Title
Public Hearing to Review and Comment on the Draft Housing Element and Zoning Amendments to address State Fair Housing Law and Accommodate the Regional Housing Needs Allocation for the Period 2023-2031
Body
To: Honorable President and
Members of the Planning Board
From: Andrew Thomas, Planning, Building and Transportation Director
EXECUTIVE SUMMARY
The City of Alameda (City) has completed a draft update to the Housing Element of the General Plan and a comprehensive set of zoning amendments to affirmatively further fair housing and accommodate the 5,353 unit Regional Housing Needs Allocation (RHNA) for the 2023-2031 Housing Element cycle. Both documents are available for public review at www.alameda2040.org <http://www.alameda2040.org> and www.alamedaca.gov <http://www.alamedaca.gov>.
On August 25, 2022, the State of California Department of Housing and Community Development (HCD) found that the draft Housing Element is in substantial compliance with State Housing Law. HCD also referenced the proposed zoning amendments, and emphasized that they are critical to compliance.
No final action is required at this time. Staff is recommending a limited number of final revisions for Planning Board consideration in response to community comments received during the HCD review period. The HCD letter and community comments are attached as Exhibit 1.
BACKGROUND
State Housing Element Law (Article 10.6 of the Government Code) requires that the City update its General Plan Housing Element every eight (8) years. Over the course of the last year and a half, the Planning Board has held monthly public workshops to review and comment on the draft Housing Element and zoning amendments. In addition, the City Council held several workshops on the draft Housing Element, and the Commission on Persons with Disabilities, Transportation Commission and the Historical Advisory Board held public workshops to review and discuss the draft Housing Element. Guidance was also provided by HCD throughout the process and in a November 2021 letter addressing the conflicts between State Fair Housing Law and Article 26 of the City Charter. (Exhibit 2.)
On May 25, 2022, the City submitted the draft Housing Element to HCD for its review. In July, HCD reached out to the City with a number of questions about the draft Housing Element. Based upon those questions, staff revised the draft Housing Element to include additional information and analysis. On August 12, 2022, the City published the changes on the City website and www.alameda2040.org <http://www.alameda2040.org> and requested public comment on those changes. The City received three comment letters during the public review period, and based upon those comments, staff made additional minor changes to the Housing Element and zoning amendments, which are highlighted in the draft Housing Element and discussed below.
DISCUSSION
The objective of the Housing Element update and accompanying zoning amendments is to ensure that the Housing Element and Zoning Ordinance comply with State Law, which will enable the City to avoid the consequences of non-compliance. Failure by the City to comply with State Housing Element Law subjects the City to the risk of:
• Loss of local land use control and approval of housing projects by the State (e.g., Gov. Code, §§ 65589(d)(5)(B), 65750 et seq; Camp v. Mendocino (1981) 123 Cal.App.3d 334);
• Loss of State funding for open space, transportation, and affordable housing;
• State mandated fines, which escalate in size, until the City adopts a conforming Housing Element (Gov. Code, §§ 65589.5(k)(1)(B) and 65589.5(l); and
• Lawsuits against the City for failure to comply with State law.
To avoid the consequences of non-compliance, the Housing Element and zoning ordinance amendments must:
• Accommodate the City’s Regional Housing Needs Allocation (RHNA) by ensuring that the General Plan Housing Element and zoning ordinance enable construction of 5,353 housing units over the next 8 year Housing Element cycle; and
• Affirmatively further fair housing by removing regulatory barriers that serve to segregate the community or impose barriers to access to certain types of housing. (Gov. Code, § 65583(c)(5).)
A Balanced Compromise Plan. The Housing Element and zoning amendments achieve a balance between the requirements of State Law to accommodate the RHNA and affirmatively further fair housing and the goals of the Alameda community as articulated at the Housing Element public workshops.
• NAS Alameda Priority Development Area - 39%. In response to community desires to maximize the use of Alameda Point and the former Naval lands to accommodate the RHNA, approximately 39% of the RHNA is accommodated in the City’s NAS Alameda Priority Development Area (PDA), which includes 24% of the units at Alameda Point and 15% at other surplus federal lands in the PDA such as the Housing Authority’s North Housing Project, the Habitat for Humanity project, and Carmel’s project adjacent to Coast Guard housing on Singleton Avenue.
• Northern Waterfront PDA - 24%. Vacant and underutilized lands in the Northern Waterfront PDA accommodates approximately 24% of the RHNA on sites such as Encinal Terminals, Alameda Marina, the former Pennzoil Site, the Housing Authority site on Eagle Street at Tilden Avenue, and underutilized sites on Clement Avenue and Mariner Square Drive.
• Shopping Centers, Park Street and Webster Street Commercial Corridors - 27%. Shopping center sites, such as South Shore Center, Harbor Bay, and Alameda Landing accommodate 19% of the RHNA, and the Park Street District and Webster Street District commercial corridors accommodate approximately 8% of the RHNA.
• Residential Districts - 10%. In response to community desires to minimize development within existing neighborhoods, only 10% of the RHNA is accommodated through in-fill development in the R-1 through R-6 Districts on existing residential properties. Approximately 7% of that in-fill is provided by the existing accessory dwelling unit program (approximately 50 units per year). The additional 3% is accommodated by zoning amendments to allow residential property owners to add additional units within existing residential buildings. The residential districts include over 16,000 parcels on over 2,500 acres or residentially zoned land.
Fair housing requirements provide that the City affirmatively further fair housing by taking meaningful actions that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity. To affirmatively further fair housing, the draft Housing Element and zoning amendments include the following:
• Form Based Regulations. Emphasize and reinforce form based regulations (e.g. height limits, lot coverage limits, etc.) and remove provisions that act to create barriers to access to housing for lower income and middle income households or to individuals that may require daily assistance or a specific housing type.
• Equal Regulation. Apply the form-based requirements (e.g. height, lot coverage, and setback) equally to all housing types in each zoning district. Likewise, housing types (e.g. single family housing, multifamily housing, shared housing, transitional housing, supportive housing, and assisted living housing) are regulated equally.
• Remove Barriers to Affordable Housing. Remove regulations that prohibit the most affordable housing types, such as the prohibition of construction of multifamily housing (three or more units in a building) and the citywide density limitation on residential densities over 21 units per acre (three or more units on a 5,000 square foot lot). These prohibited housing types are the most affordable housing types. Prohibiting them creates a barrier to access to housing in Alameda for households with lower incomes. (For more information, see Exhibit 2, November 2021 letter from HCD.)
Community Comments and Staff Responses and Recommendations.
The following section describes the major issues and suggestions received from Alameda Architectural Preservation Society (AAPS), the Housing Element Working Group (HEWG), and Alameda Citizens Task Force (ACT). (All letters included in Exhibit 1.)
Residential District Zoning and Measure A. AAPS and ACT are advocating for preserving the multifamily prohibition (i.e. buildings with more than two units) and the 21 unit per acre residential density limit (e.g. more than two units on a 5,000 square foot parcel) in all residential zoning districts. They are requesting that Program #4 Residential Rezoning be removed from the Housing Element because it is not necessary to comply with State law.
By advocating for no changes to the prohibition on multifamily housing and density limitation over 21 units per acre in all residential districts, AAPS and ACT support maintaining regulations that prohibit the construction of the most affordable types of housing in all residential districts. These regulations serve to limit access to housing for lower and middle income households, which are the types of households that are most in need of additional housing opportunities. (See Housing Conditions Appendix for more information on housing need.)
Staff and, more importantly, HCD believe Program #4 and the accompanying zoning amendments are critical to Housing Element certification and affirmatively furthering fair housing, as they facilitate and encourage a variety of housing types. HCD specifically references the importance of Program #4 in its 2022 letter. HCD’s November 2021 letter also addresses the conflicts between the City’s existing prohibition on multifamily housing and density limitations and fair housing law. Removal of these exclusionary regulations in the residential districts is an important component to affirmatively further fair housing, and critical for the City to remain in compliance with State Housing Law. These zoning ordinance amendments help move Alameda in the direction of being an inclusive and equitable community, overcoming patterns of segregation, and fostering inclusive communities free from barriers that restrict access to opportunity.
Displacement. ACT and AAPS argue that removing the multifamily prohibition in the residential districts will result in widespread displacement of low income residents from these neighborhoods. This concern is not supported by the City’s experience with accessory dwelling units (ADUs). In 2018, the City amended the ADU ordinance to make it possible to construct 2 additional units on each parcel in the residential districts. The City currently issues building permits for approximately 50 ADUs in the residential districts annually. There is no evidence of displacement as a result of this construction in the residential districts since 2018. In addition, the Housing Element includes specific actions and responsibilities to minimize or prevent displacement. (See Housing Element programs #8, #9, #13, and #14.)
Residential District Capacity. In response to ACT’s concern that the Housing Element does not include the Accessor’s Parcel Number and specific information about each one of the 16,000 parcels in the residential districts, the Housing Element no longer relies or includes an estimate of new construction in backyards or on any vacant parcels, because it is not practical or possible to identify the specific parcels among the 16,000 parcels where that new construction may occur. The Housing Element projects that approximately 20 more units will be constructed within existing building envelopes each year in addition to approximately 50 ADUs as the result of the residential zoning amendments. For ADUs and addition of new units within existing residential buildings, HCD’s published guidance on Housing Element Site Inventory does not require the City to identify the specific 70 parcels on which each unit will be constructed over the next 8 years because those parcels include existing residential development. (HCD Housing Element Site Inventory Guidebook (June 10, 2020), p. 5 [“A jurisdiction must identify, as part of an inventory, sites within its boundaries… that could have the potential for new residential development within the eight- or five-year timeframe of the housing element planning period. [Emphasis added.]”.)
Older and Significant Properties. AAPS correctly points out that the residential districts include a very large number of older Victorians and historical Study List properties. In recognition of Alameda’s older building stock, the zoning amendments do not change how the City treats historic properties or the review process for alterations or demolition of a Study List property. The zoning amendments do incentivize property owners to reinvest in their historic buildings, which will help ensure that Alameda historic homes remain for future generations and provide additional housing for those future generations.
Height Limits. With the following exceptions, the Housing Element and zoning amendments preserve existing height limits and lot coverage requirements throughout Alameda: 1) in the R-1 and R-2 districts within ¼ mile of high quality transit and in the North Park Street Residential sub-district, residential building height limits are raised from 30 feet to 40 feet; 2) in the Neighborhood Business District C-1 areas, the height limit is raised from 30 feet to 45 feet; 3) in the Webster Street commercial district and the North Park Street Workplace sub-district, building heights are raised from 40 feet to 60 feet; and 4) in the North Park Street Mixed Use sub-district, the height limit is increased from 40 to 50 feet.
R-1 and R-2 District Height limits. In their letter, HEWG proposes an increase of the height limit in the R-1 and R-2 Districts to 45 feet to allow for additional housing opportunities in slightly larger buildings. HEWG points out the following:
“… in these zones, which make up the majority of acreage available for residential development, there are hundreds of beautiful, historic homes that exceed that limit. Thus the ostensible reason for the limit, to preserve the aesthetic character possessed by many of the neighborhoods within these zones, is simply not valid.”
Staff believes the height limits as currently proposed provide an appropriate balance between the need to encourage more housing and the need to respect community anxiety about the impacts of additional traffic from new housing and concern about the demolition of existing buildings to construct new buildings. The proposed zoning amendments raise the height limit in R-1 and R-2 Districts to 40 feet within ¼ mile of transit to incentive additions and new construction near existing transit, and the zoning amendments allow for unlimited density within existing residential buildings With these two provision, staff does not think raising the height limit in all R-1 and R-2 districts to 45 feet is necessary.
Affordable Housing Height Limits. HEWG recommends a citywide height limit exemption for 100% affordable housing developers. Staff does not feel the need for this exemption. State law provides for a significant density bonus for 100% affordable projects and requires that the City grant waivers from any applicable height limit if that limit physically precludes the project from being constructed at the permitted density. (Gov. Code, § 65915, et seq.) In other words, State law already ensures that the applicable height limit will not be a constraint on a 100% affordable housing project, therefore staff does not think exempting the citywide height limit for 100% affordable housing developers is necessary.
C-1 Neighborhood Business District Height Limits. HEWG recommends raising the height limit in these small districts to allow for four or five stories. HEWG also notes that many of these C-1 districts are located on transit corridors.
In response, staff revised the zoning amendments to establish a 45-foot height limit in the C-1 district. Most C-1 districts are adjacent to R-6, R-5 or R-4 zones which allow heights near or above 45 feet. Some C-1 districts are adjacent to R-2 or even R-1 districts, but they are also located within ¼ mile of transit, which allows for a 40-foot height limit for those residential areas. Staff believes raising the C-1 height limit to 45 feet strikes an appropriate balance between good transit oriented urban form and the need to accommodate additional housing units within these transit oriented districts.
North Park Street District Height Limits. HEWG recommends increasing height limits to 90 feet for NP-G district (parcels facing Park Street from Blanding to Lincoln) and to 60 feet in the NP-R district (the blocks near Park Street between Blanding, Lincoln and Tilden that are predominately occupied by residential uses. HEWG states that the increased height limit:
“would unlock significantly increased housing production in a priority area for more intense, transit- and pedestrian-centric development, a neighborhoods that will soon be on a completed Cross-Alameda Trail and is on or adjacent to many commercial and recreational amenities.”
Staff believes the existing 60-foot height limit on Park Street is adequate. It allows for a four or five story mixed use building (four stories of residential over commercial ground floor). If the developer wishes to increase the number of housing units that are deed restricted beyond the City’s 15% requirement, they are able to qualify for a 20%-25% density bonus, which would allow for an additional floor of housing or a six story building of 65 to 75 feet in height. California residential building codes effectively make a 90 foot building unlikely, because the Code requires “high rise construction” techniques and materials (e.g. steel construction) for buildings over 85 feet.
Staff also thinks that the 40 foot height limit in the North Park residential district is appropriate. The area is within ¼ mile of excellent transit. For that reason, staff believes that these areas should be considered comparable to R-1 or R-2 zones within ¼ mile of transit (40 foot height limit).
Affordable Housing. The RHNA establishes that the need for housing for lower income and moderate income households is severe. It identifies that 58% of the regional need in Alameda is for housing that is affordable to very low-, low- and moderate-income households. HEWG correctly identifies that that the City’s 15% inclusionary housing requirement for residential projects (AMC Section 30-16) is not adequate to ensure that 58% of the 5,535 constructed residential units will be deed restricted for moderate- and lower-income households.
State housing law does not require that the City’s Housing Element demonstrate how the City will deed restrict 58% of the new units of housing. State law allows a City to count units planned for property to be rezoned to permit multifamily housing by right with a minimum residential density of 30 units per acre as units that will be affordable to very low- and low-income households. The Housing Element and the zoning amendments ensure that adequate amounts of land in Alameda are zoned to permit multifamily housing with a minimum density of 30 units per acre.
Over the last 8 years, the City has conducted an annual public hearing to review the Housing Element (see Housing Element program #22), which has provided an opportunity for Planning Board and community consideration of the City’s Inclusionary Housing ordinance and whether it should be amended to increase the 15% requirement or reallocate how the 15% is distributed between very low-, low- and moderate-income deed restriction requirements. The Planning Board has discussed potential changes in the past but not made any recommendations to the City Council. One important factor is that State law requires that any proposal to increase the amount above 15% must be accompanied by an analysis demonstrating that the increase will not pose a financial constraint to housing development in Alameda. The analysis must be submitted to HCD for review prior to consideration of the ordinance for adoption by the City Council. Most agree that it would be difficult in the current economic environment, with high local construction and labor costs and high local land values, to demonstrate that increasing the number of units that must be financially subsidized in each project and reducing the number of units that will provide that subsidy would not be a constraint on the financial feasibility of constructing housing in Alameda. Furthermore, raising the 15% threshold would result in a standard that guarantees density bonuses and waivers for all residential projects.
Therefore, in an effort to balance the need for affordable housing with the need to establish clear and enforceable form based local zoning standards, staff does not recommend increasing the Inclusionary Housing requirement above the current 15% standard.
Affordable Housing Funding. HEWG correctly points out that the most significant constraint to affordable housing in Alameda and the region are the need for financial subsidies for each affordable housing unit constructed. HEWG states in its letter:
“To combat the severe shortage of subsidized affordable housing, the city can and should seek additional funding for affordable housing production, whether by bond measure or other means.”
Staff agrees with HEWG. Housing Element program #8 currently includes the following language:
“Pursue federal, state, and private funding for low- and moderate-income housing by applying for state and federal monies for direct support of lower-income housing construction and rehabilitation, specifically for development of housing affordable to extremely low-income households.”
Staff recommends amending the Housing Element text to add the following language in Housing Element program #8: “consider a local bond measure to help fund affordable housing”.
High Opportunity Areas, Bay Farm Island, and Harbor Bay Club. HEWG is correct that the majority of the housing planned over the next 8 years is located in West Alameda and the Northern Waterfront which are not in areas of High or Highest Opportunity. The High and Highest Opportunity areas are located in east Alameda and on Bay Farm Island. The former Naval Air Station Lands and the Northern Waterfront are the areas in Alameda that the City of Alameda and the Regional Sustainability Strategy identify as the “priority areas” for development in Alameda (the “PDAs”). These are also the areas in Alameda that have the vast majority of Alameda’s vacant and underutilized land.
In response to HEWG’s concern about Higher Opportunity Areas, an additional site within the Highest Opportunity area was added to the Housing Element. During the Housing Element review period, the owner of the property at 400 Park Street (the Coral Reef Inn & Suites), which is a 2.5 acre site located in an area of “Highest Opportunity”, informed staff of his interest in building housing on the site, which could accommodate approximately 150 additional residential units.
HEWG suggests that the Harbor Bay Club site (HBC) could be rezoned to facilitate housing in an area of Highest Opportunity. The HBC site was considered for housing during the General Plan update, and at that time, the Planning Board chose to maintain the existing Commercial Recreation General Plan designation, unless and until it was determined at a later date that the property was needed for the Housing Element. The Planning Board has since proceeded prepare a Housing Element that does not rely on the Harbor Bay site. At this time, staff does not recommend addition or rezoning of the Harbor Bay Club site as part of the Housing Element and zoning amendments.
Jean Sweeney Park. HEWG proposes consideration of a housing project on a small portion of City-owned land designated for Jean Sweeney Open Space Park (20+ acres). Staff agrees that any proposed housing project at Jean Sweeney Park should be considered by the larger community, but does not recommend adding it to the Housing Element at this time for the following reasons:
• Any sale or proposed long term ground leases of Jean Sweeney Park would require approval by the voters of Alameda. Article 22, Section 12 of the City Charter prohibits public parks from being “sold or otherwise alienated except pursuant to the affirmative votes of the majority of the electors voting on such a proposition,” i.e. via a ballot initiative.
• Any proposed housing project would require several steps, including the following: the Council must take action to place a ballot measure authorizing approval of any sale and/or long term ground lease of Jean Sweeney Park on the ballot, the voters must approve the ballot measure by a majority vote, a development partner must be selected, followed by project design, approval and construction. At such time that these steps have been completed, it is likely that the current 8-year Housing Element cycle is drawing to a close.
• If the City includes a housing project on the Jean Sweeney Park site, and any of the steps described above result in the project not going forward, the City may find itself in a “no net loss” situation, which would require finding another site to compensate for the loss of the units planned for on the Park lands.
• Even if the voters approve the ballot measure and a ground lease becomes available for an affordable housing developer, that developer will still need financial subsidies to build a housing project. For example, Alameda owns land at Alameda Point that it can make available to affordable housing developers at no cost, but those developers still need a financial subsidy from the adjacent for-profit developers or the City in addition to the free land to build the housing. Therefore, unless the project is a for profit market rate project, it is unlikely that the developer would be able to afford funding off-site park improvements in addition to being able to afford to prepare the site, construct the necessary infrastructure and provide affordable housing, which is the City’s greatest housing need.
Final Adjustments and Recommendations:
AAPS and ACT have consistently stated that the draft Housing Element and zoning amendments exceed the RHNA requirements and will result in more housing than is required by the RHNA. HEWG has consistently stated that the draft Housing Element and zoning amendments fall short and will not result in enough housing to meet the RHNA.
Once the Housing Element is adopted by the City Council, the Planning Board will conduct an annual public hearing to review the Housing Element housing construction statistics (Program #22), which provides an opportunity to determine whether any adjustments may need to be made to the Housing Element. The Annual Review is designed to allow the City to make adjustments, if any, if housing construction is proving to be less or more than projected in the Housing Element. There are a number of potential scenarios that could . For example, at the annual review, if the permit records show that the City is exceeding its annual housing construction obligations, the Planning Board may be able to make the necessary findings that an adjustment to “downzone” one or more areas will not impact the City’s ability to meet the RHNA. Another example is that the permit records show that one or more areas (e.g. the residential districts) are exceeding the projected number of units for those areas, but different areas (e.g. Park and Webster Street or shopping centers or C-1 districts) are underperforming, in which case the Planning Board may consider whether a zoning amendment to “downzone” the residential district(s) with a companion “upzoning ”of the under-performing areas. If the annual review shows that all areas are underperforming, the City will be obligated by its RHNA obligations and Program #22 to consider zoning changes to correct the problems and further incentivize housing production through up-zoning.
At this time, staff recommends that the Planning Board:
• Consider the comments from HCD and the local organizations and any additional public comment received, and
• Direct staff to return at the next available regularly schedule Planning Board for final Planning Board recommendation on the Housing Element and Zoning amendments with Program #8 amended to read as follows:
“Pursue federal, state, and private funding for low- and moderate-income housing by applying for state and federal monies and consider a local bond measure for direct support of lower-income housing construction and rehabilitation, specifically for development of housing affordable to extremely low-income households.”
ENVIRONMENTAL REVIEW
Reviewing and commenting on the draft Housing Element and amendments to the AMC to implement the policies and goals of the draft Housing Element is not a project under Public Resources Code section 21065 and CEQA Guidelines section 15378. Final adoption of the Housing Element and zoning code amendments will be subject to review under the California Environmental Quality Act. Staff has completed its analysis of the potential environmental impacts of Housing Element adoption and have determined that the General Plan EIR adequately anticipates and evaluates the impact of Housing Element adoption.
On November 30, 2021, by Resolution No. 15841, the City Council certified a Final Environmental Impact Report for the Alameda 2040 General Plan (State Clearinghouse No. 2021030563) in compliance with the California Environmental Quality Act, and adopted written findings, a Statement of Overriding Considerations, and a Mitigation Monitoring and Reporting Program for the General Plan Amendment to update the Alameda General Plan (General Plan EIR), which evaluated the environmental impacts of 12,000 additional housing units in Alameda over 20 years, including 5,353 housing units to accommodate the RHNA between 2023 through 2031.
Pursuant to CEQA Guidelines sections 15162 and 15163, none of the circumstances necessitating further CEQA review are present with respect to the General Plan EIR. The proposed project to recommend approval of the Housing Element and amend the AMC to implement the policies and goals of the Housing Element of the General Plan would not require major revisions to the General Plan EIR due to new significant impacts or due to a substantial increase in the severity of the significant environmental effects. There have been no substantial changes with respect to the circumstances under which the project would be undertaken that would require major revisions of the General Plan EIR due to new or substantially increased significant environmental effects. Further, there has been no discovery of new information of substantial importance that would trigger or require major revisions to the General Plan EIR due to new or substantially increased significant environmental effects. For these reasons, no further environmental review with respect to the General Plan EIR is required.
CLIMATE IMPACT
Accommodating the RHNA supports the region’s Sustainable Communities Strategy to reduce greenhouse gas emissions. A decision by the City to not meet the RHNA would likely have a negative impact on the region’s ability to reduce greenhouse gas emissions.
RECOMMENDATION
Review and comment on the draft Housing Element and draft Zoning Amendments to implement the draft Housing Element to address State Fair Housing Law and Accommodate the Regional Housing Needs Allocation for the Period 2023-2031.
Respectfully submitted,
Andrew Thomas, Planning, Building and Transportation Director
Allen Tai, City Planner
Henry Dong, Planner III
Brian McGuire, Planner II
Exhibits:
1. Letters from HCD, Alameda Architectural Preservation Society, the Housing Element Working Group, and Alameda Citizens Task Force.
2. November 2021 letter from HCD.