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HomeMy WebLinkAboutAGENDA REPORT 1993 1027 CC ADJ ITEM 11K0 1,;-?-3 ACLON: Co /_PWOW A G E N D A R E P O R T C I T Y O F M O O R P A R K ITEM II, Ke _ 0 199_3 3 TO: The Honorable City Council FROM: Jaime Aguilera, Director of Community Development�� Prepared by Deborah S. Traffenstedt, Senior Planner -1-DsT DATE: October 14, 1993 (CC Meeting of 10- 20 -93) SUBJECT: CONSIDER INCLUSIONARY ZONING AS A STRATEGY FOR THE PROVISION OF AFFORDABLE HOUSING IN NEW RESIDENTIAL AREAS AND IN THE MOORPARK REDEVELOPMENT AREA BACKGROUND As an implementation measure for the Land Use Element of the City's General Plan, and as an objective for fiscal year 1993 -1994, staff has been directed to conduct a study of the feasibility of adopting an inclusionary zoning ordinance. The intent of such an ordinance would be to require that a percentage of new, private residential development be affordable to very low, lower, and /or moderate income households. These income levels are calculated as a percentage of the county median income. Very low income is calculated as 50 percent of median income; lower income is calculated as 80 percent of median income; and moderate income is calculated as 120 percent of median income. The percentage of new residential development required to be affordable, and the income level targeted would be based on a jurisdiction's housing needs. DISCUSSION Housing Needs The City's Housing Element was approved by the City in October 1989 and sets forth the City's housing objectives for a five -year period ending July 1, 1994. Legislation is currently pending which may extend the due date for the next housing element update to July 1, 1996. The City's current share amounts to a total of 2,743 new units to be developed during the period from July 1989 to June 1994 as shown below: City Share of Regional Housing Need from 7 -89 to 7 -94: Very Low 444 Lower 515 Moderate 707 High 1,077 2,743 The Honorable City Council October 14, 1993 Page 2 Staff's last status report to the City Council pertaining to the City's progress in meeting share of regional housing needs was dated December 21, 1992 (Annual Report). In that report, staff identified that a total of 502 residential dwelling units were approved for occupancy from July 1, 1989 through December 21, 1992. Of that total, the income categories were estimated to be as follows: Very Low - 25 Lower - 37 Moderate - 42 High -398 502 As can be seen from the above numbers, the majority of the new residential units constructed since 1989 have been affordable only to higher income households. The 25 very low and 37 lower income units identified above were achieved by the Villa Campesina single - family residential project. The City's current Housing Element primarily relies upon the use of density bonuses to obtain very low and lower income units; however, that strategy has not been effective. No formal applications for a density bonus (pursuant to State law) have been received since the City's Housing Element was last updated in 1989. Staff is suggesting that a more assertive strategy should be considered as outlined below. Inclusionary Zoning Programs in California As of late January 1992, a survey by the San Diego Housing Commission found 52 California jurisdictions (45 cities and 7 counties) with inclusionary zoning programs in place that set forth affordable housing requirements for new development. A copy of the results of that survey has been provided to the City Council under separate cover. An article, Inclusionary Housing in California: Creating Affordability Without Public Subsidy, from the Fall 1992 Journal of Affordable Housing & Community Development Law has also been previously provided to the City Council. That article provides a comprehensive analysis of the legal and policy issues pertaining to inclusionary zoning. A nexus analysis done for the City of Moreno Valley that identifies how a city can provide offsets such as reduced zoning and design requirements, fee waivers or deferral, a density bonus, and /or reduced processing time to mitigate the cost of complying with an inclusionary requirement has also been provided to the City Council under separate cover. The Honorable City Council October 14, 1993 Page 3 According to the authors of Inclusionary Housing in California: Creating Affordability Without Public Subsidy, requiring a developer to include affordable units is a legitimate exercise of the municipal police power and should not be tested as an exaction requiring a formal nexus analysis. They do caution, however, that use of an in -lieu fee could lead to a challenge of the entire inclusionary program as a development exaction which is lawful only if justified by a documented showing of "nexus" between construction of market -rate housing and the need for affordable housing. Requiring commercial and industrial developers to pay a fee to support affordable housing (typically referred to a housing trust fund requirement) has also consistently been found by other local jurisdictions to require a detailed nexus study. The City Attorney has cautioned that exactions that have been imposed after "general" or "imprecise" analysis have been invalidated when challenged. Also, if an exaction takes the form of a fee, the City would, at a minimum, have to comply with Government Code Section 66001. That section requires a determination that there is "a reasonable relationship" between the use of the fee and the type of development project upon which the fee is to be imposed. Any in -lieu fee should be a subsidiary component of an integrated inclusionary program so as to minimize grounds for a successful legal challenge. If the goal is to secure enough funds to construct all the affordable units that otherwise would have been required, the potential fee amount may be high. Spending in -lieu fees can also involve difficulties, since it may take time to accumulate enough funds for an affordable development, and community consensus and site approval may be difficult to achieve. One option for spending in -lieu fees would be to subsidize the cost of integrating affordable units into an otherwise market -rate project. Another option would be to leverage various funding sources such as redevelopment and inclusionary in -lieu fees, in order to provide sufficient funding for an affordable housing project. The San Diego Housing Commission, California Inclusionary Housing Survey (January 1992) along with Inclusionary Housing in California: Creating Affordability Without Public Subsidy, (Fall 1992) provide a fairly comprehensive analysis of the benefits of an inclusionary housing program as well as a comparison of existing programs. Based on the success of existing inclusionary programs in California (i.e., the total production of more than 20,000 affordable units over approximately the last ten years), the adoption of an inclusionary zoning ordinance is an effective means by which a local jurisdiction can provide its fair share of housing for all income levels. The Honorable City Council October 14, 1993 Page 4 Affordable Housing Requirements for Specific Plan Areas One of the findings that was made by the City Council related to the decision to approve changes in land use as part of the City's recent Land Use Element update, was that the revised land use plan provided opportunities for the provision of affordable housing. Five new specific plan areas were created, and both a "maximum density" and a "density limit" were established for each of those specific plan areas. The number of dwelling units within each specific plan area would be the "maximum density" unless the property owner agrees to provide public services and /or financial contributions that the City Council determines to be of substantial public benefit to the community. The provision of affordable housing in a specific plan area would justify a density higher than the otherwise maximum residential density. The City Council could consider the adoption of an ordinance that would mandate an inclusionary zoning requirement for new residential areas in the City, which is expected to be primarily applicable to new specific plan areas. Such an ordinance would need to specify the percentage of units to be affordable to very low, lower, and /or moderate income households within each residential project proposed in certain zone districts. Staff does not expect to recommend an inclusionary requirement for larger acreage zone districts. Affordable Housing to be Provided Within Redevelopment Area The City Council should also consider the adoption of an inclusionary zoning requirement for the redevelopment area of the City. The housing production requirements of the Health and Safety Code (Redevelopment Law) are as follows: Pursuant to Section 33413(b)(1), 30 percent of the housing developed or rehabilitated by an agency in a project area must be available at affordable housing cost to persons and families of low and moderate income. Of those units, 50 percent must be affordable to and occupied by very low income households. The 50 percent very low income requirement translates to 15 percent of the total project area units developed or rehabilitated by the agency (50 percent of 30 percent = 15 percent). Pursuant to Section 33413(b)(2), 15 percent of the units developed or rehabilitated in a project area by public or private entities other than the agency shall be available at affordable housing cost to persons and families of low or moderate income. Of those units, 40 percent must be affordable to very low income households (i.e., 40 percent of 15 percent = 6 percent of the total project units required to be affordable to very low income households). The Honorable City Council October 14, 1993 Page 5 There are different legal opinions related to affordability requirements for agency developed housing, since under current law an agency's authority to construct housing is limited to housing that is entirely for low and moderate income residents; therefore, it can be argued that 100 percent of agency- constructed units must be for low and moderate income persons and households- - notwithstanding the seemingly lower standard of Section 33413(b)(1). There are also different interpretations regarding what constitutes "dwelling units developed by an agency." The State Department of Housing and Community Development (HCD) position is that "agency developed" includes at least those units which an agency itself constructs or rehabilitates as well as those units where the agency acted more like a co -owner or partner than a mere lender for the project. The City Attorney has advised that it is the legal mechanism (i.e., partnership, lease) by which the Redevelopment Agency authorizes a non - profit organization to construct housing on land owned by the Agency which would determine the housing production standard that would need to be complied with. The term of affordability for restricted units in a redevelopment area is also mandated by the Health and Safety Code. For example, if units are assisted with 20 percent set -aside funds, those units must remain affordable to low and moderate income persons for the "longest feasible time ", but not less than 10 years for owner - occupied housing and not less than 15 years in the case of new or substantially rehabilitated rental housing. Recent legislation (AB 315, Chapter 872 of 1991) requires redevelopment agencies to adopt and periodically update a plan to ensure compliance in each project area, within ten years, with existing criteria in Health and Safety Code Section 33413 regarding the affordability mix of new or rehabilitated housing (as described above). The plan must include: Estimated number of new or rehabilitated dwelling units to be developed within the project area; Estimated number of units the agency itself will develop during the time period of the plan, including the number of low and moderate income units; and Estimated number of units for very low income and low and moderate income households to be developed by private and public agencies other than the redevelopment agency. Under current law, the Redevelopment Area Housing Production Plan must be consistent with, and may be included in, a local Jurisdiction's housing element. The next required update for the City's Housing Element is July 1994 (although legislation is pending which would revise that date to July 1996). Legislation is also pending which may require completion of the initial Redevelopment Area Housing Production Plan by June 1994. Staff The Honorable City Council October 14, 1993 Page 6 will continue to monitor pending legislation to determine compliance dates for both the Housing Production Plan and Housing Element update. One way for the City to ensure that the housing production requirements of the Health and Safety Code are met for the entire Moorpark Redevelopment Area, is for the City Council /Moorpark Redevelopment Agency to adopt an inclusionary zoning requirement for all units developed in the project area by public or private entities other than the Agency. Zoning Ordinance Procedure for Amendments A proposal to amend the City's Zoning Ordinance may be initiated by the adoption of a Resolution of Intention by the City Council requesting the Planning Commission to set the matter for study, hearing and recommendation within a reasonable time. Prior to initiating Planning Commission involvement, staff intends to work with the Economic Development /Affordable Housing Committee and the City Attorney to determine the appropriate ordinance requirements, and to return to the City Council with a draft ordinance. RECOMMENDATION 1. Direct staff to work with the Economic Development /Affordable Housing Committee and City Attorney to develop a draft inclusionary zoning ordinance for new residential projects in the City and for the Moorpark Redevelopment Area. 2. Provide any desired specific direction to the Committee and staff pertaining to components of the proposed ordinance.