from an increased density that is not fully studied prior to approval. RECOMMENDATION It is recommended that the City Council Adopt Urgency Ordinance No. 2385, amending Divisions 2 and 5 of Chapter 1, Article IX of the Arcadia Municipal Code related to Urban Lot Splits and Two-Unit Projects and Determine the Ordinance to be Statutorily Exempt from the California Environmental Quality Act. Attachment: Urgency Ordinance No. 2385 (including full text amendments to Divisions 2 and 5)