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HomeMy WebLinkAbout10-22-24 Agenda Packet_Study SessionCITY OF ARCADIA Planning Commission Special Meeting Tuesday, October 22, 2024, 5:00 p.m. Location: City Council Conference Room, 240 W. Huntington Drive, Arcadia As authorized by California Government Code Section 54956 and Arcadia City Charter Section 408, a Special Meeting of the Arcadia Planning Commission is hereby called to be held at the City Council Conference Room, 240 W. Huntington Drive, Arcadia, California on Tuesday, October 22, 2024, at 5:00 p.m. 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 Planning Services at (626) 574-5423. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to the meeting. 根据《美国残障人法案》的规定,需要提供残障相关调整或便利设施才能参加会议的残障人士(包括辅助器材或服务),可向规划服务部 请求获得此类调整或便利设施,电话号码 (626) 574-5423。请在会前 48 小时通知规划服务部,以便作出合理安排,确保顺利参加会议。 Pursuant to the City of Arcadia’s Language Access Services Policy, limited-English proficient speakers who require translation services in order to participate in a meeting may request the use of a volunteer or professional translator by contacting the City Clerk’s Office at (626)574-5455 at least 72 hours prior to the meeting. 根据阿凯迪亚市的语言便利服务政策,英语能力有限并需要翻译服务才能参加会议的人可与市书记官办公室联系(电话:626-574-5455 ),请求提供志愿或专业翻译服务,请至少在会前 72 小时提出请求。 ROLL CALL Marilynne Wilander, Chair Domenico Tallerico, Vice Chair David Arvizu, Commissioner Angela Hui, Commissioner Vincent Tsoi, Commissioner STUDY SESSION 1.Report, discussion, and direction concerning the establishment of an inclusionary housing ordinance to require affordable housing in certain residential projects. ADJOURNMENT The Planning Commission will adjourn this meeting to the Regular Planning Commission Meeting on Tuesday, November 12, 2024, at 7:00 p.m. 1 Date: October 22, 2024 To: Chair and Members of the Planning Commission From: Jason Kruckeberg, Assistant City Manager/Development Services Director C: Lisa Flores, Deputy Development Services Director Re: STUDY SESSION – INCLUSIONARY HOUSING ORDINANCE At the October 22, 2024, Planning Commission Meeting, a Study Session will be held with the Commission related to a Draft Inclusionary Housing Ordinance being completed by the Development Services Department. Inclusionary Housing Ordinances are a common tool for cities to require affordable housing units to be built along with typical market rate housing. The Ordinance being drafted is a result of the City’s recently approved Housing Element and is a portion of the Element that is necessary to achieve the capacity for affordable housing units needed throughout the City. This is intended to be an informational Study Session only. No decisions or recommendations are being requested of the Commission at this time. The Draft Ordinance, along with associated economic analysis, will be provided through the actual approval process, expected to occur in several months. The City Council held Study Sessions on June 4, 2024, and October 1, 2024, to learn about the intended Ordinance and ask questions. Ultimately, the City Council voted unanimously to direct the Staff to bring a Draft Ordinance through the Public Process. At the meeting on October 22, a PowerPoint presentation will be provided to the Commission which will walk through the purpose of the Ordinance, and the primary components of the Draft under consideration. In addition, attached to this memo is a September 5 Memo to the City Council that provides some additional information that helps frame the issues for the Commission as well as a Summary of Local Inclusionary Ordinances prepared by our consultant on this project, Kimley Horn. 2 Date: September 5, 2024 To: Mayor and City Council From: Jason Kruckeberg, Assistant City Manager/Development Services Director C: Dominic Lazzaretto, City Manager Mike Maurer, City Attorney Re: INCLUSIONARY HOUSING ORDINANCE – MATERIALS REQUESTED BY CITY COUNCIL At the June 4, 2024, City Council Meeting, a Study Session was held related to a Draft Inclusionary Housing Ordinance being completed by the Development Services Department. Inclusionary Housing Ordinances are a common tool for cities to require affordable housing units to be built along with typical market rate housing. For the City, the Ordinance being drafted is a result of the City’s recently approved Housing Element and is a portion of the Element that is necessary to achieve the capacity for affordable housing units needed throughout the City. At the conclusion of the June 4 Meeting, the City Council requested that the Staff provide additional information and bring the Ordinance back in the near future. This memo and the related attachments are in response to the City Council’s request. The item will be returned to the City Council in Study Session format at the October 1, 2024, City Council meeting. The City Council requested the following pieces of additional information: • Is it possible to provide priority in affordable housing units through the Ordinance to Arcadia residents, first responders, teachers, etc. either as a percentage of available affordable units or in projects funded by the in-lieu fees ultimately collected? 3 The short answer is, it is not recommended to add these restrictions into the Ordinance. However, the City does work with developers along these lines, and developers have shown an interest in developing criteria for distributing their units based on local preferences. Working with individual developers and their specific projects is a recommended course of action rather than requiring it as part of an Ordinance. To provide more detail, requiring affordable units to be provided through an Inclusionary Ordinance subjects the City to various federal and state anti-discrimination and fair housing laws. If the City’s prioritization program were challenged, the most likely statutes implicated would be: (1) The Fair Housing Act and Fair Housing Amendments Act of 1988 (collectively the “FHA”); (2) Title VI of the Civil Rights Act; (3) The Fair Employment and Housing Act; and (4) The Unruh Civil Rights Act. We can provide more information on any of these individual laws as needed but the sum total of their impact is that the City must make units available to all potential groups. By restricting units to specific groups, the City could be found to be discriminatory against other groups. For example, the City’s demographics do not mirror the demographics found in many areas of Los Angeles County, both in terms of race and median income. So, if an Arcadia resident restriction was applied, this would allow for challenge on the basis that an equal opportunity is not being provided. Similarly, if units were restricted (per Ordinance) to various specific groups like teachers, first responders, or city employees, similar claims of discrimination could be lodged that this leaves out a fair chance at housing for all groups. The answer above is softened somewhat if the City is acting as developer (e.g. City land is being developed). But, it is recommended that this type of restriction be left out of the Ordinance and Staff be directed to work with the development community on these issues on a case by case basis. • How many cities in LA County have an Inclusionary Ordinance? A total of 21 of the 88 cities in LA County have Inclusionary Housing Ordinances. 4 • Describe the evolution of Inclusionary Ordinances in neighboring cities, did the percentage increase or decrease, were Ordinances made more stringent or not? Our consultant put together the attached document, entitled “Summary of Local Inclusionary Housing Ordinances” to answer this question. The document includes a table that provides information on the major highlights of 11 other cities’ ordinances (Table 1) as well as a comprehensive list of the changes that have occurred for six different cities’ ordinances (Table 2). • What is the percentage of affordable units in major development projects currently being processed by the City? Pending Mixed Use Developments with Affordable Housing Units in Arcadia (8/20/24) Address/Project Name Affordable Unit Count Percentage of Affordable Units (Rounded) Affordability Level 34 E. Santa Clara St. (Alexan Azalea Mixed- Use Project) 26 out of 319 total units 8% Very Low 233 & 301 E. Huntington Drive (Derby Mixed-Use Project) 9 out of 214 total units 4% Very Low 1101 W. Huntington Drive (Huntington Village Mixed-Use Project) 26 out of 278 total units 9% Not Yet Determined 325 N. Santa Anita Avenue (Alexan Arroyo Mixed- Use Project) 35 out of 359 total units 10% Very Low Total 96 Please let us know if you need any additional information prior to the meeting on October 1. Attachments: 1) Summary of Local Inclusionary Housing Ordinances 2) PowerPoint presentation slides from June 4, 2024, City Council Study Session (Revised) 5 Summary of Local Inclusionary Housing Ordinances 1 Summary of Local Inclusionary Housing Ordinances 6 Summary of Local Inclusionary Housing Ordinances 2 SUMMARY OF LOCAL INCLUSIONARY HOUSING ORIDNANCES Successful Inclusionary Housing Ordinances are drafted with intention and applicability in mind. Jurisdictions often engage in studies to determine what policies are appropriate to facilitate affordable housing development in the respective community. While jurisdictions may rely on studies and due diligence to guide the development of Inclusionary Housing policies, there are general guiding principles and factors that influence the effectiveness of Inclusionary Housing policies. Factors That Influence the Effectiveness of Inclusionary Housing: • Code Structure: The common elements of an Inclusionary Housing Ordinance are: applicability, set-aside requirements, income targeting, and alternatives and incentives. The structure and details of these code elements can have a considerable influence on the effectiveness of an Inclusionary Housing Ordinance in a jurisdiction. • Code Clarity and Accessibility: Inclusionary Housing Ordinances that are clearly written and user friendly are more likely to be successful. Policies that are only mandatory based on feasibility tend to be unclear and weaker than straightforward policies that apply to all qualifying applicants. Also, according to best practices for successful inclusionary housing programs, alternatives and incentives should be authorized in the ordinance for the sake of clarity. In general, the cities with the most successful Inclusionary Housing Ordinances have firm unconditional requirements and alternatives that are authorized in their codes. Conversely, jurisdictions whose requirements are mandatory, dependent on feasibility, have had relatively less successful policies. • Staff Support and Political Will: The final factor that influences the success of an Inclusionary Housing Ordinances is the level of support coming from city staff and elected officials; even community members and developers. Staff and City Council members in virtually all cities with Inclusionary Housing policies support inclusionary housing in their cities for several reasons including that: it allows their cities to grow wisely, it will meet the needs of the community, and it helps balance development. As of July 2024, 21 out of 88 Cities in Los Angeles County currently have an Inclusionary Housing Ordinance, including: • Agoura Hills • Alhambra • Avalon • Beverly Hills • Burbank • Calabasas • Claremont • Cudahy • Downey • El Monte • Glendale • Huntington Park • Long Beach • Lynwood • Monterey Park • Pasadena • Pomona • Santa Monica • South Gate • South Pasadena • West Hollywood • Los Angeles County 7 Summary of Local Inclusionary Housing Ordinances 3 The table below analyzes the progress of local jurisdictions’ Inclusionary Housing efforts. It is difficult to determine why jurisdictions decide to adopt or not to adopt Inclusionary Housing Ordinances but the information below presents findings from public hearings and publicly available sources. 8 Summary of Local Inclusionary Housing Ordinances 4 Table 1: Summary of Local Inclusionary Housing Ordinance s Jurisdiction Inclusionary Housing Context Pasadena Pasadena Municipal Code Chapter 17.42 : • Ten or more units shall provide 20% of the total number of units for affordable housing • Alternatives include offsite construction, in -lieu fees, and land dedication • Incentives include waiving of certain development impact fees • Affordability period of 45 years ownership units and in perpetuity for rental units Alhambra Alhambra Municipal Code Chapter 23.89: Inclusionary Housing: • Seven or more units shall provide 15% of the total number of units for affordable housing. • Projects of five or six units shall pay in-lieu fees. • Alternatives include offsite construction, in -lieu fees, and land dedication. Alhambra to review the Inclusionary Housing Ordinance biannually for effectiveness. No evaluations have been published. Fees have not been revised since adoption. Azusa Inclusionary Housing Ordinance included as a program in their 2021 -2029 Housing Element. The City of Azusa will study Inclusionary Housing Ordinances and adopt an ordinance if appropriate. According to the City’s 2023 Annual Progress Report these studies have not begun. Baldwin Park Inclusionary Housing Ordinance included as a program in their 2021 -2029 Housing Element. The City study Inclusionary Housing Ordinances and adopt an ordinance if appropriate. No further actions have been taken. Duarte The City of Duarte temporarily suspended its Inclusionary Housing Ordinance in 2016 and did not reinstate its Inclusionary Housing Ordinance as a result of the Inclusionary Housing Feasibility Study prepared by Harris & Associates in August 2020. • Main findings: o The city’s rate of return is lower than the average in Los Angeles County without in -lieu fees (4.32%) and is even lower with in-lieu fees (4.30%). o Only two cities in the San Gabriel Valley have Inclusionary Housing Requirements. ▪ Pasadena and Claremont – both cities have high rent rates and high housing demands. 9 Summary of Local Inclusionary Housing Ordinances 5 Table 1: Summary of Local Inclusionary Housing Ordinance s Jurisdiction Inclusionary Housing Context o The State provides incentives for the development of affordable housing. o Inclusionary Housing Ordinances could negatively impact the amount of residential construction. El Monte El Monte Municipal Code Chapter 17.102: • Inclusionary housing ordinance applies to new developments of ten or more dwelling units unless exempt by section 17.102.030 of the El Monte Municipal Code. • 15% of units at low (9%) and moderate (6%) incomes. • Alternatives include in-lieu fees, off-site construction, off-site rehabilitation, and land dedication. Planning Commission • First study session April 26, 2022 (Minutes are not available). • Second Study Session March 15, 2023 (Minutes are not available). • Public Hearing March 28, 2023 (Minutes not available). • Public Hearing April 13, 2023(Minutes not available). o Planning Commission recommended the code amendments . City Council • Adopted Inclusionary Housing Ordinance – May 2, 2023. o No further actions have been taken. Monrovia On January 18, 2022 Monrovia’s City Council approved Sagecrest Planning and Environmental as the consultants to prepare their Inclusionary Housing Ordinance. • Monrovia’s 2023 Annual Progress Report confirms a feasibility study is currently being reviewed by city staff and that the city plans to continue this effort but the market conditions continuous changes have delayed this study. o There is no information on what is being proposed currently, but per the 6th cycle adopted Housing Element the Inclusionary Housing ordinance would have a minimum of 20% set aside for affordable housing. Monterey Park Inclusionary Housing Ordinance adopted September 6, 2023 (Chapter 21.19 Zoning Code) • Applies to developments of five or more units. • 15% for rental projects (9% very low & low-income and 6% moderate-income) and 15% for-rent projects at 10 Summary of Local Inclusionary Housing Ordinances 6 Table 1: Summary of Local Inclusionary Housing Ordinance s Jurisdiction Inclusionary Housing Context moderate-income. • Deed-restrictions – 55 years for rental projects and 45 years for for-sale units. • Alternatives; off-site units, land dedication, and in-lieu fees. San Gabriel April 10, 2023, Planning Commission – Inclusionary Housing Ordinance was introduced . Background: • September 6, 2022 – feasibility study presented to Planning Commission – Planning Commission requested to expand the study. Feasibility study takeaways: • As inclusionary percentages increase, development decreases and feasibility percentages decrease. • Study recommends for the city to take a conservative approach. o Consider inclusionary requirement for for-sale development of no more than 10%. o Do not consider inclusionary for rental development. Planning Commission adopted a resolution recommending: • Rental properties with ten or more units shall provide 10% inclusionary units and/or an in -lieu fee. • For-sale properties with five or more units shall provide 15% inclusionary requirement and/or an in -lieu fee. City Council • On June 20, 2023 City Council considered adopting an Inclusionary Housing Ordinance. City Council directed staff to come back with a revised Inclusionary Housing Ordinance and a revised feasibility study that uses pro forma numbers. o Recommendations include: no more than 10% inclusionary requirement for for -sale unit sand no requirement for rental units. • No further updates. South Pasadena South Pasadena’s City Council adopted the Inclusionary Housing Ordinance on May 5, 2021 and added division 36.375 to Chapter 36 of the City’s Zoning Code. • A minimum of 15% of new developments. • Alternatives include off-site units, rehabilitation/conversion of units, dedication of land, and in -lieu fees. 11 Summary of Local Inclusionary Housing Ordinances 7 Table 1: Summary of Local Inclusionary Housing Ordinance s Jurisdiction Inclusionary Housing Context • No in-lieu fees adopted as of 2024. Temple City On June 21, 2022, Temple City partnered with the San Gabriel Valley Council of Governments (SGVCOG) to study the feasibility of adopting an Inclusionary Housing Ordinance. • July 5, 2023 - City Community Development Director reported to the Planning Commission that they received the Inclusionary Housing Ordinance feasibility study, but the Agenda did not attach the study and the meeting minutes did not include the discussion on the topic. • City Council - Consultant Services Agreement 10/17/23 for economic analysis for an inclusionary housing ordinance. • No further updates. 12 Summary of Local Inclusionary Housing Ordinances 8 Table 2 - Changes in Inclusionary Housing Ordinances Jurisdiction Current Inclusionary Housing Ordinance Changes / Considerations Glendale Glendale Municipal Code Chapter 30.35 • Requires 15% of total units to be affordable for projects with eight or more units • Ownership projects exempt • Deed restriction of 55 years minimum • Alternatives include o Off-site units o Acquisition and rehabilitation of existing units o In-lieu fees (fee x sq ft) ▪ 8-units $28.71 - sq. ft. ▪ 9-units $30.69 - sq. ft. ▪ 10-units $33.00 - sq. ft. ▪ 11-15 units $44.00 - sq. ft. ▪ 16-20 units $49.50 - sq. ft. ▪ 21 units or more - $55.00 - sq. ft. Originally adopted in 2004, nullified in 2009 and reinstated in 2019. Changes made: • August 16, 2011 – Ordinance 5747 o Changes were made to reflect change in department name no major changes to the ordinance itself • May 7, 2019 – Ordinance 5928 o Inclusionary requirement made applicable to developments of eight or more units rather than 5 or more units o In-lieu fee payment deferred to time of issuance of temporary or final certificate of occupancy o Ownership projects made exempt from ordinance • In-lieu fees have not been increased since 2019 • Inclusionary percentage has not changed since 2019 Irvine Irvine Municipal Code Chapter 2-3 • Requires 15% of new construction to be affordable units at 5% very-low, 5% low- income, and 5% moderate-income with a minimum affordability period of 30 years • Alternatives include: o Convert existing market rate housing to affordable housing for a period of at least 30 years o Extend the term of affordability for affordable units for a period of at least 40 years Originally adopted in 2003 with no amendments since adoption. In-lieu fees are determined using a formula: The cost of vacant residential land in the City divided by the density at which non -profit developers are building affordable units within the City. An additional $250 per unit predevelopment cost allowance and an 11.11 %share of cost for 10% of the units is added to this number. The City of Irvine is in the process of updating their Inclusionary Housing Ordinance. Planning Commission August 3, 2023 13 Summary of Local Inclusionary Housing Ordinances 9 o In-lieu fees o Transfer control of units to a nonprofit housing agency o Transfer of off-site credits for affordable units not provided on the site o Provision of alternative housing o Dedication of land o An alternative option acceptable to the city • Program in 6th Cycle Housing Element – revisiting IHO as a result of growing need for affordable housing. • July 2023 – Draft Affordable Housing Requirement and Affordable Housing In-Lieu Fee Update Study which recommends that the City: • Increase percent required from 15% to 20% o 9% very-low income, 6% low-income, and 5% moderate- income • Update in-lieu fees methodology and calculation o Three option methods: 1) per unit land cost calculation, 2) affordability gap calculation, 3) new construction full cost recovery calculation o Recommends the affordability gap calculation and for the city to review the in-lieu fees once every five years • Homeownership requirements: o 20% not found to be feasible, 15% and 10% feasible requirement • Staff Recommendation o Increase affordability period to 55 years Commissioners motioned to move the item into a second public hearing which has yet to happen due to multiple cancellations of planning commission meetings. No further action has been taken. Long Beach Long Beach Municipal Code Chapter 21.67 • Applicable to 10 or more units developments in the Downtown and Midtown areas • Percentages required correspond with the calendar year the first approval is granted. o Ownership development: ▪ 2021 - 4% ▪ 2022 - 5% ▪ 2023+ - 10% o Rental development: Originally adopted February 2021. In-lieu fee study was conducted in 2019 prior to adoption of the Inclusionary Housing Ordinance. No further updates have been made. In -Lieu fees are as follow: 14 Summary of Local Inclusionary Housing Ordinances 10 ▪ 2021 5% ▪ 2022 6% ▪ 2023+ 11% • Alternatives include o In-lieu fees o Land dedication o Alternative compliance method approved by the City Council Amended in February 2022 • Section 21.67.110(c) o 2021: 70% of the money in the housing trust fund expended on low-income housing and 30% to moderate-income o Current: all funds for “newly constructed housing affordable to very-low-income households” City staff was directed to evaluate the Inclusionary Housing Ordinance and recommend changes in 2024. • City staff presented updates and potential amendments to the inclusionary housing ordinance to Long Beah City Council on May 14, 2024, and presented to the Housing and Public Health Committee on June 11, 2024. • City committed to expanding inclusionary requirement citywide in their 6th Cycle Housing Element • City has seen an increase in affordable housing development since the adoption of the inclusionary housing requirements • Staff present the committee with three courses of action for rental developments affordability requirements: o Option A: Expand requirements citywide o Option B: Apply mixed-income requirements citywide o Option C: Apply affordability requirements based on opportunity areas • Other proposed policy modifications: o Round up fractional units when calculating number of 15 Summary of Local Inclusionary Housing Ordinances 11 affordable units o Make the Planning Commission the approving body for alternative compliance options rather than the City Council o Remove requirement for land dedication to be one mile away from housing development but still have staff or decision- making body approve the location o Ownership units shall be sold to first-time homebuyers o Additional flexibility for developments that exceed affordability requirement City staff to conduct next community and stakeholder meeting from August to early September with a Planning Commission study session currently scheduled for August 15. Montclair Montclair Municipal Code Chapter 11.81 • Requires 15% of all new residential development in redevelopment project areas to be affordable units • Deed Restricted 55 years minimum • Alternatives on a case-by-case basis: o In-lieu fees o Combined inclusionary housing projects Original adopted in 2005. City committed to update their Inclusionary Housing Ordinance in their 6th Cycle Housing Element. Proposed changes include: • Requiring new developments of three or more units to include inclusionary units. The number of inclusionary units would be determined by the tenure and unit type proposed • Allow in-lieu fees as a by-right alternative As of 2022, the in-lieu fee is $15,400 per unit. There is no further information readily available regarding the methods and yearly changes made to the in-lieu fee. Pasadena Pasadena Municipal Code Chapter 17.42 • Ten or more units shall provide 20% of the total number of units for affordable housing • Alternatives include offsite construction, in -lieu fees, and land dedication • Incentives include waiving of certain development impact fees • Affordability period of 45 years ownership units and in perpetuity for rental units Originally adopted in 2001. Amended 2003, 2004, 2005, 2006, 2013, 2017, and 2019. Changes include: • Inclusionary Housing requirement increased from 15% to 20% for projects with ten or more units • Eliminated trade-down provisions The City has completed in-lieu fee analysis using and affordability gap analysis to determine if in-lieu fees should be revised. • The table below contains the fee schedule for the past five fiscal 16 Summary of Local Inclusionary Housing Ordinances 12 years. 17 Summary of Local Inclusionary Housing Ordinances 13 Pomona Pomona Municipal Code Chapter 74 Article VIII • Inclusionary requirement can be met for for- sale units by: o If developing single-family detached units allocate 7% of units to moderate-income households, o If developing townhomes, condominium, or similar attached dwelling units allocate 11% to moderate-income households, or have 15% rental development within or outside the boundaries of the development for low-income households • Inclusionary requirement can be met for rental developments by: o Allocating 13% of units to moderate - income o Or allocate 15% of units off-site • For-sale units 45 cumulative years of affordability – for rent units 55 years minimum • Alternatives include: o In-lieu Fees o Land Dedication Originally adopted February 1, 2021. Fees have not been amended since adoption. 18 Summary of Local Inclusionary Housing Ordinances 14 Santa Ana Santa Ana Municipal Code Article XVIII.I • For sale units 5% inclusionary requirement • Rental units could be o 15% low-income units o 10% very-low-income units o 5% extremely low-income units o 10% affordable units at 5% low- income, 3% very-low income, 2% extremely low income • Alternatives include: o Off-site units o In-lieu fees ▪ 5—9 units: $6.00 per sq ft ▪ 10—14 units: $9.00 per sq ft ▪ 15—19 units: $12.00 per sq ft ▪ 20 or more: $15.00 per sq ft Originally adopted in 2011. Amendments • 2015- Ordinance No. NS-2881 introduced alternatives to the inclusionary requirements and introduced in -lieu fees • 2020 – Ordinance No. NS-2994 city reduced in-lieu fees due to the COVID-19 Pandemic • 2021- ordinance repealed and reinstated No information readily available regarding method to calculate in -lieu fees or past changes. 19