Carmel-by-the-Sea City Council
January 9, 2024

recordings, videotapes, and computer programs, which are produced as part or result of this project, the Participant must grant the United States of America a royalty-free non-exclusive and irrevocable license to publish, reproduce and use, and dispose of in any manner and for any purpose without limitation, and to authorize or ratify publication, reproduction or use of others, of all copyrightable material first produced or composed under this Agreement by the Participant, its employees or any individual or concern specifically employed or assigned to originate and prepare such material.

1. Any publications resulting from the project shall contain the following statements: "The activity which is the subject of this (type of publication) has been financed in part with Federal funds from the National Park Service, Department of the Interior, through the California Office of Historic Preservation. However, the contents and opinions do not necessarily reflect the views or policies of the Department of the Interior or the California Office of Historic Preservation, nor does mention of trade names or commercial products constitute endorsement or recommendation by the Department of the Interior or the California Office of Historic Preservation. Regulations of the U.S. Department of the Interior strictly prohibit unlawful discrimination in departmental Federally-assisted programs on the basis of race, color, sex, age, disability, or national origin. Any person who believes he or she has been discriminated against in any program, activity, or facility operated by a recipient of Federal assistance should write to: Director, Equal Opportunity Program, U.S. Department of the Interior, National Park Service, P.O. Box 37127, Washington, D.C. 20013-7127

2. The Participant shall provide three copies of all publications to the OHP no later than at the end of the project period.

VI. OTHER REQUIREMENTS
A. OMB Circulars and Other Regulations. The following Federal Regulations are incorporated by reference into this Agreement (full text can be found at http://www.ecfr.gov):

1. Administrative Requirements:
a. 2 CFR 200,“Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”

2. Determination of Allowable Costs:
a. 2 CFR 200, Subpart E, "Cost Principles”

3. Audit Requirements:
a. 2 CFR 200, Subpart F, “Audit Requirements”

4. Code of Federal Regulations/Regulatory Requirements:
a. 2 CFR 182 and 1401, "Government-wide Requirements for a Drug-Free Workplace" b. 2 CFR 180 and 1400, "Non-Procurement Debarment and Suspension" (previously located at 43 CFR, 42, "Government wide Debarment and Suspension (NonProcurement)") c. 43 CFR 18, "New Restrictions on Lobbying"
d. 2 CFR 175, "Trafficking Victims Protections Act of 2000" e. FAR Clause 52.203-12, Paragraphs (a) and (b), “Limitation on Payments to Influence Certain Federal Transactions”
f. 2 CFR 25, “System for Award Management (www.SAM.gov) and Data Universal Numbering System (DUNS)”
g. 2 CFR 170,"Reporting Subawards and Executive Compensation" or FFATA (Refer to XII.B.11)
B. Non-Discrimination. All activities pursuant to this Agreement shall be in compliance with the requirements of Executive Order 11246, as amended; Title VI of the Civil Rights Act of 1964, as amended, (78 Stat. 252; 42 U.S.C. §2000d et seq.); Title V. Section 504 of the Rehabilitation Act of 1973, as amended, (87 Stat. 394; 29 U.S.C. §794); the Age Discrimination Act of 1975 (89 Stat. 728; 42 U.S.C. §6101 et seq.); and with all other federal laws and regulations prohibiting discrimination on grounds of race, color, sexual orientation, national origin, disabilities religion, age, or sex.

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C. Lobbying Prohibition. 18 U.S.C. §1913, Lobbying with Appropriated Moneys, as amended by Public Law 107-273, Nov. 2, 2002. No part of the money appropriated by any enactment of Congress shall, in the absence of express authorization by Congress, be used directly or indirectly to pay for any personal service, advertisement, telegram, telephone, letter printed or written matter, or other device, intended or designed to influence in ay any manner a Member of Congress, a jurisdiction, or an official of any government, to favor, adopt, or oppose, by vote or otherwise, any legislation, law, ratification, policy, or appropriation, whether before or after the introduction of any bill, measure, or resolution proposing such legislation, law, ratification, policy, or appropriation; but this shall not prevent officers or employees of the United States or of its departments or agencies from communicating to any such Members or official, at his request, or to Congress or such official, through the proper official channels, requests for legislation, law, ratification, policy, or appropriations which they deem necessary for the efficient conduct of the public business, or from making any communication whose prohibition by this section might, in the opinion of the Attorney General, violate the Constitution or interfere, with the conduct of foreign policy, counter-intelligence, intelligence, or national security activities. Violations of this section shall constitute violation of section 1352(a) title 31. In addition to the above, the related restrictions on the use of appropriated funds found in Div. F, §402 of the Omnibus Appropriations Act of 2008(P.L. 110-161) also apply.

D. Anti-Deficiency Act. Pursuant to 31 U.S.C. §1341 nothing contained in this Agreement shall be construed as binding the NPS to expend in any one fiscal year any sum in excess of appropriations made by Congress, for the purposes of this Agreement for that fiscal year, or other obligation for the further expenditure of money in excess of such appropriations.

E. Minority Business Enterprise Development. Pursuant to Executive Order 12432 it is national policy to award a fair share of contracts to small and minority firms. NPS is strongly committed to the objectives of this policy and encourages all recipients of its Grant Agreements to take affirmative steps to ensure such fairness by ensuring procurement procedures are carried out in accordance with the Executive Order.

F. Assignment. No part of this Agreement shall be assigned to any other party without prior written approval of the OHP and the Assignee.

G. Member of Congress. Pursuant of 41 U.S.C. §22. No Member of Congress shall be admitted to any share or part of any contract or agreement made, entered into, or adopted by or on behalf of the United States, or to any benefit to arise thereupon.

H. Agency. The Participant is not an agent or representative of the United States, the Department of the Interior, NPS, or the State, nor will the Participant represent its self as such to third parties.

NPS and State employees are not agents of the Participant and will not act on behalf of the Participant.

I. Non-Exclusive Agreement. This Agreement in no way restricts the Participant or OHP from entering into similar agreements or participating in similar activities or arrangements, with other public or private agencies, organizations, or individuals.

J. No Employment Relationship. This Agreement is not intended to and shall not be construed to create an employment relationship between NPS or OHP and Participant or its representatives.

No representative of Participant shall perform any function or make any decision properly reserved by law or policy to the Federal government.

K. No Third-Party Right. This Agreement creates enforceable obligations between NPS, OHP and Participant. Except as expressly provided herein, it is not intended nor shall it be construed to DocuSign Envelope ID: 01707476-74CC-4C5B-97F3-B75C9FA6CFEE Attachment 1

create any right of enforcement by or any duties or obligation in favor of persons or entities not a party to this Agreement.

L. Foreign Travel. The Participant shall comply with the provisions of the Fly American Act (49 U.S.C. 40118). The implanting regulations of the Fly American Act are found at 41 CFR 301-

10.131 through 301-10.143.

M. Public Information and Endorsements

1. Participant shall not publicize or otherwise circulate promotional material (such as advertisement, sales brochures, press releases, speeches, still and motion pictures, articles, manuscripts or other publications) which states or implies governmental, Departmental, bureau, or government employee endorsement of a business, product, service, or position which the Participant represents. No release of information relating to this award may state or imply that the Government approves of the Participant's work product to be superior to other or services.

2. Participant must provide a digital copy of any public information releases concerning this award that refer to the Department of the Interior, National Park Service, OHP or Historic Preservation Fund. Specific text, layout photographs, etc. of the proposed release may be submitted for prior approval.

3. As stipulated in 36 CFR 800, public views and comments regarding all Federally-funded undertaking on historic properties must be sought and considered by the authorizing Federal agency. Therefore, the grantee is required to post a press release regarding the undertaking under this grant in on or more major newspapers or news sources that cover the area affected by the project within 30 days of receiving the signed grant agreement. A copy of the posted release must be submitted to NPS within 30 days of the posting.

4. The grantee must transmit notice of any public ceremonies planned to publicize the project or its results in a timely enough manner so that NPS, Department of the Interior, Congressional or other Federal officials can attend if desired.

N. Publications of Results of Studies. No party will unilaterally publish a joint publication without consulting the other party. This restriction does not apply to popular publications of previously published technical matter. Publications pursuant to this Agreement may be produced independently or in collaboration with other; however, in all cases proper credit will be given to the efforts of those parties contribution to the publication. In the event no agreement is reached concerning the manner of publication or interpretation of results, either party may publish data after due notice and submission of the proposed manuscripts to the other. In such instances, the party publishing the data will give due credit to the cooperation but assume full responsibility for any statements on which there is a difference of opinion.

O. Audit Requirements

1. Non-Federal entities that expend $750,000 or more during a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the Single Audit Amendments of 1996 (31 U.S.C. 7501-7507) and 2 CFR 200, Subpart F.

2. Non-federal entities that expend less than $750,000 for a fiscal year in Federal awards are exempt from Federal audit requirements for that year, but records must be available for review or audit by appropriate officials of the Federal agency, pass-through entity, and General Accounting Office (GAO).

3. Audits shall be made by an independent auditor in accordance with generally accepted government auditing standards covering financial audits. Additional audit requirements applicable to this agreement are found at 2 CFR 200, Subpart F, as applicable. Additional information on single audits is available from the Federal Audit Clearinghouse at https://harvester.census.gov/facweb/Default.aspx.

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P. Procurement Procedures. A full description of procurement standards can be found in 2 CFR 200.317-200.326.

Q. Prohibition on Text Messaging and Using Electronic Equipment Supplied by the Government while Driving. Executive Order 13513, Federal Leadership On Reducing Text Messaging While Driving, was signed by President Barack Obama on October 1, 2009. This Executive Order introduces a Federal Government-wide prohibition on the use of the text messaging while driving on official business or while using Government-supplied equipment.

Additional guidance enforcing the ban will be issued at a later date. In the meantime, please adopt and enforce policies that immediately ban text messaging while driving company-owned or -rented vehicles, government-owned, or leased vehicles, or while driving privately owned vehicles when on official government business or when performing any work for or on behalf of the government.

R. Seat Belt Provision. The Participant is encouraged to adopt and enforce on-the-job seat belt use policies and programs for their employees when operating company-owned, rented or personally owned vehicles. These measures include, but are not limited to, conducting education, awareness, and other appropriate programs for their employees about the importance of wearing seat belts and the consequences of not wearing them.

S. Participant Employee Whistleblower Rights and Requirement to Inform Employees of Whistle-blower Rights.

1. This award and employees working on this financial assistance agreement will be subject to the whistleblower rights and remedies in the pilot program on Award Recipient employee whistle-blower protections established at 41 U.S.C. 4712 by section 828 of the National Defense Authorization Act of Fiscal Year 2013 (P.L. 112-239).

2. The Participant shall inform its employees in writing, in the predominant language of the workplace, of employee whistleblower rights and protections under 41 U.S.C. 4712.

3. The Participant shall insert the substance of this clause, including this subsection (3), in all subawards or subcontracts over the simplified acquisition threshold, 42 CFR 52.203-17 (as referenced 42 CFR 3.908-9).

T. Reporting Executive Compensation

1. Participant must report all subaward and executive compensation data pursuant to the Federal Funding Accountability and Transparency Ace (FFATA) of 2006 and associate amendments (P.L. 109-282, as amended by section 6202(a) of P.L. 110-252 (see 31 U.S.C. 6101 note)). Refer to https://www.fsrs/gov/ for more information.

U. Conflict of Interest

1. The Participant must establish safeguards to prohibit its employees from using their positions for purposes that constitute or present the appearance of a personal or organizational conflict of interest. The Participant is responsible for notifying the Awarding Officer in writing of any actual or potential conflicts of interest that may arise during the life of this award. Conflicts of interest include any relationship or matter which might place the Participant or its employees in a position of conflict, real or apparent, between their responsibilities under the agreement and nay other outside interests. Conflicts of interest may also include, but are not limited to, direct or indirect financial interests, close personal relationships, positions of trust in outside organizations, or decision-making affecting the award that would cause a reasonable person with knowledge of the relevant facts to question the impartiality of the Participant and/or Participant's employees and Sub-recipients in the matter.

2. The Awarding Officer and the servicing Ethics Counselor will determine if a conflict of interest exists. If a conflict of interest exists, the Awarding Officer will determine whether a mitigation plan is feasible. Mitigation plans must be approved by the Awarding Officer in writing.

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3. Failure to resolve conflicts of interest in a manner that satisfies the government may be cause for termination of the award. Failure to make required disclosures may result in any of the remedies described in 2 CFR §200.338, Remedies/or Noncompliance, including suspension or debarment (see also 2 CFR part 180).

V. Minimum Wages Under Executive Order 13658 (January 2015)

1. Definitions. As used in this clause:
a. "United States" means the 50 states and the District of Columbia. b. "Worker"
i. Means any person engaged in performing work on, or in connection with, an agreement covered by Executive Order 13568; and
ii. Whose wage under such agreements are governed by the Fair Labor Standards Act (29 U.S.C. chapter 8), the Service Contract Labor Standards statute (41 U.S.C. chapter 67), or the Wage Rate requirements (Construction) statute (40 U.S.C. chapter 31, subchapter IV);
iii. Other than individuals employed in a bona fide executive, administrative, or professional capacity, as those terms are defined in 29 CFR 541. iv. Regardless of the contractual relationship alleged to exist between the individual and the employer.
v. Includes workers performing on, or in connection with, the agreement whose wages are calculated to special certificates issued under 29 U.S.C. §214(c). vi. Also includes any person working on, or in connection with, the agreement and individually registered in a bona fide apprenticeship or training program registered with the Department of Labor's Employment and Training Administration, Office of Apprenticeship, or with a State Apprenticeship Agency recognized by the Office of Apprenticeship.

2. Executive Order Minimum Wage rate.
a. The Participant shall pay to workers, while performing in the United States, and performing on, or in connection with, this agreement, a minimum hourly wage rate of $10.60 per hour beginning January 1, 2016.
b. The Participant shall adjust the minimum wage paid, if necessary, beginning January 1, 2016, and annually thereafter, to meet the Secretary of Labor's annual E.O. minimum wage. The Administrator of the Department of Labor's Wage and Hour Division (the Administrator) will publish annual determination in the Federal Register no later than 90 days before the effective date of the new E.O. minimum wage rate. The Administrator will also publish the applicable E.O. minimum wage on https://sam.gov/content/wagedeterminations (or any successor Web site) and on all wage determinations issued under the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute. The applicable published E.O. minimum wage is incorporated by reference into this agreement.
c. The Participant may request a price adjustment only after the effective date of the new annual E.O. minimum wage determination. Prices will be adjusted only if labor costs increase as a result of an increase in the annual E.O. minimum wage, and for associated labor costs and relevant subaward costs. Associated labor costs shall include increases or decreases that result from changes in social security and unemployment taxes and workers' compensation insurance, but will not otherwise include any amount for general and administrative costs, overhead, or profit.
i. Subrecipients may be entitled to adjustments due to the new minimum wage, pursuant to paragraph (b)(2). Participants shall consider any Subrecipient requests for such price adjustment.
ii. The Awarding Officer will not adjust the agreement price under the clause for any costs other than those identified in paragraph (b)(3)(i) of this clause, and will not provide duplicate price adjustments with any price adjustment under clauses DocuSign Envelope ID: 01707476-74CC-4C5B-97F3-B75C9FA6CFEE Attachment 1

implements the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute.
d. The Participant warrants that the prices in this agreement do not include allowance for any contingency to cover increased costs for which adjustment is provided under this clause. e. The Participant shall pay, unconditionally to each worker, all wages due free and clear without subsequent rebate or kickback. The Participant may make deductions that reduce a worker's wages below the E.O. minimum wage rate only if done in accordance with 29 CFR §10.23,Deductions.
f. The Participant shall not discharge any part of its minimum wage obligation under this clause by furnishing fringe benefits or, with respect to workers whose wages are governed by the Service Contract Labor Standards statute, the cash equivalent thereof. g. Nothing in this clause shall excuse the Participant from compliance with any applicable Federal or State prevailing wage law or any applicable law or municipal ordinance establishing a minimum wage higher than the E.O. minimum wage. However, wage increases under such other laws or municipal ordinances are not subject to price adjustment under this subpart.
h. The Participant shall pay the E.O. minimum wage rate whenever it is higher than any applicable collective bargaining agreement(s) wage rate. i. The Participant shall follow the policies and procedures in 29 CFR 10.24(b) and 10.28 for treatment of workers engaged in an occupation in which they customarily and regularly receive more than $30.00 a month in tips.

3. This clause applies to workers as defined in Section 1.b of this agreement condition. As provided in that definition:
a. Workers are covered regardless of the contractual relationship alleged to exist between the Participant or Subrecipient and the worker;
b. Workers with disabilities whose wages are calculated pursuant to special certificates issued under 29 U.S.C. 214(c) are covered; and
c. Workers who are registered in a bona fide apprenticeship program or training program registered with the Department of Labor's Employment and Training Administration, Office of Apprenticeship, or with a State Apprenticeship Agency recognized by the Office of Apprenticeship, are covered.

4. This clause does not apply to:
a. Fair Labor Standards Act (FLSA) - covered individuals performing in connection with contracts covered by the E.O., i.e. those individuals who perform duties necessary to the performance of the agreement, but who are not directly engaged in performing the specific work called for by the agreement, and who spend less than 20% of their hours worked in a particular workweek performing in connection with such agreements; b. Individuals exempted from the minimum wage requirements of the FLSA under 29 U.S.C. §213 (a) and (b), unless otherwise covered by the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute. These individuals include but are not limited to:
i. Learners, apprentices, or messengers whose wages are calculated pursuant to special certificates issued under 29 U.S.C. §214(a).
ii. Students whose wages are calculated pursuant to special certificates issued under 29 U.S.C. §214(b).
iii. Those employed in a bona fide executive, administrative, or professional capacity (29 U.S.C. §213(a)(1) and 29 CFR 541).

5. Notice. The Participant shall notify all workers performing work on, or in connection with, this agreement of the applicable E.O. minimum wage rate under this clause. With respect to workers covered by the Service Contract Labor Standards statute or the Wage Rate Requirements (Construction) statute, the Contractor may meet this requirement by posting, in a prominent and accessible place at the worksite, the applicable wage determination under those statutes. With respect to workers whose wages are governed by the FLSA, the Participant shall post notice, utilizing the poster provided by the Administrator, which can be DocuSign Envelope ID: 01707476-74CC-4C5B-97F3-B75C9FA6CFEE Attachment 1

obtained at www.dol.gov/whl/govcontracts, in a prominent and accessible place at the worksite. Participants that customarily post notices to workers electronically may post the notice electronically provided the electronic posting is displayed prominently on any Web site that is maintained by the Participant, whether external or internal, and customarily use for notices to workers about terms and conditions of employment.

6. Payroll Records
a. The Participant shall make and maintain records, for three years after completion of the work, containing the following information for each worker:
i. Name, address, and social security number,
ii. The worker's occupation(s) and classification(s);
iii. The rate or rates of wages paid;
iv. The number of daily and weekly hours worked by each worker; v. Any deductions made; and
vi. Total wages paid.
b. The Participant shall make records pursuant to paragraph (e)(1) of this clause available for inspection and transcription by authorized representatives of the Administrator. The Participant shall also make such records available upon request of the Contracting Officer. c. The Participant shall make a copy of the agreement available, as applicable, for inspection or transcription by authorized representatives of the Administrator. d. Failure to comply with this paragraph (e) shall be a violation of 29 CFR §10.26 and this agreement. Upon direction of the Administrator or upon the Awarding Officer's own action, payment shall be withheld until such time as the noncompliance is corrected. e. Nothing in this clause limits or otherwise modifies the Participant's payroll and recordkeeping obligations, if any, under the Service Contract Labor Standards statute, the Wage Rate Requirements (Construction) statute, the Fair Labor Standards Act, or any other applicable law.

7. Access. The Participant shall permit authorized representatives of the Administrator to conduct investigations, including interviewing workers at the worksite during normal working hours.

8. Withholding. The Awarding Officer, upon his or her own action or upon written request of the Administrator, will withhold funds or cause funds to be withheld from the Participant under this or any other Federal agreement with the same Participant, sufficient to pay workers the full amount of wages required by this clause.

9. Disputes. Department of Labor has set forth in 29 CFR §10.51, Disputes concerning the Participant’s compliance with Department of Labor regulations at 29 CFR §10. Such disputes shall be resolved in accordance with those. This includes disputes between the Participant (or any of its Subrecipients) and the contracting agency, the Department of Labor, or the workers or their representatives.

10. Antiretaliation. The Participant shall not discharge or in any other manner discriminate against any worker because such worker has filed any complaint or instituted or caused to be instituted any proceeding under or related to compliance with the E.O. or this clause, or has testified or is about to testify in any such proceeding.

11. Subcontractor compliance. The Participant is responsible for Subrecipient compliance with the requirements of this clause and may be held liable for unpaid wages due Subrecipient workers.

W. Patents and Inventions. Participants of agreements which support experimental, developmental, or research work shall be subject to applicable regulations governing patents and inventions, including the government-wide regulations issued by the Department of Commerce at 37 CFR 401, Rights to Inventions Made by Non-profit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements. These regulations do not apply to any agreement made primarily for educational purposes.

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CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2024-010

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA

AUTHORIZING FUNDS FROM THE CALIFORNIA DEPARTMENT OF PARK AND

RECREATION UNDER THE HISTORIC PRESERVATION FUND GRANT PROGRAM FOR A $40,000 AWARD TO PARTIALLY FUND “PHASE II” OF THE HISTORIC CONTEXT STATEMENT UPDATE PROJECT.

WHEREAS, the California Department of Park and Recreation under the Historic Preservation Fund Grant Program, may provide financial assistance to support historic preservation and has approved a grant program to provide such financial assistance for Certified Local Governments (CLG); and,
WHEREAS, the goal of the grant program is to assist CLGs with historic preservation programs; and,
WHEREAS, the City of Carmel-by-the-Sea is a CLG; and,
WHEREAS, the City of Carmel-by-the-Sea, desires to pursue a project that would result in the completion and submittal for certification by the California Coastal Commission of a comprehensive update to the City’s Historic Context Statement; and, WHEREAS, the City of Carmel-by-the-Sea’s Historic Context Statement is a key guiding regulatory document for the preservation of historic resources in the City; and, WHEREAS, the City of Carmel-by-the-Sea commits to and agrees to fully support a planning effort intended to amend a certified LCP pursuant to the provisions of the California Coastal Act, with full public participation and coordination with the Coastal Commission staff.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY:

1. Authorize the City Administrator of the City of Carmel-by-the-Sea or their Designee to accept and execute in the name of the City of Carmel-by-the-Sea, all necessary applications, contracts, and agreements and amendments thereto, to accept a $40,000 grant award from the State of California Department of Parks and Recreation.

Attachment 2
Resolution 2024-009

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA this 9 th day of January, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:

Dave Potter Nova Romero, M.M.C.

Mayor City Clerk
Attachment 2

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
January 9, 2024

CONSENT AGENDA
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Marnie R. Waffle, AICP, Principal Planner APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Resolution 2024-011 authorizing the City Administrator to execute an Amendment to Professional Services Agreement No. PBD-EMC-037-22-23 with EMC Planning Group, Inc. for scope of work for a not-to-exceed amount of $92,331, increasing the total contract cost to $371,931
RECOMMENDATION:

Adopt Resolution 2024-011 authorizing the City Administrator to execute an Amendment to Professional Services Agreement No. PBD-EMC-037-22-23 with EMC Planning Group, Inc. for scope of work for a not-to-exceed amount of $92,331, increasing the total contract cost to $371,931.

BACKGROUND/SUMMARY:

On February 7, 2023, the City Council adopted Resolution 2023-024 authorizing the City Administrator to execute a Professional Services Agreement with EMC Planning Group Inc. for a not-to-exceed fee of $239,145 to update the General Plan Housing and Safety Elements.

On July 11, 2023, the City Council adopted Resolution 2023-074, authorizing the City Administrator to execute Amendment #1 to Professional Services Agreement No. PBD-EMC-037-22-23 with EMC Planning Group, Inc. to complete the required environmental review for the General Plan Housing and Safety Element updates in accordance with the California Environmental Quality Act (CEQA) for a not-toexceed amount of $40,455, increasing the total contract cost to $279,600.

On August 3, 2023, the City submitted the 6
th cycle 2023-2031 Housing Element update to the Department of Housing and Community Development (HCD) for review. On November 1, 2023, the City received a comment letter from HCD outlining necessary revisions for the housing element to be in substantial compliance with state law.

Staff has been working with EMC Planning Group to respond to the comments and have expended the funds available in Task 3 to accomplish the work. This budget amendment allows staff to complete the necessary revisions and submit a revised Housing Element to HCD for review.

The Carmel Municipal Code requires the City Council to approve all contracts valued at $25,000 or more by Resolution. The purpose of this agenda item is to authorize the City Administrator to approve an amendment to the existing agreement with EMC Planning Group that increases the not-to-exceed contract amount by $92,331, from $279,600 to $371,931.

FISCAL IMPACT:

Consultant fees for the project are $371,931. The cost will be paid with grant funding from SB2, LEAP, and REAP, as well as contract services from the Community Planning & Building Department fiscal year 2023/2024 budget. In 2019 and 2020, the City received three grant awards totaling $290,000 to assist with the cost of updating the Housing Element: SB2 ($160,000), LEAP ($65,000), and REAP ($65,000).

PRIOR CITY COUNCIL ACTION:

On February 7, 2023, the City Council adopted Resolution 2023-024 authorizing the City Administrator to execute a Professional Services Agreement with EMC Planning Group Inc. for a not-to-exceed fee of $239,145 to update the General Plan Housing and Safety Elements.

On July 11, 2023, the City Council adopted Resolution 2023-074 authorizing the City Administrator to execute Amendment No. 1 to the Professional Services Agreement that increases the not-to-exceed contract amount by $40,455, from $239,145 to $279,600.

ATTACHMENTS:

Attachment 1) Resolution 2024-011
Attachment 2) EMC Planning Group, Inc.- Request for Contract Amendment # 3

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2024-011

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA

AUTHORIZING THE CITY ADMINISTRATOR TO EXECUTE AN AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT NO. PBD-EMC-037-22-23 WITH EMC PLANNING GROUP, INC. TO PREPARE RESPONSES TO COMMENTS PROVIDED BY THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT ON THE 6TH CYCLE 2023- 2031 HOUSING ELEMENT UPDATE FOR A NOT-TO-EXCEED AMOUNT OF $92,331 INCREASING THE TOTAL CONTRACT COST TO $371,931
WHEREAS, on February 7, 2023, the City Council adopted Resolution 2023-024 authorizing the City Administrator to execute a Professional Services Agreement with EMC Planning Group Inc. for a not-to-exceed fee of $239,145 to update the General Plan Housing and Safety Elements; and
WHEREAS, on July 11, 2023, the City Council adopted Resolution 2023-074 authorizing the City Administrator to execute Amendment #1 to the Professional Services Agreement to complete the required environmental review for a not-to-exceed amount of $40,455, increasing the total contract cost to $279,00, and
WHEREAS, on August 3, 2023, the City submitted the 6th cycle 2023-2031 Housing Element update to the Department of Housing and Community Development (HCD) for review; and
WHEREAS, on November 1, 2023, the City received a comment letter from HCD outlining necessary revisions for the housing element to be in substantial compliance with state law; and WHEREAS, EMC Planning Group, Inc. has provided a proposal to complete the responses to HCD’s comments for a not-to-exceed amount of $92,331, increasing the total contract cost to $371,931; and
WHEREAS, the Carmel Municipal Code requires the Council to approve contracts with a value of $25,000 or more by Resolution; and
WHEREAS, in 2019 and 2020, the City received three grant awards totaling $290,000 to assist with the cost of updating the Housing Element: SB2 ($160,000), LEAP ($65,000), and REAP ($65,000); and
WHEREAS, the project will be funded by SB2, LEAP, and REAP grants and contract services in the Community Planning & Building Department budget.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY:

Authorize the City Administrator to execute an amendment to Professional Services Agreement No. PBD-EMC-037-22-23 with EMC Planning Group Inc. for a not-to-exceed amount of $92,331, increasing the total contract cost to $371,931.

Attachment 1
Resolution No. 2024-011

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 9th day of JANUARY, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
_________________________ _________________________
Dave Potter Nova Romero, MMC
Mayor City Clerk
Attachment 1
December 4, 2023
Brandon Swanson
Community Planning and Building Director
City of Carmel-by-the-Sea
City Hall
Carmel-by-the-Sea, CA 93921
Re: Carmel-by-the-Sea 6th Cycle Housing Element (2023-2031) Request for Contract Amendment #3
Dear Brandon,
This is a request to amend the existing scope and budget for the 6th Cycle Housing Element Update (2023-2031) project. With this scope and budget amendment, the EMC Planning Group team will make revisions to the draft housing element in response to Housing and Community Development (HCD) comments, which the City received on November 1, 2023.

Completion of Work to Date
In coordination with City staff, EMC Planning Group facilitated and supported City staff at public meetings to inform the community on the status of the 6th Cycle Housing Element Update. EMC Planning Group facilitated additional outreach efforts including, the development of a dedicated housing element update website (https://homecarmelbythesea.com/), stakeholder survey, and promotional outreach materials.

On June 5, 2023, EMC Planning Group published the Initial Public Review Draft Housing Element for a 30-day public review period, which ended on July 6, 2023. Throughout this period, EMC Planning Group and City staff reviewed public comments and developed responses.

Attachment 2
Brandon Swanson, Community Planning and Building Director City of Carmel-by-the-Sea
December 4, 2023, Page 2
On July 11, 2023, the City Council discussed revisions to the draft housing element following the 30-day public comment period, and provided policy direction. Per the direction of City staff and the City Council, EMC Planning Group revised the draft housing element. Revisions to the draft addressed public comments and responses to the stakeholder survey. On August 3, 2023, the Initial Draft Housing Element was submitted to HCD for a 90-day review.

City staff conducted a mid-cycle review with HCD reviewers on September 15, 2023. On November 16, 2023, EMC Planning Group and City staff reviewed the HCD review letter to determine next steps. EMC Planning Group facilitated a meeting with HCD reviewers the following day on November 17, 2023. This meeting was held to gain clarity for specific comments in the November 1, 2023 HCD review letter.

HCD Requested Revisions for the Housing Element Update
EMC Planning Group will continue to work with City staff, and community stakeholders in making the necessary revisions responsive to the November 1, 2023 HCD review letter. This effort includes one (1) set of revisions and follows the Initial Draft Housing Element submitted to HCD on August 3, 2023.

Scope
Amendments to the current scope are intended to address Tasks 1–3. The following outlines the proposed revised scope of work according to task. Please note, the scope and budget included with this contract amendment is based on the following assumptions:
 Certain items identified in the Tasks require City staff knowledge and access to resources. EMC Planning Group staff will work in partnership with City staff in order to avoid redundancies and expedite revisions;
 No more than ten (10) written public comment letters would be received during the seven-day public review period for the HCD Draft #2, and these letters would not raise new issues that require additional analysis. Any additional written public comments may require a contract amendment;
 City staff would conduct all required distribution, publication, and noticing tasks associated with release of the HCD Draft #2, publication of notices in a local newspaper, public hearing notices;
 City staff will provide all internal comments on the HCD Draft #2 in one consolidated set of comments (electronically); and,
 City staff will coordinate with EMC Planning Group to permit EMC staff to submit HCD Draft #2.

Attachment 2
Brandon Swanson, Community Planning and Building Director City of Carmel-by-the-Sea
December 4, 2023, Page 3
Task 1 – Project Management and Coordination
This task includes project management and covers communication and coordination between the EMC Planning Group team, City staff, and HCD. It includes meetings, phone conferences, email exchanges, and other communications and submission of the final HCD Draft #2.

Deliverables:
 Attendance at up to two (2) one-hour meetings with HCD reviewers including meeting preparation;
 Attendance at up to four (4) one-hour meetings with City staff, including meeting preparation; and
 Management and coordination of the submittal of the Final HCD Draft #2 to HCD, both hard copy and electronically; and,
 Coordination with the City team and internal team.

Task 2 – Community Outreach and Engagement
To complete this task, EMC Planning Group will do the following:
 Develop property owner outreach forms for the City to distribute to property owners to determine development interest; and
 Maintaining the dedicated housing element update website https://homecarmelbythesea.com/ to meet AB 215 requirements including:
 Seven-day public noticing requirement for revisions to the draft housing element prior to HCD resubmittal; and
 Posting the HCD Revised Draft Housing Element online at https://homecarmelbythesea.com/.

Deliverables:
 One (1) property owner outreach form in electronic PDF format; and  Update housing element website, https://homecarmelbythesea.com/.

Task 3 – Revisions to the Housing Element Per November 1, 2023 HCD Review Letter
To complete this task, EMC Planning Group will revise the draft housing element and submit two (2) informal partial submissions to HCD reviewers according to the topics identified in the November 1, 2023 HCD review letter. EMC Planning Group will work with City staff to identify the items to submit for an informal review.

Attachment 2
Brandon Swanson, Community Planning and Building Director City of Carmel-by-the-Sea
December 4, 2023, Page 4
Specifically, EMC Planning Group will be responsible for the following in response to the HCD Review Letter:

A. Housing Needs, Resources, and Constraints

1. Affirmatively Furthering Fair Housing;

2. Special Housing Needs with support from City staff;

3. Sites Inventory
 Realistic Capacity, with support from the City;
 Suitability of Nonvacant Sites, with support from the City in gathering data; and resources provided by the City’s subconsultant, ECONorthWest;  Alternative Adequate Sites, with support from the City;  Zoning for Lower-Income Households, with support from the City;  Infrastructure;
 Zoning for a Variety of Housing Types.

4.Governmental and Non-Governmental Constraints.

B. Housing Programs

1. Schedule of Actions and Discrete Timing for Implementation  Program 3.1A, with support from the City;
 Program 3.3D, with support from the City;

2. Identify Actions to Make Sites Available During Planning Period  Shortfall of Sites to Accommodate the Lower-Income RHNA (This item is being reviewed by HCD staff as of 11/17/23);
 Minimum Densities;
 City-Owned Sites, with support from the City.

3. Address and as Possible, Remove Governmental and Non-Governmental Constraints
 Revise or Add Programs to Address/Remove Identified Constraints, with support from the City.

4. Promote and Affirmatively Further Fair Housing Opportunities, with support from the City.

Deliverables assumes a revised copy sent to HCD on or before January 24, 2024 as outlined in the timeline below:
 Two (2) informal partial submissions to HCD in response to the November 1, 2023 HCD review letter;
 One (1) revised draft posted on the City’s website for a seven-day public review period;
 One (1) revision based on comments received during the seven-day public review period (assuming up to 10 written comments);
Attachment 2
Brandon Swanson, Community Planning and Building Director City of Carmel-by-the-Sea
December 4, 2023, Page 5
 One (1) Revised Draft Housing Element – clean version in electronic PDF format and one (1) hard copy;
 One (1) Revised Draft Housing Element – track changes version in electronic PDF format;
 One (1) Revised HCD Site Inventory Table in electronic Excel format (if necessary);
 One (1) Revisions Matrix detailing responses to HCD comments;  One (1) Re-submittal Cover Letter in electronic PDF format; Task 4 –Safety Element
Complete preparation of Safety Element updates/revisions per scope of services in contract executed on February 7, 2023.

Task 5 – CEQA
Complete preparation of CEQA documentation per scope of services in contract executed on February 7, 2023 and amended on July 11, 2023.

Timeline
The timeline for the scope of revisions to the housing element is contingent on the timeliness of HCD to respond to revisions. It is also understood that the City is waiting for further clarification from HCD on the following items which could affect the timeline:
 Program 3.1.G and minimum density of 33 dua/ac. Particularly the fact that commercial uses are permitted and a single-story commercial use could be proposed.
 Water issues in Carmel-by-the-Sea. City’s control is limited to small scale programs and allocation priority.
 Use of SB 10 for Site 10 (Carmel Foundation) and Site 11 (American Legion).

These properties are both owned by service providers therefore reasonable to use SB 10.

The following table presents an anticipated timeframe to complete the aforementioned revisions to the housing element. Please note the timeline anticipates a timely execution of amendment #3 and may be impacted if the amendment is authorized after funds in the existing contract are expended.

Attachment 2
Brandon Swanson, Community Planning and Building Director City of Carmel-by-the-Sea
December 4, 2023, Page 6
Task Timeframe
Task 1 Project Management and Coordination Ongoing throughout the project Task 2 Community Outreach and Engagement December 2023 – January 24, 2024 Task 3 HCD Housing Element Draft #2 (Response to HCD letter, republish draft and submit to HCD) December 2023 –January 24, 2024 Budget
A spreadsheet is attached presenting the budget for the process. The following table provides an overview of the contract, including this contract amendment request.

Contract Overview
Current Contract (including contingency) $239,145
Amendment #1 $40,455
Amendment #2 (time extension) $0.00
Subtotal $279,600
Amendment #3 (including contingency) $92,331
Total New Contract Amount After Approval of this Amendment $371,931 We look forward to continue to work with you and City staff on this important planning effort. Please let me know if you have any questions.

Sincerely,
Michael Groves, AICP
Senior Principal
Cc: Anastazia Aziz, AICP
Attachment 2
Task
Senior Principal Principal Associate Planner Graphics Desktop Publisher Admin/Production Staff Michael Groves Anastazia Aziz
Martin Carver
Kailon Thompson &
Kylie Pope Matt Papurello Kristina Arden Tiffany Robinson Billing Rate (Per Hour) $295.00 $275.00 $175.00 $140.00 $150.00 $125.00 Task 1 - Project Management and Coordination 7.0 12.0 18.0 0.0 4.0 5.0 56.0 $11,140.00 Task 2 - Community Outreach and Engagement 0.0 4.0 9.0 0.0 2.0 0.0 20.0 $3,675.00 Task 3 - HCD Revisions to Housing Element 4.0 25.0 85.0 12.0 4.0 17.0 212.0 $36,435.00 Task 4 - Safety Element $19,920.00
Task 5 - CEQA $4,463.00
Subtotal (Hours) 11.0 41.0 112.0 12.0 10.0 22.0 Total Hours Total Cost Subtotal (Cost) $3,245.00 $11,275.00 $19,600.00 $1,680.00 $1,500.00 $2,750.00 288.0 $75,633.00 Additional Costs
Travel and Production Costs
Administrative Overhead 10%
Total
Total Costs
Contingency Fees*
Contingency Fees*
Administrative Overhead 10%
Total
*The need for subconsultant support is unknown at this time and will be determined with City Staff at a later date. This contingency is not a part of the total cost, but is strongly recommended to be approved with the contract - to allow as staff discretionary funds to be used throught the term of the contract to seek certification of the Housing Element by HCD. $16,500.00
$75,831.00
$15,000.00
$1,500.00
$180.00
$18.00
$198.00
Carmel-by-the-Sea Housing Element Update (6th Cycle) HCD Revisions EMC Planning Group Inc.

Total
Hours Total Cost

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
January 9, 2024

CONSENT AGENDA
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Jane Hogan, Accountant
APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Resolution 2024-012 Authorizing the City Administrator to Execute a Professional Services Agreement with Visit Carmel to Serve as the Carmel Restaurant Improvement District Owners' Association
RECOMMENDATION:

Approve Resolution 2024-012 Authorizing the City Administrator to execute a Professional Services Agreement with Visit Carmel to serve as the Carmel Restaurant Improvement District Owners' Association BACKGROUND/SUMMARY:

Background Summary:

The Carmel Restaurant Improvement District (CRID) was initially established on January 1, 2019, for a five-year term.

Restaurant business owners decided to pursue renewal of the CRID in order to continue a revenue source devoted to providing sales and marketing services to increase restaurant food and drink sales at assessed restaurant businesses.

Following the CRID renewal process, on July 11, 2023, Council adopted Ordinance No. 2023-005, renewing the CRID for a term of 9 years and 6 months, starting January 1, 2024, through June 30, 2033, and adopted the CRID Management District Plan.

Through the adoption Ordinance 2023-005, the Council determined that Visit Carmel will continue to serve as the Owners’ Association for the CRID and designated to continue to implement the CRID Management District plan, as defined in Streets and Highways Code §36612.

Passage of this Ordinance authorized the Council to contract with Visit Carmel to administer the CRID.

Recommendation:

It is recommended by staff that the City enter into an agreement with Visit Carmel to serve as the "Owners' Association" for the CRID. As defined within State law, the "Owners’ Association" is a “private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance and activities specified in the management district plan.”
Carmel Restaurant Improvement District Highlights: A restaurant improvement district is a special assessment district formed under California Streets and Highway Code that allows restaurant business owners to organize their collective efforts to increase restaurant sales. Specifically, as specified within the District Management Plan, the CRID will:

Include all full service and fine dining restaurant businesses, presently existing, and those established in the future, within the City boundaries of Carmel-by-the-Sea.

Provide sales and marketing services to increase restaurant food and drink sales of the assessed businesses within the CRID.

Set an annual assessment rate at one quarter of one percent (.25%) of gross food and drink sales revenue, which may be increased by the CRID Management Committee to a maximum rate of one percent (1%) of gross food and drink sales revenue during the CRID's term.

Remain in existence through the nine (9) year six (6) month duration, beginning January 1, 2024 through June 30, 2033. Once per year, beginning on the anniversary of the CRID formation, as set forth in the adopted formation resolution, there is a thirty (30) day period in which business owners paying fifty percent or more of the assessment may submit a written petition requesting the disestablishment of the district.

Have an estimated annual budget of $240,000 for the nine year and six month term if maximum assessment rates are not adopted.

In addition, the City will be responsible for:

Collecting the assessment on a quarterly basis from each restaurant business located within the CRID boundaries. The City shall be paid a fee equal to two percent (2%) of the amount of assessment collected to offset its cost of collection and administration.

Forwarding the assessments to Visit Carmel, which will serve as the Owners’Association as required by State law, and have the responsibility of managing CRID programs as provided in the Management District Plan.

The Visit Carmel Board will:

Support a CRID Management Committee tasked with managing funds and implementing programs in accordance with the Management District Plan.

FISCAL IMPACT:

The City will receive an annual fee of two percent (2%) of the amount collected (currently estimated to be $5,595 for fiscal year 2023-24) to cover its costs of administration.

PRIOR CITY COUNCIL ACTION:

On October 2, 2018, Council approved Resolution No. 2018-107-2 Authorizing the City Administrator to execute a Professional Services Agreement with Visit Carmel to serve as the Carmel Restaurant Improvement District Owners' Association.

On July 11, 2023, Council passed Ordinance 2023-005 renewing the Carmel Restaurant Improvement District (CRID) for a term of nine (9) years and six (6) months, beginning January 1, 2024 or soon as possible thereafter, and ending on June 30, 2033.

ATTACHMENTS:

Attachment 1) Resolution 2024-012
Attachment 2) PSA CRID Visit Carmel
Attachment 3) Exhibit A - CRID Management District Plan 2024-33 Attachment 1

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2024-012

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AUTHORIZING THE

CITY ADMINISTRATOR TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH VISIT CARMEL TO SERVE AS THE OWNERS’ ASSOCIATION FOR THE CARMEL RESTAURANT IMPROVEMENT DISTRICT FOR THE TERM OF JANUARY 1, 2024 THROUGH JUNE 30, 2033 WHEREAS, the City intends to establish the Carmel Restaurant Improvement District (CRID) under the Property and Business Improvement District Law of 1994, California Streets and Highways Code §3660; and WHEREAS, Streets and Highways Code §36612 requires a private nonprofit entity to contract with a city to administer or implement improvements, maintenance and activities specified in the management district plan; and
WHEREAS, Visit Carmel serves as the Owners’ Association for the Carmel Hospitality Improvement District and is qualified to serve in this capacity for the Carmel Restaurant Improvement District as well; and WHEREAS, the CRID will have a nine-year six-month duration, commencing on January 1, 2024 and terminating on June 30, 2033.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA DOES HEREBY FINDS AND ORDERS THE FOLLOWING:

Authorize the City Administrator to execute a professional services agreement with Visit Carmel to serve as the Owners’ Association for the Carmel Restaurant Improvement District from January 1, 2024 and terminating on June 30, 2033.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 9th day of January, 2024 by the following roll call vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

SIGNED: ATTEST:

Dave Potter, Mayor Nova Romero, City Clerk
Attachment 1

1 CITY OF CARMEL‐BY‐THE‐SEA

PROFESSIONAL SERVICES AGREEMENT
Visit Carmel – Carmel Restaurant Improvement District Owner’s Association THIS AGREEMENT is, by and between the City of Carmel‐By‐The‐Sea, a municipal corporation, (hereinafter "City"), and Visit Carmel, (hereinafter "Consultant"), collectively referred to herein as the “parties” and shall be effective on January 9, 2024.

WHEREAS, the City wishes to engage Consultant to perform the services required by this Agreement; and WHEREAS, Consultant is willing to render such professional services, as hereinafter defined, on the following terms and conditions; and
WHEREAS, Consultant represents that it is trained, experienced and competent and holds all necessary licenses and certifications to perform the services required by this Agreement.

NOW, THEREFORE, in consideration of the terms and conditions herein contained, the parties hereby covenant and agree as follows:

1. SERVICES
A. Scope of Services. Consultant agrees to provide to the City, as the scope of services (“Scope of Services”) under this Agreement, the following: Manage CRID assessment funds and implement programs in accordance with the Management District Plan, as set forth in Exhibit “A” attached hereto and incorporated herein by reference and in accordance with the California Property and Business Improvement District Law of 1994. The Scope of Services under this Agreement should include, but is not limited to, a project description, project phases, task descriptions, identification of key personnel, identification of subconsultants, their key personnel and general description of services that will be performed, as further set forth in this Agreement and attachments hereto. Consultant agrees to all of the following:
i. Consultant will furnish all of the labor, technical, administrative, professional and other personnel, all supplies and materials, equipment, printing, vehicles, transportation, office space and facilities, and all tests, testing and analyses, calculations, and all other means whatsoever, except as otherwise expressly specified in this Agreement, necessary to perform the services required of Consultant under this Agreement. ii. Consultant must make every reasonable effort to maintain the stability and continuity of Consultant’s key personnel and subcontractors, if any. Consultant must notify City and obtain City’s written approval with respect of any changes in key personnel prior to the performance of any services by replacement personnel.
iii. Consultant must obtain City’s prior written approval before utilizing any subcontractors to perform any services under this Agreement. This written approval must include the identity of the subcontractor and the terms of compensation.

Attachment 2

2 iv. Consultant represents that it has the qualifications, experience and facilities necessary to properly perform the services required under this Agreement in a thorough, competent and professional manner. Consultant will at all times faithfully, competently and to the best of its ability, experience and talent, perform all services described in this Agreement.

In meeting its obligations under this Agreement, Consultant must employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing services similar to those required of Consultant under this Agreement. v. City may inspect and accept or reject any of Consultant’s work under this Agreement, either during performance or when completed. Acceptance of any of Consultant’s work by City will not constitute a waiver of any of the provisions of this Agreement. vi. The Consultant must maintain any work site in the City in a safe condition, free of hazards to persons and property resulting from its operations.

B. Change Orders.
i. Agreements and Change Orders exceeding $59,999 require City Council approval to be valid.
ii. The City may order changes to the Scope of Services, consisting of additions, deletions, or other revisions, and the compensation to be paid Consultant will be adjusted accordingly.

All such changes must be authorized in writing, and executed by Consultant and City. The cost or credit to City resulting from changes in the services will be determined by the written agreement between the parties. However, any increase in compensation beyond the compensation limit amount approved by the City Council must be authorized in advance by the City Council and any service provided by Consultant in the absence ofsuch approval are at Consultant’s sole risk.
iii. Consultant will not be compensated for any services rendered in connection with its performance of this Agreement that are in addition to or outside of those set forth in the Scope of Services or otherwise required by this Agreement, unless such additional services are authorized in advance and in writing by City. iv. If Consultant believes that additional services are needed to complete the Scope of Services, Consultant will provide the City Administrator with written notification describing the proposed additional services, the reasons for such services, and a detailed proposal regarding cost.

C. Familiarity with Services and Site.
i. By executing this Agreement, Consultant represents that Consultant:
a. has thoroughly investigated and considered the Scope of Services to be performed; b. has carefully considered how the services should be performed; c. understands the facilities, difficulties, and restrictions attending performance of the services under this Agreement; and
Attachment 2

3 d. possesses all licenses required under local, state or federal law to perform the services contemplated by this Agreement, and will maintain all required licenses during the performance of this Agreement.
ii. If services involve work upon any site, Consultant has or will investigate the site and is or will be fully acquainted with the conditions there existing, before commencing its services.

Should Consultant discover any latent or unknown conditions that may materially affect the performance of services, Consultant will immediately inform City of such fact and will not proceed except at Consultant’s own risk until written instructions are received from City.

2. COMPENSATION
A. Total Fee. Compensation is entirely funded by CRID assessments. City shall collect assessments on a quarterly basis. City shall transfer to Consultant all collected assessments, less the City collection fee of two (2) percent and any proportional enforcement costs associated with the collection of delinquent CRID assessments within thirty (30) days of receipt of all remittances from the reporting restaurant owners. Payments shall include a total balance of the CRID assessment, less any administrative collection fee and enforcement fees
B.   Reporting. Consultant agrees to provide to City reports under this Agreement as follows:
i. Preparation of the Annual Report as required by the California Property and Business Improvement District Law of 1994, which shall include:
a) Any recommended changes to the CRID boundaries;
b) The improvements and activities to be provided for that fiscal year; c) An estimate of cost for providing the improvements and activities; d) The method and basisfor levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his/her business for that fiscal year;
e) The amount of any surplus or deficit revenues to be carried over from a previous fiscal year; and
f) The amount of any contributions to be made from sources other than assessments.
ii. Deliver the annual report to the City in the month of April, as required by the California Property and Business Improvement District Law of 1994. The annual report required by this section may include other annual reports as part of an all‐ inclusive report.

C. Audit and Examination of Accounts:
i. Consultant must keep and will cause any assignee or subconsultant under this Agreement to keep accurate books of records and accounts, in accordance with sound accounting principles, which pertain to services to be performed under this Agreement.

Attachment 2

4 ii. Any audit conducted of books of records and accounts must be kept in accordance with generally accepted professional standards and guidelines for auditing. iii. Consultant must disclose and make available any and all information, reports, books of records or accounts pertaining to this Agreement to the City and any city of the County of Monterey, or other federal, state, regional or governmental agency which providesfunding for these Services.
iv. Consultant must include the requirements of Section 2F, “Audit and Examination of Accounts,” in all contracts with assignees or subconsultants under this Agreement. v. All records provided for in this Section are to be maintained and made available throughout the performance of this Agreement and for a period of not less than four (4) years after full completion of the Services. All records, which pertain to actual disputes, litigation, appeals or claims, must be maintained and made available for a period of not less than four (4) years after final resolution of such disputes, litigation, appeals or claims.

3. AGREEMENT TERM
A. Term. The work under this Agreement will commence by January 1, 2024 and must be completed by June 30, 2033 unless sooner terminated or the City grants an extension of time in writing pursuant to the terms of this Agreement, except for provisions in this Agreement that will survive the termination or completion of this Agreement.

B. Timely Work. Consultant will perform the Services under this Agreement in accordance with the following phase, task and/or milestone dates:
i. Consultant shall perform all duties incidental or necessary in executing the Management District Plan and providing annual reports to Council in a timely fashion and shall be performed diligently, completely and in accordance with professional standards of performance. Failure to so perform is hereby deemed a material breach of this Agreement and City may terminate this agreement with no further liability hereunder.

4. REPRESENTATIVES AND COMMUNICATIONS
A. City’s Project Representative. The City appointsthe individual named below asthe City’s Project Representative for the purposes of this Agreement (“City’s Project Representative”). The City may unilaterally change its project representative upon notice to Consultant.

Name:   Chip Rerig
Title: City Administrator
Address: P.O. Box CC, Carmel‐by‐the‐Sea, CA 93921
Telephone: 831‐620‐2000
Email: [email protected]
B. Consultant’s Project Manager. Consultant appoints the person named below as its Project Manager for the purposes of this Agreement (“Consultant’s Project Manager”).

Attachment 2

5 Name:   Amy Herzog
Title: Executive Director
Company: Visit Carmel
Address: P.O. Box 3921, Carmel‐by‐the‐Sea, CA 93921
Telephone: 831‐238‐1849
Email: [email protected]
C. Meet and Confer. Consultant agrees to meet and confer with the City’s Project Representative, its agents or employees with regard to Services as may be required by the City to insure timely and adequate performance of this Agreement.

D. Communications and Notices. All communications between the City and Consultant regarding this Agreement, including performance of Services, will be between the City’s Project Representative and Consultant’s Project Manager. Any notice, report, or other document that either party may be required or may wish to give to the other must be in writing and will be validly given to and received by the addressee, if delivered personally, on the date of such personal delivery, if delivered by email, on the date of transmission, or if by mail, seven (7) calendar days after posting.

5. INDEMNIFICATION
Consultant hereby agrees to the following indemnification clause:

To the fullest extent permitted by law (including, without limitation, California Civil Code Sections 2782 and 2782.6), Consultant will defend (with legal counsel reasonably acceptable to the City), indemnify and hold harmless the City and its officers, designated agents, departments, officials, representatives and employees (collectively "Indemnitees") from and against claims, loss, cost, damage, injury expense and liability (including incidental and consequential damages, Court costs, reasonable attorneys' fees as may be determined by the Court, litigation expenses and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation) to the extent they arise out of, pertain to, or relate to, the negligence, recklessness, or willful misconduct of Consultant, any subconsultant or subcontractor, anyone directly or indirectly employed by them, or anyone that they control (collectively "Liabilities"). Such obligations to defend, hold harmless and indemnify any Indemnitee will not apply to the extent that such Liabilities are caused in part by the active negligence or willful misconduct of such Indemnitee.

Notwithstanding the provisions of the above paragraph, Consultant agrees to indemnify and hold harmless the City from and against all claims, demands, defense costs, liability, expense, or damages arising out of or in connection with damage to or loss of any property belonging to Consultant or Consultant's employees, subconsultants, representatives, patrons, guests or invitees.

In no event will the obligation of the Consultant exceed the limitations on the duty to defend and indemnify as set forth in Civil Code Sections 2782, 2782.6, and 2782.8.

Attachment 2

6 6. INSURANCE
Consultant must submit and maintain in full force all insurance as described herein. Without altering or limiting Consultant's duty to indemnify, Consultant must maintain in effect throughout the term of this Agreement a policy or policies of insurance with the following minimum limits of liability:

A. Commercial General Liability Insurance including but not limited to premises, personal injuries, bodily injuries, property damage, products, and completed operations, with a combined single limit of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate.

B. Professional Liability Insurance with limits of not less than $1,000,000 per occurrence or claim and $2,000,000 in the aggregate. Consultant will have a policy for professional liability coverage that provides coverage on an occurrence basis or obtain extended reporting (tail) coverage (with the same liability limits) for at least three years following the City's acceptance of the work.

C. Automobile Liability Insurance covering all automobiles, including owned, leased, non‐owned, and hired automobiles, used in providing Services under this Agreement, with a combined single limit of not less than $1,000,000 per occurrence.

D. Workers' Compensation Insurance. If Consultant employs others in the performance of this Agreement, Consultant must maintain Workers' Compensation insurance in accordance with California Labor Code section 3700 and with a minimum of $1,000,000 per occurrence.

E. Other Insurance Requirements:
i. All insurance required under this Agreement must be written by an insurance company either:
a. admitted to do business in California with a current A.M. Best rating of no less than A:VI; or
b. an insurance company with a current A.M. Best rating of no less than A:VII.

Exception may be made for the State Compensation Insurance Fund when not specifically rated.
ii. Each insurance policy required by this Agreement may not be canceled, except with prior written notice to the City.
iii. All liability and auto policies must:
a. Provide an endorsement naming the City of Carmel‐by‐the‐Sea, its officers, officials, employees, and volunteers as additional insureds. General liability coverage can be provided in the form of an endorsement to the Consultant’s insurance (at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10 and CG 23 37 forms if later revisions used).
b. Provide that such Consultant’s insurance is primary as respects the City, its officers, officials, employees, and volunteers. Any insurance or self‐insurance Attachment 2

7 maintained by the City is excess to the Consultant’s insurance and will not contribute with it.
c. Contain a “Separation of Insureds” provision substantially equivalent to that used in the ISO form CG 00 01 10 01 or their equivalent.
d. Provide for a waiver of any subrogation rights against the City via an ISO CG 24 01 10 93 or its equivalent.
iv. Prior to the start of work under this Agreement, Consultant will file certificates of insurance and endorsements evidencing the coverage required by this Agreement with the City. Consultant will file a new or amended certificate of insurance promptly after any change is made in any insurance policy which would alter the information on the certificate then on file.
v. Neither the insurance requirements hereunder, nor acceptance or approval of Consultant’s insurance, nor whether any claims are covered under any insurance, may in any way modify or change Consultant’s obligations under the indemnification clause in this Agreement, which will continue in full force and effect. All coverage available to the Consultant as named insured will also be available and applicable to the additional insured. Notwithstanding these insurance requirements, Consultant is financially liable for its indemnity obligations under this Agreement.
vi. All policies must be written on a first dollar coverage basis or contain a deductible provision. Any deductibles or self‐insured retentions (“SIR”) must be declared to and approved by the City. At the option of the City, either: the insured will reduce or eliminate such deductibles or SIR as respects the City, its officers, officials, employees and volunteers; or Consultant will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. In no event will any SIR or insurance policy contain language, whether added by endorsement or contained in the policy conditions, that prohibits satisfaction of any self‐insured provision or requirement by anyone other than the named insured, or by any means including other insurance, or which is intended to defeat the intent or protection of an additional insured.
vii. City reservesthe right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. viii. Consultant must require and verify that all subconsultants and subcontractors maintain insurance meeting all the requirements in this Agreement. ix. If Consultant, for any reason, fails to have in place at all times during the term of this Agreement all of the required insurance coverage, the City may, but is not obligated to, obtain such coverage at Consultant’s expense and deduct the cost from the sums due Consultant. Alternatively, City may terminate the Agreement.

Attachment 2

8 x. The existence of the required insurance coverage under this Agreement will not be deemed to satisfy or limit Consultant’s indemnity obligations under this Agreement.

Consultant acknowledges that the insurance coverage and policy limits set forth in this Agreement constitute the minimum coverage and policy limits required. Should any coverage carried by the Consultant or any subcontractor of any tier have limits of liability that exceed the limits or have broader coverage than required in this Agreement, those higher limits and that broader coverage are deemed to apply for the benefit of any person or organization included as an additional insured and those limits and broader coverage will become the required minimum limits and insurance coverage in all sections of this Agreement. Any insurance proceeds available to City in excess of the limits and coverages required by this Agreement, and which is applicable to a given loss, must be made available to City to compensate it for such losses.
xi. Consultant must give City prompt notice of claims made of lawsuits initiated that arise out of or result from Consultant’s performance under this Agreement, and that involve or may involve coverage under any of the required liability insurance policies. xii. The Consultant hereby waives any right of subrogation that any of its insurers may have or that they may accrue out of the payment of any claim related to the Consultant’s performance of this Agreement, regardless of whether any endorsements required by this section are obtained.

7. PERFORMANCE STANDARDS
A. Consultant warrants that Consultant and Consultant’s agents, employees, and subconsultants performing Services under this Agreement are specially trained, experienced, and competent and have the degree of specialized expertise contemplated within California Government Code Section 37103, and further, are appropriately licensed to perform the work and deliver the Services required under this Agreement.

B. Consultant, its agents, employees, and subconsultants must perform all Services in a safe and skillful manner consistent with the usual and customary standards of care, diligence and skill ordinarily exercised by professional consultants in similar fields in accordance with sound professional practices. All work product of Consultant must comply with all applicable laws, rules, regulations, ordinances and codes. Consultant also warrants that it is familiar with all laws that may affect its performance of this Agreement and will advise City of any changes in any laws that may affect Consultant’s performance of this Agreement. All Services performed under this Agreement that are required by law to be performed or supervised by licensed personnel must be performed in accordance with such licensing requirements.

C. Consultant must furnish, at its own expense, all materials, equipment and personnel necessary to carry out the terms of this Agreement. Consultant may not use the City premises, property (including equipment, instruments, or supplies) or personnel for any purpose other than in the performance of its obligations under this Agreement.

D. Consultant agrees to perform all work under this Agreement to the satisfaction of City and as specified herein. The City’s Project Representative or his or her designee will evaluate the work.

Attachment 2

9 If the quality of work is notsatisfactory, City in its discretion may meet with Consultant to review the quality of work and resolve the matters of concern, and may require Consultant to repeat the work at no additional fee until it is satisfactory.

8. CITY INFORMATION AND RESOURCES
A. Available Information. The City will make available to Consultant all relevant information, plans, maps, reports, specifications, standards and pertinent data which is in the hands of the City and is required by Consultant to perform the Services. Consultant may rely upon the accuracy and completeness of such information and data furnished by the City, except where it is stated otherwise or unreasonable.

B. City Resources. The City acknowledges that Consultant’s ability to provide the Services in accordance with this Agreement may be dependent on the City providing available information and resources in a prompt and timely manner as reasonably required by Consultant. To the extent that the City fails to provide City resources, Consultant will not be liable for any resulting delay in the Services or failure to meet the Project Schedule, but in no event will such delay or failure to provide City resources constitute a breach of this Agreement by the City, nor will Consultant be entitled to extra compensation for same. Consultant’s sole remedy shall be an extension of time to complete the Scope of Services.

C. Obligations of Consultant. No reviews, approvals, or inspections carried out or supplied by the City will derogate from the duties and obligations of Consultant, and all responsibility related to performance of the Services will be and remain with Consultant.

9. OWNERSHIP AND USE OF MATERIALS
A. Ownership of the Materials. All data, studies, reports, calculations, field notes, sketches, designs, drawings, plans, specifications, cost estimates, manuals, correspondence, agendas, minutes, notes, audio‐visual materials, photographs, models,software data, computersoftware (if purchased on the City’s behalf) and other documents or products produced by Consultant under this Agreement (collectively, “the Materials”) are and will remain the property of the City even though Consultant or another party may have physical possession of them or a portion thereof. Consultant hereby waives, in favor of the City, any moral rights Consultant, its employees, subconsultants, vendors, successors or assignees may have in the Materials.

B. No Patent or CopyrightInfringement. Consultant guaranteesthat in its creation of the Materials produced under this Agreement, no federal or state patent or copyright laws were violated.

Consultant agreesthat all copyrights, which arise from creation of the work or Services pursuant to this Agreement, will be vested in the City and waives and relinquishes all claims to copyright or intellectual property rights in favor of the City. Consultant covenants that it will defend, indemnify and hold City harmless from any claim or legal action brought against the City for alleged infringement of any patent or copyright related to City’s use of Materials produced by Consultant and its employees, agents and subconsultants under this Agreement.

C. Delivery and Use of the Materials. All Materials will be transferred and delivered by Consultant to the City without further compensation following the expiration or sooner termination of this Attachment 2

10 Agreement, provided that the City may, at any time prior to the expiration or earlier termination of this Agreement, give written notice to Consultant requesting delivery by Consultant to the City of all or any part of the Materials in which event Consultant must forthwith comply with such request. The Materials created electronically must be submitted in a format and medium acceptable to the City. The Materials may be used by the City in any manner for the intended purpose or as part of its operations associated with the Materials.

D. Survival of Ownership and Use Provisions. The provisions contained in Section 10, Ownership and Use of Materials survives the expiration or earlier termination of this Agreement, and that this Section is severable for such purpose.

E. Additional Copies. If the City requires additional copies of reports, or any other material that Consultant is required to furnish as part of the Services under this Agreement, Consultant must provide such additional copies, and the City will compensate Consultant for the actual costs related to the production of such copies by Consultant.

10. CONFIDENTIALITY
A. No Disclosure. Consultant must keep confidential and may not disclose, publish or release any information, data, or confidential information of the City to any person other than representatives of the City duly designated for that purpose in writing by the City. Consultant may not use for Consultant’s own purposes, or for any purpose other than those of the City, any information, data, or confidential information Consultant may acquire as a result of the performance of the Services under this Agreement. Consultant must promptly transmit to the City any and all requests for disclosure of any such confidential information or records. The obligations under this Section will survive the expiration or earlier termination of this Agreement.

B. California Public Records Act. Consultant acknowledges that the City is subject to the California Public Records Act (Government Code Section 6250 et seq.), known as the “PRA,” and agrees to any disclosure of information by the City as required by law. Consultant further acknowledges that it may have access to personal information as defined under the PRA, and Consultant will not use any such personal information for any purposes other than for the performance of Services under this Agreement without the advance written approval of the City.

All Scopes of Services and related documents received will be public records, with the exception of those elements, identified by the Consultant as business trade secrets and are plainly marked “Trade Secret,” “Confidential,” or “Proprietary.” If disclosure is required under the PRA or otherwise by law, the City will not be liable or responsible for the disclosure of any such records and the Consultant will indemnify, defend, and hold the City harmless for any such disclosure.

11. CONFLICT OF INTEREST
Consultant covenants that neither Consultant, nor any officer, principal or employee of its firm, has or will acquire any interest, directly or indirectly, that would conflict in any manner with the interests of City relating to this Agreement or that would in any way hinder Consultant’s performance of services under this Agreement. Consultant’s attention is directed to the conflict of interest rules Attachment 2

11 applicable to governmental decision‐making contained in the Political Reform Act (California Government Code Section 87100 and following) and its implementing regulations (California Code of Regulations, Title 2, Section 18700 et seq.), and California Government Code section 1090.

Consultant is required to file a Form 700 in compliance with the City’s Conflict of Interest Code unless a written determination by the City Administrator is made modifying or eliminating said requirement, or unless otherwise exempted by law.

In addition, Consultant, Consultant’s employees, and subconsultants agree as follows:

A. That they will conduct their duties related to this Agreement with impartiality, and must, if they exercise discretionary authority over others in the course of those duties, disqualify themselves from dealing with anyone with whom a relationship between them could bring the impartiality of Consultant or its employees into question;
B. May not influence, seek to influence, or otherwise take part in a decision of the City knowing that the decision may further their private interests;
C. May not accept any commission, discount, allowance, payment, gift, or other benefit connected, directly or indirectly, with the performance of Services related to this Agreement, that causes, or would appear to cause, a conflict of interest;
D. May have no financial interest in the business of a third party that causes, or would appear to cause, a conflict of interest in connection with the performance of the Services related to this Agreement, and if such financial interest is acquired during the term of this Agreement, Consultant must promptly declare it to the City, and;
E. May not, during the term of this Agreement, perform a service for, or provide advice to, any person, firm, or corporation, which gives rise to a conflict of interest between the obligations of Consultant under this Agreement and the obligations of Consultant to such other person, firm or corporation.

12. DISPUTE RESOLUTION
A. Dispute Resolution Procedures. The parties will make reasonable efforts to promptly resolve any dispute, claim, or controversy arising out of or related to this Agreement (“Dispute”) using the Dispute Resolution Procedures set forth in this Section.

B. Negotiations. First, the City’s Project Representative and Consultant’s Project Manager will make reasonable efforts to resolve any Dispute by amicable negotiations and will provide frank, candid, and timely disclosure of all relevant facts, information, and documents to facilitate negotiations. Should these negotiations be unsuccessful in resolving the Dispute, the matter will be promptly referred to the City Administrator or designee, and the Consultant’s Principal, who will meet and confer, in good faith, to resolve the Dispute to mutual satisfaction of the parties.

C. Mediation. If all or any portion of a Dispute cannot be resolved by good faith negotiations as set forth above within thirty (30) days of the date that the matter was referred to the City Attachment 2

12 Administrator pursuant to subsection B above, either party may, by notice to the other party, submit the Dispute for formal mediation to a mediator selected mutually by the parties from the Monterey Superior Court’s Court‐Directed Mediator Panel list. The duration of any such mediation may not exceed 2 hours unless otherwise agreed to by the parties. The cost of the mediation (including fees of mediators) will be borne equally by the parties, and each party will bear its own costs of participating in mediation. The mediation will take place within or in close proximity to the City of Carmel‐by‐the‐Sea.

In any mediation conducted pursuant to this section, the provisions of California Evidence Code section 1152 will be applicable to limit the admissibility of evidence disclosed by the parties in the course of the mediation. In the event the parties are unsuccessful in resolving the dispute through the mediation process, then the parties agree that the dispute will be submitted to Binding Arbitration to a single Arbitrator in accordance with the existing Rules of Practice and Procedure of the Judicial Arbitration and Mediation Services, Inc. (JAMS) within thirty (30) days of the close of mediation as declared by the mediator.

D. Arbitration. The submission to Mediation and Arbitration in accordance with the requirements of thissection of any and all agreements, differences, or controversiesthat may arise hereunder is made a condition precedent to the institution of any action or appeal at law or in equity with respect to the controversy involved. The award by the arbitrator will have the same force and effect and may be filed and entered, as a judgment of the Superior Court of the State of California and is subject to appellate review upon the same terms and conditions as the law permits for judgments of Superior Courts. A “Prevailing Party” will be determined in the Arbitration, and the prevailing party will be entitled to reasonable attorney’s fees and costs incurred, and accrued interest on any unpaid balance that may be due. Costs will include the cost of any expert employed in the preparation or presentation of any evidence. All costs incurred and reasonable attorney fees will be considered costs recoverable in that proceeding, and be included in any award.

13. TERMINATION OF AGREEMENT
A. Termination for Cause or Default. The City reserves the right to immediately terminate this Agreement, in whole or in part, if Consultant or any subconsultant defaults or fails to deliver the Services in accordance with the terms and conditions of this Agreement. Such termination must be in writing, setting forth the effective date of termination, and will not result in any penalty or other charges to the City, and may be issued without any prior notice. Without limitation, Consultant is in default of its obligations contained in this Agreement if Consultant, or any subconsultant:
i. Fails to perform the required Services within the term and/or in the manner provided under this Agreement;
ii. Fails to supply sufficient, properly skilled workers or proper workmanship, products, material, tools and equipment to perform the Services;
iii. Fails to observe or comply with all laws, ordinances, including all requirements of governmental or quasi‐governmental authorities, including federal, state, and local Attachment 2

13 government enactments, bylaws, and other regulations now or, following the date of this Agreement, in force that pertain to;
iv. Fails to observe or comply with the City’s reasonable instructions; v. Breaches the Conflict of Interest provisions of this Agreement; or vi. Otherwise violates any provision of this Agreement.

B. Termination for Convenience. The City may, at its option and sole discretion, terminate this Agreement, in whole or in part, with or without cause, at any time during the Agreement Term for the convenience of the City, upon ten (10) days written notice to the Consultant.

C. Steps after Termination:
i. Upon termination of this Agreement by the City for any reason, the City will pay Consultant for satisfactorily performed Services and disbursements incurred by Consultant to the date of termination pursuant to this Agreement, less any amounts necessary to compensate the City for damages or costs incurred by the City arising from Consultant’s default. Termination will be without prejudice to any other rights or remedies the City may have.
ii. Upon receipt of written notice of termination of this Agreement by the City for any reason, Consultant must:
a. Promptly cease all Services, including Services provided by any subconsultant, unless otherwise directed by the City; and
b. Deliver to the City all the Materials provided to Consultant or prepared by or for Consultant or the City in connection with this Agreement. Such Materials are to be delivered to the City in completed form; however, notwithstanding the provisions of Section 10, Ownership and Use of Materials, herein, the City may condition payment for services rendered to the date of termination upon Consultant’s delivery to the City of such Materials.
iii. If this Agreement is terminated by the City for any reason, the City is hereby expressly permitted to assume the projects and Services, and to complete them by any means including, but not limited to, an agreement with another party.

14. LEGAL ACTION / VENUE
A. Should either party to this Agreement bring legal action against the other, the validity, interpretation and performance of this Agreement will be controlled by and construed under the laws of the State of California, excluding California’s choice of law rules.

B. Venue for any such action relating to this Agreement will be in Monterey County.

Attachment 2

14 C. If any legal action or proceeding, including action for declaratory relief, is brought for the enforcement of this Agreement or because of an alleged dispute, breach, default or misrepresentation in connection with this Agreement, the prevailing party may recover reasonable attorneys’ fees as may be determined by the Arbitrator, experts’ fees, and other costs, in addition to any other relief to which the party may be entitled.

15. MISCELLANEOUS PROVISIONS
A. Non‐discrimination. During the performance of this Agreement, Consultant, and its subconsultants, may not unlawfully discriminate against any person because of race, religious creed, color, sex, national origin, ancestry, physical disability, mental disability, medical condition, maritalstatus, age, orsexual orientation, either in Consultant’s employment practices or in the furnishing of services to recipients. Consultant further acknowledges that harassment in the workplace is not permitted in any form, and will take all necessary actions to preventsuch conduct.

B. Acceptance of Services Not a Release. Acceptance by the City of the Services to be performed under this Agreement does not operate as a release of Consultant from professional responsibility for the Services performed.

C. Force Majeure. Either party is absolved from its obligation under this Agreement when and to the extent that performance is delayed or prevented, and in the City’s case, when and to the extent that its need for vehicles, materials, or Services to be supplied hereunder are reduced or eliminated by any course, except financial, for reasons beyond its control. Such reasons include, but are not limited to: earthquake, flood, epidemic, fire, explosion, war, civil disorder, act of God or of the public enemy, act of federal, state or local government, or delay in transportation to the extent that they are not caused by the party’s willful or negligent acts or omissions, and to the extent that they are beyond the party’s reasonable control.

D. Headings. The headings do not govern, limit, modify, or in any manner affect the scope, meaning or intent of the provisions of this Agreement. The headings are for convenience only.

E. Entire Agreement. This Agreement, including the Exhibits attached hereto, constitutes the entire agreement between the parties hereto with respect to the terms, conditions, and Services and supersedes any and all prior proposals, understandings, communications, representations and agreements, whether oral or written, relating to the subject matter thereof pursuant to Section 1B, “Change Order of Services.” Any Change Order to this Agreement will be effective only if it is in writing signed by both parties hereto and will prevail over any other provision of this Agreement in the event of inconsistency between them.

F. Conflict between Agreement and Exhibits. In the event of a conflict between a provision in this Agreement and a provision in an Exhibit attached to this Agreement, the provisions in this Agreement will take precedence.

G. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, and may be signed in counterparts, but all of which together will constitute one and the same Agreement.

Attachment 2

15 H. Multiple Copies of Agreement. Multiple copies of this Agreement may be executed, but the parties agree that the Agreement on file in the office of the City’s City Clerk is the version of the Agreement that governs should any difference exist among counterparts of this Agreement.

I. Authority. Any individual executing this Agreement on behalf of the City or Consultant represents and warrants hereby that he or she has the requisite authority to enter into this Agreement on behalf of such party and bind the party to the terms and conditions of this Agreement.

J. Severability. If any of the provisions contained in this Agreement are held illegal, invalid or unenforceable, the enforceability of the remaining provisions will not be impaired thereby.

Limitations of liability and indemnities will survive termination of the Agreement for any cause.

If a part of the Agreement is valid, all valid parts that are severable from the invalid part remain in effect. If a part of this Agreement is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.

K. Non‐exclusive Agreement. This Agreement is non‐exclusive and both the City and Consultant expressly reserve the right to enter into agreements with other Consultants for the same or similar services, or may have its own employees perform the same or similar services.

L. Assignment of Interest. The duties under this Agreement are not assignable, delegable, or transferable without the prior written consent of the City. Any such purported assignment, delegation, or transfer constitutes a material breach of this Agreement upon which the City may terminate this Agreement and be entitled to damages.

M. City Business License. Prior to receiving a Notice to Proceed from the City, Consultant will obtain and maintain a valid City of Carmel‐by‐the‐Sea Business License for the duration of the Agreement. Costs associated with the license are the responsibility of Consultant.

N. Laws. Consultant agrees that in the performance of this Agreement it will comply with all applicable federal, state and local laws and regulations. This Agreement will be governed by and construed in accordance with the laws of the State of California and the City of Carmel‐by‐the‐ Sea.

Attachment 2

16 IN WITNESS WHEREOF, the parties enter into this Agreement hereto on the day and year first above written in Carmel‐by‐the‐Sea, California.

CITY OF CARMEL‐BY‐THE‐SEA CONSULTANT

City Administrator Consultant Signature

Printed Name                                                  Date Printed Name                                                   Date

Title

Consultant Legal Company Name
APPROVED AS TO FORM:

By:  _______________________________      Date: ______________________ Brian Pierik, Esq., City Attorney
ATTEST:

By:     _________________________________    Date: ______________________ Nova Romero, MMC, City Clerk
Attachment 2
2024-2033

CARMEL RESTAURANT IMPROVEMENT DISTRICT

MANAGEMENT DISTRICT PLAN
Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.

July 11, 2023
Attachment 3
Contents
I. OVERVIEW ........................................................................................................................................3 II. BACKGROUND ................................................................................................................................5 III. BOUNDARY.......................................................................................................................................6 IV. ASSESSMENT BUDGET AND SERVICES................................................................................7 A. Annual Service Plan............................................................................................................ 7 B. Annual Budget .................................................................................................................... 9 C. California Constitutional Compliance .............................................................................. 10 D. Assessment........................................................................................................................ 12 E. Penalties and Interest ........................................................................................................ 12 F. Time and Manner for Collecting Assessments................................................................. 13 V. GOVERNANCE...............................................................................................................................14 A. Owners’ Association......................................................................................................... 14 B. Brown Act and California Public Records Act Compliance ............................................ 14 C. Annual Report................................................................................................................... 14 APPENDIX 1 – LAW....................................................................................................................15 APPENDIX 2 – ASSESSED BUSINESSES.................................................................................26 Prepared by
Civitas
(800)999-7781
www.civitasadvisors.com
Attachment 3
CRID Management District Plan 3
July 11, 2023
I. OVERVIEW
Developed by Visit Carmel (VC) and Carmel restaurant businesses, the Carmel Restaurant Improvement District (CRID) is an assessment district proposed to continue to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of increased restaurant food and drink sales and market assessed businesses in the CRID. The CRID was initially formed on January 1, 2019 for a five (5) year term. VC and Carmel restaurant businesses now wish to renew the CRID for a nine (9) year and six (6) months term.

Location: The CRID includes all full service restaurant businesses, existing and in the future, located within the City boundaries of the City of Carmel-by-the-Sea, as shown on the map in Section III.

Services: The CRID is designed to provide specific benefits directly to payors by increasing restaurant food and drink sales and revenue therefrom. Sales and marketing services will be provided to increase restaurant food and drink sales and market assessed businesses in the CRID.

Budget: The total CRID annual assessment budget for each full fiscal year (July 1 – June 30) of operations is anticipated to be approximately $240,000. The initial “year” of operations will be a partial year consisting of six (6) months, with an anticipated assessment budget of $96,000. A similar assessment budget is expected to apply to subsequent years, but this budget is expected to fluctuate as restaurant food and drink sales do, as businesses open and close, and if the assessment rate increases or decreases, as detailed in Section IV.

Cost: The annual assessment rate is one quarter of one percent (0.25%) of gross food and drink sales revenue. During the CRID’s term, the assessment rate may be increased by the CRID Management Committee to a maximum rate of one percent (1%) of gross food and drink sales revenue for assessed businesses. The maximum increase or decrease in any year shall be one quarter of one percent (0.25%). If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of one quarter of one percent (0.25%) of gross food and drink sales revenue.

Collection: The City will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, penalties and interest) from each assessed business located in the boundaries of the CRID. The City shall take all reasonable efforts to collect the assessments from each assessed business.

Duration: The CRID will have a nine (9) year and six (6) month life, beginning January 1, 2024 or as soon as possible thereafter, and ending on June 30, 2033. After nine (9) years and six (6) months, the CRID may be renewed pursuant to the 94 Law if business owners support continuing the CRID programs. Once per year, beginning on the anniversary of CRID renewal, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a City Council hearing on CRID termination.

Attachment 3
CRID Management District Plan 4
July 11, 2023
Management: Visit Carmel shall continue to serve as the CRID’s Owners’ Association. Visit Carmel Board has formed a CRID Management Committee, which is comprised of a minimum of three (3) business owners, or their representatives, paying the CRID assessment which will be responsible for implementing this Plan. The CRID Management Committee shall be responsible for managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council.

Attachment 3
CRID Management District Plan 5
July 11, 2023
II. BACKGROUND
Business Improvement Districts (BIDs) utilize the efficiencies of private sector operation in the market-based promotion of business districts. BIDs allow business owners to organize their efforts to increase sales and promotional efforts. Business owners within the district fund a BID, and those funds are used to provide services that the businesses desire and benefit the businesses within the district.

Business Improvement District services may include, but are not limited to:
➢ Marketing of the District
➢ Business Promotion Activities
➢ Infrastructure Improvements
In California, BIDs are formed pursuant to the Property and Business Improvement District Law of 1994 (PBID Law). This law allows for the creation of special benefit assessment districts to raise funds within a specific geographic area. The key difference between BIDs and other special benefit assessment districts is that funds raised are managed by the private non-profit corporation governing the district.

There are many benefits to Business Improvement Districts:
➢ Funds cannot be diverted for other government programs; ➢ Services are customized to fit the needs of each district; ➢ They allow for a wide range of services, including those listed above; ➢ Business Improvement Districts are designed, created and governed by those who will pay the assessment; and
➢ They provide a stable funding source for business promotion.

The PBID Law is provided in Appendix 1 of this document.

Attachment 3
CRID Management District Plan 6
July 11, 2023
III. BOUNDARY
The CRID will include all full service restaurant businesses, existing and in the future, within the City boundaries of the City of Carmel-by-the-Sea, as shown in the map below.

As used herein, full service restaurant business means: a restaurant business providing a full line of prepared food and drinks using non-disposable plates, glasses, and utensils for immediate consumption on the site. Full line restaurant businesses provide table service to patrons who pay after eating. Full service restaurant businesses may provide takeout service. As used herein, restaurant business does not include coffee shops, bakeries, candy shops, or any business that sells food and/or drinks incidentally to its main business purpose.

A complete listing of assessed businesses within the CRID can be found in Appendix 2.

Attachment 3
CRID Management District Plan 7
July 11, 2023
IV. ASSESSMENT BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the CRID funds are activities and improvements designed to increase restaurant food and drink sales and revenue therefrom.

A service plan assessment budget has been developed to deliver services that benefit the assessed businesses. A detailed annual assessment budget will be developed and approved by the Owners’ Association. The table below illustrates the annual assessment budget for fiscal year January 1, 2024- June 30, 2024, which covers the initial six (6) month period of the CRID.

Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. The table below illustrates the annual assessment budget for fiscal year two (July 1, 2024- June 30, 2025). However, the VC board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year.

A description of the proposed improvements and activities for the initial year of operation is below.

The same activities are proposed for subsequent years. In the event of a legal challenge against the CRID, any and all assessment funds may be used for the costs of defending the CRID.

Sales & Marketing,
$67,200 , 70%
Administration,
$16,320 , 17%
Contingency/Reserve,
$10,560 , 11%
Collections,
$1,920 , 2%
Fiscal Year 2024 (January- June)
Assessment Budget: $96,000
Attachment 3
CRID Management District Plan 8
July 11, 2023
Each budget category includes all costs related to providing that service. For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The costs of an individual staff member may be allocated to multiple budget categories. The staffing levels necessary to provide the services below will be determined by the VC on an as- needed basis.

Sales and Marketing
A sales and marketing program will promote assessed restaurant businesses. The sales and marketing program will have a central theme of promoting Carmel as a desirable place for culinary experiences.

The program will have the goal of increasing customers and sales at assessed businesses and may include the following activities:
• Internet marketing efforts, including the use of digital ad programs and social media, to increase awareness and optimize internet presence to drive customers and sales to assessed businesses;
• Print and digital ads in magazines and newspapers, television/video ads, and radio/podcast ads targeted at potential visitors to drive customers and sales to assessed businesses; • Public relations campaigns to increase awareness and brand image using earned media coverage;
• Direct to consumer e-mail and mail campaigns;
• Attendance at media events and/or trade shows to promote assessed businesses; • Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses;
• Attendance at professional industry conferences and affiliation events to promote assessed businesses;
Sales & Marketing,
$168,000 , 70%
Administration,
$40,800 , 17%
Contingency/Reserve,
$26,400 , 11%
Collections, $4,800
, 2%
Fiscal Year 2024/2025 (July- June)
Assessment Budget: $240,000
Attachment 3
CRID Management District Plan 9
July 11, 2023
• Creation of or participation in promotional culinary or dining events; • Lead generation activities designed to attract customers to assessed businesses; • Development and maintenance of a website designed to promote assessed businesses; and • Creative asset and content creation including photo and video production.

Administration
The administration portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy and other general administrative costs such as insurance, legal, and accounting fees.

Contingency/Reserve
The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the CRID Management Committee. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the CRID Management Committee. The reserve fund may be used for the costs of renewing the CRID.

Collections
The City shall retain a fee equal to two percent (2%) of the amount of assessment collected to cover its costs of collection and administration.

B. Annual Budget
The total CRID annual assessment budget for each full fiscal year (July 1 – June 30) of operations is anticipated to be approximately $240,000. The initial “year” of operations will be a partial year consisting of six (6) months, with an anticipated assessment budget of $96,000. A similar assessment budget is expected to apply to subsequent years, but this budget is expected to fluctuate as restaurant food and drink sales do, as businesses open and close, and if the assessment rate is increased or decreased pursuant to Section IV.

The annual assessment rate is one quarter of one percent (0.25%) of gross food and drink sales revenue. During the CRID’s term, the assessment rate may be increased by the CRID Management Committee to a maximum rate of one percent (1%) of gross food and drink sales revenue for assessed businesses. The maximum increase or decrease in any year shall be one quarter of one percent (0.25%).

The table below demonstrates the estimated maximum budget if the assessment rate is increased at the earliest opportunity each year, as it is a required disclosure, it is not the anticipated course of action.

Alternate courses of action may be taken in regard to implementing the assessment rate increase other than what is demonstrated in the chart below, within the parameters of this Management District Plan.

Estimated Annual Budget if Maximum Assessment Rates are Adopted Year Sales &
Marketing Admin Contingency/Reserve Collection Total
Jan -Jun 2024 $67,200 $16,320 $10,560 $1,920 $96,000
2024/2025 $168,000 $40,800 $26,400 $4,800 $240,000
2025/2026 $252,000 $61,200 $39,600 $7,200 $360,000
2026/2027 $336,000 $81,600 $52,800 $9,600 $480,000
2027/2028 $336,000 $81,600 $52,800 $9,600 $480,000
2028/2029 $336,000 $81,600 $52,800 $9,600 $480,000
2029/2030 $336,000 $81,600 $52,800 $9,600 $480,000
Attachment 3
CRID Management District Plan 10
July 11, 2023
The table below demonstrates the annual improvement and service plan budget with the assumption that the rates will not be increased during the CRID’s term.

Estimated Annual Budget if Maximum Assessment Rates Are Not Adopted Year Sales &
Marketing Admin Contingency/Reserve Collection Total
Jan - Jun 2024 $72,000 $16,320 $10,560 $1,920 $96,000
2024/2025 $180,000 $40,800 $26,400 $4,800 $240,000
2025/2026 $180,000 $40,800 $26,400 $4,800 $240,000
2026/2027 $180,000 $40,800 $26,400 $4,800 $240,000
2027/2028 $180,000 $40,800 $26,400 $4,800 $240,000
2028/2029 $180,000 $40,800 $26,400 $4,800 $240,000
2029/2030 $180,000 $40,800 $26,400 $4,800 $240,000
2030/2031 $180,000 $40,800 $26,400 $4,800 $240,000
2031/2032 $180,000 $40,800 $26,400 $4,800 $240,000
2032/2033 $180,000 $40,800 $26,400 $4,800 $240,000
Total $1,692,000 $383,520 $248,160 $45,120 $2,256,000
C. California Constitutional Compliance
The CRID assessment is not a property-based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the CRID assessment is a business-based assessment, and is subject to Proposition 26.

Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these exceptions apply to the CRID, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services.

1. Specific Benefit
Proposition 26 requires that assessment funds be expended on, “a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to serve the specific businesses within the CRID. The activities described in this Plan are specifically targeted to increase gross food and drink sales revenue for assessed businesses within the boundaries of the CRID, and are narrowly tailored. CRID funds will be used exclusively to provide the specific benefit of increased demand for food and drink sales directly to the assessees. Assessment funds shall not be used to feature non-assessed businesses in CRID programs, or to directly generate sales for non-assessed businesses. The activities paid for from assessment 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230
2 Cal. Const. art XIII C § 1(e)(1)
2030/2031 $336,000 $81,600 $52,800 $9,600 $480,000
2031/2032 $336,000 $81,600 $52,800 $9,600 $480,000
2032/2033 $336,000 $81,600 $52,800 $9,600 $480,000
Total $2,839,200 $689,520 $446,160 $81,120 $4,056,000
Attachment 3
CRID Management District Plan 11
July 11, 2023
revenues are business services constituting and providing specific benefits to the assessed businesses. Nothing in this Plan limits the ability of the Owners’ Association to enter into private contracts with non-assessed businesses for the provision of services to those businesses.

The assessment imposed by this CRID is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in gross food and drink sales revenue. The specific benefit of an increase in gross food and drink sales revenue for assessed businesses will be provided only to businesses paying the district assessment, with marketing and sales programs promoting businesses paying the CRID assessment. The marketing and sales programs will be designed to increase gross food and drink sales revenue at each assessed business. Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed businesses, the administration and contingency and collections services also provide the specific benefit of increased gross food and drink sales revenue to the assessed businesses.

Although the CRID, in providing specific benefits to payors, may produce incidental benefits to nonpaying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3

2. Specific Government Service
The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.” 4 The legislature has
recognized that marketing and promotions services like those to be provided by the CRID are government services within the meaning of Proposition 265. Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6

3. Reasonable Cost
CRID activities and improvements will be implemented carefully to ensure they do not exceed the reasonable cost to the City of such activities and improvements. The full amount assessed will be used to provide the activities and improvements described herein. Funds will be managed by the CRID Management Committee, and reports submitted on an annual basis to the City. Only assessed restaurant businesses will directly benefit from other CRID-funded services. Non-assessed restaurant businesses will not directly receive these, nor any other, CRID-funded services and benefits.

The CRID-funded programs are all targeted directly at and feature only assessed businesses. It is, however, possible that there will be a spill over benefit to non-assessed businesses. If non-assessed restaurant businesses receive incremental gross food and drink revenue, that portion of the promotion or program generating that gross food and drink revenue shall be paid with non-CRID funds. CRID funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental gross food and drink sales for non-assessed businesses.
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
6 Government Code § 53758(b)
Attachment 3
CRID Management District Plan 12
July 11, 2023
D. Assessment
The annual assessment rate is one quarter of one percent (0.25%) of gross food and drink sales revenue. During the CRID’s term, the assessment rate may be increased by the CRID Management Committee to a maximum rate of one percent (1%) of gross food and drink sales revenue for assessed businesses. The maximum increase or decrease in any year shall be one quarter of one percent (0.25%).

If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of one quarter of one percent (0.25%) of gross food and drink sales revenue.

The assessment was calculated based on the total cost of the activities to be provided for the benefit of the businesses within the CRID with costs allocated based on the proportional benefit conferred to each business. Activities funded by the CRID are specifically targeted to increase food and drink sales revenue at assessed businesses. All food and drink sales do not represent the same benefit to the payors. For example, higher priced food and drink is of greater benefit than lower priced food and drink because the assesse derives greater revenue. To account for this benefit differential and to make sure the benefits are proportional, an assessment formula based on a percentage of revenue has been selected. The proposed formula accurately reflects greater benefit to assessed businesses with higher priced food and drink.

The term “gross food and drink sales revenue” as used herein means: the consideration charged whether or not received, for prepared food and drink items to be consumed on or off the businesses’ premises valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits, and property and services of any kind or nature, without any deduction therefrom whatsoever.

Gross food and drink sales revenue shall not include, for purposes of the assessment: facility rental fees, off-site catered or ticketed events, nor revenue generated from retail products, such as branded promotional items (coffee mugs, t-shirts, hats, etc.), and similar items.

The assessment is levied upon and is a direct obligation of the assessed business. However, the restaurant business may, at its discretion, pass the assessment on to customers. The amount of assessment, if passed on to each customer, shall be disclosed in advance and separately stated from the amount of consideration charged and any other applicable taxes, and each customer shall receive a receipt for payment from the business. The assessment is imposed solely upon and is the sole obligation of the assessed restaurant business even if it is passed on to customers. The California Department of Tax and Fee Administration (CDTFA) issued a written opinion that state sales tax applies to the revenue generated from Business Improvement District (BID) assessments on items where state sales tax is levied. In light of CDTFA’s opinion, businesses that pay both state sales tax and CRID assessments on sales are advised to collect sales tax on the assessment revenue.

Bonds shall not be issued.

E. Penalties and Interest
The City shall be responsible for collection of delinquent assessments. The City of Carmel-by-theSea shall retain any penalties or interest collected with unpaid assessments as its fee for collecting the delinquent assessments. Assessed businesses which are delinquent in paying the assessment shall be responsible for paying:

1. Original Delinquency: Any assessed business which fails to remit payment of assessments within fourteen (14) days of the due date shall pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment.

Attachment 3
CRID Management District Plan 13
July 11, 2023

2. Continued Delinquency: If an assessed business fails to remit any delinquent remittance within sixty (60) days, the City may file a complaint against the assessed business. If the City determines than an assessed business is delinquent, the assessed business can be sent directly to collections without further review and the assessed business will be responsible for all late fees, interest, and collection fees.

3. Fraud: If it is determined that the nonpayment of any remittance due is due to fraud, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the penalties stated above.

4. Interest: In addition to penalties imposed, any assessed business which fails to remit any assessment shall pay simple interest at the rate of six percent (6%) per year or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the assessment first became delinquent until paid.

5. Penalties Merged With Assessment: Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the assessment required to be paid.

F. Time and Manner for Collecting Assessments
Visit Carmel shall be responsible for educating new and existing businesses in the CRID of its renewal.

The City shall notify Visit Carmel when a business closes, opens or changes ownership within the CRID. The CRID assessment will be implemented beginning January 1, 2024 and will continue for nine (9) years and six (6) months through June 30, 2033. The City will be responsible for collecting the gross food and drink sales revenue assessment on a quarterly basis (including any delinquencies, penalties and interest) from each assessed business. The City shall take all reasonable efforts to collect the assessments from each assessed business. The City shall forward the assessments collected to Visit Carmel within thirty (30) days from collection.

Attachment 3
CRID Management District Plan 14
July 11, 2023
V. GOVERNANCE
A. Owners’ Association
The City Council, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the CRID as defined in Streets and Highways Code §36612.

The City Council has determined that the Visit Carmel will continue to serve as the Owners’ Association for the CRID. The CRID Management Committee, comprised of a minimum of three (3) business owners, or their representatives, paying the CRID assessment, will continue to be responsible for implementing this Plan. Visit Carmel shall continue to be responsible for managing funds and implementing programs in accordance with this Plan and by direction of the CRID Management Committee, and must provide annual reports to the City Council.

B. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the Board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act.

C. Annual Report
The VC shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:
• Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.
• The improvements and activities to be provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year. • The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

Attachment 3
CRID Management District Plan 15
July 11, 2023
APPENDIX 1 – LAW
*** THIS DOCUMENT IS CURRENT THROUGH THE 2023 SUPPLEMENT *** (ALL 2022 LEGISLATION)

STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994 CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.” 36601. Legislative findings and declarations; Legislative guidance The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businesses in a business district are not taxesfor the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed.

Attachment 3
CRID Management District Plan 16
July 11, 2023
Therefore, for special benefits to exist as a separate and distinct category from general benefits, the incidental or collateral effects of those special benefits are inherently part of those special benefits.

The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessmentsthey may levy and the proper determination of special benefits.

Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes.
36603. Preemption of authority or charter city to adopt ordinances levying assessments Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)). 36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes.

ARTICLE 2. Definitions
36606. “Activities”
“Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district. 36606.5. “Assessment”
“Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.
36607. “Business”
Attachment 3
CRID Management District Plan 17
July 11, 2023
“Business” means all types of businesses and includes financial institutions and professions. 36608. “City”
“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California. 36609. “City council”
“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part. 36609.4. “Clerk”
“Clerk” means the clerk of the legislative body.
36609.5. “General benefit”
“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.
36610. “Improvement”
“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.
36611. “Management district plan”; “Plan”
“Management district plan” or “plan” means a proposal as defined in Section 36622. 36612. “Owners’ association”
“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), for all records relating to activities of the district.
36614. “Property”
“Property” means real property situated within a district.

Attachment 3
CRID Management District Plan 18
July 11, 2023
36614.5. “Property and business improvement district”; “District” “Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.
36614.6. “Property-based assessment”
“Property-based assessment” means any assessment made pursuant to this part upon real property. 36614.7. “Property-based district”
“Property-based district” means any district in which a city levies a property-based assessment. 36615. “Property owner”; “Business owner”; “Owner”
“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient. 36615.5. “Special benefit”
(a) “Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.
(b) “Special benefit” also includes, for purposes of a property-based district, a particular and distinct benefit provided directly to each assessed parcel within the district. Merely because parcels throughout an assessment district share the same special benefits does not make the benefits general. 36616. “Tenant”
“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.

ARTICLE 3. Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.

CHAPTER 2. Establishment
36620. Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter. 36620.5. Requirement of consent of city council
Attachment 3
CRID Management District Plan 19
July 11, 2023
A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district (a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district.

The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request.
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623.
36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries.
(b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part. (d) The improvements, maintenance, and activities proposed for each year of operation of the district and the estimated cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a Attachment 3
CRID Management District Plan 20
July 11, 2023
statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against their property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k)
(1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof. (2) In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property-based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (3) In a property-based district, properties throughout the district may share the same special benefits. In a district with boundaries that define which parcels are to receive improvements, maintenance, or activities over and above those services provided by the city, the improvements, maintenance, or activities themselves may constitute a special benefit. The city may impose assessments that are less than the proportional special benefit conferred, but shall not impose assessments that exceed the reasonable costs of the proportional special benefit conferred. Because one or more parcels pay less than the special benefit conferred does not necessarily mean that other parcels are assessed more than the reasonable cost of their special benefit. (l) In a property-based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (m) Any other item or matter required to be incorporated therein by the city council. 36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the Attachment 3
CRID Management District Plan 21
July 11, 2023
public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council. (c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627. 36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district.
(4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district.

Notwithstanding the foregoing, improvements and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district.

Attachment 3
CRID Management District Plan 22
July 11, 2023
(7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property-based district, that property within the district will receive a special benefit.
(8) In a property-based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part. 36628. Establishment of separate benefit zones within district; Categories of businesses The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone. 36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any propertybased assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622. 36629. Provisions and procedures applicable to benefit zones and business categories All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district. 36630. Expiration of district; Creation of new district If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part.

CHAPTER 3. Assessments
36631. Time and manner of collection of assessments; Delinquent payments The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property
Attachment 3
CRID Management District Plan 23
July 11, 2023
(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.
36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625. An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment.
36634. Service contracts authorized to establish levels of city services The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed. 36635. Request to modify management district plan
The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter. 36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention (a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.

CHAPTER 3.5. Financing
36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments Attachment 3
CRID Management District Plan 24
July 11, 2023
(a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part.
(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.

CHAPTER 4. Governance
36650. Report by owners’ association; Approval or modification by city council (a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used.
(b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year.
(4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.

The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district. 36651. Designation of owners’ association to provide improvements, maintenance, and activities The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.

CHAPTER 5. Renewal
Attachment 3
CRID Management District Plan 25
July 11, 2023
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit (a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.

CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure (a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention. 36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district (a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.

Attachment 3
CRID Management District Plan 26
July 11, 2023
APPENDIX 2 – ASSESSED BUSINESSES
Akaoni
Alvarado Street Brewery
Anton & Michel Restaurant
Aubergine
AW Shucks
Basil Pangaea Grill
Barmel Patisserie Boissiere
Brophy's Tavern Portabella
Bud's at La Playa Promesa
Cantinetta Luca Rise + Roam
Carmel Belle Seventh and Dolores
Carmel Burger Bar Stationaery
Carmel's Hidden Gem Sushi Heaven
Café Luna Terrys Lounge
Carmel's Bistro Giovanni The Pocket
Casanova Restaurant Tommys Wok
Catch Toro Sushi
Chez Noir Tree House Cafe
Cottage Restaurant Tuck Box
Cultura Comida Y Bebida Vesuvio & Star Bar
Dametra Cafe Village Corner
Edwin's Carmel Yafa
Enzo Ristorante Italiano
Flaherty's Seafood Grill & Oyster Bar
Flying Fish Grill
Foray
Forge in the Forest
Grasings Coastal Cuisine
Grill on Ocean Ave
Hogs Breath Inn
Il Fornaio
Il Tegamino
Katy's Place
L Escargot
La Balena
La Bicyclette
Le Souffle
Little Napoli & Bar Napoli
Little Swiss Cafe
Links Club
Mission Bistro
Mulligan Public House
Nicolás Cocina de Herencia
*List as of March 2023
Attachment 3

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
January 9, 2024

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Ashlee Wright, Director, Libraries & Community Activities APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Consideration of philosophy regarding ticketed events held in the public right-of-way during Car Week
RECOMMENDATION:

Receive the report and provide staff with direction
BACKGROUND/SUMMARY:

At its October meeting Council received an after action report on Car Week and provided staff with direction to continue to improve mitigation efforts for future Car Week impacts, as well as policy direction for future updates to Policy C16-01 regarding special events.

Since August staff has received applications for five (5) events for Car Week 2024. Four (4) of the applications are for returning events - those held during Car Week 2023, and one (1) new permit application. All applications are works in progress, as the event organizers work on their planning for Car Week 2024. For the four (4) returning events, no substantive changes are being proposed.

The new event is being proposed by Denny Levett and Richard Kreitman and is looking to present a similar style event as the Concours on the Avenue (COTA). The event will occupy the same footprint as the COTA event - which was Ocean Avenue from Junipero Street to Monte Verde Street and the side streets on the north side of Ocean to Sixth Avenue and the side streets on the south side of Ocean Avenue to Seventh Avenue. (Attachment 1).

However, this event is also proposed to be a ticketed event. The City has never permitted a ticketed event during Car Week due to concerns with the difficulties of the logistics of turning the heart of the downtown - where citizens work and live, into a locked down event venue. While cars will be visible from the sidewalks and intersections through event fencing only ticket holders will be able to get a 360 degree up close view of the vehicles.

Ticketed Events vs. Non-ticketed Events
COTA event organizer, Doug Freedman, had been working for a number of years on turning the COTA event into a ticketed event in order to help mitigate some of the costs of holding the event. In 2021 in order to meet the State’s COVID protocols for large scale events Mr. Freedman did set-up check-points of entry to the event to check COVID vaccination status and issue masks. For the most part this did work and COTA was able to meet the state’s requirements. Mr. Freedman did intend to approach the Council regarding turning COTA into a ticketed event for the following year.

During Car Week there are two different kinds of events throughout the peninsula broadly speaking - private ticketed events such as the Pebble Beach Concours d’Elegance or the many different auctions such as Bohnham’s, Mecum, or Sotheby’s to name a few, and non-ticketed events that are free and open to the public to attend such as the events that have been held in Carmel year after year, Concours de Lemons and the Exotics on Broadway in Seaside, or the Little Car Show in Pacific Grove.

In addition, these public events that are free and open to the public provide a unique opportunity to both residents and visitors to view vehicles that they would maybe not normally be able afford to see to admire the engineering, history, and artwork of such vehicles.

It has been proposed that having a ticketed event could Because this is not private property and the entire village would not be closed to the public except ticket holders, it is unclear how this Non-Car Week Ticketed Events in Carmel
While the question at hand is regarding a ticketed event during Car Week on public property, for Council’s reference, the City has permitted ticketed events on public property at other times during the year. The City has approved ticketed events that are not open to the general public such as the annual Monterey County Vintners Winemakers Celebration or the annual Carmel Art Festival which has a ticketed VIP event the first night of the festival, but is otherwise open to the public. The reason for these events being fenced off from the general public is to meet State and local regulations regarding the serving of alcohol. Anyone can purchase tickets for the events and both of these groups are 501 (c) 3 non-profit organizations. In addition, and somewhat related, the footprint of these events is significantly smaller than the footprint of COTA, with the Winemakers Celebration taking a block and a half on Dolores Street and Seventh Avenue and Carmel Art Festival occupies Devendorf Park.

Options
As mentioned previously, Car Week events in Carmel have always been free and open to the public. These public events provide an attraction for visitors, and also workers on their lunch breaks and residents avoiding leaving the village, as well as an amazing opportunity to see really cool cars.

Staff is looking for direction from Council regarding their philosophy around ticketed events during Car Week.

1. Direct staff to not allow ticketed events on public property during Car Week and to include that direction in future policy updates.

2. Direct staff to allow the event organizer to move forward with a ticketed event on public property.

3. Direct staff to work with the event organizer on a scaled version of a ticketed event on public property.

This direction and information will help the event organizer, as they further develop their budget for this event and plan for logistics.

FISCAL IMPACT:

Car Week is a revenue generator for the entire peninsula. There is no anticipated fiscal impact with Council receiving this report and providing staff with direction.

PRIOR CITY COUNCIL ACTION:

Council receives regular reports on Car Week
ATTACHMENTS:

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
January 9, 2024

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Robert Harary, P.E, Director of Public Works APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Receive a presentation regarding Scout House Options and provide direction to staff RECOMMENDATION:

Receive a presentation regarding Scout House Options and provide direction to staff.

BACKGROUND/SUMMARY:

Scout House Background
The Scout House sits on a small, relatively steep-sloped site on the northeast corner of Mission Street and Eighth Avenue in the Residential and Limited Commercial Zoning District. The building was constructed by Carmel Master Builder M.J. Murphy in 1931 for use by the Boy Scouts. The Scout House has a large gathering room, working fireplace, and kitchen, and is a completely contained unit; however, the building has been closed to the public for decades and has deteriorated to a point where it cannot be occupied and is not useful to house any activity in its current condition.

In 2000, Congleton Architect AIA prepared a Scout House Master Plan for the Community and Cultural Commission, who adopted the Master Plan and forwarded it to the City Council. Although the Master Plan contained valuable information, most of the proposed work was never accomplished, and many issues identified have since become outdated.

The site was added to the City’s Historic Inventory in 2002 for the important contributions it made to the civic and social fabric of the community. In 2005, the City Council reconfirmed the historic inventory listing. Since the property is a historic resource, improvements are subject to the City’s Historic Preservation Ordinance, Carmel Municipal Code (CMC) Chapter 17.32, and must comply with the California Environmental Quality Act (CEQA). Improvements will also require reviews by the City’s Historic Resources Board and/or Planning Commission and comply with a Determination of Consistency with the Secretary’s Standards for the Treatment of Historic Properties.

The Scout House does not meet the requirements of the Americans with Disabilities Act (ADA). In 2016, Boy Scout Troop 127 installed a parking space on the east side of the building to improve accessibility. However, there is not adequate room to provide a full-width access aisle; therefore, the parking space is not in compliance with the ADA. In 2016, Council passed a resolution finding that an unreasonable hardship exists in providing accessibility to the building; however, the resolution did not specify what aspects of accessibility posed such hardship. Blanket findings of “unreasonable hardship” which propose to waive all accessibility requirements could leave the City vulnerable to challenges under the ADA record.

Building Condition
Regardless if the Scout House is ultimately renovated, relocated and renovated, or sold, the building requires extensive renovation to be occupied and/or made available for public events. Significant improvements are necessary to meet all building codes, and other upgrades would be prudent to restore the facility for beneficial use. Improvements are needed for the building interior, as well as exterior, as outlined below.

Key Interior Building Improvements
The upstairs is suitable for use as Assembly A-3 occupancy if adequate and accessible means of egress and an appropriate number of fixtures are provided. However, there is currently no accessible route or path of exit travel for people with disabilities which is the primary reason that the building has been closed.

ADA compliance: An elevator or lift may be required.

Downstairs classrooms/storage areas do not have sufficient ceiling height to be used as habitable space; however, its continued use for storage could be allowed if a rated door is installed. Raising the ceiling height would allow for habitable space but would require costly structural renovations that may trigger seismic upgrade requirements.

Installation of two upstairs restrooms would provide accessible restroom facilities while reconstruction of the downstairs restrooms would provide compliance with current restroom requirements for the numbers of water closets and lavatories.

A dual position drinking fountain should be installed upstairs.

The ground floor concrete slab and structural footings are assumed to be in good condition; however, they do not comply with current code requirements. A structural engineer must evaluate these structural elements during design, and structural modifications may be required.

Hazardous materials (lead, asbestos, and mold) need to be remediated during the renovation.

The electrical system needs to be substantially replaced.

Lighting fixtures should be restored in-kind.

The mechanical/HVAC system, gas water heater, and forced air unit need to be replaced. All electric appliances are encouraged.

Plumbing systems need to be replaced.

A fire sprinkler system may be required.

All kitchen appliances and fixtures need to be replaced.

Panic hardware on the exterior doors is required.

Interior paint is needed throughout.

The wood-burning fireplace and chimney need to be professionally cleaned.

Key Exterior/Site Improvements
Spot repairs are needed throughout the exterior siding.

Exterior paint is needed throughout.

Masonry steps and railings fronting on Mission Street need to be replaced.

Repairs are needed along the masonry retaining wall on Mission.

The southeast wood steps may need to be replaced.

A water leak downstream of the water meter on City property must be repaired.

Sewer lateral must be inspected and repaired or replaced per CAWD standards.

Non-compliant ADA ramp at the northeast corner of Mission and Eighth needs to be reconstructed.

Curb, gutter, and sidewalk along Mission Street should be reconstructed.

Driveway needs to be resurfaced or reconstructed.

Drought-tolerant landscaping, an on-site rain garden or other infiltration system, and an irrigation system are needed.

Options for Future Use
In recent years, there has been growing attention focused on reopening the Scout House. One of the City Council’s Strategic Priorities is to “Explore Opportunities for the Scout House.” In 2022, Council directed staff to issue a Request for Proposals (RFP) to solicit proposals seeking interested community volunteers and contractors to renovate the Scout House at no cost to the City, and for the selected volunteers/contractors to subsequently operate and maintain the facility for a number of years thereafter.

Unfortunately, no proposals were received. This approach is further outlined in Option 3 below.

At the April 4, 2023 meeting, Council conducted the first Public Hearing on this matter and requested staff to proceed with the RFP to determine community interest in submitting proposals to renovate, operate, and maintain the Scout House. At the June 6, 2023 meeting, Council conducted a second Public Hearing and adopted two resolutions as follows. Resolution 2023-040 authorized the City Administrator to issue a Request for Proposals seeking technical Proposals to enter into an Operations and Maintenance Agreement and Site Lease with the City for Renovation and subsequent Activities Programming, Operations, and Maintenance of the Scout House, and Resolution 2023-042 declared the Scout House Real Property Exempt Surplus Land.

Had there been proposals submitted pursuant to the RFP, the selected Contractor would have been expected to pay ongoing facility maintenance costs including: custodial, fire alarm monitoring, pest control, landscape maintenance, water, gas, and electric utilities, and minor building repairs. The City would continue to pay for trash/recycling and sewer service. Future capital improvements were intended to be potentially shared expenses.

In late 2023, meetings and correspondence with the California Department of Housing and Community Development (HCD), and HCD’s review of the City’s RFP, including the proposed Operations and Maintenance Agreement and Site Lease, resulted in HCD issuing the following determination letter:
“The City’s preferred option (restoration with an operation and maintenance agreement) would not be considered a disposition under the Surplus Land Act (SLA) because no development or demolition would take place. In accordance with the SLA Guidelines (2021), section 102(h), the disposition of surplus land means the sale or lease of local agency-owned land formally declared surplus. But a” lease” does not include a lease of land on which no development or demolition will occur. Please accept this as our official determination that the site, as currently planned for restoration, is not subject to the SLA for the reasons noted above in our Guidelines.” The Scout House remains an ongoing liability to the City without any beneficial use. Renovating the Scout House on site has major challenges: the cost of renovating the facility, meeting ADA and other building codes, renovating on a small, steeply-sloped lot, and conforming to historic restoration requirements.

Selling the property would transfer these same challenges to a buyer. Relocating the facility requires an acceptable site for its intended use, and the costs of relocation and renovation, although these costs would be offset by selling the existing site once vacated.

Based on community feedback and research to date, staff envisions the following five (5) Options for the Scout House as the most reasonable alternatives at this time. Each Option has distinct advantages and disadvantages. Some of these options have subsequent alternatives. Several Options would involve a cumbersome environmental review process under CEQA, and some Options would be conditioned under the Surplus Lands Act.

At the January 9, 2024 Council meeting, staff will review these Options and seek Council direction on the best Option, or Options, to further evaluate in 2024. Staff intends to return to Council with more specifics once an Option(s) is tentatively selected.

Option 1 – Renovate the Scout House as a Capital Improvement Project This Option was previously considered during development of prior year Capital Improvement Programs, but not funded. This Option would be for the City to treat this project like any other Capital Improvement Project and take on the full planning, design, bidding, and construction for a complete renovation meeting all historic restoration and code requirements and the desired programs of the community.

Subsequent Option: Upon completion of the renovation, the property could be leased out to a third-party contractor, similar to Forest Theater or Sunset Center, with shared responsibility for maintenance, utilities, and future capital upgrades. Alternatively, the property could be sold after the renovation.

CEQA and SLA Issues: Renovation of the historic resource by the City will likely be Categorically Exempt under CEQA since the building would be restored per the State Secretary’s Standards for the Treatment of Historic Properties. This renovation would not be subject to the SLA.

Advantages: Complete renovation meeting City and community needs for decades to come.

The City controls the renovation schedule. Least challenging CEQA and SLA process for a renovation Option.

Disadvantages: City pays full cost of renovation.

Option 2 – Sell the Property
The second Option is to sell the property to a private party. The sale would be subject to a Surplus Lands Act disposition process which requires that it is first prioritized for affordable housing development. This site was not included as an opportunity site for the City’s Housing Element evaluation. The sale would likely be a public process, and the community may raise issues with the City’s intent to divest itself of the property. Another potential barrier to selling the building is that it is listed on the City’s Historic Inventory, which prohibits demolition and limits exterior modifications.

Thus, the buyer of the property may have limited options. The buyer may restore the exterior of the building to meet the historic preservation standards and renovate the interior of the building for residential or multi-family housing. The buyer may also convert it to certain retail uses in accordance with Residential and Limited Commercial Zoning per CMC Section 17.14.030, “Land Use Regulations,” as prescribed in Attachment #1. Re-use options may be allowed per the Zoning Ordinance or may require a Use Permit. If rezoning is pursued, a General Plan Amendment would also be required. Depending on the desired renovation and use, the CEQA process may entail an Initial Study, Categorical Exemption, and/or Mitigated Negative Declaration.

However, the buyer may desire to demolish the historic structure and rebuild a new facility. To do so, the buyer would need to demonstrate, via an Environmental Impact Report (EIR), that the significant impacts to the historic resource are unavoidable, and propose mitigation. Council would then need to find overriding considerations to certify such an EIR.

CEQA and SLA Issues: Selling the site would trigger the SLA disposition process. The CEQA review process would depend on the buyer’s desired restoration or reuse of the site.

Advantages: Generates revenue and removes the property from City liability. Relatively shorter process than other Options.

Disadvantages: Potentially difficult disposition process. Becomes private property potentially without future public benefit.

Option 3 – Reissue the RFP for Contractors to Renovate, Lease, and Operate the Scout House Pursuant to Government Code Section 52201, a City Council may lease real property to create an economic opportunity. In early 2023, Staff completed an RFP seeking technical Proposals to enter into an Operations and Maintenance (O&M) Agreement with the City for the renovation of the Scout House and subsequent activities programming, operations, management, and maintenance of the facility. The rough cost estimate required to renovate the Scout House was estimated at over $1,000,000. The Contractor was asked to bear the full costs of performing the renovation work as no City funding was proposed.

The selected Proposer/Contractor signing the O&M Agreement would also need to enter into a Site Lease to cover the duration of their occupation of the Scout House. Under the Site Lease, the Lessee would pay fair market rent for the use and enjoyment of the Scout House. While fair market rent must be paid per the terms of the Site Lease, the current fair market rent is lower than that of surrounding properties due to the condition of the Scout House, and cost of the renovation may be considered as a credit to offset the rent.

The Site Lease would authorize the Contractor to undertake various fundraising activities, including, for example, the sale of naming rights of interior portions of the facility, and the use of the facility for commercial purposes consistent with existing zoning (Residential and Limited Commercial), including a potential sublease of the facility, if desired. This would allow the Lessee to generate revenue once the renovation work on the premises is complete.

Subsequent Option: The City could participate in the funding of the renovation with the selected Contractor.

However, any City funding would trigger California Public Contracting regulations and the payment of prevailing wages, likely resulting in a more-costly overall project.

CEQA and SLA Issues: Renovation will likely be Categorically Exempt under CEQA since the building would be restored per the State Secretary’s Standards for the Treatment of Historic Properties. As determined by the HCD, this renovation Option would not be subject to the SLA.

Advantages: The City maintains ownership. The renovation is completed at no cost (or reduced cost) to the City. Renovated facility meets City and community needs for decades to come.

Disadvantages: The RFP process was already implemented in 2023 without any proposals being submitted. Even with more extensive outreach to solicit more proposals, there is no guarantee that contractors would be interested in pursuing this renovation at their risk and expense and operating the facility afterwards.

Option 4 – Relocate and Renovate the Building and Sell the Existing Property It may be feasible to relocate the Scout House structure to another site, and, if so, the current site could be sold as a vacant parcel under the Surplus Lands Act disposition process. The concept behind this option would be to use the money generated from the land sale to offset the cost for relocating the building to a site in which costs and challenges to construct ADA-required improvements for the current site would be reduced.

If this Option is desired or short-listed by Council, staff would need to perform additional research on the feasibility and cost of a relocation, determine the value of the remnant parcel, and evaluate the site(s) for viability for receiving the building, as well as to determine impacts that the relocated building would have on the selected site, such as lost housing opportunities, emergency access, or parking. Until the Vista Lobos site is determined to be included, or not, as part of the Police Building project, other City-owned sites should be considered, such as one of the Sunset Center parking lots. However, having to purchase a new parcel to accommodate the relocated structure would likely render this Option as cost-prohibitive.

Subsequent considerations: Should the City relocate the building to another City-owned site, the City could then renovate the building as a Capital Improvement Project, as per Option 1 above, or sell the relocated building as per Option 2, or re-issue the RFP, as described in Option 3, requesting a Contractor to renovate the building, lease the property, and provide activities programming, operations, and maintenance of the facility for a period of time afterwards.

CEQA and SLA Issues: Relocating the Scout House and selling the site would trigger the SLA disposition process. Because of the many variables associated with this concept, the CEQA review process would depend on the selected site, and the extent of renovation. While this may be completed via an Initial Study and Mitigated Negative Declaration, until more specifics are identified, this Option may require an Environmental Impact Report.

Advantages: A significant advantage to Option 4 is the flexibility of subsequent options (i.e. renovate, sell, re-issue the RFP) following the relocation of the structure. Reconstruction of the building to a different site may reduce the renovation costs associated with providing ADA access. Sale of the vacant parcel would offset the cost of relocation and renovation. Subsequent flexibility to renovate the building by City or private contractor. Renovated facility meets City and community needs for decades to come.

Disadvantages: The key disadvantage of Option 4 at this time is the risks and unknowns. There will be a cost and structural difficulty to relocate the building, if feasible. Disposing the remnant parcel triggers the SLA, and the value and re-use of the existing site may be limited for potential buyers. There will also be impacts to the site selected for the relocated structure, or the City may need to acquire a new site which would render this option cost-prohibitive. Up front capital costs required until the existing parcel is sold.

Option 5 – Status Quo
This Option is to maintain the status quo by keeping the building closed to the public and performing ongoing maintenance to prevent further decay. With this option, the building provides no benefit to the public and essentially only serves as a liability to the City.

CEQA and SLA Issues: This Option would have no CEQA review requirements and is no subject to the SLA.

Advantages: No capital investment needed at this time.

Disadvantages: Continued liability and maintenance expenditures with no useful benefit of the facility.

Environmental Impact:

The proposed actions do not constitute a “project” as defined by the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378(b). A project does not include organizational or administrative activities of governments that will not result in direct or indirect physical changes on the environment. However, prior to commencing renovations, relocating the facility, or selling the Scout House, the City will complete all necessary reviews pursuant to CEQA.

FISCAL IMPACT:

There is no cost for exploring the Options associated with the Scout House at this time.Ongoing maintenance of the facility is absorbed in the Public Works/Facilities Maintenance Division operating budget.

The fiscal impact of implementing an Option will need to be identified once Council narrows down the best Option(s), and staff evaluates the associated programming process and costs.

PRIOR CITY COUNCIL ACTION:

At the April 4, 2023 meeting, Council conducted the first Public Hearing on this matter and requested staff to proceed with the RFP to determine community interest in submitting proposals to renovate, operate and maintain the Scout House.

At the June 6, 2023 meeting, Council conducted a second Public Hearing and adopted two resolutions as follows. Resolution 2023-040 authorized the City Administrator to issue a Request for Proposals seeking technical Proposals to enter into an Operations and Maintenance Agreement and Site Lease with the City for Renovation and subsequent Activities Programming, Operations, and Maintenance of the Scout House, and Resolution 2023-042 declared the Scout House Real Property Exempt Surplus Land.

ATTACHMENTS:

Attachment 1) CMC Section 17.14.030, Land Use Regulations Attachment 1
Attachment 1
Attachment 1
Attachment 1
Attachment 1
Attachment 1
Attachment 1
Attachment 1

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
January 9, 2024

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Marnie R. Waffle, AICP, Principal Planner APPROVED BY: Chip Rerig, City Administrator
SUBJECT: 6
th Cycle Draft Housing Element (2023-2031), Response to HCD Comment Letter RECOMMENDATION:

Receive the report and provide direction.

BACKGROUND/SUMMARY:

EXECUTIVE SUMMARY:

This report focuses on policy-level changes to the draft 6 th cycle Housing Element based on comments
received from the State of California Department of Housing and Community Development (HCD) on November 1, 2023. This review aims to obtain feedback from the City Council and the public on the proposed changes before resubmitting the Housing Element to HCD on January 24th. Revisions to the 6 th
cycle Housing Element are ongoing, and a revised draft will be posted online at www.HOMECarmelByTheSea.com on January 16
th
.

Background:

The City of Carmel-by-the-Sea last updated the General Plan Housing Element in 2015 for the 5th cycle planning period of 2015-2023. Under state law, the Housing Element must be updated every eight (8) years in a manner consistent with the Regional Housing Needs Allocation (RHNA). The 6th cycle planning period is 2023-2031, and the City’s RHNA is 349 housing units. The Housing Element includes policies, programs, incentives, and objectives to achieve the City’s housing goals, including planning for the creation of 349 new housing units, and must be adopted by the local jurisdiction and certified by the California Department of Housing and Community Development (HCD) by December 15, 2023. A 120-day grace period follows, ending on April 15, 2024.

In 2022, Mayor Potter appointed a Housing Ad-Hoc Committee consisting of Mayor Pro Tem Bobby Richards and Councilmember Karen Ferlito.

On February 7, 2023, the City entered into a Professional Services Agreement with EMC Planning Group to assist the City with preparing the 6
th cycle Housing Element Update.

On June 6, 2023, the Public Review Draft of the 6
th cycle Housing Element was released for a 30-day
public comment period.

On August 2, 2023, the 6
th cycle Housing Element was submitted to the State Department of Housing and Community Development (HCD) for a 90-day review period (Attachment 1).

On November 1, 2023, the City received HCD’s comment letter on the draft Housing Element (Attachment 2).

Staff is working with our partners at EMC Planning Group to revise the 6 th cycle Housing Element in
response to HCD’s comments. The revised Housing Element is scheduled to be resubmitted to the State on January 24, 2024. State law requires that the revised Housing element be made available for public review at least seven (7) days prior to resubmitting. The revised 6 th cycle Housing Element will be posted
online at www.HOMEcarmelbythesea.com on January 16, 2024.

The state has 60 days to review the revised 6
th cycle Housing Element and provide a letter of substantial compliance with state law or additional comments. Assuming the former, the City Council would be asked to adopt the updated Housing Element at their regular meeting on April 2, 2024. The document would then be submitted back to the State in advance of the April 15
th deadline for certification. Once certified, the 6th
cycle Housing Element will be submitted to the California Coastal Commission for final approval as part of our Local Coastal Plan.

Summary of Revisions:

The HCD comment letter focuses on two categories of the draft 6 th cycle Housing Element, “Housing
Needs, Resources, and Constraints” and “Housing Programs.” Many of the comments focus on providing additional analysis to address various topics. This analysis informs the 6th-cycle housing programs.

Affirmatively Furthering Fair Housing (AFFH). New state legislation for the 6 th cycle Housing Element
update requires a more robust analysis on affirmatively furthering fair housing. This includes explaining how the City proactively complies with fair housing and responds to fair housing complaints. The Housing Element must also analyze historic patterns of integration and segregation, disparities in access to transportation, and substandard housing. Based on these analyses, housing programs are developed to address any deficiencies. Additional analyses are being incorporated into the 6 th cycle Housing Element.

Regional Housing Needs Allocation (RHNA). RHNA is an assignment of housing units to individual cities and counties based on the projected housing need within a region. Carmel is part of the Association of Monterey Bay Governments (AMBAG) region, which includes Monterey and Santa Cruz counties and the cities within each county. Carmel’s share of the regional housing need is 349 new housing units. Units include single-family, multi-family, and accessory dwelling units, among other potential housing types. A portion of the 349 housing units (231 units) must be set aside as affordable to lower and moderate-income households.

To increase the local housing supply over the next eight years, the 6 th cycle Housing Element proposes to
amend the zoning code to require a minimum density of 33 dwelling units per acre for all new construction projects in the CC, SC, RC, and R-4 zoning districts. The Carmel Municipal Code already requires that residential uses occupy all new second-floor construction, and that will continue to be implemented.

Current Progress in Meeting the RHNA – Pipeline Projects. Additional information has been included in the 6 th cycle housing element regarding projects in review, approved, or under construction between July 1st and December 31st, 2023. Seventeen (17) new housing units have been approved (Ulrika Plaza, Scandia Lopez, & CRI on Carpenter), and an additional ten (10) new housing units are currently under review (JB Pastor & CRI on Carpenter). These 27 units reduce the city’s remaining RHNA commitment from 349 to 322 units.

Additionally, between July 1
st and December 31st, 2023, four ADUs were issued certificates of occupancy, 13 ADUs remain under construction, and building permits were issued for five newADUs. These additional 22 housing units further reduce the city’s remaining RHNA commitment to 300.

The development community continues to show a strong interest in the construction of ADUs. The Building Safety Division is actively reviewing four building permit applications for newADUs, which are expected to be completed during the Housing Element planning period (2023-2031). The city is six months into the planning period and has met over half of the projected ADU development for the next eight years.

On an annual basis, staff will report to the State the number of new housing units in review, approved, and/or under construction. This report is known as the Annual Progress Report and is due on April 1 st each year.

Housing Priority Overlay Zone. The proposed Housing Priority Overlay Zone has been eliminated from the housing programs. Overlay Zones were challenged in a recent court case (Martinez vs City of Clovis), and HCD does not appear to support using Overlay Zones. Instead, the city will implement the provisions previously proposed under the Overlay Zone through other regulatory means (e.g., the adoption of policies, amendments to the Carmel Municipal Code, etc.), including:

Prioritizing the distribution of the city’s water resources to affordable housing.

Evaluating further parking reductions and/or waivers for affordable housing.

Evaluating permit fee reductions and/or waivers for affordable housing.

Establishing a floor area ratio incentive program to encourage affordable housing.

Establishing a minimum density of 33 dwelling units per acre in the CC, SC, RC, and R-4 Districts.

Next steps and Timeline:

The 6
th cycle draft Housing Element will be posted on the city’s website on January 16th and resubmitted to HCD for a 60-day review period on January 24, 2024. Staff will remain in close contact with HCD staff during the review process to answer any questions or provide clarification where needed.

On or before March 25, 2024, the city will receive a letter from HCD that either, 1) Finds the draft Housing Element substantially complies with state law, or 2) Requires further revisions and outlines what those revisions include.

If HCD finds the document in substantial compliance, the City Council can adopt the Housing Element and submit it back to HCD for certification. If revisions are required, City staff will review the comments, discuss any substantive changes with the City Council and the public, and resubmit the document for another 60-day review by HCD. This process continues until HCD finds the document to be in substantial compliance with state law.

The environmental review for the 6
th cycle Housing Element update is underway. A draft Initial Study has been completed, and a Mitigated Negative Declaration has been prepared for the project. The environmental document will be posted for a 20-day public review period. The environmental document and 6 th cycle Housing Element will be presented to the City Council concurrently for adoption.

Following the City Council's adoption of the 6
th cycle Housing Element and HCD certification, staff will submit the document to the California Coastal Commission (CCC) as a Local Coastal Plan (LCP) Amendment. HCD does not require the City to obtain approval from the CCC before adopting or certifying the updated Housing Element.

FISCAL IMPACT:

Consultant fees for the project are $371,931. The cost will be paid with grant funding from SB2, LEAP, and REAP, as well as contract services from the Community Planning & Building Department fiscal year 2023/2024 budget. In 2019 and 2020, the City received three grant awards totaling $290,000 to assist with the cost of updating the Housing Element: SB2 ($160,000), LEAP ($65,000), and REAP ($65,000).

PRIOR CITY COUNCIL ACTION:

On February 7, 2023, the City Council adopted Resolution 2023-024, entering into a Professional Services Agreement with EMC Planning Group for the 6th cycle Housing Element update and General Plan Safety Element update at a cost of $239,145.

On July 11, 2023, the City Council adopted Resolution 2023-074, amending the Agreement to include additional work under the California Environmental Quality Act (CEQA) at an additional cost of $40,455.

On January 9, 2024, the City Council was presented with Resolution 2024-011, amending the Agreement to include additional work in response to the comment letter from the State Department of Housing and Community Development (HCD) for an additional cost of $92,331.

ATTACHMENTS:

Attachment 1) 6th cycle Draft Housing Element 08.03.23
Attachment 2) HCD 90 day Comment Letter 11.01.23
Attachment 3) Reader's Guide 01.09.24
Housing and Community Development (HCD) Initial Draft
6th Cycle Housing Element Update
(2023-2031)

CITY OF CARMEL-BY-THE-SEA
August 1, 2023
Prepared by
EMC Planning Group
Attachment 1
Attachment 1
This document was produced on recycled paper.

HOUSING AND COMMUNITY DEVELOPMENT (HCD) INITIAL DRAFT
6TH CYCLE HOUSING ELEMENT UPDATE
(2023-2031)

CITY OF CARMEL-B Y-THE-SEA

PREPARED FOR
City of Carmel-by-the-Sea
Marnie Waffle, AICP, Principal Planner
City of Carmel-by-the-Sea
P.O. Box CC
Carmel-by-the-Sea, CA 93921
Tel 831.620.2000

PREPARED BY
EMC Planning Group Inc.
601 Abrego Street
Monterey, CA 93940
Tel 831.649.1799
Fax 831.649.8399
Ande Flower, MUP, AICP, Principal Planner
[email protected]
www.emcplanning.com
August 1, 2023
Attachment 1
Attachment 1
EMC Planning Group Inc.

Table of Contents

1.0 INTRODUCTION.................................................................................................... 1-1

1.1 Introduction ...................................................................................................................... 1-1

1.2 California’s Housing Crisis.............................................................................................. 1-2

1.3 Regional Housing Needs Allocation .............................................................................. 1-3

1.4 Affirmatively Furthering Fair Housing.......................................................................... 1-4

1.5 Overview of Planning Efforts ........................................................................................ 1-7

1.6 Public Participation ........................................................................................................ 1-11

2.0 GOALS, POLICIES, AND PROGRAMS ................................................................... 2-1

2.1 Introduction ...................................................................................................................... 2-1

2.2 What’s New....................................................................................................................... 2-1

2.3 Program Overview and Quantified Objectives............................................................ 2-3

2.4 Goals, Policies and Programs ......................................................................................... 2-4 Appendices
Appendix A Housing Needs & Fair Housing Report
Appendix B Housing Constraints
Appendix C Vacant and Available Sites
Appendix D Review of Previous Housing Element
Appendix E List of Contacted Organizations
Appendix F ECONorthwest Feasibility Study
Appendix G Energy Conservation and Reduction of Greenhouse Gas Emissions Appendix H Stakeholder Survey
Figures
Figure 2-1 Sites Inventory ............................................................................................................... 2-5 Figure 2-2 Existing Overnight Visitor Accommodation Map ................................................. 2-11 Figure 2-3 Potential SB-10 Opportunity Sites............................................................................ 2-13 Figure 2-4 The Housing Priority Overlay Zoning District ...................................................... 2-23 Tables
Table 1-1 Regional Housing Needs Allocation .......................................................................... 1-4 Table 2-1 Quantified Objectives Summary................................................................................. 2-3 Attachment 1
Attachment 1
Chapter 1.0 – Introduction 1-1 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023

1.0 Introduction

1.1 Introduction
Carmel-by-the-Sea is a community with a high quality of life, a healthy environment, and renowned architecture. The long-term vitality of Carmel-by-the-Sea and the local economy depend upon the availability of various types of housing to satisfy the community’s local housing needs while continuing to be a vacation destination for all. As Carmel-by-the-Sea looks towards the future, increasing the range and diversity of housing options is integral to the City’s success. This Housing Element serves as a continuation of the City’s commitment to ensuring new opportunities for residential development, as well as preserving and enhancing existing neighborhoods, and continuing to protect the natural environment.

Located on the Monterey Peninsula and incorporated in 1916, Carmel-by-the-Sea is a bijou coastal community boasting sweeping views of the Pacific Ocean, acclaimed architecture, and a strong residential character. The City has nearly 50 historic properties within the centralized commercial district, primarily dating to the turn of the 20th century and the 1920-1930s period. Residences throughout the one-square-mile village span a range of construction eras but are collectively appreciated for their architectural aesthetic. As a result of its beauty, the City is a popular tourism and second-home destination. Approximately 51 percent of housing units are for seasonal, recreational, or occasional use, creating high barriers of entry to the housing market for local renters.

This 2023-2031 Housing Element represents the City of Carmel-by-the-Sea’s intent to plan for the housing needs of the community while meeting the State's housing goals as set forth in Article 10.6 of the California Government Code (Section 65580-65589.11). The California State Legislature has identified the attainment of a decent home and a suitable living environment for every Californian as the State's major housing goal. The Carmel-by-the-Sea 6th Cycle Housing Element represents a sincere and creative effort to meet State housing mandates within the constraints of an established and nearly built-out community with limited land availability, coastal hazards, and extraordinarily high costs of land and housing.

Pursuant to state law, the Housing Element must be updated periodically according to statutory deadlines. This 6th Cycle Housing Element covers the planning period 2023 through 2031 and replaces the City's 5th Cycle Housing Element that covered the period 2015 through 2023.

Attachment 1
Chapter 1.0 – Introduction 1-2 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Per State Housing Element law, the document must be periodically updated to:
 Outline the community’s housing production objectives consistent with State and regional growth projections;
 Describe goals, policies and implementation strategies to achieve local housing objectives;  Examine the local need for housing with a focus on special needs populations;  Identify adequate sites for the production of housing serving various income levels;  Analyze potential constraints to new housing production;  Evaluate the Housing Element for consistency with other General Plan elements; and  Evaluate Affirmatively Furthering Fair Housing.

1.2 California’s Housing Crisis
The 6th Cycle Housing Element update comes at a critical time because California is experiencing a housing crisis, and as is the case for all jurisdictions in California, Carmel-by-the-Sea is committed to playing its part in meeting the growing demand for housing. In the period 2020 through 2045, the AMBAG region is projected to add 36,544 jobs,1 which represents a nine (9) percent increase. These changes will increase demand for housing across all income levels, and if the region can’t identify ways to significantly increase housing production, it risks worsening the burden for existing lowerincome households, many of whom do not have the luxury or skill set to move to a new job center but that are nonetheless faced with unsustainable increases in housing cost.

If the region becomes less competitive in attracting workers and increasingly unaffordable to lower-income workers and seniors, then social and economic segregation will worsen, only exacerbating historic patterns of housing discrimination, racial bias, and segregation. This potentiality has become so acute in recent years that the California Legislature addressed the issue with new legislation in 2018. Assembly Bill (AB) 686 requires all state and local agencies to explicitly address, combat, and relieve disparities resulting from past patterns of housing segregation to foster more inclusive communities.

This is commonly referred to as Affirmative Furthering Fair Housing, or AFFH (more on this below).
1 Source: AMBAG, November 18, 2022. “Final 2022 Regional Growth Forecast” “There's a movement in
California now called 'Yes, In
My Backyard,' and I'd love to
see us join that.”
May 24, 2023 Housing Ad Hoc
Committee Community Meeting
Attendee
Attachment 1
Chapter 1.0 – Introduction 1-3 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Carmel-by-the-Sea has had moderate success in meeting its housing needs. In the last Housing Element cycle (2015 to 2022 – 2023 pending2), for example, 18 housing units were constructed in the City, which represented 58 percent of its Regional Housing Needs Allocation (RHNA) of 31 new housing units. Of the units built, none were affordable to lower- and moderate-income households,3 and 100 percent were affordable to above moderate-income households.

1.3 Regional Housing Needs Allocation
For the eight-year time frame covered by this Housing Element Update (2023-2031), the Department of Housing and Community Development (HCD) has identified the region’s housing need as 33,274 units. The total number of housing units assigned by HCD is separated into four income categories that cover housing types for all income levels, from very low-income households to market rate housing.4 This calculation is based on population projections produced by the California Department of Finance as well as adjustments that incorporate the region’s existing housing need. Per Government Code Section 65583(a), the Housing Element must also provide quantification and analysis of projected housing needs for extremely low-income households. The number of units for the extremely low-income level is not assigned by HCD, but is left for quantification by the local jurisdiction. This calculation is based on the HCD approved methodology5, assuming that 50 percent of very low-income households qualify as extremely lowincome households.

Almost all jurisdictions in the Monterey Bay Area received a larger RHNA this cycle compared to the last cycle, primarily due to changes in state law that led to a considerably higher Regional Housing Needs Determination (RHND) compared to previous cycles.

On November 8, 2022, AMBAG’s adopted RHNA Methodology was approved by HCD. For Carmel-by-the-Sea, the RHNA to be planned for this cycle is 349 units, a substantial increase from the last cycle. Table 1-1 Regional Housing Needs Allocation shows the RHNA for Carmel-by-theSea for the period 2023 through 2031. 2 Source: November 8, 2022 HCD letter to AMBAG. Local governments may credit new units approved, permitted, and/or built beginning from the start date of the RHNA projection period, June 30, 2023, towards their RHNA 3 Source: City of Carmel-by-the-Sea HCD Annual Reports and City staff. 4 HCD divides the RHND into the following four income categories:

Very Low income: 0-50% of Area Median Income
Low income: 50-80% of Area Median Income
Moderate income: 80-120% of Area Median Income
Above Moderate income: 120% or more of Area Median Income 5 https://www.hcd.ca.gov/planning-and-community-development/housing-elements/building-blocks/extremely-lowincome-housing-needs Attachment 1
Chapter 1.0 – Introduction 1-4 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table 1-1 Regional Housing Needs Allocation
Income Group Percentage of Area Median Income (AMI) Share Extremely Low Income6 <30 57
Very Low Income <50 56
Low Income 51-80 74
Moderate Income 81-120 44
Above Moderate Income 121 + 118
Total 349
SOURCE: AMBAG

1.4 Affirmatively Furthering Fair Housing
In 2018, Assembly Bill (AB) 686, established an independent state mandate to affirmatively further fair housing (AFFH). Assembly Bill (AB) 686 extends requirements for federal grantees and contractors to “affirmatively further fair housing,” including requirements in the Federal Fair Housing Act, to public agencies in California. Affirmatively furthering fair housing is defined specifically as taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity by replacing segregated living patterns with truly integrated and balanced living patterns; transforming racially and ethnically concentrated areas of poverty into areas of opportunity; and fostering and maintaining compliance with civil rights and fair housing laws.

Assembly Bill (AB) 686 requires public agencies to:
 Administer their programs and activities relating to housing and community development in a manner to affirmatively further fair housing;
 Not take any action that is materially inconsistent with the obligation to affirmatively further fair housing;
 Ensure that the program and actions to achieve the goals and objectives of the Housing Element affirmatively further fair housing; and
 Include an assessment of fair housing in the Housing Element.

The requirement to Affirmatively Further Fair Housing (AFFH) is derived from The Fair Housing Act of 1968, which prohibited discrimination concerning the sale, rental, and financing of housing based on race, color, religion, national origin, or sex—and was later amended to include familial status and disability. The 2015 U.S. Department of Housing and Urban Development (HUD) Rule 6 Extremely low-income RHNA is found as a subset within the very low-income category for all other tables in this document
Attachment 1
Chapter 1.0 – Introduction 1-5 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 to Affirmatively Further Fair Housing and California Assembly Bill (AB)686 (2018) mandate that each jurisdiction takes meaningful action to address significant disparities in housing needs and access to opportunity. AB 686 requires that jurisdictions incorporate AFFH into their Housing Elements, which includes inclusive community participation, an assessment of fair housing, a site inventory reflective of AFFH, and the development of goals, policies, and programs to meaningfully address local fair housing issues.

An AFFH analysis was prepared and is included as an Appendix to this Housing Element (see Appendix A).

Defining Segregation
Segregation is the separation of different demographic groups into different geographic locations or communities, meaning that groups are unevenly distributed across geographic space. This report examines two spatial forms of segregation: neighborhood-level segregation within a local jurisdiction and city-level segregation between jurisdictions in the Monterey Bay Area.

Neighborhood-level segregation (within a jurisdiction, or intra-city): Segregation of race and income groups can occur from neighborhood to neighborhood within a city. For example, if a local jurisdiction has a population that is 20 percent Latinx, but some neighborhoods are 80 percent Latinx while others have nearly no Latinx residents, that jurisdiction would have segregated neighborhoods.

City-level segregation (between jurisdictions in a region, or inter-city): Race and income divides also occur between jurisdictions in a region. A region could be very diverse with equal numbers of White, Asian, Black, and Latinx residents, but the region could also be highly segregated with each city comprised solely of one racial group.

There are many factors that have contributed to the generation and maintenance of segregation.

Historically, racial segregation stemmed from explicit discrimination against people of color, such as restrictive covenants, redlining, and discrimination in mortgage lending. This history includes many overtly discriminatory policies made by federal, state, and local governments (Rothstein 2017).

Segregation patterns are also affected by policies that appear race-neutral, such as land use decisions and the regulation of housing development.

Segregation has resulted in vastly unequal access to public goods such as quality schools, neighborhood services and amenities, parks and playgrounds, clean air and water, and public safety (Trounstine 2015). This generational lack of access for many communities, particularly people of color and lower income residents, has often resulted in poor life outcomes, including lower educational attainment, higher morbidity rates, and higher mortality rates (Chetty and Hendren 2018, Ananat 2011, Burch 2014, Cutler and Glaeser 1997, Sampson 2012, Sharkey 2013).

Attachment 1
Chapter 1.0 – Introduction 1-6 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Segregation Patterns in the Monterey Bay Area
Across the Monterey Bay Area, Hispanic and Black residents are significantly more segregated from other racial and income groups. The highest levels of racial segregation occur between the Hispanic and Black populations. The analysis completed for this report indicates that the amount of racial segregation both within Monterey Bay Area cities and across jurisdictions in the region has slightly increased since the year 2010.

Segregation and Land Use
It is difficult to address segregation patterns without an analysis of both historical and existing land use policies that impact segregation patterns. Land use regulations influence what kind of housing is built in a city or neighborhood (Lens and Monkkonen 2016, Pendall 2000). These land use regulations in turn impact demographics: they can be used to affect the number of houses in a community, the number of people who live in the community, the wealth of the people who live in the community, and where within the community they reside (Trounstine 2018). Given disparities in wealth by race and ethnicity, the ability to afford housing in different neighborhoods, as influenced by land use regulations, is highly differentiated across racial and ethnic groups (Bayer, McMillan, and Reuben 2004).7
Segregation in the Carmel-by-the-Sea
The following are highlights of demographics as they apply to Carmel-by-the-Sea. For further information regarding the history of racial segregation, please refer to Appendix A.  As of 2019, White residents are the most segregated compared to other racial groups as measured by the isolation index. White residents live in neighborhoods where they are less likely to come into contact with other racial groups;
 As of 2019, Non-Hispanic White individuals comprise 87 percent of Carmel-by-the-Sea’s population followed by Hispanic or Latino (8 percent) and Asian populations (5 percent);  The City has no populations identifying as American Indian, Alaska Native, Native Hawaiian or Other Pacific Islander; and
 Black or African American non-Hispanic individuals represent less than 1 percent of the City’s population.
7For the source data, see U.S. Census Bureau, American Community Survey 5-Year Data (2015-2019), Table B19013B, Table B19013D, B19013H, and B19013I.

Attachment 1
Chapter 1.0 – Introduction 1-7 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Carmel-by-the-Sea’s General Plan and Municipal Code
historically emphasized single-family residential
development patterns and consequently, the City offers a limited variety of housing types with 87 percent single family detached units. Historically, this type of
development contributed to segregation patterns,
including in Carmel-by-the-Sea, due to, among other
factors, the higher purchase costs that accompany singlefamily homes. Financing for single-family properties favored educated higher income earners and as a result
purchasing property in the City remained out of reach for many lower income households and led to the
demographics seen in the City today. While Carmel-bythe-Sea’s population demographics are not as diverse as other jurisdictions within Monterey County and restrictive covenants were not enacted specifically in the City,
enacting policies and programs that promote AFFH and highlight the community’s assets could attract individuals to the area, encourage those that work in the City to live there as well, and assist lower-income households that are currently living in the community. Currently, 28 percent of households within Carmel-by-the-Sea are considered lower-income.

Regional Segregation
The following are highlights of regional segregation metrics as they apply to Carmel-by-the-Sea:
 The City has a higher share of White residents than other jurisdictions in the Monterey Bay Area as a whole, a lower share of Latinx residents, a lower share of Black residents, and a lower share of Asian/Pacific Islander residents; and
 Regarding income groups, the City has a lower share of very low-income residents than other jurisdictions in the Monterey Bay Area as a whole, a lower share of low-income residents, a lower share of moderate-income residents, and a higher share of above moderate-income residents.

1.5 Overview of Planning Efforts
This section provides an overview of planning and legislative efforts that provide the context for development of the 6th Cycle Housing Element.
"I urge you to enthusiastically
embrace this opportunity to
do exactly what you've come
up with because Carmel really
needs it, and it didn't happen
that Carmel turned out to be
a wealthy white exclusive
community by accident. It was
purposeful. “
May 24, 2023 Housing Ad Hoc
Committee Community
Meeting Attendee
Attachment 1
Chapter 1.0 – Introduction 1-8 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Effectiveness of Previous Housing Element
The 2015 Housing Element identified a Regional Housing Needs Allocation of 31 housing units in Carmel-by-the-Sea between 2015 and 2023. The RHNA was divided into the following income categories:
 7 units affordable to extremely low- and very low-income households;  5 units affordable to low-income households;
 6 units affordable to moderate-income households; and  13 units affordable to above moderate-income households.

During the 2015–2023 planning period, 18 new above moderate-income units were added to the City’s housing stock, and no units were added in the moderate, low or very low-income categories8 .

This indicates that residential growth for extremely and very low-income households was slower than anticipated, which may be in part due to a lack of water resources, the COVID pandemic, the cost of land and construction, and the overall lack of interest to develop affordable housing in the community. As a result, housing costs continued to increase substantially due to low supply, and affordability became more elusive.

The goals, objectives, policies, and actions in the 2015 Housing Element complied with State Housing Law and provided proper guidance for housing development in the City. In the 2023 Housing Element update, objectives for each of the goals will be modified as appropriate to more specifically respond to the housing environment in Carmel-by-the-Sea from 2023-2031. Policies will also be modified as needed to respond to current Housing Element Law and existing and anticipated residential development conditions. See Appendix E for a complete review and analysis of Carmelby-the-Sea’s 5th Cycle Housing Element (2015-2023).

New State Laws Affecting Housing
While the City has taken steps throughout the 5th Cycle to increase housing production locally, the State passed numerous laws to address California’s housing crisis during the same period. As the State passes new legislation in the remainder of the 5th Cycle and during the 6th Cycle, the City will continue to amend the Municipal Code; to monitor and evaluate policies and programs designed to meet State requirements; and to proactively implement new policies and programs to help increase housing production citywide.

In 2019, several bills were signed into law that include requirements for local density bonus programs, the Housing Element, surplus lands, accessory dwelling unit (ADU) streamlining, and removing local barriers to housing production. The City implemented changes required by state law, through amendments to the Municipal Code. The following is a summary of recent legislation and 8 RHNA Progress Report - 5th Cycle RHNA Progress Report - California Open Data Attachment 1
Chapter 1.0 – Introduction 1-9 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 proposed City activities that will further the City’s efforts to increase housing production during the 6th Cycle. Please see the section above for a discussion of Assembly Bill (AB) 686 (Affirmatively Furthering Fair Housing).

Climate Change and RHNA Methodology
Per statute, Assembly Bill (AB) 1445 (2023) amends California Government Code Section 65584.04 and would require Councils of Governments to consider including the impacts of climate change as a factor when developing the methodology for allocating regional housing need. Regions would specifically need to consider emergency evacuation route capacity, wildfire risk, and sea level rise, but could also consider any other climate change-related factor. Although this does not apply to the current RHNA, it could affect the 7th Cycle allocation.

Incentives for Accessory Dwelling Units
In 2020, AB 686, AB 587, AB 671, AB 881, and SB 13
further incentivize the development of accessory dwelling units (ADUs) through streamlined permits, reduced
setback requirements, increased allowable square footage, reduced parking requirements, and reduced fees. The City last amended the Municipal Code in 2017 to address ADUs and is currently following state law while preparing
additional amendments to the Municipal Code.

In 2023, the City intends to further amend the standards for ADUs and JADUs, consistent with state Law, to encourage conversion of guest houses to ADUs and promote construction of new units. Further the City will develop pre-approved, standardized ADU plans to make construction more affordable and will continue to include the HD ADU handbook on the City’s website.

Low-Barrier Navigation Centers
AB 101 (2019) requires jurisdictions to allow “low-barrier navigation centers” ByRight in areas zoned for mixed uses and in nonresidential zones permitting multifamily uses, if the center meets specified requirements. A low-barrier navigation center is a service-enriched shelter focused on moving unhoused people into permanent housing. The center provides temporary living facilities while case-managers connect individuals to public benefits, health services, and housing. The City’s Municipal Code will be amended to comply with state law.

Surplus Public Land
AB 1255 and AB 1486 (2020) seek to identify and prioritize state and local surplus lands available for housing development affordable to lower-income households. City-owned land was considered through preparation of the adequate sites inventory of the 6th Cycle Housing Element. These sites may be developed over time or possibly leased for development.

ADUs and JADUs make
economic sense for many of us
and could account for scores of
new units in the next 8 years.

November 17, 2022 Housing Ad Hoc
Committee Community Meeting
Attendee
Attachment 1
Chapter 1.0 – Introduction 1-10 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 In 2019, Governor Gavin Newsom signed an executive order to identify State owned sites to help address the California housing crisis.

Accelerated Housing Production
Assembly Bill (AB) 2162 (2018) and Senate Bill (SB) 2 (2019) address various methods and funding sources that jurisdictions may use to accelerate housing production.

Priority Processing
SB 330 (2019) enacts changes to local development policies, permitting, and processes that will be in effect through January 1, 2025. SB 330 places new criteria on the application requirements and processing times for housing developments; prevents localities from decreasing the housing capacity of any site, such as through downzoning or increasing open space requirements, if such a decrease would preclude the jurisdiction from meeting its RHNA housing targets; prevents localities from establishing non-objective standards; and requires that any proposed demolition of housing units be accompanied by a project that would replace or exceed the total number of units demolished.

Additionally, any demolished units that were occupied by lower-income households must be replaced with new units affordable to households with those same income levels.

Housing and Public Safety
In response to SB 379 (2015) and other recent state legislation, local jurisdictions must update their safety element to comprehensively address climate adaptation and resilience (SB 379 and SB 1035, 2018) and identify evacuation routes (SB 99 and AB 747, both 2019). These updates are triggered by the 6th Cycle Housing Element update. This Housing Element will contain an evaluation of the existing safety element and programming actions to update the safety element to satisfy the new state requirements. Also, as sites are identified and analyzed for inclusion in the City’s housing site inventory, special attention will be paid to the risk of wildfire and the need for evacuation routes. In this way, the City will coordinate updates between the elements, so that future development is directed into areas that avoid or reduce unreasonable risks while also providing needed housing and maintaining other community planning goals.

Disadvantaged Communities
In 2011, the Governor signed SB 244 which requires local governments to make determinations regarding “disadvantaged unincorporated communities,” defined as a community with an annual median income that is less than 80 percent of the statewide annual median household income. The City has determined that there are no unincorporated islands or fringe or legacy communities that qualify as disadvantaged communities inside or near its boundaries.

Consistency with General Plan
The City of Carmel-by-the-Sea adopted a comprehensive update to its General Plan in 2003 in conjunction with the adoption of their Local Coastal Plan. Additional, element-specific, updates Attachment 1
Chapter 1.0 – Introduction 1-11 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 were completed in 2009 and 2015. The General Plan is a long-range planning document that serves as the “blueprint” for development for local jurisdictions in California. All development-related decisions in the City must be consistent with the General Plan, and if a development proposal is not consistent with the plan, then it must be revised or the plan itself must be amended.

State law requires a community’s General Plan to be internally consistent. This means that the Housing Element, although subject to special requirements and a different schedule of updates, must function as an integral part of the overall General Plan, with consistency between it and the other General Plan elements. From an overall standpoint, the development projected under this Housing Element is consistent with the other elements in the City’s current General Plan.

Many housing needs can only be addressed on a comprehensive basis in concert with other community concerns such as infill development or mixed-use incentives, for example, which must consider land use, traffic, parking, design, and other concerns as well.

The City’s Housing Element is being updated at this time in conformance with the 2023-2031 6th Cycle update for jurisdictions in the Association of Monterey Bay Area Governments (AMBAG) region. The Housing Element builds upon the other General Plan elements and contains policies to ensure that it is consistent with other elements of the General Plan. As portions of the General Plan are amended in the future, the plan (including the Housing Element) will be reviewed to ensure that internal consistency is maintained.

1.6 Public Participation
The primary purpose of this chapter is to describe the
effort made by the City of Carmel-by-the Sea to engage
all economic segments of the community (including
residents and/or their representatives) in the
development and update of the Housing Element. This
public participation effort also includes formal
consultation, pursuant to Government Code §65352.3,
with representatives from the Tribal Nations that are
present and active in Monterey County. It is also
responsive to AB 686 (2018, Affirmatively Furthering
Fair Housing), which requires local jurisdictions, as they update their Housing Elements, to conduct public
outreach to equitably include all stakeholders in the
Housing Element public participation program.

The mission of the Housing Ad Hoc
Committee is to provide guidance as
the City updates the Housing Element
of its General Plan. The Committee will
participate in public outreach and
education; consider opportunities and
incentives for the development of
affordable housing; and explore
creative, tailored solutions to meet
the City’s workforce and range of
other housing needs while preserving
the character of Carmel by-the-Sea.

Karen Ferlito and Bobby Richards,
Housing Ad Hoc Committee
Councilmembers
Attachment 1
Chapter 1.0 – Introduction 1-12 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 The 6th Cycle RHNA numbers are a monumental change for all California communities, and the success of the update process hinges in part on a community outreach and engagement program that was robust, inclusive, and meaningful. The City’s community engagement program has included an initial presentation to the City Council, a series of Housing Ad Hoc Committee community meetings, stakeholder outreach, direct contact with interested residents and property owners, and online/virtual participation. Key components of the interactive engagement plan include: Housing Element website, http://www.HOMECarmelbytheSea.com where all updates are provided as well as community engagement opportunities.

H.O.M.E. Carmel-by-the-Sea website
Housing Opportunities Made Easier (HOME) at HOMECarmel (homecarmelbythesea.com) is a dedicated website that provides a portal to all of the housing -element-related public engagement activities that are available to members of the public. This includes information on housing element basics, community ideas board, property owner interest forms, site surveys, site selection details, and materials from community workshops.
 Q&A. Received questions in a managed space that accommodated messages throughout the iterative brainstorming process.
 Ideas Board. Promoted brainstorming among community members to suggest creative ways to achieve our RHNA goals.
 Interactive Site Inventory Mapping. Allowed community members an opportunity to examine proposed housing sites and suggest alternative solutions via an interactive online mapping tool. The site inventory mapping tool was advertised on the H.O.M.E. Carmel-by-theSea website in addition to other City communication outlets and made available through engage.emcplanning.com/homecarmelpotentialsitesinventory.  Surveys. Encouraged community-members to voice their opinions in a convenient way that also helped City staff understand what areas of the City need more encouragement to participate.

Aggregate data also helped the City understand generally who is participating with the outreach tools. All surveys were advertised on the H.O.M.E. Carmel-by-the-Sea website in addition to other City communication outlets. City staff also walked the City and handed out flyers to hospitality workers in an effort to increase the demographics of community members taking the Stakeholder Survey. The Stakeholder Survey was available in both English and Spanish. • Stakeholder Survey. Released for public engagement on May 24, 2023 to solicit input from Carmel-by-the-Sea residents, property owners, business owners, employees, community activists, and visitors. The stakeholder survey closed July 6. The Housing Element will contain updated policies and programs as guided by the public’s perspective.

Attachment 1
Chapter 1.0 – Introduction 1-13 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  Property Owner Interest Form. Released for public engagement on April 6, 2023 to develop a list of property owners interested in building an accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU). A list of interested property owners will be added to Appendix C – Sites Inventory when the survey is closed July 6.

Community Meetings
The City hosted a series of community meetings to inform and educate the public on the 2023-2031 6th Cycle Housing Element Update planning process and collect community feedback. These meetings are ongoing and continue to guide the policies and programs to ensure Carmel-by-theSea’s character and values are upheld.  November 17, 2022 Housing Ad Hoc Committee
Community Meeting. Hosted to introduce the 2023-2031
6th Cycle Housing Element Update to community residents.  February 7, 2023 City Council Meeting. Presentation on preliminary housing feasibility report and Housing Element update status.
 February 28, 2023 Housing Ad Hoc Committee
Community Meeting. Hosted to discuss development
constraints and potential incentives.
 April 6, 2023 Housing Ad Hoc Committee Community
Meeting. Hosted to discuss current 5th Cycle Housing
Element policies and programs, HOMECarmel unveiling
and walk through, and introduction to AFFH.
 May 24, 2023 Housing Ad Hoc Committee Community
Meeting. Hosted to discuss housing needs, fair housing, sites inventory, and policies and programs to address the needs.
 June 15, 2023 Joint City Council/Planning Commission/Housing Ad Hoc Community Meeting. Hosted to discuss the Public Draft Housing Element, the 30-day Public Comment Period, and next steps in the planning process.
 July 11, 2023 City Council Meeting. Update on the Housing Element Public Review Draft and discuss revision to the document after the 30-day comment period and review the City’s response to public comments on the Public Draft.
 August 1, 2023 City Council Meeting. Update on the Housing Element planning process and review of full Initial Draft Housing Element prior to submittal to HCD for 90-day review.

If you rewind the clock 30
years, we did have 4,000 or
more full-time residents in
this town so it’s not like that’s
impossible. But the world is
different now, the number of
cars has increased, etc., so
there will be interesting
balances and challenges as we
add people to our community,
which is going to be a great
thing.

November 17, 2022
Housing Ad Hoc Committee
Community Meeting
Attendee
Attachment 1
Chapter 1.0 – Introduction 1-14 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Public Participation to Affirmatively Furthering Fair Housing The Carmel-by-the-Sea public participation program was also responsive to AFFH, which requires local jurisdictions to conduct public outreach to equitably include all stakeholders in the Housing Element public participation program (see the discussion above for more complete information on AFFH).

The organizations listed in Appendix E were contacted initially with an invitation to further connect.

There were more opportunities for deeper connection with some of the Community Based Organizations (CBOs) included with the list.

The City emphasized the power of public participation during the public draft 30-day review period.

Community members were informed that their comments would be included in the public record that will be read by decision-makers and reviewed by HCD, with transparent obligation to be responsive to comments as part of the preliminary draft submittal to HCD.

Tribal Consultation
This public participation effort also includes formal consultation, pursuant to Government Code §65352.3, with representatives from the Esselen Nation that is present and active in Monterey County. Consultation is in process.

Public Review of Draft and Final Housing Element
Public Comment Review Period
As required by HCD, the Draft Housing Element was available for 30-days of public review from June 5, 2023 to July 6, 2023. The Draft Housing Element was posted on the City of Carmel website and the dedicated Housing Element website (homecarmelbythesea.com) and a number of public comments were received. Additionally, a joint City Council and Planning Commission Committee meeting was held on June 15, 2023 where verbal public comments were accepted on the Draft Housing Element.

Public comments received during the 30-day public review period can be found in the Public Comment Report, along with responses. The HCD Initial Draft has been updated as needed to reflect the comments received by the public.

Stakeholder Survey
The City of Carmel published a Stakeholder Survey to gather input from community members. The goal of the survey was to inform the City of Carmel-by-the-Sea what housing needs exist and to solicit community members input on how to achieve the RHNA. The survey was made available in English and Spanish and was posted on the dedicated Housing Element website (homecarmelbythesea.com). The Stakeholder survey was available from May 24, 2023 to July 6, 2023. 156 responses were received in English and 1 response was received in Spanish. See Appendix H for an in-depth discussion of the Stakeholder Survey results.

Attachment 1
Chapter 1.0 – Introduction 1-15 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Overall, survey respondents indicated a need for more diverse housing types within the City (apartments, condominiums, ADUs and senior housing). Survey respondents encourage the use of second story buildings for housing within the Commercial District, especially for affordable units, and indicate a need for expanded City services to distribute information about affordable units.

When asked if property owners would consider adding an ADU to their property, many responded that lots are too small, however, a number of property owners did indicate interest if the permitting was streamlined, fees were lowered, or financial assistance was provided.

Attachment 1
Chapter 1.0 – Introduction 1-16 EMC Planning Group
Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 This side intentionally left blank.

Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-1 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023

2.0 Goals, Policies, and Programs

2.1 Introduction
The City is responsible for enabling the production of housing by reducing regulatory barriers, providing incentives, and supporting programs that create or preserve housing, especially for vulnerable populations. To enable the construction of quality housing, the City has identified the following goals:

Goal HE-1 Facilitate Housing Construction
Goal HE-2 Protect Affordable Housing and Improve the Housing Stock Goal HE-3 Provide Opportunities for New Affordable and Other Special Needs Housing Goal HE-4 Exemplify Sustainable Development and Energy Conservation Goal HE-5 Publicize Housing Needs and Resources
The City’s demographic and housing needs assessment, including contributing factors to housing disparities, formed an integral part of program development. Highlights include: the predominant age group in 2019 was between 65 to 74 years of age; the population was comprised of over 85% White individuals; the unemployment rate was 0.1 percent; above-moderate households made up the majority of households at 62 percent; and 57 percent of total households were owner occupied and 43 percent renter occupied. Of note, 23 percent of household are cost burdened and 23 percent are severely cost burdened. Detailed information is provided in Appendix A.

Additionally, the majority of the sites identified in the Site Inventory were not identified in the 5th Cycle Housing Element. The Policies and Programs below are intended to reduce the regulatory barriers to redevelop of these sites and to demonstrate the City is taking measures to ensure construction of more units, in the 6th cycle.

2.2 What’s New
This section provides an overview of significant new policy and program directions being taken by the City of Carmel-by-the-Sea to address housing issues in the community and the larger Monterey Bay Area.

Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-2 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Affirmatively Furthering Fair Housing
The new policy direction that the City will undergo during the 6th Cycle Housing Element Update involves addressing historic economic and racial segregation patterns. In 2018, the California Legislature established an independent state mandate to affirmatively further fair housing (AFFH).

Affirmatively furthering fair housing is defined specifically as taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity by replacing segregated living patterns with truly integrated and balanced living patterns; transforming racially and ethnically concentrated areas of poverty into areas of opportunity; and fostering and maintaining compliance with civil rights and fair housing laws.

Contributing Factors
The following contributing factors that impact fair housing and affirmatively furthering fair housing (AFFH) within the City were identified and prioritized as follows:

High Priority
 Lack of affordable housing;
 Lack of adequate housing stock that meets the needs of residents;  Lack of adequate affordable housing options;
 Jobs-worker imbalance;
 Lack of accessible units for individuals with disabilities;  Lack of Transitional and Supportive Housing/Emergency Shelters;  Since 2015, there have been eighteen (18) housing permits in the City of which all are for above moderate-income households;
 There is a lack of developable land, and the City is subject to additional coastal zone regulations;
 Lack of racial and ethnic diversity within the City; and  Cost of land, materials, and labor which limit profitability of affordable housing.

Medium Priority
 Lack of access to information about fair housing rights; and  Limited knowledge of fair housing by residents.

More detailed AFFH information is located in Appendix A. The City of Carmel-by-the-Sea is adopting new policies and programs through the update of this 6th Cycle Housing Element, to align with the state’s new AFFH mandate. Policies and programs that support this alignment are identified with the letters “AFFH.”
Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-3 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023

2.3 Program Overview and Quantified Objectives
Quantified Objectives estimate the number of units likely to be constructed, rehabilitated, or conserved/preserved by income level during the planning period. The Quantified Objectives do not represent a ceiling on development, but rather set a target goal for the jurisdiction to achieve, based on needs, resources, and constraints. These objectives will focus communication between the City and HCD with future Annual Progress Reports (APRs). HCD does not require that all objectives must be met, rather, it is a goal that enables objective assessments about program effectiveness so the City can make informed determinations to continue, modify, or delete programs with the next Housing Element update Cycle. Table 2-1, Quantified Objectives, provides an estimate of the number of units likely to be constructed, rehabilitated or conserved/preserved in Carmel-by-the-Sea in the 6th Cycle.

Table 2-1 Quantified Objectives Summary
Income Category New Construction Rehabilitation* Conservation/ Preservation**
Extremely Low 57 0 0
Very Low 56 5 0
Low 74 5 50
Moderate 44 6 0
Above Moderate 118 400 0
Total 349 416 50
SOURCE: City of Carmel-by-the-Sea 2023
NOTES: *The City has approximately 3,800 residential units, 60 (or about one percent) of which are affordable units. Each year the City processes approximately 100 building permits for remodels, additions, and other construction, which rehabilitates the existing housing stock. For the lower-income categories rehabilitation goals, the City assumes that one percent of the total permits processed will be for affordable units. Under these assumptions, the City would rehabilitate two units of affordable housing a year or approximately 16 units throughout the 2023-2031 planning cycle. This represents approximately 30 percent of the City’s existing affordable housing inventory. **The City has no units at risk of converting to market rate during this planning cycle.

Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-4 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023

2.4 Goals, Policies and Programs
Community input has been and continues to be an
integral part of the development of policies and programs for the 6th Cycle Housing Element. The purpose of this
section is to set forth goals, policies, and programs to further the development of housing for all income levels in the community. The Implementation Programs listed
below provide a workplan for programs to ensure timely
implementation and tracking.

GOAL H1 FACILITATE HOUSING

CONSTRUCTION
Policy 1.1: Ensure adequate sites are available to
meet the City’s projected housing
growth needs.

Program 1.1.A: Adequate Sites
The City has a RHNA or growth need of 113 units affordable to Extremely Low- and Very LowIncome households. The City’s General Plan and Municipal Code provide for housing types at appropriate densities to accommodate the RHNA. The City will encourage and facilitate the development of new units consistent with the RHNA by continuing to work with housing providers such as the Carmel Foundation and will actively find new organizations to partner with. The City also offers incentives and concessions outlined in Programs listed below including Program 3.1.G A Housing Priority Overlay District. See Figure 2-1 for Sites Inventory map, and further analysis in Appendix C.

Quantified Objective: 57 Extremely Low, 56 Very Low, 74 Low, 44 Moderate and 118 Above Moderate-Income housing units
Timeframe: Ensure adequate sites are maintained to meet RHNA through June 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-3.1.a: Adequate Sites)
"... The land as it exists
now, the way it's zoned,
could support the 349
units, plus the buffer. So,
the question then is how do
we get people excited
about developing some of
those units?
That's where these
programs and processes
come into play and that's
why we need to amend the
Municipal Code, to codify
those things..."
May 24, 2023 Housing Ad Hoc

Attachment 1
8 Junipero St.

Mountain View Ave.

Ocean Ave.

Carpenter St.

San Carlos St.

Monte Verde St.

Guadalupe St.

Santa Rita St.

Santa Fe St.
1st Ave.
2nd Ave.
3rd Ave.
4th Ave.
5th Ave. Torres St.

Dolores St.

Lincoln St.

Camino Real
Casanova St.

Carmelo St.

San Antonio Ave.
6th Ave.
7th Ave.
9th Ave.
10th Ave.
11th Ave.
12th Ave.
13th Ave.

Santa Lucia Ave.

Sites Inventory
Carmel Housing & Safety Element Update
0 1050 feet
Figure 2-1
Source: Monterey County GIS 2023, Google Earth 2023 Site Inventory Parcels City Limit
Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-6 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Program 1.1.B: Underutilized Sites - AFFH
Publicly owned sites represent an opportunity to partner with a non-profit or developer to build affordable units. The City may enter into an agreement with a development partner that makes construction of affordable units more financially feasible because the cost of the land is under City ownership. The City will actively investigate the feasibility of developing underutilized publicly owned sites for housing development and possible partnerships with housing providers to develop housing for lower-income households and/or senior housing on appropriate underutilized sites.

Quantified Objective: 50 affordable units
Timeframe: Complete investigations and potential partnerships by June 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly 3-3.1.b: Surplus Sites)
Program 1.1.C: Development on Small Sites
Small sites can be difficult to develop particularly when development standards don’t adequately take into account small lot dimensions. The City will continue to offer incentives and concessions that facilitate development on small sites in the commercial and multi-family districts, including density bonuses that allow for development up to 88 du/ac. Presently, Carmel Municipal Code Section

17.14.060 (Central Commercial (CC) District Regulations Applicable) waives off-street parking entirely for apartments in the CC district. In the Service Commercial (SC) District, the required parking for an affordable housing unit is ½ space per unit and for senior housing it is ⅓ space per unit. Senior housing also has a guest parking requirement of 1 space per 4 housing units. The City will further evaluate the residential parking requirements in the Service Commercial (SC) and Residential & Limited Commercial (RC) zoning districts to help facilitate market rate housing.

Alternative parking programs such as bike and/or car share, or free or discounted bus passes, will be evaluated to offset reduced parking.

Quantified Objective: 35 units
Timeframe: Complete evaluations by December 2024
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly 3-3.1.c: Development on Small Sites)
Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-7 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Policy 1.2: Continue to monitor and work cooperatively with regional agencies to augment infrastructure in a manner that provides adequate capacity for existing and new housing needs while preserving and improving the unique visual character of the City.

Program 1.2.A: Water Distribution Prioritization for Affordable Housing – AFFH Perhaps the greatest constraint to housing production in Carmel-by-the-Sea is the lack of water.

Potable water is a fundamental infrastructure need for housing and is a limited resource in Carmelby-the-Sea. Water is regulated by the State Water Resources Control Board (SWRCB) and the Monterey Peninsula Water Management District (MPWMD). Few developed sites have available water credits sufficient to accommodate construction of additional residential units, and the City’s own water allocation is quite limited. Further, due to the current State imposed cease-and-desist order in Carmel, California American Water (Cal-Am) is not permitted to set new water meters at this time. The City will continue to work cooperatively with MPWMD to address water availability and infrastructure limitations that affect the ability to serve new housing development.

From its own modest water allocation, the City will grant water allocation priority to those projects that assist the City in meeting its share of the regional housing need for lower- and moderate-income households. A City policy to clearly reflect water allocation priority and incentives for Extremely Low, Very Low, Low and Moderate-Income households will be adopted.

Quantified Objective: 187 units
Timeframe: Adopt policy by June 2025
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-3.2: Address Infrastructure Constraints) Program 1.2.B: Address Infrastructure Constraints
Ensuring the City’s infrastructure is modernized and can accommodate future growth is a critical charge of local governments. Much of the City’s infrastructure is nearing the end of its lifecycle and crafting Capital Improvement Programs that effectively manage infrastructure is imperative.

Additionally, the City experienced significant power outages during the 2022-2023 winter season that negatively impacted the City at large. The City’s Public Works Department continues to improve City infrastructure including road maintenance and storm drains, through the City’s 5-Year Capital Improvement Plan process. The City will continue to work cooperatively with outside agencies, including the Pacific Gas and Electric Company (PG&E), the Carmel Area Wastewater District (CAWD), and California American Water (Cal-AM), to continue to maintain and upgrade the City’s infrastructure.

Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-8 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Quantified Objective: N/A
Timeframe: City’s 5-Year Capital Improvement Process through June 2031 Responsible Party: Public Works Department
Funding Source: General Fund
(Formerly Program 3-3.2: Address Infrastructure Constraints) Policy 1.3: Reduce or eliminate governmental constraints on the provision of affordable housing. Direct public funding resources to the conservation of existing housing units in neighborhoods where continued residential use is appropriate.

Program 1.3.A: Condominium Conversions - AFFH
The City will continue to implement the condominium conversion ordinance, which restricts the conversion of apartments to condominiums to preserve the lower-cost rental housing options (i.e., apartments) within the City. Apartments cannot be converted to condominiums unless a new apartment is being created to offset the conversion.

Quantified Objective: Preserve rental units
Timeframe: Continued ordinance implementation through June 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.3.a: Condominium Conversions)
Program 1.3.B: Overnight Visitor Accommodation (Conversion) Development Transfer Rights - AFFH
Pursuant to Coastal Zone requirements, the City has recognized existing overnight visitor accommodations (hotels/motels, inns, bed and breakfasts and other various lodging options) as an important coastal visitor asset and economic base in the community. There are a number of older, overnight visitor accommodations s in the R-1, CC, RC, and SC zoning districts, including some that are non-conforming. Figure 2-2 shows existing overnight visitor accommodation locations, and the corresponding list can be found in Appendix C. Property owners of these establishments are encouraged to consider rehabilitating these sites as multi-family rental residences. These properties are distributed throughout the City and this policy would diversify the housing stock through more cost-effective means of rehabilitating and refurbishing existing buildings. The City will develop a program to incentivize both the transfer of development rights of overnight visitor accommodations to other sites within commercial zoning districts and conversion of existing overnight visitor Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-9 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 accommodation properties to multi-family residences that include 15 percent lower-income units.

This program would retain the same number of overnight visitor accommodation rooms to serve coastal visitor access in the City while increasing the affordable multi-family housing rental stock.

Quantified Objective: 33 units converted from overnight visitor accommodation rooms to housing units
Timeframe: Program developed by June 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-4.1.b Conversion of R-1 Motels)
Program 1.3.C: Accessory Dwelling Units - AFFH
The City’s Accessory Dwelling Units (ADUs) and Junior ADUs (JADUs) ordinance is currently being updated to reflect state law. The City recognizes that ADUs provide affordable housing options for family members, seniors, students, in-home health care providers, and other small household types. ADUs can also be useful to generate additional rental income for the homeowner, making homeownership more financially feasible. It’s also important to note that 80% percent of Carmel-by-the-Sea’s vacant units are for seasonal, recreational, or occasional (second home) use.

ADU and JADU development on properties used for occasional use adds to the permanent rental housing stock and provides on-site oversight for second home properties. The City includes the Housing and Community Development Department ADU Handbook on the Planning Department website to offer technical assistance to interested property owners.

Pre-approved, standardized plans can eliminate the costs of designing a custom ADU, and assures property owners the unit type and size is already approved by the City. Pre-approved plans can also make construction more affordable if the designs are using materials that are easily sourced and standard sized.

To further promote ADU development the City will implement to the following:
 Amend the Municipal Code to reflect current State ADU law in a timely manner as new relevant state laws are adopted during the planning cycle.

Timeframe: Program developed by June 2031
 Develop pre-approved, standardized ADU plans available on the City’s website to further incentive the construction of ADUs.

Timeframe: December 2028
Quantified Objective: 34 units
Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-10 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.3.c: Subordinate Units)
Program 1.3.D – Overnight Visitor Accommodation - Employee Housing Program The City has a number of overnight visitor accommodation (motels, hotels, inns) properties that would greatly benefit from incorporating affordable on-site employee housing. Figure 2-2 shows existing overnight visitor accommodation locations, and the corresponding list can be found in Appendix C. These units would alleviate the current lack of housing that many employees that work in overnight accommodations in Carmel face. As an incentive to commercial overnight visitor accommodation property owners to provide on-site affordable employee housing, the City will offer an additional overnight accommodation room for every onsite housing unit created. This incentive will serve to increase affordable rental housing, offset the loss of revenues for the business owners, and maintain visitor-serving coastal access. The City will amend the Municipal Code as follows:
 Allow at least one on-site affordable employee housing unit in conjunction with one new overnight visitor accommodation room per unit;
Timeframe: December 2026
Quantified Objective: 31 units
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.3.c: Subordinate Units)
Program 1.3.E: Amend the A-2 Zoning District - AFFH
The Community and Cultural Center Zoning District, A-2, allows senior housing (55+) as a permitted use in addition to uses that provide cultural and community activities associated with the arts, education and recreation; however, development standards are not specified for the A-2 district and design review is required. The lack of development and design standards adds uncertainty and can significantly lengthen the development process. Amending the A-2 zoning district with clear setbacks, height, and objective design standards will add clarity and remove a development constraint. The City will amend the Municipal Code to include clear development and design standards for the A-2 zoning district to encourage affordable senior housing.

Quantified Objective: 33 units
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(NEW)
Attachment 1
8 Junipero St.

Mountain View Ave.

Ocean Ave.

Carpenter St.

San Carlos St.

Monte Verde St.

Guadalupe St.

Santa Rita St.

Santa Fe St.
1st Ave.
2nd Ave.
3rd Ave.
4th Ave.
5th Ave. Torres St.

Dolores St.

Lincoln St.

Camino Real
Casanova St.

Carmelo St.

San Antonio Ave.
6th Ave.
7th Ave.
9th Ave.
10th Ave.
11th Ave.
12th Ave.
13th Ave.

Santa Lucia Ave.

Existing Overnight Visitor Accommodation Map
Carmel Housing & Safety Element Update
0 1050 feet
Figure 2-2
Source: Monterey County GIS 2023, Google Earth 2023 Visitor Accommodations City Limit
Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-12 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Program 1.3.F: Manufactured Homes on a Foundation System The City currently permits manufactured homes on a foundation system on lots zoned for conventional single-family residential dwellings pursuant to state law Government Code 65852.3.

Manufactured homes represent an affordable and cost-effective form of housing. The City will amend the Municipal Code to include manufactured homes as a permitted use in the R-1 zoning district subject to the same development standards to which a conventional single-family residential dwelling on the same lot would be subject.

Quantified Objective: 8 units
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(NEW)
Program 1.3.G: Prepare Checklist and Procedures for SB35 Government Code section 65913.4 allows qualifying development projects with a specified proportion of affordable housing units to move more quickly through the local government review process and restricts the ability of local governments to reject these proposals. SB 35 does not apply within the Coastal Zone. Carmel-by-the-Sea is entirely within the Coastal Zone. If SB-35 becomes applicable to Coastal Zone areas, the City will create a SB35 checklist and written procedures for processing SB35 applications to ensure efficient and complete application processing.

Quantified Objective: N/A
Timeframe: Within 6 months of any change to the law that would impact the City Responsible Party: Community Planning and Building Department Funding Source: General Fund
(NEW)
Program 1.3.H: Implement state law SB-10 Opportunities to Maximize Feasibility of Development in Strategic Locations.

SB10 encourages strategic density within neighborhoods. There are at least three larger sites zoned single-family (R-1) near the commercial core that could be developed with multi-family units with the implementation of SB-10. Figure 2-3 maps the three potential sites.

Quantified Objective: 18 units
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(NEW)
Attachment 1
Junipero St.

Mountain View Ave.

Ocean Ave.

Carpenter St.

San Carlos St.

Monte Verde St.

Guadalupe St.

Santa Rita St.

Santa Fe St.
1st Ave.
2nd Ave.
3rd Ave.
4th Ave.
5th Ave. Torres St.

Dolores St.

Lincoln St.

Camino Real
Casanova St.

Carmelo St.

San Antonio Ave.
6th Ave.
7th Ave.
9th Ave.
10th Ave.
11th Ave.
12th Ave.
13th Ave.

Santa Lucia Ave.
8th Ave.

Potential SB-10 Opportunity Sites
Carmel Housing & Safety Element Update
0 1050 feet
Figure 2-3
Source: Monterey County GIS 2023, Google Earth 2023 SB-10 Sites City Limit
6-First Church of
Christ Parking Lot
7-Red Cross
11-American Legion
Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-14 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Policy 1.4: Improve Development Review and Approval Processes

Program 1.4.A: Eliminate Unnecessary Use Permits - AFFH Multi-family and duplex housing units constituted approximately 13 percent of Carmel’s housing stock. The use permit (UP) (or conditional use permit (CUP)) requirement is implemented as an additional regulatory tool and adds extra regulations, review, and required findings, to a variety of development standards that affect multi-family development. Municipal Code Chapter 17.64 Findings Required for Permits and Approvals includes a broad list of applicable conditional uses and incentives. There are opportunities to reduce redundancies and facilitate residential construction while still enabling development to meet City regulations. For example, a use permit is required in:
 Municipal Code Section 17.64.190 Residential Construction at Densities Between 33 and 44 Units per Acre;
 Municipal Code Section 17.64.230 Affordable Housing – Residential Construction at Densities Between 45 and 88 Units Per Acre for developments the request a bonus density or a density bonus; and
 Municipal Code Section 17.14.150 Building Height requires a use permit for additional underground floors used for parking vehicles, storage and mechanical equipment. The additional use permit requirement can affect how much parking can be accommodated and limit the number of units.

The City will explore eliminating UP requirements to remove a constraint to the development of multi-family residential units in conjunction with Program 3.1.G A Housing Priority Overlay District.

Quantified Objective: 50 units
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Development Department
Funding Source: General Fund
(Formerly Program 3-2.1.d: Multi-Family Residential Development Review) Program 1.4.B: Objective Design Standards - AFFH
The City currently relies upon mostly subjective design guidelines for new single-family residences.

In the commercial and multi-family districts, less detailed subjective design guidelines are in place.

The City’s residential and commercial design guidelines are being updated this year to provide clarity and more objectivity, however fully objective design standards are not currently being developed.

Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-15 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 The lack of objective design guidelines creates a higher level of subjectivity for multi-family affordable projects.

The lack of Objective Design Standards poses a constraint to residential development. Guidelines that are subjective increase uncertainty and risk for housing developers. Objective Design Standards provide a measure of clarity that proposed developments will be measured against, and provide the community with assurance that developments will conform with measurable objective standards.

The City will create Objective Design Standards for multi-family affordable developments.

Quantified Objective: 50 units
Timeframe: Adoption of Objective Design Guidelines by December 2025 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(NEW)
GOAL H2 PROTECT AFFORDABLE HOUSING AND IMPROVE THE

HOUSING STOCK
Policy 2.1: Maintain and encourage expansion of permanent residential housing stock in the Residential and Commercial Districts.

Program 2.1.A: Incentives for Mixed-Use Development - AFFH Providing additional development capacity of any type increases project feasibility. In order to better incentivize affordable residential development, the City will amend the Municipal Code to increase the floor area bonuses from 15 to up to 25 percent for projects that include housing for Moderate, Low or Very-Low-income households. The City will also distribute informational materials promoting the floor area bonus and other applicable incentives.

Quantified Objective: 65 units
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-2.1.a)
Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-16 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Program 2.1.B: Permanent Housing - AFFH
Short-term rentals can provide valuable coastal visitor-serving access; however, units used as shortterm rentals preclude the establishment of permanent housing. The City also has a significant percentage of the housing stock that remains vacant for part of the year due to second home ownership. This creates a significant barrier for current and potential residents to enter the local housing market and further limits opportunities to correct the housing crisis, address diversity, and provide inclusive housing options.

The City’s ordinance prohibiting short-term, transient rentals and timeshares of residential dwellings in the R-1 District and allowing a limited number of short-term rentals in the commercial areas has successfully limited the proliferation of these uses. The City will continue to implement these ordinances. In an effort to address the high rate of second home ownership, the City will promote Accessory Dwelling Units and Junior Accessory Dwelling Units (see Programs 1.3.C and 1.3.D) to add affordable rental units on properties that may otherwise lie vacant, and will establish an Affordable Housing Trust Fund (see Program 2.1.D).

Quantified Objective: Preservation of permanent housing and affordable units Timeframe: Continued ordinance implementation through June 2031 Responsible Party: Community Planning and Building Department, and City Administrator
Funding Source: General Fund
(Formerly Program 3-4.1.a)
Program 2.1.C: Monitor Affordable Housing Stock - AFFH
The City will develop a City-managed Affordable Housing Oversight Program and continue to monitor affordable housing projects and work with the owners to preserve affordability through identification of funding sources and/or opportunities for partnerships with other housing providers. The program will formalize annual monitoring of the affordable housing stock throughout the city to ensure affordable housing is being protected and provided as required by Government Code Section 65590. The City will update its databases to better track data on new construction, demolition, conversion and replacement housing units for low- and moderate-income households including the following:
 The number of new housing units approved for construction;  The number of low- and moderate-income housing units required to be provided in new housing developments;
 The number of existing residential dwelling units occupied by low- and moderate-income households that have been authorized to be demolished or converted; and Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-17 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  The number of low- and moderate-income housing units required to be replaced (of those units being demolished or converted).

Quantified Objective: Monitor 60 housing units
Timeframe: Develop program by June 2025
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.3.d: Monitor Affordable Housing Stock) Program 2.1.D: Establish Affordable Housing Trust Fund - AFFH The City currently relies on outside agencies and
organizations to fund affordable housing projects.

However, in an effort to establish a City-funded source dedicated to supporting the creation, maintenance, and
rehabilitation of affordable units, the City will explore the creation of an Affordable Housing Trust Fund. Sources of funding could include increasing the existing Transit
Occupancy Tax (TOT) or dedicating a portion of existing TOT to affordable housing, property transfer tax, sales tax, vacancy tax or other funding source.

Quantified Objective: $1,000,000
Timeframe: Establish Fund by
June 2031
Responsible Party: City Administrator
Funding Source: General Fund
(NEW)
Policy 2.2: Preserve and protect the scale of established neighborhoods while encouraging property improvement.

Program 2.2.A: Historic Preservation Educational Programs Cities have unique characteristics that develop over time. Carmel-by-the-Sea has a distinctive building style and form that existing residents cherish and which serves to attract new residents and visitors. In an effort to continue to encourage improvements to the existing housing stock, the City will continue to promote education programs that improve public understanding of the City’s rich “I believe a vacancy tax should
be proposed to the voters, which
can go toward funding
affordable housing. The City
needs to frame affordable
housing in a positive way. I feel
like people's aversion to
affordable housing in their
communities is just a public
relations failure."
May 24, 2023 Housing Ad Hoc Committee
Community Meeting Attendee
Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-18 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 cultural and design heritage, and provide zoning flexibility and incentives to facilitate rehabilitation of historic resources. The City will continue to use the Historic Building Code to facilitate residential rehabilitation of historic residences.

Quantified Objective: 50 rehabilitated historic units
Timeframe: Continued education and ordinance implementation through June 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-4.3.a: Neighborhood Preservation Educational Programs) Policy 2.3: Preserve and expand affordable and rental housing opportunities to enable local employees to live in the community where they work.

Program 2.3.A: Preserve and Increase Upper Floor Residential Uses - AFFH The retail and office landscape is shifting and the City continues to experience retail and office vacancies. This shift represents an opportunity to increase supply of housing as a preferred development form in all Commercial Districts. The City currently prohibits the conversion of existing second-floor residential units to commercial use and requires all newly constructed secondfloor space to be used as residential units. Housing over first-floor commercial uses is a particularly suitable solution for underutilized second-floor space. Therefore, the City will proactively work with property owners to encourage conversion of vacant or underutilized upper floors to residential use.

Quantified Objective: 20 units
Timeframe: Proactive outreach through December 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-2.1.b)
Policy 2.4: Preserve the existing housing stock
Program 2.4.A: Housing Rehabilitation and Maintenance Information - AFFH In order to stay habitable and energy efficient, all buildings need maintenance. When buildings fall into an extreme state of disrepair, a more comprehensive housing rehabilitation procedure is needed.

Over the past few years, inflation and building supply chain issues have dramatically increased the cost of building materials. Labor costs have also risen significantly due to a shortage of skilled construction workers and ongoing cost-of-living increases. This results in very costly rehabilitation Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-19 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 projects. In order to assist Low-income property owners, the City will distribute information on Inspection Services and Housing Rehabilitation programs and alternative ways of financing home repairs.

Quantified Objective: 16 rehabilitated units
Timeframe: Proactive outreach through June 3031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Programs 3-1.1.a and 3-1.1.c Housing Rehabilitation and Housing Maintenance) GOAL H3 PROVIDE OPPORTUNITIES FOR NEW AFFORDABLE AND

OTHER SPECIAL NEEDS HOUSING
Policy 3.1: Incentivize affordable housing development, with an emphasis on affordable housing built to accommodate Extremely-Low and Low Income residents.

Encourage the private sector to produce affordable housing.

Program 3.1.A: Mixed Use Affordable Housing - AFFH
The retail and office landscapes are shifting and this change represents an opportunity to encourage mixed-use developments (housing over first-floor commercial uses) as a preferred development form. The City will proactively work with property owners to incentivize upper-floor housing opportunities, including the potential of allowing a third-floor mezzanine for affordable housing.

Such development would be subject to appropriate objective design standards, including the City’s 30-foot height limit.

Quantified Objective: 10 units
Timeframe: Proactive outreach through June 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly 3-2.1.c: Incentives for Mixed Use Affordable Housing) Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-20 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Program 3.1.B: Housing for Extremely-Low Income
Households - AFFH
Providing housing units for Extremely-Low Income (ELI)
Households earning 30 percent or less of the Area Median Income (AMI) for Monterey County has proved challenging for the City. The City will continue to place specific
emphasis on the provision of multi-family housing and nontraditional housing types such as single-room-occupancy units and transitional housing. The City will encourage development of housing for ELI households through a
variety of activities such as targeted outreach to for-profit and non-profit housing developers on at least an annual basis, providing in-kind technical assistance, fee deferrals, expedited/priority processing, identifying grant and funding opportunities, applying for or supporting applications for funding on an ongoing basis, reviewing and prioritizing local funding for developments that include housing for ELI households and/or offering additional incentives to supplement the density bonus provisions in state law.

The City also has a variety of programs to encourage the development ELI units including Accessory Dwelling Units, a portion of which are affordable by design to Extremely-Low Income Households and Employee Housing. The City has also funded a full-time permanent Associate Planner position through the General Fund to focus on long-range planning and housing needs.

Quantified Objective: 57 units
Timeframe: Fund Associate Planner through June 2031
Responsible Party: Planning and Building Department
Funding Source: General Fund
(Formerly Program 3-5.4.b)
Program 3.1.C: Density Bonus - AFFH
Density bonuses can provide a significant incentive to build affordable housing units. By increasing the number of units permitted to be built on a property, the financial investment required to bring the development to fruition has a higher likelihood of a return. Given the high cost of materials, labor and borrowing costs, increasing the number of units can make the housing project financially feasible. The City will further review and revise applicable density bonus and bonus density ordinances to clarify the regulations and increase certainty of applicability. “I'm pretty passionate about
affordable housing and
diversity. I think that's what
makes a community, and we
do lack it. I have kids that
live in the community and
go to Carmel High School,
and I would like to see more
of a social, economic, and
age difference in our
community, personally."
May 24, 2023 Housing Ad Hoc
Committee Community Meeting
Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-21 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Quantified Objective: 15 units
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.4.a: Density Bonus)
Program 3.1.D: Reduced Entitlement and Development Fees - AFFH Entitlement and development fees paid by project applicants assist in the City’s ability to recover administrative and operating costs; however, these fees may have the unintended consequence of increasing the cost of housing. To encourage the development of affordable housing, the City will waive the parking in-lieu fees and reduce the planning and building permit fees by up to 25% for projects that provide affordable housing in commercial areas.

Quantified Objective: Reduced City fees by 25% for developments with affordable units Timeframe: Adopt Fee Schedule by July 2025
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.5.a: Reduced Entitlement and Development Fees) Program 3.1.E: Reduced Parking Requirements - AFFH
Parking requirements increase costs to residential development and take up valuable space that can be used for housing. The City will continue to offer reduced parking requirements for affordable housing developments. Additionally, the City will waive the parking in-lieu fees for projects with affordable units, clarify the program requirements in the Central Commercial (CC) zoning district, and reduce parking requirements in the Multi-Family Residential (R-4), Residential & Limited Commercial (RC), and Service Commercial (SC) zoning districts.

Quantified Objective: Reduced parking for developments with affordable units Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.5.b: Reduced Parking Requirements) Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-22 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Program 3.1.F: Expedited Processing Procedures - AFFH
Faster permit processing times reduce overall project timelines and allow a project to get to the construction stage in a timely manner. Reducing overall project timelines is critical during this inflationary period where materials and labor costs continue to rise. Additionally, supply chains still have not recovered to pre-pandemic levels and delays in processing can also result in delays in placing orders and receiving materials and securing labor. The City will develop a policy to offer expedited review procedures for residential projects that include affordable housing units and will clarify and refine permit processing procedures for affordable housing to shorten processing procedures.

Quantified Objective: Shorter processing times by 50% for developments with affordable units Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.5.c: Expedited Processing Procedures) Program 3.1.G: A Housing Priority Overlay Zoning District - AFFH Overlay districts are zoning districts established by the City to carry out specific purposes. Overlay districts can be constraints to development, or they can be used as a tool to encourage certain types of development. Currently, the City does not have an overlay district to encourage housing in the commercial districts. An overlay that requires a minimum density of 33 du/ac in the Central Commercial (CC), Service Commercial (SC), Residential and Limited Commercial (RC) District, and R-4 District encourages a higher unit yield and improves the financial viability of the project by increasing the unit count. Minimum density is also a tool that works to ensure the limited available land in the City is used in an efficient manner and lower densities are avoided. See the Housing Priority Overlay location with Figure 2-4.

The City will revise and incorporate into this new overlay zoning district all Municipal Code sections addressing affordable housing, including but not limited to Municipal Code Sections 17.64.190 Residential Construction at Densities Between 33 and 44 Units Per Acre, 17.64.220 Affordable Housing – Residential Construction at Densities Between 45 and 88 Units Per Acre, 17.64.230 Single-Family Dwellings in the SC and RC Districts, 17.14.030 (Land Use Regulations), and

17.14.230 (Affordable Housing); and to include incentives found elsewhere within the Municipal Code and 6th Cycle Housing Element programs including:
 Water distribution priority (Program 1.2.A);
 Parking reduction/waiver (Program 3.1.E);
 Fee waiver/reductions (Program 3.1.D);
Attachment 1
Junipero St.

Mountain View Ave.

Ocean Ave.

Carpenter St.

San Carlos St.

Monte Verde St.

Guadalupe St.

Santa Rita St.

Santa Fe St.
1st Ave.
2nd Ave.
3rd Ave.
4th Ave.
5th Ave.

Torres St.

Dolores St.

Lincoln St.

Camino Real
Casanova St.

Carmelo St.

San Antonio Ave.
6th Ave.
7th Ave.
8th Ave.
9th Ave.
10th Ave.
11th Ave.
12th Ave.
13th Ave.

Santa Lucia Ave.

Housing Priority Overlay
Carmel Housing & Safety Element Update
0 1050 feet
Figure 2-4
Source: Monterey County GIS 2023, Google Earth 2023 City Limit Overlay District
Site Inventory Parcels
Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-24 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  FAR incentive (Program 2.1.A); and
 Establish a minimum density of 33 du/ac.

Quantified Objective 100 units
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(NEW)
Policy 3.2: Recognize the special needs of persons with disabilities and the need to retain flexibility in the design review process to accommodate these needs.

Program 3.2.A: Reasonable Accommodation Procedures - AFFH A reasonable accommodation is any change, exception or adjustment to a rule, policy, practice or service that allows a person with a disability to have an equal opportunity to participate. Information on reasonable accommodation procedures will continue to be provided at City Hall and on the City’s website. The City will evaluate and revise Policy C11-01, which describes procedures to provide reasonable accommodation and will explore reduced or waived permit fees for persons with disabilities in compliance with the provisions of SB 520 (Year), in an effort to remove any additional barriers and encourage those with disabilities to apply.

Quantified Objective: 8 applications
Timeframe: Adoption of revised policy by June 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.1: Reasonable Accommodation Procedures) Policy 3.3: Facilitate the provision of transitional and supportive housing in appropriate districts in the community.

Program 3.3.A: Zoning for Transitional and Supportive Housing - AFFH Senate Bill (SB) 2 (2007) revised Housing Element law requiring that transitional and supportive housing be permitted as a residential use, subject only to restrictions that apply to other residential dwellings of the same type in the same zone. In compliance with SB 2, the City will continue to allow transitional/supportive housing as a residential use, subject only to those requirements of other residential dwellings of the same type in the same zone. The City will also amend the Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-25 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Municipal Code to clarify that transitional and supportive housing is a permitted use in zoning districts that allow residential uses.

Quantified Objective: N/A
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.8: Zoning for Transitional and Supportive Housing) Program 3.3.B: Low-Barrier Navigation Centers - AFFH
Assembly Bill (AB) 101 (2019) provides a pathway to permanent housing for people experiencing homelessness. A “Low Barrier Navigation Center” is a housing first, low-barrier, service-enriched shelter focused on moving people into permanent housing. The shelter provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter, and housing. In order to comply with state law, the City will amend the Municipal Code to include the definition for “Low Barrier Navigation Center” and will develop By Right procedures for processing low barrier navigation centers.

Quantified Objective: N/A
Timeframe: Adoption of Municipal Code amendments by December 2024 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(NEW)
GOAL H4 EXEMPLIFY SUSTAINABLE DEVELOPMENT AND ENERGY

CONSERVATION
Policy 4.1: Support energy and water conservation programs to reduce the consumption of these resources in housing and to reduce housing costs.

Program 4.1.A: Water Conservation - AFFH
Potable water remains scarce and highly regulated in the City and continues to be a major limiting constraint to new development. In order to preserve the City’s limited water allocation for new residential units, the City will continue to enforce the Water Management Program through the building permit process, establish the Water Distribution Policy, and provide information to the Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-26 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 community on water conservation retrofits and best practices. In addition, the City will provide information on and promote water conservation education through outreach and community engagement, and retrofit rebates provided by the Monterey Peninsula Water Management District.

Quantified Objective: Promote water conservation in 100 existing units Timeframe: Adoption of policy by June 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly 3-5.6.b Water Conservation)
Program 4.1.B: Energy Conservation and Green Building
Conserving energy to reduce stress on the electrical grid and reduce the effects of climate change (i.e. wildfire and flooding) is increasingly critical. The City experienced significant power outages during the 2022-23 winter storms, adjacent areas were flooded, and the past few wildfire seasons have significantly impacted air quality and resulted in evacuations of neighboring communities. The City will continue to review applications for new construction and substantial alterations, taking into consideration solar orientation and access to sunlight. The City will also continue to require compliance with current state building standards for energy efficiency in all new homes. The City will further disseminate information by updating the website annually with related energy conservation and green building information. The City also participates in the Community Wildfire Protection Program and is committed to implementing Program recommendations.

Quantified Objective: Promote energy conservation in 100 existing units Timeframe: Continued education and compliance through June 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.6.a: Energy Conservation and Green Building) GOAL H5 PUBLICIZE HOUSING NEEDS AND RESOURCES
Policy 5.1: Support and enforce fair housing laws. Expand fair housing choice by promoting housing opportunities and removing impediments to fair housing.

Program 5.1.A: Fair Housing Services - AFFH
The Fair Housing Act protects people from discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance, or engaging in other housing-related activities. The Attachment 1
Chapter 2.0 – Goals, Policies, and Programs 2-27 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 California Department of Fair Employment and Housing and the Conflict Resolution and Mediation Center of Monterey County provide fair housing services and information. These agencies advise persons in need of information on housing and employment, mediate landlord/tenant disputes and research complaints about discriminatory housing practices. The City shall coordinate with these agencies to provide printed information about fair housing services at City Hall, on the City’s website, and in other public buildings such as the City’s two libraries. The City shall also refer inquiries related to fair housing to these agencies and provide fair housing resources at outreach events.

Quantified Objective: 25 referrals/materials distributed Timeframe: Proactive outreach through June 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.7: Fair Housing Services)
Program 5.1.B: Housing Choice Voucher Program - AFFH
Created by the Housing and Community Development Act of 1978, the Housing Choice Voucher program, formerly known as Section 8, provides assistance to eligible Low- and Moderate-Income families to rent housing in the private market. Eligibility for this program is based on the family’s gross annual income and family size. The Housing Choice Voucher rental assistance program is administered by the Housing Authority of Monterey County. The City will continue to facilitate use of the Housing Choice Voucher program in the community by distributing information for the program at City Hall and the Library and making referrals to the Housing Authority.

Quantified Objective: 40 referrals/materials distributed Timeframe: Proactive outreach through June 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.3.b Section 8 Rental Assistance)
Program 5.1.C: Shared Housing Information - AFFH
Shared housing is another important tool to provide affordable housing units. Shared housing is generally more affordable because a portion of a residence is rented as opposed to an entire unit.

Shared housing can also financially help low-income individuals who own their homes and alleviate loneliness. Benefits to Low-Income individuals include provision of safe and secure affordable housing in a high-cost market. The City will continue to distribute informational materials from the Attachment 1
Chapter 2.0 – Goals, Policies, and Implementing Programs 2-28 EMC Planning Group Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Monterey County Housing Authority and the Carmel Foundation, display information at City Hall and other public buildings and posted on the City’s website. The City will also seek out other Shared Housing providers and resources to expand this housing option.

Quantified Objective: 80 referrals/website visits
Timeframe: Proactive outreach through June 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.2: Shared Housing Information)
Policy 5.2: Promote public awareness and foster pride in the history of the village.

Program 5.2.A: Support Community Organizations - AFFH
Community organizations play a pivotal role to provide outreach and services to those facing housing issues. The City will continue to support neighborhood organizations that promote neighborhood involvement, safety and improvement, including but not limited to the Carmel Residents Association, the Carmel Foundation and the Carmel Heritage Society. The City will develop partnerships with these organizations to promote neighborhood enhancement programs, conduct and improve outreach and education, and solicit community input.

Quantified Objective: N/A
Timeframe: Proactive outreach and partnerships through June 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-4.2.b: Support Neighborhood Organizations)

Attachment 1
Housing Needs & Fair Housing Report A

APPENDIX
Attachment 1
Attachment 1
Table of Contents
APPENDIX A HOUSING NEEDS & FAIR HOUSING REPORT........................................... A-1 A.1 Introduction ........................................................................................................................... A-1 A.2 Population, Employment, and Household Characteristics ............................................. A-8 A.3 Disproportionate Housing Needs ..................................................................................... A-31 A.4 Special Needs Groups ......................................................................................................... A-40 A.5 Access to Opportunity ........................................................................................................ A-53 A.6 Housing Stock Characteristics........................................................................................... A-60 A.7 Fair Housing Enforcement and Outreach Capacity....................................................... A-74 A.8 Fair Housing Recommendations ....................................................................................... A-79 A.9 Conclusion ............................................................................................................................ A-84 Tables
Table A-1 Population Growth Forecast by Jurisdiction, 2015-2045 ................................... A-9 Table A-2 Population Age Distribution by Jurisdiction, 2019 ............................................ A-11 Table A-3 Population by Race by Jurisdiction, 2019 ............................................................ A-12 Table A-4 Employment Growth Forecast by Jurisdiction, 2015-2045 ............................. A-19 Table A-5 Employment by Sector, Carmel-by-the-Sea, 2010 and 2019............................ A-20 Table A-6 Unemployment Rate, Carmel-by-the-Sea, 2019................................................. A-22 Table A-7 Regional Housing Needs Allocation .................................................................... A-23 Table A-8 Occupations by Mean Salary, Monterey County, 2019 ..................................... A-24 Table A-9 Housing Forecast by Jurisdiction, 2015-2045..................................................... A-24 Table A-10 Households by Income Category, Carmel-by-the-Sea, 2019............................ A-27 Table A-11 Overview of Special Needs Groups..................................................................... A-40 Table A-12 Extremely Low-Income Households, Carmel-by-the-Sea, 2015-2019 ........... A-42 Table A-13 Disability Status by Age, Carmel-by-the-Sea, 2021............................................ A-47 Attachment 1
Table A-14 Population with Developmental Disabilities by Age, Carmel-by-the-Sea, 2021........................................................................................ A-48 Table A-15 Population with Developmental Disabilities by Residence, Carmel-by-the-Sea, 2021........................................................................................ A-48 Table A-16 Homeless Population by Jurisdiction, 2017-2022.............................................. A-52 Table A-17 Homelessness by Household Type and Shelter Status, Monterey County, 2019 ........................................................................................................... A-52 Table A-18 Housing Unit Growth Trends by Jurisdiction, 2010-2019.............................. A-60 Table A-19 Housing Units by Type by Jurisdiction, 2019 ................................................... A-61 Table A-20 Housing Units by Type and Tenure, Carmel-by-the-Sea, 2019 ...................... A-62 Table A-21 Household Size by Tenure by Jurisdiction, 2019 .............................................. A-62 Table A-22 Vacant Housing Units by Type, Carmel-by-the-Sea, 2019............................... A-65 Table A-23 Housing Permits by Income Group, Carmel-by-the-Sea, 2015-2021............ A-65 Table A-24 Inventory of Assisted Rental Housing ................................................................ A-67 Table A-25 Median Home Value by Jurisdiction, 2019-2022............................................... A-72 Table A-26 Average Rent by Number of Bedrooms, Carmel-by-the-Sea, 2023................ A-72 Table A-27 Housing Affordability, Carmel-by-the-Sea, 2022............................................... A-73 Table A-28 Fair Housing Issues, Contributing Factors, and AFFH Programmatic Actions ..................................................................................................................... A-81 Figures
Figure A-1 Major Public and Legal Actions that Influence Fair Access to Housing ..........A-3 Figure A-2 Population Growth, Carmel-by-the-Sea, 2010-2019 ............................................A-9 Figure A-3 Population Distribution by Age, Carmel-by-the-Sea, 2010-2019 .................... A-10 Figure A-4 Population by Race Compared to the County, 2019 ......................................... A-11 Figure A-5 Population by Race, Carmel-by-the-Sea, 2010-2019 ......................................... A-13 Figure A-6 Diversity Index, Carmel-by-the-Sea, 2018 .......................................................... A-14 Figure A-7 R/ECAP by Census Tract, Carmel-by-the-Sea, 2009-2013 ............................. A-16 Figure A-8 RCAAs by Census Tract, Carmel-by-the-Sea, 2015-2019 ................................ A-17 Attachment 1
Figure A-9 Percent Non-White by Block Group, Carmel-by-the-Sea, 2018 ..................... A-18 Figure A-10 Worker Earnings by Place of Residence & Place of Work, Carmel-by-the-Sea, 2019........................................................................................ A-21 Figure A-11 Household by Type by Jurisdiction, 2019 ........................................................... A-25 Figure A-12 Changes in Household Type, Carmel-by-the-Sea, 2010-2019.......................... A-26 Figure A-13 Households by Household Size by Jurisdiction, 2019 ...................................... A-26 Figure A-14 Median Household Income by Jurisdiction, 2019 ............................................. A-28 Figure A-15 Median Income by Block Group, Carmel-by-the-Sea, 2015-2019 .................. A-29 Figure A-16 Income by Category, Carmel-by-the-Sea, 2019.................................................. A-30 Figure A-17 Housing Tenure by Jurisdiction, 2019 ................................................................. A-31 Figure A-18 Housing Problems by Tenure, Carmel-by-the-Sea, 2015-2019........................ A-32 Figure A-19 Severe Housing Problems by Tenure, Carmel-by-the-Sea, 2015-2019........... A-33 Figure A-20 Overcrowding by Severity by Jurisdiction, 2019................................................ A-34 Figure A-21 Overcrowding by Tenure and Severity, Carmel-by-the-Sea, 2019 .................. A-34 Figure A-22 Overcrowded Households, Carmel-by-the-Sea.................................................. A-35 Figure A-23 Cost Burden Severity by Jurisdiction, 2015-2019 .............................................. A-36 Figure A-24 Cost Burden by Tenure, Carmel-by-the-Sea, 2015-2019 .................................. A-37 Figure A-25 Cost Burden by Home Owners, Carmel-by-the-Sea, 2015-2019..................... A-38 Figure A-26 Cost Burden by Renter Households, Carmel-by-the-Sea, 2015-2019............. A-39 Figure A-27 Percent Living Below the Poverty Line by Race and Ethnicity, Carmel-by-the-Sea, 2019........................................................................................ A-43 Figure A-28 Senior Population by Jurisdiction, 2019 .............................................................. A-44 Figure A-29 Senior Housing by Tenure, Carmel-by-the-Sea, 2019 ....................................... A-44 Figure A-30 Senior Households by Income, Carmel-by-the-Sea, 2019 ................................ A-45 Figure A-31 Population by Disability Status by Jurisdiction, 2021........................................ A-46 Figure A-32 Trends in Persons with Disabilities, Carmel-by-the-Sea, 2012-2021 .............. A-46 Figure A-33 Households by Size and Tenure, Carmel-by-the-Sea, 2019.............................. A-49 Figure A-34 Single-Parent Households by Jurisdiction, 2019 ................................................ A-49 Attachment 1
Figure A-35 Trends in Single-Parent Households, Carmel-by-the-Sea, 2010-2019............ A-50 Figure A-36 Hired Farm Labor, Monterey County, 2002-2017............................................. A-51 Figure A-37 TCAC Opportunity Composite Score, Carmel-by-the-Sea, 2022 ................... A-54 Figure A-38 TCAC Opportunity Economic Score, Carmel-by-the-Sea, 2022 .................... A-55 Figure A-39 TCAC Opportunity Education Score, Carmel-by-the-Sea, 2022 .................... A-57 Figure A-40 TCAC Opportunity Environmental Score, Carmel-by-the-Sea, 2022............ A-58 Figure A-41 Social Vulnerability Index, Carmel-by-the-Sea, 2018 ........................................ A-59 Figure A-42 Housing by Type in Carmel-by-the-Sea, 2010-2019.......................................... A-61 Figure A-43 Household Tenure by Race, Carmel-by-the-Sea, 2019 ..................................... A-63 Figure A-44 Vacancy Rates by Jurisdiction, 2019 .................................................................... A-64 Figure A-45 Vacancy Trends, Carmel-by-the-Sea, 2010-2019 ............................................... A-64 Figure A-46 Displacement Risk, Carmel-by-the-Sea, 2022..................................................... A-70 Figure A-47 Housing Stock by Age, Carmel-by-the-Sea, 2019.............................................. A-71 Figure A-48 FHEO Cases Total, Monterey County, 2020 ..................................................... A-76 Figure A-49 FHEO Cases, Disability Bias, Monterey County, 2020 .................................... A-77 Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-1 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Appendix A
Housing Needs & Fair Housing Report
A.1 Introduction
The following report provides both the City of Carmel-by-the-Sea Housing Needs Assessment and Fair Housing Assessment. This analysis primarily utilizes U.S. Census Bureau American Community Survey (ACS) 5-Year Estimate data1 and California Department of Housing and Community Development (HCD) data.

Housing Needs Assessment
The Housing Needs Assessment for the City of Carmel-by-the-Sea provides an in-depth analysis of the City’s population, employment, economics, household, and housing stock conditions and characteristics. This assessment develops context for the City’s goals, programs, and policies for the 6th Cycle Housing Element.

Fair Housing Assessment
In 2018, Governor Brown signed Assembly Bill (AB 686) which requires departments and agencies to administer programs relating to housing in a way that affirmatively furthers fair housing (AFFH) 2 .

As of January 1, 2019, AB 686 extends the obligation to affirmatively further fair housing to all public agencies in the State of California. This affirmative duty is not limited to those agencies with relationships with the federal government and is to be broadly applied throughout agencies at the state and local level. Now, all public agencies must both (1) administer programs and activities relating to housing and community development in a manner that affirmatively furthers fair housing, and (2) take no action inconsistent with this obligation3. AB 686 also made changes to Housing Element Law, requiring Housing Elements and General Plans to incorporate AFFH requirements.

Such requirements include an analysis of fair housing outreach and capacity, integration and segregation, access to opportunity, disparate housing needs, and current fair housing practices. 1 The primary reason for using 2019 data is because this is the data that was primarily being used by HCD in their AFFH datasets for the majority of housing needs data, including data that is pulled from CHAS datasets which range from 2013-2019. Additionally, 2020-2021 Census data may not be representative due to the COVID-19 pandemic. Largely, the data is reported for 2019 as this aligns with the supplemental data HCD has provided and allows for consistent reporting.
2 Public agencies receiving funding from the U.S. Department of Housing and Urban Development (HUD) are also required to demonstrate their commitment to AFFH. The federal obligation stems from the fair housing component of the federal Civil Rights Act mandating federal fund recipients to take “meaningful actions” to address segregation and related barriers to fair housing choice.
3 California Department of Housing and Community Development Guidance, 2021, page 9.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-2 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Affirmatively Furthering Fair Housing
“Affirmatively furthering fair housing” means taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics. Specifically, affirmatively furthering fair housing means taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with civil rights and fair housing laws.

The duty to affirmatively further fair housing extends to all of a public agency’s activities and programs relating to housing and community development. (Gov. Code, § 8899.50, subd. (a)(1).)”
SOURCE: California Department of Housing and Community Development Guidance, 2021, page 14.

History of segregation in the region
The United States’ oldest cities have a history of
mandating segregated living patterns. Exclusive zoning
practices were common in the early 1900s -- courts
struck down only the most discriminatory and allowed
those that would be considered today to have a
“disparate impact” on classes protected by the Fair
Housing Act. For example, the 1926 case Village of
Euclid v. Amber Realty Co. (272 U.S. 365) supported the segregation of residential, business, and industrial uses, justifying separation by characterizing apartment
buildings as “mere parasite(s)” with the potential to
“utterly destroy” the character and desirability of
neighborhoods. At that time, multifamily apartments
were the only housing options for people of color,
including immigrants.

The Federal Fair Housing Act was not enacted until nearly 60 years after the first racial zoning ordinances appeared in U.S. cities. This coincided with a shift away from federal control over lowincome housing toward locally-tailored approaches (block grants) and market-oriented choice (Section 8 subsidies, now called Housing Choice Vouchers)—the latter of which is only effective when adequate affordable rental units are available.

Figure A-1 on the following page provides a timeline of major legal and public actions that have influenced fair access to housing beginning in 1910.

This history of segregation in the
region is important not only to
understand how residential
settlement patterns came about—
but, more importantly, to explain
differences in housing opportunity
among different residents.

In sum, not all residents had equal
ability to build housing wealth.

This historically unequal playing
field in part determines structural
inequities that persist today.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-3 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-1 Major Public and Legal Actions that Influence Fair Access to Housing SOURCE: Root Policy Research
Appendix A – Housing Needs & Fair Housing Report A-4 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Monterey County and the Monterey Bay region also have an interesting past, as far as the fight to end racial segregation is concerned. Some of the segregation in the Monterey Bay area can be attributed to historically discriminatory practices, such as racial covenants4 , redlining5, and
discriminatory mortgage approvals. While Carmel-by-the-Sea itself does not have a history of racial covenants, the City’s racial characteristics do reflect persistent “structural inequities” in society, and “self-segregation” (i.e., preferences to live near similar people).

Kent Seavey’s 2007 book Carmel: A History in Architecture details the history of Carmel-by-the-Sea, from its early settlement by Spanish explorers, to its marketing as a “seaside resort for Catholics” in the 1880s, to the development of the City’s more contemporary history and architectural design.

Similar to other jurisdictions within Monterey County, Carmel-by-the-Sea does not have a high level of diversity.

Harold and Ann Gilliam describe the history of Carmel in their 1996 book Creating Carmel, The Enduring Vision. Carmel started as an artist town, with notable writers, artists and poets Mary Austin, Sinclair Lewis, Jack London and Robinson Jeffers settling in Carmel-by the-Sea. They were drawn to Carmel-by-the-Sea for its natural beauty, a quiet town among Monterey pine forest, scenic, rocky coastline, and white sand beaches. The early small cottages of the early 1900’s reflect these humble beginnings, and the evolution of Carmel’s architecture, including, Comstock’s notable fairy-tale style buildings, mirrors the community of artists who resided in Carmel-by-the-Sea. As Carmel-by-the-Sea grew and became a globally known tourist destination land prices began to increase. Gilliam writes, "[a]s expensive homes have replaced Carmel’s traditional cottages, the town’s demographics have changed. The artists and writers who carried on the Sterling tradition… and the low-to-middleincome residents in the old redwood cottages, have been gradually replaced by upscale business people and professionals able to afford the fantastically escalating prices of land”. In addition to historical discriminatory practices that embedded segregated living patterns throughout the Monterey Bay area, it’s also necessary to recognize the historical impacts of colonization and genocide on Indigenous populations and how the effects of those atrocities are still being felt today.

Historically, the Monterey Peninsula has been home to indigenous populations for more than 10,000 years. The original inhabitants of present-day Monterey County were the Ohlone (Costanoan), Salinan, and Esselen tribes who have “…lived in communities related by language, family, and custom.”6
However, “[d]ue to the devastating policies and practices of a succession of explorers, missionaries, settlers, and various levels of government over the centuries since European expansion, these tribes have lost the vast majority of their population as well as their land.”7 4 Racial covenants are clauses that were inserted into property deeds to prevent people who were not White from buying or occupying land. 5 Redlining is the practice of denying credit to individuals based on race, ethnicity, or other discriminatory practices. 6 From Racial Beachhead: Diversity and Democracy in a Military Town, by Carol Lynn McKibben, 2012, Stanford University Press.
7 From Indigenous peoples of San Mateo County. San Mateo County Office of Education.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-5 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 The lasting influence of these policies and practices have contributed directly to the disparate housing and economic outcomes collectively experienced by Native populations today.8 The Monterey County Weekly news outlet highlights the past and present effects of restrictive covenants, along with other housing issues such as “the lack of affordable housing, generational wealth inequities and zoning issues,” as potential contributing factors segregation within the County.9 Though restrictive racial covenants were never enacted specifically in Carmel-by-the-Sea (unlike nearby Pebble Beach and Pacific Grove), the City’s population demographics are less diverse than other jurisdictions within Monterey County. Carmel-by-the-Sea’s General Plan and Zoning Ordinance have long emphasized single-family residential patterns and consequently, the City offers a limited variety of housing types with 87 percent single family detached units. Historically, this type of development contributed to segregation patterns in part due to higher purchase costs that accompany single-family homes. Because financing for single-family properties favored educated higher income earners, purchasing property in the City remained out of reach for many lower income households and likely contributed to the demographics seen in the City today.

Enacting policies and programs that promote AFFH and highlight the community’s assets could attract a broader demographic to the area, and encourage those that work in the City to live here as well. As reflected by the 2021 Proclamation of the City Council of Carmel-by-the-Sea: Carmel-bythe-Sea has been and will continue to be enriched and enhanced in its cultural fabric, economic prosperity, and personal understanding of others by having a principled and respectful community standard towards all people.
8 From Systemic Inequality: Displacement, Exclusion, and Segregation, by Danyelle Solomon, et al., 2019, Center for American Progress. 9 From Ribakoff, S. (2022, November 24) A new group sets out to explore the history of racist housing covenants in Monterey County. Monterey County Weekly.

Carmel-by-the-Sea has been and will continue to be enriched and enhanced in its cultural fabric, economic prosperity and personal understanding of others by having a principled and respectful community standard towards all people.

July 5, 2021
Proclamation of the City Council of
Carmel-By-The-Sea
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-6 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Overview of Carmel-by-the-Sea
Over the past 10 years, Carmel-by-the-Sea has experienced growth in both population and jobs10, which means more
housing of various types and sizes is needed to ensure that residents across all income levels, ages, and abilities have a place to call home. While the number of people drawn to the City has steadily increased, housing production has not kept pace with demand, contributing to the housing shortage in the City. The following Housing Needs and Fair Housing Assessment develops context for the goals, programs, and policies that Carmel-by-the-Sea will implement to address inequities in the 6th Cycle Housing Element.

Summary of Population, Employment, Household and
Housing Stock Characteristics
The following provides a brief overview of population,
employment, household, and housing stock characteristics in Carmel-by-the-Sea. These statistics help inform the existing housing needs in Carmel-by-the-Sea, as well as highlighting past trends and future forecasts to develop proactive policies and programs to address the needs of the community.
 Between 2010-2019, Carmel-by-the-Sea’s population increased by 2.8 percent.11  According to the Association of Monterey Bay Area Governments (AMBAG) 2022 Regional Growth Forecast, Carmel-by-the-Sea, the population is forecast to grow by approximately three (3) percent between 2015 to 2045.
 In 2019, the predominant age group was individuals between 65 to 74 years of age.  In 2019, the population was comprised of the following racial and ethnic groups: non-Hispanic White individuals (86.5 percent), Hispanic or Latino (8.2 percent), Asian populations (5.2 percent), and Black or African American (0.1 percent).
 According to the AMBAG 2022 Regional Growth Forecast, Carmel-by-the-Sea is projected to experience an employment growth of 17 percent (562 new jobs) between 2015-2045.  In 2019, the unemployment rate was 0.1 percent; approximately 5 percent less than the County. 10 From AMBAG Regional Growth Forecast 2022; 2010 (population: 3,722); 2015 (population 3,854); 2020 (population: 3,949).
11 From U.S. Census Bureau, ACS 5-Year Estimate, 2010-2019 The fear factor about ‘housing
projects’ is very high in this
community. Even the process of
identifying housing sites is a red
flag for this community. However,
[more detached dwelling units and
new residential apartments above
commercial spaces] is a
continuation of a tradition that is
tried and true and proven all over
the world and also is the tradition
of this community.

February 28, 2023 Housing Ad Hoc
Committee Community Meeting
Attendee
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-7 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  According to the AMBAG 2022 Regional Growth Forecast, Carmel-by-the-Sea is forecast to have a household growth of approximately one (1) percent by 2045 – an increase of 42 housing units.
 In 2019, the largest household type was married-couple family households (47 percent) singleperson households (40 percent), female-headed households (6 percent), Other non-family households (5 percent), and male-headed households (2 percent).  In 2019, above moderate-income households made up the majority of households in the City (62 percent) followed by lower-income households (28 percent), and moderate-income households (10 percent).
 In 2019, the housing stock was predominantly occupied by owner households (57 percent), compared to renter households (43 percent).
 In 2019, the majority of households (94 percent) do not experience overcrowding. Six (6) percent of households in Carmel-by-the-Sea are severely overcrowded and zero percent are moderately overcrowded.
 In 2019, 23 percent of households are cost burdened and 23 percent are severely cost burdened.  The 2015-2019 Comprehensive Housing Affordability Strategy (CHAS) data indicates there were approximately 310 extremely low- and very low-income households living in Carmel-by-theSea. There are approximately 140 extremely low-income households in Carmel-by-the-Sea, 100 of which are owner-occupied households and 40 extremely low-income renter-occupied households.
 In 2019, senior households makeup 43 percent of all households; 15 percent of seniors rent their homes.
 In 2019, 12 percent of people in Carmel-by-the-Sea have a disability of some kind.  In 2019, Carmel-by-the-Sea had 70 large households, of which 57 percent are renter-occupied households. Renter-occupied households makeup the majority of all 3-5+ person households.  In 2019, female-headed family households comprised 75 percent of single-parent households and male-headed households accounted for 25 percent. No single-parent households fell below the poverty level.
 The number of households experiencing homelessness has decreased between 2017 to 2022 from 16 persons to one (1), respectively.
 In 2019, Carmel-by-the-Sea had 3,832 housing units, an approximate 6 percent increase from the 3,606 units that existed in 2010.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-8 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  Between 2015 and 2022, 18 housing units were issued permits in Carmel-by-the-Sea which represents 58 percent of the RHNA number of 31 units assigned in the 5thCycle Housing Element.
 In 2019, the housing stock included the following unit types: 87 percent of homes were singlefamily detached; 10 percent were multifamily; 2 percent were mobile homes; and 1 percent were single-family attached.
 From 2010 to 2019, the City has experienced a stable vacancy average of 51 percent as a result of tourism and second-home ownership.
 As of 2019, 80 percent of Carmel-by-the-Sea’s vacant units were for seasonal, recreational, or occasional (second home) use.
 In 2022, the median home value was estimated to be $2,070,835. Home prices increased by 59 percent from 2019 to 2022. This reflects a 20 percent higher increase than the County, which is similar to nearby cities.
12  As of 2023, the average rent for an apartment in Carmel-by-the-Sea ranged from $2,200 (studio) to $5,459 (three bedrooms).13
A.2 Population, Employment, and Household Characteristics Population characteristics impact current and future housing needs in a community. A city’s population growth, age composition, and race and ethnicity composition help to determine the type and extent of housing needed. The following section provides analysis of population characteristics and local trends that affect housing demand in Carmel-by-the-Sea.

Population Growth
Table A-1 shows population projections through 2045 according to the Association of Monterey Bay Area Governments (AMBAG) 2022 Regional Growth Forecast. In Carmel-by-the-Sea, the population is forecast to grow approximately 3 percent between 2015 to 2045. This reflects 11 percent less than the County, 1 percent more than Pacific Grove, and 56 percent less than Del Rey Oaks14. Population growth forecasts provide critical insight to the future demands of communities in terms of housing needs, employment, and more.
12 From Zillow Home Value Index, December 2019-2022 13 From Zillow Rental Price Index, March 2023 14 These two Cities have been chosen for comparison throughout the document based on having comparable population sizes to Carmel-by-the-Sea.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-9 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-1 Population Growth Forecast by Jurisdiction, 2015-2045 Jurisdictions Population Change
2015-2045
2015 2020 2025* 2030* 2035* 2040* 2045* Numeric %
Monterey County 430,310 441,143 452,761 467,068 476,028 483,884 491,443 61,133 14% Carmel-by-theSea 3,854 3,949 3,946 3,954 3,964 3,974 3,984 130 3% Del Rey Oaks 1,663 1,662 1,693 1,734 1,859 2,330 2,650 987 59% Pacific Grove 15,460 15,265 15,290 15,395 15,530 15,676 15,817 357 2% SOURCE: AMBAG Regional Growth Forecast, 2022
NOTE: *Projected growth values
Figure A-2 illustrates population growth in Carmel-by-the-Sea between 2010-2019. Carmel-by-theSea’s population increased by 2.8 percent from 2010 to 2019. The City’s population steadily increased from 2010 to 2017 before experiencing a sharp decline through 2019.

Figure A-2 Population Growth, Carmel-by-the-Sea, 2010-2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2010-2019 Age Characteristics
A community’s housing needs are partly determined by preferences of age groups and household types (age, family/non-family, female-headed, etc.). When seeking housing, households may prioritize factors such as size, accessibility, and price. For instance, younger and middle-aged households may seek homes that can accommodate a growing household size, whereas older adults may seek to downsize to an apartment with assistive care services or a smaller, more affordable single-family home. Disabled persons may seek homes that are accessible and include universal 3600
3650
3700
3750
3800
3850
3900
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Population
Year
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-10 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 design or visitability features. Overall, the life stages of a population determine the housing stock that is needed in a community.

In 2010, Carmel-by-the-Sea’s predominant age group was
individuals between 65 and 74 years of age (19 percent).

Figure A-3 shows that between 2010 and 2019, the
general age of the population has been slowly increasing, with the most populous age groups in the City being
individuals between 55 and 84 years of age. The City’s
median age has changed little since 2010, ranging from
56 in 2010, 54 in 2015, and 59 in 2019. Overall, the City’s aging trend suggests a demand for housing geared toward middle-aged to senior groups.

Figure A-3 Population Distribution by Age, Carmel-by-the-Sea, 2010-2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2010, 2015, 2019 Age 0-4 Age 5-14 Age 15-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64 Age 65-74 Age 75-84 Age 85+ 2010 3% 8% 4% 8% 10% 17% 12% 19% 12% 5%
2015 6% 11% 6% 6% 11% 11% 16% 20% 8% 6%
2019 1% 10% 1% 8% 11% 11% 14% 21% 15% 7%
0%
5%
10%
15%
20%
25%
“When I grew up, this
was a town of children.

All the property owners
were parents. All the
employees in the stores
were parents. So,
everything in this town
was about children, and
we don't have children
anymore.”
May 24, 2023 Housing Ad
Hoc Committee Community
Meeting Attendee
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-11 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-2 shows population age distribution revealing that Carmel-by-the-Sea’s most populous age group in 2019 was individuals 65 to 74 years of age (21 percent). Compared to the County and nearby cities, Carmel-by-the-Sea has the largest 55 to 85+ age group (43 percent) followed by Pacific Grove (27 percent), Del Rey Oaks (23 percent), and the County (13 percent). Since 2010, Carmelby-the-Sea’s smallest age demographic are those aged 0-14.

Table A-2 Population Age Distribution by Jurisdiction, 2019 Jurisdiction Population Age
0-4 5-14 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+
Monterey County 7.3% 14.8% 14.3% 14.4% 13.0% 11.8% 11.1% 7.7% 3.6% 1.9% Carmel-by-the-Sea 1.4% 9.7% 1.4% 8.1% 10.6% 11.4% 14.3% 21.3% 14.9% 7% Del Rey Oaks 5.7% 8.3% 5.7% 12.6% 12.5% 13% 18.9% 15.9% 4.4% 2.9% Pacific Grove 3.5% 12.2% 8.5% 10.0% 10.4% 13.3% 14.7% 16.5% 6.6% 4.3% SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019
Race and Ethnicity Characteristics
Understanding the racial and ethnic composition of a city is vital to ensuring equal opportunity to housing for all groups, inclusive of cultural norms and preferences. An in-depth analysis of race and ethnicity is provided in the Fair Housing Report in Appendix A. Figure A-4 illustrates the racial and ethnic composition of Carmel-by-the-Sea compared to the County.

Figure A-4 Population by Race Compared to the County, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019
American
Indian or
Alaska
Native
Asian
Black or
African
American,
NonHispanic
White,
NonHispanic
Some
other race
Hispanic
or Latino
Native
Hawaiian
and Other
Pacific
Islander
Carmel-by-the-Sea 0.0% 5.2% 0.1% 86.5% 0.0% 8.2% 0.0%
Monterey County 0.2% 5.5% 2.5% 30.8% 0.1% 60.3% 0.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-12 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 When comparing the City and the County, non-Hispanic White and Hispanic or Latino populations are the most represented; however, the County presents more diversity than Carmel-by-the-Sea.

Non-Hispanic White individuals comprise 87 percent of Carmel-by-the-Sea’s population followed by Hispanic or Latino (8 percent) and Asian populations (5 percent). In contrast, the County’s largest population is Hispanic or Latino individuals (60 percent) followed by non-Hispanic White (31 percent). The City has no populations identifying as American Indian or Alaska Native or Native Hawaiian or Other Pacific Islander. Black or African American non-Hispanic individuals represent less than 1 percent of the City’s population.

Table A-3 provides a comparison of racial and ethnic composition by jurisdiction. In 2019, Carmelby-the-Sea (87 percent) and the neighboring City of Pacific Grove (83 percent) had the largest nonHispanic White populations compared to Del Rey Oaks (75.5 percent) and the County (30.8 percent). Compared to surrounding cities and the County, Carmel-by-the-Sea had the lowest Asian population (5 percent). Overall, Carmel-by-the-Sea is one of the least diverse when compared to the County and the nearby cities of Del Rey Oaks and Pacific Grove.

Table A-3 Population by Race by Jurisdiction, 2019
Jurisdiction
American
Indian or
Alaska
Native
Asian,
alone
Black or
African
American,
NonHispanic
White, NonHispanic
Some
Other
Race
Hispanic
or Latino
Native
Hawaiian
and Other
Pacific
Islander
Monterey County 0.2% 5.5% 2.5% 30.8% 0.1% 60.3% 0.5%
Carmel-by-the-Sea 0.0% 5.2% 0.1% 86.5% 0.0% 8.2% 0.0%
Del Rey Oaks 0.0% 7.1% 2.5% 75.5% 0.0% 13% 0.3%
Pacific Grove 0.2% 5.8% 1.0% 82.8% 0.0% 10.3% 0.1%
SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019
When analyzing race and ethnicity in a city, it’s important to understand how demographics have changed over time. Figure A-5 illustrates changes in population by race between 2010-2019 in Carmel-by-the-Sea. During this time frame, Carmel-by-the-Sea’s population composition experienced fluctuations in nearly all populations, and by 2019 saw a decline in each population except non-Hispanic White. In 2015, the non-Hispanic White population experienced a 2 percent decrease in size, while the Asian and Hispanic or Latino populations increased 2 percent and 3 percent, respectively. In 2019, Carmel-by-the-Sea experienced a 7 percent increase in the nonHispanic White population, and a decline in both the Asian and Hispanic or Latino populations by 4 percent and 3 percent, respectively. Since 2015, population levels have remained less than 1 percent for Black or African American, American Indian or Alaska Native, Native Hawaiian, and Other Pacific Islander populations in Carmel-by-the-Sea.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-13 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-5 Population by Race, Carmel-by-the-Sea, 2010-2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2010, 2015, 2019 Demographic characteristics such as the racial and ethnic composition of a city are necessary to inform the housing needs of a community inclusive of cultural norms and preferences.

Diversity Index
The Diversity Index measures the degree to which the five major ethnic populations (non-Hispanic White, non-Hispanic Black, Asian and Pacific Islander, Hispanic, and Two or more races) are evenly distributed across a geographic area. The index ranges from 0 to 1 – where 0 is low diversity, meaning only one group is present and 1 is high diversity, meaning an equal proportion of all five groups is present).

Integration and Segregation
“Integration generally means a condition in which there is not a high concentration of persons of a particular race, color, religion, sex, familial status, national origin, or having a disability or a particular type of disability when compared to a broader geographic area.

Segregation generally means a condition in which there is a high concentration of persons of a particular race, color, religion, sex, familial status, national origin, or having a disability or a type of disability in a particular geographic area when compared to a broader geographic area.” SOURCE: California Department of Housing and Community Development Guidance, 2021, page 31.

Figure A-6 below depicts the level of diversity within the City. Carmel-by-the-Sea, along with neighboring jurisdictions have the lowest levels of diversity within the region. Carmel-by-the-Sea has a low level of diversity with 86.5 percent of the population identifying as non-Hispanic White.

American
Indian or
Alaska Native
Asian
Black or
African
American,
Non-Hispanic
White, NonHispanicSome other
race
Hispanic or
Latino
Native
Hawaiian and
Other Pacific
Islander
2010 0.0% 8.6% 1.4% 81.5% 0.0% 8.5% 0.0%
2015 0.3% 9.0% 0.0% 79.6% 0.0% 11.1% 0.0%
2019 0.0% 5.2% 0.1% 86.5% 0.0% 8.2% 0.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-14 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-6 Diversity Index, Carmel-by-the-Sea, 2018
SOURCE: California Department of Housing and Community Development, AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-15 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Racially or Ethnically Concentrated Areas of Poverty and Affluence A Racially Concentrated Area of Poverty or an Ethnically Concentrated Area of Poverty (R/ECAP) and a Racially Concentrated Area of Affluence (RCAAs) represent opposing ends of the segregation spectrum from racially or ethnically segregated areas with high poverty rates to affluent predominantly White neighborhoods. Historically, HUD has paid particular attention to R/ECAPs as a focus of policy and obligations to AFFH. Recent research out of the University of Minnesota Humphrey School of Public Affairs argues for the inclusion of RCAAs to acknowledge current and past policies that created and perpetuate these areas of high opportunity and exclusion.15 R/ECAPs
HCD and HUD’s definition of a Racially/Ethnically Concentrated Area of Poverty is:

A census tract that has a non-White population of 50 percent or more (majority-minority) or, for non-urban areas, 20 percent, AND a poverty rate of 40 percent or more; OR A census tract that has a non-White population of 50 percent or more (majority-minority) AND the poverty rate is three times the average tract poverty rate for the County, whichever is lower.

SOURCE: California Department of Housing and Community Development Guidance, 2021.

It is important to note that R/ECAPs and RCAAs are not areas of focus because of racial and ethnic concentrations alone. This study recognizes that racial and ethnic clusters can be a part of fair housing choice if they occur in a non-discriminatory market. Rather, R/ECAPs are meant to identify areas where residents may have historically faced discrimination and continue to be challenged by limited economic opportunity, and conversely, RCAAs are meant to identify areas of particular advantage and exclusion.

RCAAs
HCD and HUD’s definition of an RCAA is a census tract 1) with a percentage of its total White population that is 1.25 times higher than the average percentage of the COG region’s White population; and 2) has a median income that is 2 times higher than the COG Area Median Income (AMI). Generally, these are understood to be neighborhoods in which there are both high concentrations of non-Hispanic White households and high household income rates.

SOURCE: California Department of Housing and Community Development Guidance, 2023 As can be seen in the Figure A-7 and Figure A-8, the City of Carmel-by-the-Sea is not considered a R/ECAP; nor, is the City considered an RCAA. As highlighted previously, Carmel-by-the-Sea does not have a majority-minority population and thus cannot be labelled as a R/ECAP. Figure A-9 15 From Goetz, E. G., Damiano, A., & Williams, R. A. (2019). Racially Concentrated Areas of Affluence: A Preliminary Investigation. Cityscape: A Journal of Policy Development and Research, 21(1), 99–124 Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-16 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 shows that less than or equal to 20 percent of the City’s population is non-White. Though Carmelby-the-Sea’s percentage of exclusively White population and AMI are higher than the County-wide average, the median income in the City is not high enough for the jurisdiction to be considered an RCAA16.

Figure A-7 R/ECAP by Census Tract, Carmel-by-the-Sea, 2009-2013 SOURCE: California Department of Housing and Community Development, AFFH Data Viewer 16 To be considered an RCAA, census tracts must have a Location Quotient (LQ) of more than 1.25 and a median income 1.5 times higher than the COG AMI or 1.5 times higher than the State AMI, whichever is lower. In this case, Carmel’s median income would need to be 1.5 times greater than the State AMI of $69,021.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-17 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-8 RCAAs by Census Tract, Carmel-by-the-Sea, 2015-2019 SOURCE: California Department of Housing and Community Development, AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-18 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-9 Percent Non-White by Block Group, Carmel-by-the-Sea, 2018 SOURCE: California Department of Housing and Community Development, AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-19 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Employment
Employment characteristics can significantly impact the housing needs and trends of a community from income and wage scale to job location and industry. Employment and income are determinates of a population’s ability to purchase housing including the type of housing and size, both of which can induce negative effects such as overpayment and overcrowding. Table A-4 summarizes projected employment growth for Carmel-by-the-Sea, the County, and nearby cities from 2015- 2045.

Table A-4 Employment Growth Forecast by Jurisdiction, 2015-2045 Jurisdictions Population Change
2015 - 2045
2015 2020 2025* 2030 2035* 2040* 2045* Numeric Percent
Monterey County 225,268 243,015 245,054 249,613 253,918 258,553 263,437 38,169 17% Carmel-by-the-Sea 3,353 3,566 3,593 3,674 3,752 3,833 3,915 562 17% Del Rey Oaks 705 748 753 774 794 815 834 129 18%
Pacific Grove 7,470 8,016 8,061 8,152 8,244 8,343 8,445 975 13% SOURCE: AMBAG Regional Growth Forecast, 2022
NOTE: *Projected growth values
According to the AMBAG 2022 Regional Growth Forecast, Carmel-by-the-Sea was projected to experience an employment growth of 17 percent (562 new jobs) between 2015-2045. This projected employment growth mirrors the County (17 percent) and is 4 percent higher than Pacific Grove (13 percent), but reflects 1 percent lower than Del Rey Oaks (18 percent). This projected increase in job growth presents an opportunity for cities to construct additional housing options for the existing and future workforce.

Table A-5 shows 2010 and 2019 employment data for Carmel-by-the-Sea by sector. Key findings in employment data include the following:
 Education services, healthcare, and social assistance industries were the largest employers of Carmel-by-the-Sea (28 percent) in both 2010 and 2019, followed by arts, entertainment, recreation, accommodation, and food services (19 percent and 15 percent, respectively);  Information industries experienced the greatest increase between 2010 and 2019 (585 percent), followed by construction (276 percent);
 Five sectors experienced drastic declines in employment between 2010 and 2019 including finance and insurance, real estate, and rental leasing (137 percent), professional, scientific, management, and administrative services (61 percent), public administration (54 percent), arts, entertainment, recreation, accommodation and food services (35 percent), and education services, healthcare, and social assistance (20 percent); Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-20 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  Wholesale trade (2 percent) and agriculture, forestry, fishing and hunting, and mining (0 percent) industries experienced the least amount of growth; and
 Overall, there was a 19 percent decrease in employment for Carmel-by-the-Sea residents between 2010 and 2019.

Table A-5 Employment by Sector, Carmel-by-the-Sea, 2010 and 2019 Industry Sector
2010 2019 Percent
Change
2010-2019 People
Employed
Percent of City
Employment
People
Employed
Percent of City
Employed
Agriculture, forestry, fishing and
hunting, and mining 0 0% 0 0% 0%
Construction 25 1% 94 7% 276%
Manufacturing 40 2% 67 5% 68%
Wholesale Trade 0 0% 26 2% 2%
Retail Trade 247 14% 213 15% 14%
Transportation and warehousing,
and utilities 63 4% 95 7% 51%
Information 14 1% 96 7% 585%
Finance and insurance, real
estate, and rental leasing 172 10% 73 5% -137%
Professional, scientific,
management, and administrative
services
273 15% 106 7% -61%
Education services, healthcare,
and social assistance 493 28% 394 28% -20%
Arts, entertainment, recreation,
accommodation, and food services 330 19% 216 15% -35%
Public Administration 112 6% 52 4% -54%
Total Employment 1,769 100% 1,432 100% -19%
SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2010, 2019 Balance of Jobs to Workers
A city houses employed residents who either work in the community where they live, or work elsewhere in the region. Conversely, a city may have job sites that employ residents from the same city but more often employ workers commuting from outside of it. One measure of local imbalance is the relationship between workers and jobs. A city with a surplus of workers, “exports” workers to other parts of the region, while a city with a surplus of jobs must conversely “import” them.

Smaller cities will typically have more employed residents than jobs and will export workers as a result, while larger cities tend to have a surplus of jobs and will import workers. To some extent, the Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-21 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 regional transportation system is set up for this flow of workers to the region’s core job centers. At the same time, as the housing affordability crisis has illustrated, local imbalances may be severe, where local jobs and worker populations are out of sync at a sub-regional scale.

A community may offer employment for relatively low-income workers but have relatively few housing options for those workers. Conversely, it may house residents who are low-wage workers but offer few employment opportunities for them. Such relationships may cast extra light on potentially pent-up demand for housing in particular price categories. A relative surplus of jobs relative to residents in a given wage category suggests the need to import those workers, while conversely, surpluses of workers mean the community will export those workers to other jurisdictions. Such flows are not inherently bad, though over time, sub-regional imbalances may appear.

Figure A-10 illustrates earnings of workers in comparison to worker place of residence and place of work in Carmel-by-the-Sea. In 2019, Carmel-by-the-Sea had more low-wage jobs than low-wage residents (where low-wage refers to jobs paying less than $25,000). At the high end of the wage spectrum (i.e., wages over $75,000 per year), the City had more high-wage jobs than high-wage residents.17 This indicates the City is a net-importer of workers for both low- and high-wage jobs. It should be noted that the minimum wage has increased since 2019, from $12 to $15.50, thus increasing the annual incomes of full-time workers as well.

Figure A-10 Worker Earnings by Place of Residence & Place of Work, Carmel-by-the-Sea, 2019
SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019
17 The source table is top-coded at $75,000, precluding more fine-grained analysis at the higher end of the wage spectrum.
48 148
213
328
621
457
1,108
1,226
509
703
0 200
400
600
800
1,000
1,200
1,400
Less than
$9,999
$10,000 to
$24,999
$25,000 to
$49,999
$50,000 to
$74,999
$75,000 or
more
Workers
Wage Group
Place of Residence
Place of Work
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-22 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 According to U.S. Census Bureau data reported in a Housing Feasibility Study for the City of Carmel-by-the-Sea by ECONorthwest,
18 a mere 2.6 percent of workers live and work in Carmel-bythe-Sea, while approximately half of all workers live within 10 miles of the City and 26 percent commute from more than 25 miles away.
19 Concentrations in hospitality and leisure services may create obstacles for local workers that earn lower-incomes and cannot afford to live in the community. Such imbalances of jobs to housing impacts an individual’s ability to integrate into the community due to long distance travel, excessive costs of travel, and reduced personal time.

Unemployment rates20 are essential to understanding the affordability needs of a community when determining housing options. Table A-6 provides a breakdown of unemployment rates for Carmelby-the-Sea, the County, and nearby cities. Compared to the County and nearby cities, Carmel-bythe-Sea has the lowest unemployment rate with less than 1 percent of unemployed residents. This indicates an approximate 4.8 percent less than the County, 5 percent less than the Del Rey Oaks, and 3.8 percent less than Pacific Grove.

Table A-6 Unemployment Rate, Carmel-by-the-Sea, 2019
Jurisdictions Unemployment Rate
Monterey County 4.9%
Carmel-by-the-Sea 0.1%
Del Rey Oaks 5.1%
Pacific Grove 3.9%
SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019
The Monterey Bay Area approved Regional Housing Needs Assessment (RHNA) Methodology is broken down into four income levels:
 Very Low Income (50 percent or less of the County’s median income);  Low Income (50-80 percent of the County’s median income);  Moderate Income (80-120 percent of the County’s median income); and  Above moderate Income (120 and above the County’s median income).

Carmel-by-the-Sea’s RHNA allocation is presented below in Table A-7. 18 From ECONorthwest, Housing Feasibility Study, 2023 19 From U.S. Census Bureau Longitudinal Employer-Household Dynamics Data 20 The term unemployment refers to a person who is actively searching for employment but is not able to find work.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-23 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-7 Regional Housing Needs Allocation
Income Group Percentage of AMI Share
Extremely Low-Income21 <30 57
Very Low-Income <50 56
Low-Income 50-80 74
Moderate-Income 80-120 44
Above Moderate-Income 120+ 118
Total 349
SOURCE: City of Carmel-by-the-Sea, 2023
In Monterey County, the median household income in 2019 was an estimated $71,015 compared to Carmel-by-the-Sea at $98,188. Table A-8 lists occupations by mean salary in Monterey County.

According to Table A-8, the occupations that fall below 50 percent of the median income are Food Preparation and Serving-Related Occupations; Personal Care and Services Occupations; and Farming, Fishing, and Forestry Occupations. The majority of occupations in Monterey County have an average income that is low (50-80 percent AMI) or very low (<50 percent AMI). If applied to Carmel-by-the-Sea, it should be anticipated that affordable housing is needed to accommodate potential low- and very low-income households.

Household Characteristics
Characteristics of a household include household type and size, income, affordability, and special needs groups. According to HCD, a household is defined as “All persons who occupy a housing unit. The occupants may be a single family, on person living alone, two or more families living together, or any groups of related or unrelated persons who share living arrangements.” Large families, single parent households, female-headed households, or extremely low- and low-income households may be classified as Special Needs groups. Special Needs groups are identified due to the unique nature of household characteristics and potential housing challenges faced. The following section examines household characteristics trends in Carmel-by-the-Sea and the region.

Table A-9 provides an overview of the projected housing units needed in Monterey County, Carmelby-the-Sea, and nearby cities, Del Rey Oaks and Pacific Grove.22 Carmel-by-the-Sea is forecast to have a household growth of approximately 1 percent by 2045 – an increase of 42 housing units.

Compared to the County, this reflects 18 percent less projected growth and 2 percent less growth than Pacific Grove. Of the nearby cities, the City of Del Rey Oaks has the highest projected increase in housing unit growth at 61 percent.
21 Extremely low-income RHNA is found as a subset within the very low-income category for all other tables in this document.
22From AMBAG Regional Growth Forecast, 2022
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-24 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-8 Occupations by Mean Salary, Monterey County, 2019 Occupation Salary
Management Occupations $117,738
Business and Financial Operations Occupations $78,900
Computer and Mathematical Occupations $96,980
Architecture and Engineering Occupations $92,554
Life, Physical, and Social Science Occupations $84,516
Community and Social Services Occupations $59,549
Legal Occupations $103,094
Education, Training, and Library Occupations $69,296
Arts, Design, Entertainment, Sports, and Media Occupations $56,599 Healthcare Practitioners and Technical Occupations $115,486 Healthcare Support Occupations $42,625
Protective Service Occupations $70,161
Food Preparation and Serving-Related Occupations $30,127 Building and Grounds Cleaning and Maintenance Occupations $36,330 Personal Care and Service Occupations $31,984
Sales and Related Occupations $42,099
Office and Administrative Support Occupations $44,239
Farming, Fishing, and Forestry Occupations $29,901
Construction and Extraction Occupations $60,870
Installation, Maintenance, and Repair Occupations $54,180 Production Occupations $41,905
Transportation and Material Moving Occupations $37,144
SOURCE: California Employment Development Division, Occupational Wage data, 2019 Table A-9 Housing Forecast by Jurisdiction, 2015-2045
Jurisdictions Population Change
2015 - 2045
2015 2020 2025* 2030* 2035* 2040* 2045* Numeric Percent Monterey County 139,177 141,764 146,716 153,852 159,100 162,612 165,328 26,151 19% Carmel-by-the-Sea 3,417 3,437 3,437 3,442 3,450 3,453 3,459 42 1% Del Rey Oaks 741 741 762 809 848 1,052 1,195 454 61%
Pacific Grove 8,184 8,201 8,214 8,267 8,336 8,400 8,463 279 3% SOURCE: AMBAG Regional Growth Forecast, 2022
NOTE: *Projected growth values
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-25 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Household Type and Size
Figure A-11 illustrates household characteristics by type in 2019 for Carmel-by-the-Sea, the County, and nearby cities, Del Rey Oaks and Pacific Grove. In Carmel-by-the-Sea, the largest household type was married-couple family households (47 percent) followed by single-person households (40 percent). This is consistent with the County and nearby cities. Carmel-by-the-Sea has the lowest percentage of female-headed households (6 percent) compared to the County (13 percent), Del Rey Oaks (7 percent), and Pacific Grove (9 percent).

Figure A-11 Household by Type by Jurisdiction, 2019
SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019
Figure A-12 illustrates household changes between 2010-2019 in Carmel-by-the-Sea. Over the last decade, married-couple family households have remained the largest household type in the City followed by single-person households. Since 2015, married-couple family households have begun declining, while single-person households have increased. Female-headed households experienced the most fluctuation between 2010-2019, showing a steady increase between 2010-2013, then slowly decreasing through 2019 to 6 percent (7 percent decrease between 2013-2019). Male-headed households have slightly increased since 2010 from zero to 2 percent in 2019. These changes in household type over time indicate a need for housing options that appeal to both family-sized and smaller-sized households (keeping affordability in mind).

13.3%

5.9% 6.9% 8.8%

6.5%

2.0% 4.5% 2.8%

52.5%

46.9%

51.4% 45.9%

6.1%

5.2%

3.7%

6.4%

21.6%

40.0%

33.5% 36.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Monterey County Carmel-by-the-Sea Del Rey Oaks Pacific Grove Single-person Households
Other Non-Family Households
Married-couple Family Households
Male-headed Households
Female-Headed Households
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-26 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-12 Changes in Household Type, Carmel-by-the-Sea, 2010-2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2010-2019 NOTE: Non-family households include unrelated persons living in one housing unit.

Figure A-13 illustrates households by household size for Carmel-by-the-Sea, the County, and nearby cities. Carmel-by-the-Sea’s largest household type according to size is 2-person households (42 percent) followed by 1-person households (40 percent). This is consistent with findings in Figure A-12, with married-couple family households remaining the largest household type since 2010 followed by single-person households. This reflects a demand for affordable housing units appealing to married-couple and single-person households.

Figure A-13 Households by Household Size by Jurisdiction, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019

8.8% 10.5% 11.9% 13.0% 11.0% 11.1% 11.0% 10.7% 6.8% 5.9%

0.0% 1.3% 1.5% 1.1% 1.1% 2.1% 1.2% 1.3%

0.9% 2.0%

43.6%

44.4% 46.4%

50.9% 50.9% 52.4% 49.3% 46.7% 49.9% 46.9%

3.6%

2.5%

3.8%

3.7% 2.6% 2.0%

2.8% 3.6% 3.8% 5.2%

44.0% 41.3% 36.4% 31.3% 34.5% 32.4% 35.7% 37.6% 38.5% 40.0% 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Single-person Households
Other Non-Family Households
Married-couple Family Households
Male-headed Family Households
Female-Headed Family Households

40.0%

23.9%

33.5% 36.0%

41.5%

31.1%

38.2% 36.2%

14.8%

34.0%

21.4% 22.2%

3.6% 11.0% 6.9% 5.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Carmel-by-the-Sea Monterey County Del Rey Oaks Pacific Grove 5-Person or More Household
3-4-Person Household
2-Person Household
1-Person Household
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-27 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Household Income
Affordability is a key component in determining the housing needs of a community. Household income determines the ability of a household to purchase or rent a housing unit. However, fluctuating household incomes may result in the need to spend disproportionate amounts of income on housing costs, referred to as overpayment or cost burden. As a result, this may also lead to overcrowding and/or substandard living conditions.

The following are income categories based on area median income (AMI) according to HCD:
 Extremely low-income: households earning 0-30 percent of AMI;  Very low-income: households earning 30-50 percent of AMI;  Low-income: households earning 50-80 percent of AMI;
 Moderate-income: households earning 80-100 percent of AMI; and  Above-moderate income: households earning 100-120 percent of AMI.

Government Code Section 65583(a) defines extremely low-income households as earning 30 percent or below area median income, and considers them as a subset of the very low-income category. The extremely low-, very low-, and low-income groups are referred to as lower-income. In Carmel-bythe-Sea 28 percent of households are considered lower-income.

Table A-10 summarizes households by income category in Carmel-by-the-Sea in 2019. Above moderate-income households make up the majority of households in the City (62 percent) followed by lower-income households (28 percent). Approximately 7 percent of households in Carmel-bythe-Sea identify as extremely low-income. This reflects a need for more affordable housing in the City, and in tandem with Figure A-12 and Figure A-13 findings, it is likely the demand for singleperson households is accompanied by a need for affordable options.

Table A-10 Households by Income Category, Carmel-by-the-Sea, 2019 Income Category (% of County MFI) Households Percent
Extremely Low-Income (30% MFI or less) 140 7%
Very Low-Income (30-50% MFI) 170 9%
Low-Income (50-80% MFI) 235 12%
Moderate-Income (80-100% MFI) 185 10%
Above Moderate-Income (>100% MFI) 1,200 62%
Total 1,930 100%
SOURCE: Department of Housing and Urban Development (HUD) Comprehensive Housing Affordability Strategy (CHAS), 2015-2019 Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-28 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-14 illustrates the median household income in Carmel-by-the-Sea, the County, and nearby cities in 2019. Carmel-by-the-Sea’s median household income was $98,188 – approximately $27,173 higher than the County ($71,015). The City of Del Rey Oaks had the second highest median household income at $95,000 followed by Pacific Grove at $88,250. Understanding Carmel-by-theSea’s median household income determines what income category households identify with and what affordability levels look like for the community.

Figure A-14 Median Household Income by Jurisdiction, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019
Figure A-15 illustrates median household income across Carmel-by-the-Sea. According to the HCD AFFH Data Viewer, Carmel-by-the-Sea households experience variation in median household income based on location. Households located in the center of the City reportedly earn less than the City’s annual median income ($98,188) and households located in the north and south earn more (>$87,100 - <125,000).

Figure A-16 provides a breakdown of 2019 incomes by category in Carmel-by-the-Sea.

Approximately 43 percent of households are earning $100,000 or more (more than the City’s annual median income). Conversely, 26 percent households earn an annual income less than $50,000 ($48,188 less than the City’s annual median income). Approximately 41 percent of households are earning below the City’s annual median income, of which 10 percent earn less than $25,000. $71,015.00
$98,188.00 $95,000.00
$88,250.00
$-
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
Monterey County Carmel-by-the-Sea Del Rey Oaks Pacific Grove Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-29 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-15 Median Income by Block Group, Carmel-by-the-Sea, 2015-2019 SOURCE: California Department of Housing and Community Development, AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-30 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-16 Income by Category, Carmel-by-the-Sea, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimates, 2019
The household income characteristics in Carmel-by-the-Sea reveal a demand for the development of more affordable housing options that appeal to both lower-income and above-moderate households.

Carmel-by-the-Sea is comprised primarily of above moderate-income households (62 percent), most of which identify as married-couple families (47 percent). Nonetheless, 28 percent of households are lower-income and 40 percent of households identify as single-persons. Affordable housing in Carmel-by-the-Sea must accommodate these households as well despite their non-majority makeup.

Figure A-17 illustrates housing by tenure in Carmel-by-the-Sea, the County, and nearby cities. Fiftyseven (57) percent of households in Carmel-by-the-Sea are owners and 43 percent are renters. This reflects an approximate 6 percent higher owner household population than the County (51 percent), 11 percent higher than Pacific Grove (46 percent), and 14 percent lower than Del Rey Oaks (71 percent).
10%
8%
8%
15%
11%
12%
11%
20% Less than $25,000
$25,000 - $34,999
$35,000 - $49,999
$50,000 - $74,999
$75,000 - $99,999
$100,000 - $149,999
$150,000 - $199,999
$200,000 or more
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-31 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-17 Housing Tenure by Jurisdiction, 2019
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
A.3 Disproportionate Housing Needs
Housing Problems and Severe Housing Problems
The following section details housing problems and severe housing problems in Carmel-by-the-Sea according to the Census Bureau Comprehensive Housing Affordability Strategy (CHAS).

Disproportionate Housing Needs
“Disproportionate housing needs generally refers to a condition in which there are significant disparities in the proportion of members of a protected class experiencing a category of housing need when compared to the proportion of members of any other relevant groups, or the total population experiencing that category of housing need in the applicable geographic area. For purposes of this definition, categories of housing need are based on such factors as cost burden and severe cost burden, overcrowding, homelessness, and substandard housing conditions.” SOURCE: California Department of Housing and Community Development Guidance, 2021, page 39.

The CHAS data set provides in-depth analysis on housing needs by income level according to types of households. According the CHAS, housing problems are defined as having one or more of the following variables:
 Incomplete kitchen facilities;
 Incomplete plumbing facilities;
 More than one person per room; and
 Cost burden greater than 30 percent.
57% 51%
71%
46%
43% 49%
29%
54%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Carmel-by-the-Sea Monterey County Del Rey Oaks Pacifc Groves Renter Occupied
Owner Occupied
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-32 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Severe housing problems are defined as having one or more of the following variables:
 Incomplete kitchen facilities;
 Incomplete plumbing facilities;
 More than 1.5 persons per room; and
 Cost burden greater than 50 percent.

Additionally, CHAS defines cost burden as the ratio of housing costs to household income. The following defines cost burden by renter and owner:
 Renter Cost Burden: gross rent (contract rent plus utilities); and  Owner Cost Burden: select monthly owner costs including mortgage payment, utilities, association fees, insurance, and real estate taxes.

Figure A-18 and Figure A-19 illustrate housing problems by tenure and severe housing problems by tenure in Carmel-by-the-Sea during 2019. Approximately 60 percent of renter households have at least one of four housing problems and 36 percent have at least one of four severe housing problems. In contrast, 47 percent of owner households experience at least one housing problem and 25 percent have at least one severe housing problem.

Figure A-18 Housing Problems by Tenure, Carmel-by-the-Sea, 2015-2019 SOURCE: U.S. Census Bureau, CHAS Data, 2015-2019
NOTE: The four housing problems are: incomplete kitchen facilities, incomplete plumbing facilities, more than 1 person per room, and cost burden greater than 30%.
47%
60%
53%
40%
0% 20% 40% 60% 80% 100%
Owner %
Renter %
Household has at least 1 of 4
Housing Problems
Household has none of 4
Housing Problems OR cost
burden not available, no other
problems
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-33 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-19 Severe Housing Problems by Tenure, Carmel-by-the-Sea, 2015-2019 SOURCE: U.S. Census Bureau, CHAS Data, 2015-2019
NOTE: The four housing problems are: incomplete kitchen facilities, incomplete plumbing facilities, more than 1.5 person per room, and cost burden greater than 50%.

Overcrowding
Understanding the prevalence of overcrowded households within a community helps determine the need for affordable and adequately sized housing units for the community. Overcrowding is defined as a household with more than one occupant per room excluding bathrooms and kitchens. Units with more than 1.5 persons per room are considered severely overcrowded. Overcrowding may occur due to a lack of available affordable and/or adequately sized housing units. Cultural norms and customs combined with low-income or lack of adequately size housing units can result in overcrowding too. For example, in Asian culture, households are often comprised of multigenerations. If this custom is also compounded by low-income or lack of adequately sized housing units overcrowding may occur.

Figure A-20 illustrates overcrowding by severity in Carmel-by-the-Sea, the County, and nearby cities in 2019. The City of Del Rey Oaks households experience the least amount of overcrowding (0.8 percent) and no severe overcrowding, compared to Carmel-by-the-Sea households that experience zero percent moderate overcrowding, but 6 percent severe overcrowding. Monterey County has a higher overall percentage of households that experience overcrowding (9 percent) and severe overcrowding (5 percent) compared to Carmel-by-the-Sea. 25%
36%
75%
64%
0% 20% 40% 60% 80% 100%
Owner %
Renter %
Household has at least 1 of 4
Housing Problems
Household has none of 4 Housing
Problems OR cost burden not
available, no other problems
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-34 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-20 Overcrowding by Severity by Jurisdiction, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
Figure A-21 illustrates overcrowding by tenure and severity in Carmel-by-the-Sea during 2019.

Renter households in Carmel-by-the-Sea experience 8 percent more overcrowding than owner households. While renter households do not experience overcrowding (more than 1-person per room), 10 percent experience severe overcrowding (more 1.5-persons per room). Similarly, owner households in Carmel-by-the-Sea do not experience overcrowding, but 2 percent do experience severe overcrowding.

Figure A-21 Overcrowding by Tenure and Severity, Carmel-by-the-Sea, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
94%
86%
99%
92%
0%
9%
1%
3%
6% 5%
0%
5%
75%
80%
85%
90%
95%
100%
Carmel-by-the-Sea Monterey County Del Rey Oaks Pacific Grove More than 1.5 Occupants per Room

1.0 to 1.5 Occupants per Room

1.0 or Less Occupants per Room
98%
90%
0%
0%
2%
10%
84%
86%
88%
90%
92%
94%
96%
98%
100%
Owner Occupied Renter Occupied
More than 1.5 Occupants
per Room

1.01 to 1.5 Occupants per
Room

1.0 or Less Occupant per
Room
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-35 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-22 illustrates overcrowded households in Carmel-by-the-Sea. According to the HCD AFFH Data Viewer, Carmel-by-the-Sea households experience no variation in overcrowding based on location. In the City, overcrowding rates are less than 8.2 percent.

Figure A-22 Overcrowded Households, Carmel-by-the-Sea
SOURCE: California Department of Housing and Community Development, AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-36 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Cost Burden
According to HCD, overpayment or cost burden is measured as households spending more than 30 percent of their gross income including utilities for housing; severe overpayment or severe cost burden is measured as households spending 50 percent or more of their gross income for housing.

For the duration of this report, overpayment will be referred to as cost burden.

The cost burden rates of owners and renters in a community provide insight to housing needs such as, the affordability of the local housing market and the availability of housing units that accommodate household needs like size and housing type. Additionally, federal and state agencies examine cost burden to determine a community’s need for housing assistance.

Figure A-23 illustrates cost burden severity in Carmel-by-the-Sea, the County, and nearby cities.

Carmel-by-the-Sea household cost burden rates are similar to the County. In Carmel-by-the-Sea, 46 percent of households experience some level of cost burdened, of which 23 percent are severely cost burdened, while the County has a cost burden rate of 22 percent and a severe cost burden rate of 18 percent. The cities of Del Rey Oaks and Pacific Grove have slightly lower rates of cost burden overall with 67 percent and 61 percent of households experiencing no cost burden, respectively.

Overall, the City of Del Rey Oaks has the lowest percent of households experiencing any type of cost burden. It is important to relate Carmel-by-the-Sea’s approximate 46 percent cost burden with its 10 percent population of overcrowded renter households, as these may be indicators of an unaffordable and homogenous local housing market.

Figure A-23 Cost Burden Severity by Jurisdiction, 2015-2019 SOURCE: U.S. Census Bureau, CHAS Data, 2015-2019
54% 59%
67% 61%
23%
22%
21%
21%
23% 18%
11%
16%
0% 1% 1% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Carmel-by-the-Sea Monterey County Del Rey Oaks Pacific Grove 0%-30% of Income Used for Housing 30%-50% of Income Used for Housing 50%+ of Income Used for Housing Not Computed
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-37 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-24 illustrates cost burden by tenure in Carmel-by-the-Sea. Renter and owner households experience similar levels of cost burden. Renter households experience 24 percent cost burden and 23 percent severe cost burden (47 percent total), whereas owner households experience 23 percent cost burden and 22 percent severe cost burden (45 percent total). This reflects a 1 percent difference between cost burden and severe cost burden for renter and owner households, respectively.

Figure A-24 Cost Burden by Tenure, Carmel-by-the-Sea, 2015-2019 SOURCE: U.S. Census Bureau, CHAS Data, 2015-2019
Figure A-25 illustrates cost burden of home owners in Carmel-by-the-Sea. According to the HCD AFFH Data Viewer, the highest rates of cost burden among home owners in Carmel-by-the-Sea are concentrated in the central and southern regions of the City. In these regions, 80 percent of owner households experience cost burden. In the northern region of the City, 40-60 percent of owner households experience cost burden.

Figure A-26 illustrates cost burden of renters in Carmel-by-the-Sea. When analyzing concentrations of cost burden among renter-occupied households in Carmel-by-the-Sea, there is no variation based on location. Between 40-60 percent of renter-households experience cost burden across the City. 55% 52%
23% 24%
22% 23%
0% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Owner Occupied Renter Occupied
Not Computed
50%+ of Income Used for
Housing
30%-50% of Income Used for
Housing
0%-30% of Income Used for
Housing
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-38 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-25 Cost Burden by Home Owners, Carmel-by-the-Sea, 2015-2019 SOURCE: California Department of Housing and Community Development, AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-39 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-26 Cost Burden by Renter Households, Carmel-by-the-Sea, 2015-2019 SOURCE: California Department of Housing and Community Development, AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-40 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 A.4 Special Needs Groups
Special needs groups are those that may face particular challenges in obtaining adequate housing due to inherent circumstances such as age, disabilities, household size, income level, age, and occupation.

Large families, single parent households, female-headed households, or extremely low- and lowincome households, and homeless persons may be classified as Special Needs groups. Special Needs groups are identified due to the unique nature of household characteristics and potential housing challenges faced. Table A-11 provides a summary of special needs groups in Carmel-by-the-Sea.

Table A-11 Overview of Special Needs Groups
Special Needs Groups Count Percent of Total
Households
Percent of Total
Population
Total population 3,830 -- 100%
Total occupied units (households) 1,925 100% --
Extremely Low-income (0-30% of HAMFI)
households 140 households 7% --
Total Senior Population 1,657 persons -- 43%
Senior Owner-Households 763 households 40% --
Senior Renter-Households 283 households 15% --
Persons with Disabilities23 406 persons -- 12%
Persons with Developmental
Disabilities1 <70 persons -- --
Large Households 70 households 4% --
Single-Parent Households 153 households 8% --
Single-Parent, Female Headed
Households with Children (under 18)
below poverty line
0 households -- --
People Living in Poverty 111 persons -- 3%
Farmworkers2 26,929 persons -- --
Migrant Farmworkers 4,972 persons -- --
Seasonal Farmworkers 12,123 persons -- --
Permanent Farmworkers 14,806 persons -- --
Persons Experiencing Homelessness3 1 person -- --
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019; U.S. Census Bureau CHAS 2015-2019 Data; USDA Statistics Services; California Department of Developmental Services, Consumer Count by California ZIP Code and Residence Type (2021).

NOTE: 1. Data provided by California Department of Developmental Services and taken at the ZIP code level.

2. Agriculture, forestry, fishing and hunting and mining industry. Farmworker data is taken of the population 16 years and older. Data provided by USDA Statistics Services and taken at the County level for 2017; includes permanent and seasonal farmworkers.

3. Total results from 2022 Monterey County Homeless County and Survey Comprehensive Report. 23 This estimate uses U.S. Census Bureau ACS 5-Year Estimates for 2021.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-41 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Extremely Low-Income Households and Poverty Status
Extremely low-income (ELI) households are those that earn less than 30 percent of the median family income (MFI).

Very low-income households are those that earn 50 percent of less of the MFI. Extremely low-income households
typically face a combination of housing challenges related to income status, family size/type, disability status, access to housing opportunities, and other household characteristics.

Additionally, ELI households are more likely to experience overcrowding, cost burden, and substandard housing
conditions. Extremely low-income households are typically minimum-wage workers, disabled persons, farmworkers, and seniors on fixed incomes.

Table A-12 provides a breakdown of extremely low-income households in Carmel-by-the-Sea. The 2015-2019
Comprehensive Housing Affordability Strategy (CHAS) data indicates there were approximately 140 ELI households (7 percent of total households) in Carmel-by-the-Sea. Of the extremely low-income households in Carmel-by-the-Sea, 29 percent are renter-occupied households and 71 percent are owner-occupied households, or 2 percent and 5 percent of all households, respectively.

When analyzing cost burden of ELI households, approximately 120 ELI households experience severe cost burden (paying more than 50 percent of median gross income on housing) and 140 experience moderate cost burden (paying more than 30 percent of median gross income on housing). Of the ELI households experiencing some form of cost burden, the majority are owneroccupied households.

Data for overcrowding by income level is not available for Carmel-by-the-Sea. However, because owner-occupied households represent the majority of ELI households and experience higher rates of cost burden, overcrowding, substandard housing issues it may be assumed that ELI households experience overcrowding.

The projected RHNA for ELI households was based on the assumption that 50 percent of very lowincome households qualify as extremely low-income households. The very low-income housing need is 113 housing units, of which the City estimates 57 housing units will accommodate the extremely low-income housing need.

It seemed really scary when
we first looked at the [RHNA
numbers] and the idea of
trying to squeeze more into
this beautiful place that’s so
unique [but] I really like the
idea of coming at this from a
compassionate and creative
perspective. I really resonate
with that.

November 17, 2023
Housing Ad Hoc
Committee Community
Meeting Attendee
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-42 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-12 Extremely Low-Income Households, Carmel-by-the-Sea, 2015-2019 Households Number Percentage of Total
Households
Total occupied units (households) 1,925 100%
Total Lower-income (0-80% of HAMFI) households 545 28%
Extremely Low-income (0-30% of HAMFI) households 140 7% Extremely Low-income renters 40 2%
Extremely Low-income owners 100 5%
Lower-income households paying more than 50% 270 14%
Extremely Low-income paying more than 50% 120 6%
ELI Renter HH severely cost burdened 20 1%
ELI Owner HH severely cost burdened 100 5%
Lower-income households paying more than 30% 430 22%
Extremely Low-income paying more than 30% 140 7%
ELI Renter HH moderately cost burdened 40 2%
ELI Owner HH moderately cost burdened 100 5%
Lower-income households experiencing 1 of 4 Housing Problems 450 23% Extremely Low-income households experiencing 1 of 4 Housing Problems 140 7% ELI Renter HH experiencing 1 of 4 Housing Problems 40 2% ELI Owner HH experiencing 1 of 4 Housing Problems 100 5% SOURCE: U.S. Department of Housing and Urban Development (HUD), Comprehensive Housing Affordability Strategy (CHAS) 2015-2019.

NOTE: MFI = HUD Median Family Income, this is the median family income calculated by HUD for each jurisdiction, to determine Fair Market Rents (FMRs) and income limits for HUD programs. MFI will not necessarily be the same as other calculations of median incomes (such as Census number), due to a series of adjustments that are made.

The four housing problems are: incomplete kitchen facilities, incomplete plumbing facilities, more than 1 person per room, and cost burden greater than 30%. ***Cost burden is the ratio of housing costs to household income. For renters, housing cost is gross rent (contract rent plus utilities). For owners, housing cost is "select monthly owner costs", which includes mortgage payment, utilities, association fees, insurance, and real estate taxes.

In 2019, approximately 111 persons were identified as living below the poverty line.24 Figure A-27 illustrates the percent of the population in Carmel-by-the-Sea living below the poverty line in 2019 by race and ethnicity. Despite being the smallest population in the City (comprising .1 percent of the population), the Black or African American population is estimated to have the highest rate of poverty (50 percent); however, the low sample size makes it difficult to draw conclusions about this population. In contrast, the non-Hispanic White population represents 87 percent of the total population and only 2 percent is living below the poverty line. The Hispanic or Latinx population experiences the second highest rate of poverty with 13 percent living below the poverty line. 24 From U.S. Census Bureau ACS 5-Year Estimate, 2019, Table S1701 Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-43 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-27 Percent Living Below the Poverty Line by Race and Ethnicity, Carmel-by-the-Sea, 2019
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
NOTE: Race/Ethnicity represents percentage of the total population* To address the needs of ELI households, the City will adopt housing programs to facilitate the construction of affordable and supportive housing for ELI households. Policies that will directly impact ELI households in Carmel-by-the-Sea include:
 Policy 3.1: Incentivize affordable housing development, with an emphasis on affordable housing built to accommodate Extremely Low-Income residents. Encourage the private sector to produce affordable housing;
 Policy 4.1: Support energy and water conservation programs to reduce the consumption of these resources in housing and to reduce housing costs; and  Policy 5.1: Support and enforce fair housing laws. Expand fair housing choice by promoting housing opportunities and removing impediments to fair housing.

All housing policies and programs can be found in full detail in Chapter 2 of the Housing Element.

Seniors
Seniors are identified as individuals 65 years and older. Senior households often experience a combination of factors that can make accessing or keeping affordable housing a challenge. They often live on fixed incomes and are more likely to have disabilities, chronic health conditions, and/or reduced mobility. Seniors who rent may be at even greater risk for housing challenges than those who own, due to income differences between these groups.

Hispanic or
Latinx
Other Race
or Multiple
Races
(Hispanic
and NonHispanic)
White,
NonHispanic
Asian
alone
Native
Hawaiian
and Other
Pacific
Islander
Black or
African
American
(Hispanic
and NonHispanic)
American
Indian or
Alaska
Native
(Hispanic
and NonHispanic)
Below Poverty Line 13.4% 0.0% 2.1% 0.0% 0.0% 50.0% 0.0% Race/Ethnicity* 8.2% 0.0% 86.5% 5.2% 0.0% 0.1% 0.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-44 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-28 illustrates the senior population in Carmel-by-the-Sea, the County, and nearby cities.

Compared to the County and nearby cities, Carmel-by-the-Sea has the highest senior population (43 percent), approximately 30 percent more than the County and 16 percent more than Pacific Grove.

Figure A-28 Senior Population by Jurisdiction, 2019
SOURCE: U.S. Census Bureau, 2019
NOTE: Senior population is defined as persons 65 years and older.

Figure A-29 illustrates senior housing by tenure in Carmel-by-the-Sea during 2019. Senior households in Carmel-by-the-Sea are primarily owners (73 percent). Similarly, the senior households of the County (73 percent) and nearby cities of Del Rey Oaks (91 percent) and Pacific Grove (68 percent) are majority owners.

Figure A-29 Senior Housing by Tenure, Carmel-by-the-Sea, 2019 SOURCE: U.S. Census Bureau, 2019
NOTE: Senior population is identified as persons 65 years and older. 43%
13%
23%
27%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Carmel-by-the-Sea Monterey County Del Rey Oaks Pacific Grove 73% 73%
91%
68%
27% 27%
9%
32%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Carmel-by-the-Sea Monterey County Del Rey Oaks Pacific Grove Renter
Owner
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-45 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-30 illustrates senior households by their income. 14 percent of Carmel-by-the-Sea’s senior households earn a yearly income of $200,000 or more). However, an estimated 61 percent of senior households earn less than the City’s median household income ($98,188).

Figure A-30 Senior Households by Income, Carmel-by-the-Sea, 2019 SOURCE: U.S. Census Bureau, 2019
NOTE: Senior population is identified as persons 65 years and older.

People with Disabilities
People with disabilities face additional housing challenges. Encompassing a broad group of individuals living with a variety of physical, cognitive and sensory impairments, many people with disabilities live on fixed incomes and are in need of specialized care, yet often rely on family members for assistance due to the high cost of care. When it comes to housing, people with disabilities are not only in need of affordable housing but accessibly designed housing, which offers greater mobility and opportunity for independence. Unfortunately, the need typically outweighs what is available, particularly in a housing market with such high demand. People with disabilities are at a high risk for housing insecurity, homelessness, and institutionalization, particularly when they lose aging caregivers.

Figure A-31 illustrates population by disability status in Carmel-by-the-Sea, the County, and nearby cities in 2021. Twelve (12) percent of the population in Carmel-by-the-Sea has some form of disability, which is on par with nearby cities. The cities of Del Rey Oaks and Pacific Grove each have a population of 13 percent and 12 percent, respectively, with a disability. The County has the lowest percentage of persons with a disability at 9 percent.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-46 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-31 Population by Disability Status by Jurisdiction, 2021 SOURCE: U.S. Census Bureau, 2021
Over the last decade, the population of persons with disabilities has increased in Carmel-by-the-Sea.

Figure A-32 illustrates trends in persons with disabilities in Carmel-by-the-Sea between 2012-2021.

In 2014, the population of persons with disabilities began to steadily increase from 12 percent to its highest point at 22 percent in 2018. In 2019, the upward trend in persons with disabilities began to decline reaching 16 percent, and eventually hitting 12 percent in 2021. Overall, the population of persons with disabilities has increased 3 percent since 2012.

Figure A-32 Trends in Persons with Disabilities, Carmel-by-the-Sea, 2012-2021 SOURCE: U.S. Census Bureau, 2012-2021
88% 91% 87% 88%
12% 9% 13% 12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Carmel-by-the-Sea Monterey County Del Rey Oaks Pacific Grove With a disability
No disability
91% 93%
88% 86% 84% 83%
78%
84% 85% 88%
9% 7%
12% 14% 16% 17%
22%
16% 15% 12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
No disability
Disability
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-47 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-13 provides an overview of disability by type and age in Carmel-by-the-Sea during 2021.

Hearing difficulty is the most widespread disability in Carmel-by-the-Sea (41 percent) with the highest concentration in persons 65 years of age and older. Self-care difficulty is the least common disability with 7 percent experiencing this in Carmel-by-the-Sea. Overall, seniors (persons aged 65+) makeup the largest demographic with a disability (50 percent).

Table A-13 Disability Status by Age, Carmel-by-the-Sea, 2021 Disability Type Under 18 18-64 65 and Over Total
Percent of
Population with
a Disability
Hearing Difficulty 20 0 305 325 41%
Vision Difficulty 20 0 50 70 9%
Cognitive Difficulty 0 29 46 75 9%
Ambulatory Difficulty 0 0 142 142 18%
Self-care Difficulty 0 0 56 56 7%
Independent Living Difficulty 0 0 130 130 16%
Total 40 29 729 798 100%
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2021
NOTE: These disabilities are counted separately and are not mutually exclusive, as an individual may report more than one disability. These counts should not be summed.

State law also requires Housing Elements to examine the housing needs of people with developmental disabilities. Developmental disabilities are defined as severe, chronic, and attributed to a mental or physical impairment that begins before a person turns 18 years old. This can include Down’s Syndrome, autism, epilepsy, cerebral palsy, and mild to severe mental retardation. Some people with developmental disabilities are unable to work, rely on Supplemental Security Income, and live with family members. In addition to their specific housing needs, they are at increased risk of housing insecurity after an aging parent or family member is no longer able to care for them.

Table A-14 shows the population with developmental disabilities by age in Carmel-by-the-Sea. In Carmel-by-the-Sea, of the 798 persons with a disability, approximately less than 70 have a developmental disability. Of these, less than 31 are children/young adults (i.e., under the age of 18) and less than 36 are adults.

Table A-15 shows the population with developmental disabilities by residence in Carmel-by-the-Sea.

The most common living arrangement for individuals with developmental disabilities in Carmel-bythe-Sea is the home of parent/family/guardian.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-48 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-14 Population with Developmental Disabilities by Age, Carmel-by-the-Sea, 2021 Age Group Number
Age Under 18 <31
Age 18+ <36
SOURCE: California Department of Developmental Services, Consumer Count by California ZIP Code and Age Group (2021).

NOTE: Universe: Population with developmental disabilities. Notes: The California Department of Developmental Services is responsible for overseeing the coordination and delivery of services to more than 330,000 Californians with developmental disabilities including cerebral palsy, intellectual disability, Down syndrome, autism, epilepsy, and related conditions. The California Department of Developmental Services provides ZIP code level counts. To get jurisdiction-level estimates, ZIP code counts were crosswalked to jurisdictions using census block population counts from Census 2010 SF1 to determine the share of a ZIP code to assign to a given jurisdiction.

Table A-15 Population with Developmental Disabilities by Residence, Carmel-by-the-Sea, 2021
Residence Type Number
Home of Parent/Family/Guardian <38
Foster/Family Home 0
Independent/Supported Living <11
Other 0
Community Care Facility <11
Intermediate Care Facility 0
SOURCE: California Department of Developmental Services, Consumer Count by California ZIP Code and Residence Type (2021).

NOTE: Universe: Population with developmental disabilities. Notes: The California Department of Developmental Services is responsible for overseeing the coordination and delivery of services to more than 330,000 Californians with developmental disabilities including cerebral palsy, intellectual disability, Down syndrome, autism, epilepsy, and related conditions. The California Department of Developmental Services provides ZIP code level counts. To get jurisdiction-level estimates, ZIP code counts were crosswalked to jurisdictions using census block population counts from Census 2010 SF1 to determine the share of a ZIP code to assign to a given jurisdiction.

Large Households
Large households are defined as households of five or more individuals. Large households often have different housing needs than smaller households. Household income and local housing markets can greatly impact a household’s ability to afford adequately sized housing. If a city’s rental housing stock does not include larger apartments, large households who rent could end up living in overcrowded conditions. Similarly, large households may experience overpayment as a result of a high housing market and limited availability.

Figure B-33 illustrates 2019 households by size and tenure in Carmel-by-the-Sea. The City has 70 large households, of which 57 percent are renter-occupied households. Owner-occupied households makeup the majority of 1-person and 2-person households, whereas renter-occupied households makeup the majority of all 3-5 person households. This combined with a total cost burden rate of 46 percent for renter households (Figure A-24), suggests it is likely that large households in Carmel-bythe-Sea may experience overcrowding and/or overpayment.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-49 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-33 Households by Size and Tenure, Carmel-by-the-Sea, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
Single-Parent Households
Households headed by one person are often at greater risk of housing insecurity, particularly femaleheaded households, who may be supporting children or a family with only one income.

In Carmel-by-the-Sea, the largest proportion of households are married-couple family households at 47 percent, while female-headed households make up 6 percent, and male-headed households make up 2 percent of all households (Figure A-11). Figure A-34 shows single-parent households in Carmel-by-the-Sea, the County, and nearby cities. Compared to the County and nearby cities, Carmel-by-the-Sea’s ratio of single-parent households is on par. Carmel-by-the-Sea’s single-parent households are predominantly female-headed family households (75 percent). Male-headed family households makeup 25 percent.

Figure A-34 Single-Parent Households by Jurisdiction, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
59% 63%
43%
28%
41% 43%
37%
57%
72%
57%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1 Person
Household
2 Person
Household
3 Person
Household
4 Person
Household
5 Or More
Person
Household
Owner Occupied
Renter Occupied
79% 75% 79% 73%
21% 25% 21% 27%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Monterey County Carmel-by-the-Sea Del Rey Oaks Pacific Grove Male-headed Family Households
Female-Headed Family Households
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-50 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Over the last decade, male-headed family households have slightly increased in Carmel-by-the-Sea, while female-headed family households have decreased. Figure A-35 illustrates trends in singleparent households in Carmel-by-the-Sea between 2010-2019.25 Figure A-35 Trends in Single-Parent Households, Carmel-by-the-Sea, 2010-2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2010-2019 NOTE: This table reports female- and male-headed family households as a percentage of total households in Carmel-by-the-Sea.

During this period, male-headed households increased from zero percent in 2010 up to 2 percent by 2015. From 2016-2018, the male-headed family households remained at 1 percent until increasing to 2 percent by 2019. Comparatively, female-headed family households decreased a total of 3 percent between 2010-2019. From 2010-2013, female-headed family households steadily increased reaching its highest point at 13 percent in 2013. By 2014, the group experienced a 2 percent decrease and remained constant until 2018 when it began to decline, reaching 6 percent in 2019.

Female-headed households with children may face particular housing challenges, with pervasive gender inequality resulting in lower wages for women. Moreover, the added need for childcare can make finding a home that is affordable more challenging. In 2019, there were no single-parent households that fell in the Below Poverty Level category in Carmel-by-the-Sea.

Farmworkers
Across the state, housing for farmworkers has been recognized as an important and unique concern.

Farmworkers generally receive wages that are considerably lower than other jobs and may have temporary housing needs. Finding decent and affordable housing can be challenging, particularly in the current housing market.
25 The data reports female- and male-headed family household as a percentage of total households in Carmel-by-the-Sea. 9%
10%
12%
13%
11% 11% 11% 11%
7%
6%
0%
1% 1% 1% 1%
2%
1% 1% 1%
2%
0%
2%
4%
6%
8%
10%
12%
14%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Female-Headed Family Households
Male-headed Family Households
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-51 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 According to the U.S. Department of Agriculture Census of Farmworkers, the number of permanent farm workers in Monterey County has decreased since 2002, totaling 14,806 in 2017, and the number of seasonal farm workers has also decreased, totaling 12,123 in 2017. Figure A-36 shows hired farm labor in Monterey County between 2002-2017.

Figure A-36 Hired Farm Labor, Monterey County, 2002-2017 SOURCE: U.S. Department of Agriculture, Census of Farmworkers (2002, 2007, 2012, 2017), Table 7: Hired Farm Labor.

NOTES: Universe: Hired farm workers (including direct hires and agricultural service workers who are often hired through labor contractors). Farm workers are considered seasonal if they work on a farm less than 150 days in a year, while farm workers who work on a farm more than 150 days are considered to be permanent workers for that farm.

There are no agriculture uses within the City of Carmel-by-the-Sea. However, Carmel-by-the-Sea shares the responsibility for farmworker housing as farmworkers may work within 75 miles of agricultural land uses (including dairy, vineyards, and produce) and the City is within 75 miles of these uses.

Persons Experiencing Homelessness
Homelessness remains an urgent challenge in many communities across the state, reflecting a range of social, economic, and psychological factors. Rising housing costs result in increased risks of community members experiencing homelessness. Addressing the specific housing needs for the unhoused population remains a priority throughout the region, particularly since homelessness is disproportionately experienced by people of color, people with disabilities, those struggling with addiction and those dealing with traumatic life circumstances.

Table A-16 show changes in the homeless population between 2017-2022 in Carmel-by-the-Sea, the County and neighboring jurisdictions. According to the 2022 Monterey Homeless Count and Survey Comprehensive Report, Carmel-by-the-Sea has seen a decrease in homeless persons since 2017, totaling one person in 2022. Similarly, the Monterey Bay Area overall has seen a decrease in homeless populations with the exception of Seaside.
17,538
13,564
12,306
13,875
16,159 16,713
14,806
12,123
0 2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Permanent Seasonal
Farm Workers
2002
2007
2012
2017
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-52 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-16 Homeless Population by Jurisdiction, 2017-2022 Jurisdiction
Unsheltered Sheltered Total
2019-2022 % Change 2017 2019 2022 2017 2019 2022 2017 2019 2022 Monterey (City) 292 167 74 46 37 27 338 204 101 -50%
Carmel-by-the-Sea 16 6 1 0 0 0 16 6 1 *
Del Rey Oaks 111 0 2 0 0 0 111 0 2 *
Seaside 40 126 90 58 56 62 98 182 152 -16%
Pacific Grove 35 14 29 0 0 0 35 14 29 *
Total 509 315 198 104 93 89 613 408 287 -66%
SOURCE: 2022 Monterey Homeless Count and Survey Comprehensive Report NOTE: % change was not calculated when jurisdiction was below 25 individuals.

Table A-17, shows household type and shelter status in Monterey County in 2019. In Monterey County, the most common type of household experiencing homelessness are those without children in their care. Among households experiencing homelessness that do not have children, 83 percent are unsheltered. Similarly, the majority of homeless households with children are unsheltered (45 percent).

Table A-17 Homelessness by Household Type and Shelter Status, Monterey County, 2019 Jurisdiction
People in
Households
Composed Solely of
Children Under 18
People in Households
with Adults and Children
People in Households
without Children Under
18 Total
Count Percent Count Percent Count Percent
Sheltered –
Emergency Shelter 0 0% 146 22% 218 11% 364
Sheltered –
Transitional
Housing
0 0% 218 33% 124 6% 342
Unsheltered 10 100% 303 45% 1,685 83% 2,340
Total 10 100% 667 100% 2,027 100% 2,704
SOURCE: U.S. Department of Housing and Urban Development (HUD), Continuum of Care (CoC) Homeless Populations and Subpopulations Reports (2019).

For the data table behind this figure, please refer to the Data Packet Workbook, Table HOMELS-01.

NOTES: Universe: Population experiencing homelessness. This data is based on Point-in-Time (PIT) information provided to HUD by CoCs in the application for CoC Homeless Assistance Programs. The PIT Count provides a count of sheltered and unsheltered homeless persons on a single night during the last ten days in January. Each Bay Area County is its own CoC, and so the data for this table is provided at the county-level. Per HCD’s requirements, jurisdictions will need to supplement this county-level data with local estimates of people experiencing homelessness.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-53 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 A.5 Access to Opportunity
This section discusses disparities in access to opportunity among protected classes including access to quality education, employment, transportation, and environment. The California Tax Credit Allocation Committee (TCAC) in collaboration with HCD developed a series of opportunity maps that help to identify areas of the community with good or poor access to opportunity for residents.

These maps were developed to align funding allocations with the goal of improving outcomes for low-income residents—particularly children.

Access to Opportunity
“Access to opportunity is a concept to approximate place-based characteristics linked to critical life outcomes. Access to opportunity oftentimes means both improving the quality of life for residents of low-income communities, as well as supporting mobility and access to ‘high resource’ neighborhoods. This encompasses education, employment, economic development, safe and decent housing, low rates of violent crime, transportation, and other opportunities, including recreation, food and healthy environment (air, water, safe neighborhood, safety from environmental hazards, social services, and cultural institutions).” SOURCE: California Department of Housing and Community Development Guidance, 2021, page 34.

The opportunity maps highlight areas of highest resource, high resource, moderate resource, moderate resource (rapidly changing), low resource, and high segregation and poverty. TCAC provides opportunity maps for access to opportunity in quality education, employment, transportation, and environment. Opportunity scores are presented on a scale from zero to one and the higher the number, the more positive the outcomes.

Disparities in Access to Opportunity
As can be seen in Figure A-37, TCAC Opportunity Composite Score, Carmel-by-the-Sea is considered a highest resource area as is much of western Monterey County. According to the HCD AFFH Data Viewer TCAC Opportunity Map, there are no areas of variation in access to opportunity across the City.

Economic
TCAC’s economic opportunity score is comprised of poverty, adult educational attainment, employment, job proximity, and median home value. Figure A-38 shows concentrations of economic outcomes in Carmel-by-the-Sea. According the HCD AFFH Data Viewer TCAC Economic Opportunity Map, all areas of Carmel-by-the-Sea have a high economic opportunity score of 0.75-1.0. This reflects a high level of opportunity for economic advancement for residents in Carmel-by-the-Sea.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-54 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-37 TCAC Opportunity Composite Score, Carmel-by-the-Sea, 2022 SOURCE: California Department of Housing and Community Development AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-55 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-38 TCAC Opportunity Economic Score, Carmel-by-the-Sea, 2022 SOURCE: California Department of Housing and Community Development AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-56 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Education
TCAC’s education score is based on math proficiency, reading proficiency, high school graduation rates, and the student poverty rate. Opportunity scores are presented on a scale from zero to one and the higher the number, the more positive the outcomes.

Figure A-39 shows the level of TCAC educational opportunity across Carmel-by-the-Sea. According to TCAC’s Educational Opportunity Map, Carmel-by-the-Sea scores between 0.75-1.0 indicating a high level of positive educational outcomes for residents in Carmel-by-the-Sea.

Carmel-by-the-Sea is served by the Carmel Unified School District (CUSD), along with elementary, middle, and high schools within the City and school district. As of 2022, the State of California School Dashboard highlights a 97.9 percent graduation rate among all students enrolled in Carmel High School, which is higher than the statewide average (87.4 percent) and County average (88.5 percent).

When broken down by race/ethnicity, Hispanic and White students graduated at a high rate (97.4 percent for both groups). There is no performance data available for the graduation rates of African American, Asian, Filipino, and American Indian students at Carmel High.

Additionally, there is no performance data available for the graduation rates of students with a disability within Carmel High.

Environment
TCAC’s opportunity areas environmental scores are based on the CalEnviroScreen 4.0 indicators, which identify areas disproportionately vulnerable to pollution sources such as ozone, PM2.5, diesel PM, pesticides, toxic release, traffic, cleanup sites, groundwater threats, hazardous waste, impaired water bodies, and solid waste sites.

Figure A-40 shows TCAC environmental outcomes across Carmel-by-the-Sea. According to the HCD AFFH Data Viewer TCAC Environmental Opportunity Map, Carmel-by-the-Sea scores between 0.75-1.0 indicating a low level of environmental pollution burden and positive outcomes for residents in Carmel-by-the-Sea.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-57 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-39 TCAC Opportunity Education Score, Carmel-by-the-Sea, 2022 SOURCE: California Department of Housing and Community Development AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-58 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-40 TCAC Opportunity Environmental Score, Carmel-by-the-Sea, 2022 SOURCE: California Department of Housing and Community Development AFFH Data Viewer The Social Vulnerability Index (SVI) provided by the Center for Disease Control (CDC)ranks census tracts based on their ability to respond to a disaster and includes four themes of socioeconomic status, household composition, race or ethnicity, and housing and transportation.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-59 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-41 shows SVI levels across Carmel-by-the-Sea. Carmel-by-the-Sea scores low on the SVI (less than 0.25) indicating that the City is slightly vulnerable to disasters, but highly equipped to respond to them. Just outside of the City’s borders however, vulnerability levels increase to 0.25-0.5.

This is likely due to a difference in jurisdictional resources.

Figure A-41 Social Vulnerability Index, Carmel-by-the-Sea, 2018 SOURCE: California Department of Housing and Community Development AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-60 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Disparities Specific to the Population Living with a Disability In Carmel-by-the-Sea, 12.3 percent of the population is living with at least one disability, compared to 8.8 percent in Monterey County. The most common disabilities in the City are: hearing difficulty (9.9 percent), ambulatory difficulty (4.4 percent), and independent living difficulty (4.3 percent). For the population 65 and over, the share of the population with hearing difficulties increases to 19.3 percent.

A.6 Housing Stock Characteristics
Carmel-by-the-Sea’s housing stock is defined as all housing units within its jurisdiction.

Characteristics of housing stock include housing type, age, condition, tenure, vacancy rates, costs, affordability, and growth. The following section provides an in-depth analysis of the housing stock in Carmel-by-the-Sea to determine how/if the current the housing stock meets the needs of existing and future residents.

Housing Growth
Table A-18 provides an overview of housing growth trends between 2010-2019 in Carmel-by-theSea, the County, and nearby cities. Between 2010-2019, Carmel-by-the-Sea housing unit estimates grew approximately 6 percent, more than the County and Del Rey Oaks, but 2 percent less than Pacific Grove. These estimates show the majority of housing growth in Carmel-by-the-Sea occurred between 2015-2019 (8 percent).

Table A-18 Housing Unit Growth Trends by Jurisdiction, 2010-2019 Jurisdiction 2010 2015 2019 Percent Change
2010-2015
Percent Change
2015-2019
Monterey County 138,833 139,794 141,820 1% 1%
Carmel-by-the-Sea 3,606 3,532 3,832 -2% 8%
Del Rey Oaks 752 733 745 -3% 2%
Pacific Grove 7,723 8,411 8,347 9% -1%
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2010-2019 Housing Type
Table A-19 provides a comparison of housing unit types in Carmel-by-the-Sea, the County, and nearby cities. In Carmel-by-the-Sea, single-family detached units are the most common housing type (87 percent). This aligns with the County (63 percent), Del Rey Oaks (76 percent), and Pacific Grove (60 percent) having majority single-family detached units. Overall, Carmel-by-the-Sea has the highest percentage of single-family detached units compared to the County and nearby cities, but the lowest percentage of multifamily housing units (10 percent).

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-61 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-19 Housing Units by Type by Jurisdiction, 2019
Jurisdiction
SingleFamily
Detached
SingleFamily
Attached
Multifamily Mobile
Homes Total Units
Count Percent Count Percent Count Percent Count Percent Monterey County 88,721 63% 8,796 6% 37,734 27% 6,529 5% 141,820 Carmel-by-the-Sea 3,319 87% 54 1% 367 10% 92 2% 3,832
Del Rey Oaks 567 76% 49 7% 118 16% 11 2% 745
Pacific Grove 5,023 60% 497 6% 2,668 32% 159 2% 8,347
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
NOTE: Table indicates total housing units.

Figure A-42 illustrates housing type trends in Carmel-by-the-Sea between 2010-2019. In 2010, the majority of housing types were single-family detached homes (82 percent); this has since increased to 87 percent in 2019. Multifamily housing (2+ units) has decreased by 3 percent since 2010 accounting for only 10 percent of housing types in 2019. In 2010, mobile homes comprised the smallest percentage of housing type in Carmel-by-the-Sea, and have since slightly increased to 2 percent in 2019.

Figure A-42 Housing by Type in Carmel-by-the-Sea, 2010-2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2010-2019 Housing Availability and Tenure
Housing tenure refers to individuals who own or rent a housing unit. The number of residents who own their homes compared to those who rent their homes can help identify the level of housing insecurity (i.e., ability for individuals to stay in their homes) in a city and region. Generally, renters Single-Family
Home:

Attached
Single-Family
Home:

Detached
Multifamily
Housing: Two
to Four Units
Multifamily
Housing: Fiveplus UnitsMobile Homes
2010 5% 82% 6% 7% 0%
2015 2% 87% 3% 7% 2%
2019 1% 87% 3% 7% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-62 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 may be displaced more quickly if prices increase. Additionally, housing tenure may be an indicator of housing affordability (i.e., if the local housing market has high barriers to entry, there may be more renter households than owner households).

In Carmel-by-the-Sea, the housing stock includes 828 renter-occupied housing units and 1,099 owner-occupied housing units (Table A-20). When analyzing housing unit type in tandem with tenure, the majority of all housing units are single-family detached (87 percent), of which 17 percent are renter-occupied and 32 percent are owner-occupied (Figure A-17; Table A-20).

Table A-20 Housing Units by Type and Tenure, Carmel-by-the-Sea, 2019 Tenure
SingleFamily
Detached
SingleFamily
Attached
Multifamily Mobile
Homes Total Units
Count Percent Count Percent Count Percent Count Percent Renter-Occupied 568 69% 19 2% 221 27% 20 2% 828
Owner-Occupied 1,076 98% 0 0% 23 2% 0 0% 1,099
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
NOTE: Table indicates total occupied housing units.

Table A-21 provides an overview of household size by tenure for Carmel-by-the-Sea, the County, and nearby cities. In Carmel-by-the-Sea, the average household size is 2.04, of which the majority of larger households are comprised of renter-occupied units (2.13 persons/unit). An average household size of 2.04 suggests a need for more small housing units. This aligns with 82 percent of Carmel-bythe-Sea’s population being comprised of 1-2 person households (Figure A-13). Compared to the County and nearby cities, Carmel-by-the-Sea has the lowest average household size (2.04 persons/unit). The County has a high average household size of 3.27 suggesting a need for large housing units and even a need for smaller independent units such as ADUs/JADUs for extended family, etc.

Table A-21 Household Size by Tenure by Jurisdiction, 2019 Jurisdiction OwnerOccupied
RenterOccupied
Average
Household
Size
Monterey County 3.13 3.41 3.27
Carmel-by-the-Sea 1.97 2.13 2.04
Del Rey Oaks 2.29 2.49 2.35
Pacific Grove 2.34 2.15 2.23
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-63 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-43 illustrates 2019 household tenure by race in Carmel-by-the-Sea. Tenure by race varies some in Carmel-by-the-Sea as the majority of all households are non-Hispanic White (87 percent), of which 58 percent are owner-households and 42 percent are renter-households (Figure A-4; Figure A-43). Hispanic or Latino households (8 percent) makeup the second largest population in Carmelby-the-Sea, of which 72 percent are owner-households and 28 percent are renter-households. Less than 1 percent of Black or African American, Native Hawaiian or Other Pacific Islander, and American Indian or Alaska Native households are represented in the City’s housing market.

Figure A-43 Household Tenure by Race, Carmel-by-the-Sea, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
Figure A-44 illustrates vacancy rates in Carmel-by-the-Sea, the County, and nearby cities. Carmel-bythe-Sea has a vacancy rate of 50 percent. This reflects a 40 percent higher vacancy rate than the County (10 percent) and 32 percent higher than Pacific Grove (18 percent).

American
Indian or
Alaska
Native
(Hispanic
and NonHispanic)
Asian
alone
Native
Hawaian
and Other
Pacific
Islander
Black or
African
American
(Hispanic
and NonHispanic)
Hispanic or
Latinx
Some
Other
Race/Multi
ple Races
White
(Hispanic
and NonHispanic)
White,
NonHispanic
Renter Occupied 0% 51% 0% 0% 28% 100% 42% 42%
Owner Occupied 0% 49% 0% 0% 72% 0% 58% 58%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-64 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-44 Vacancy Rates by Jurisdiction, 2019
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
Figure A-45 illustrates vacancy trends in Carmel-by-the-Sea from 2010-2019. Over the course of nearly a decade, the City has experienced a stable vacancy average of 51 percent. This is staggeringly high considering the current housing crisis. Additionally, this affects the accuracy of data reporting for the City, as the majority of homeowners do not live in Carmel-by-the-Sea full time, thus resulting in skewed data collection.

Figure A-45 Vacancy Trends, Carmel-by-the-Sea, 2010-2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
Table A-22 shows vacant housing units by type, revealing 80 percent of Carmel-by-the-Sea’s vacant units are for seasonal, recreational, or occasional use, aligning with the 51 percent average vacancy trends (Figure A-45). The high percentage of vacant housing units is largely impacted by tourism 50%
10% 13%
18%
0%
10%
20%
30%
40%
50%
60%
Carmel-by-the-Sea Monterey County Del Rey Oaks Pacific Grove 46% 47% 51% 52% 51% 52% 53% 52% 52% 50%
54% 53% 49% 48% 49% 48% 47% 48% 48% 50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Occupied
Vacant
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-65 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 and second-home ownership. This creates a significant barrier for current and potential residents to enter the local housing market and hinders opportunities to correct the housing crisis, address diversity, and provide inclusive housing options to promote a vibrant and active community.

Table A-22 Vacant Housing Units by Type, Carmel-by-the-Sea, 2019 Housing Unit Type Estimate Percentage
For rent 96 5%
Rented, not occupied 12 1%
For sale only 11 1%
Sold, not occupied 49 3%
For seasonal, recreational, or occasional
use
1,522 80%
For migrant workers 0 0%
Other vacant 215 11%
Total 1,905 100%
SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
Table A-23 shows housing permits issued by the City of Carmel-by-the-Sea by income group.

Between 2015 and 2022, 18 housing units were issued permits in Carmel-by-the-Sea which represents 58 percent of the RHNA number of 31 units assigned in the 5th Cycle Housing Element.

Table 3-9 shows housing permits by income group in Carmel-by-the-Sea. Of the 18 housing units permitted, all were for above moderate-income.

Table A-23 Housing Permits by Income Group, Carmel-by-the-Sea, 2015-2021 Income Group Number Percent
Very Low-Income Permits 0 0.0%
Low-Income Permits 0 0.0%
Moderate-Income Permits 0 0.0%
Above Moderate-Income Permits 18 58.0%
Total 18 58.0%
SOURCE: California Department of Housing and Community Development (HCD), 5th Cycle Annual Progress Report Permit Summary (2022).

NOTE: Universe: Housing permits issued between 2015 and 2021. Notes: HCD uses the following definitions for the four income categories: Very Low Income: units affordable to households making less than 50 percent of the Area Median Income for the county in which the jurisdiction is located. Low Income:
units affordable to households making between 50 percent and 80 percent of the Area Median Income for the county in which the jurisdiction is located. Moderate Income: units affordable to households making between 80 percent and 120 percent of the Area Median Income for the county in which the jurisdiction is located.

Above Moderate Income: units affordable to households making above 120 percent of the Area Median Income for the county in which the jurisdiction is located.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-66 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Assisted Housing Developments At-Risk of Conversion
While there is an immense need to produce new affordable housing units, ensuring that the existing affordable housing stock remains affordable is equally important. Additionally, it is typically faster and less expensive to preserve currently affordable units that are at risk of converting to market-rate than it is to build new affordable housing.

The California Housing Partnership Preservation Database is the state’s most comprehensive source of information on subsidized affordable housing at risk of losing its affordable status and converting to market-rate housing.26 According to the database, there are no federal or state assisted units in Carmel-by-the-Sea.

A variety of affordable housing projects provided through an assortment of local programs serves the Carmel-by-the-Sea. Each of the following projects serves as an example of the methods and incentives used by the City to achieve production of affordable housing units.

Oliver White Building and Viejo Carmel
The mixed-use Oliver White building contains four residential units, one of which is a ModerateIncome unit in perpetuity. Originally this site was developed with a single-story commercial building.

The owner and City worked together to achieve a second story of residential apartments at a density of 44 units per acre.

The Viejo Carmel project is a larger example of infill development that provides affordable housing.

The 20,000 square-foot site was occupied by semi-industrial uses and offices. The site was razed and redeveloped with ten condominiums and ten apartments at a density of 44 units per acre. Without density bonuses, the site could only achieve 15 residential units. With density bonuses, an additional two Low-Income rental apartments in perpetuity were approved. Additionally, the parking requirement for the low-income units was reduced.

Norton Court Apartments
The Norton Court Apartments for seniors is operated by the Carmel Foundation. As part of this 24- unit project, the City entered into a 50-year agreement to lease the property for one dollar per year to the Carmel Foundation. This amounts to a substantial land subsidy provided by the City that offsets a large part of the cost of developing housing. The units are restricted as Low- and Moderate-Income. Rents are maintained as affordable to lower-income seniors strictly through private donations raised by the Carmel Foundation.
26 This database does not include all deed-restricted affordable units in the state, so there may be at-risk assisted units in a jurisdiction that are not captured.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-67 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Trevett and Hazeltine Courts
Trevett and Hazeltine Courts were developed with funding from the Carmel Foundation. Rents for the 26 rental apartments are maintained as affordable to lower-income seniors with private donations raised by the Foundation.

San Carlos Lodge
This site was granted a major addition and allowed the conversion of some existing apartments to transient overnight visitor accommodation units. As a condition, the project retained two of the existing apartments as affordable housing for Moderate-Income households in perpetuity.

The City’s inventory of affordable units is listed below in Table A-24.

Table A-24 Inventory of Assisted Rental Housing
Development
Name
Total Units Household Type Provided By Expiration of
Affordability
Oliver White 1 Moderate Density Bonus In perpetuity
Viejo Carmel 2 Low Density Bonus In perpetuity
Norton Court 24 Senior Low Lease Subsidy Not defined
San Carlos Lodge 2 Moderate Condition of Approval In perpetuity Trevett Court 14 Senior Private non-profit Not applicable Hazeltine Court 12 Senior Private non-profit Not applicable Hasegawa 1 Low Inclusionary In perpetuity
Carl 1 Senior Inclusionary 2027
Mandurrago 2 Senior Inclusionary In perpetuity
Gonzales 1 Low Inclusionary In perpetuity
Ravel Corporation 1 Low Inclusionary In perpetuity
Trini Iye 1 Moderate Inclusionary In perpetuity
Total 62
Source: City of Carmel-by-the-Sea Community Planning and Building Department, 2023 Potential Loss of Assisted Housing Units
Housing units developed with public subsidies are an important source of affordable housing to lower-income households. Preserving the long-term affordability of such housing units is the most cost-effective means for providing decent and affordable housing in a community. Recognized this important resource, State Housing Element law requires that a jurisdiction examine the potential loss of publicly subsidized multi-family rental housing for lower-income household due to expiration of deed restrictions, affordability covenants, and /or subsidy contracts.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-68 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Norton Court, Trevett Court, and Hazeltine Court are owned and operated by the Carmel Foundation, a non-profit organization which does not intend to convert the units to market rate housing within this Housing Element cycle. The Foundation currently has a 5-7 year wait list units on these properties. Trevett Court and Hazeltine Court did not receive any public assistance and have no deed restrictions or affordability covenants. While Norton Court receives a subsidized property lease, no restriction was ever placed on the property to maintain the units as affordable housing. Units in the Oliver White Building, Viejo Carmel, and Sand Carlos Lodge are restricted as affordable housing in perpetuity.

One unit in the Carl development is listed with an expiration date of 2027. City staff are further researching the terms of this affordable unit. To maintain the existing affordable housing stock, the City can either preserve the existing affordable units or facilitate the development of new units.

Depending on the circumstances of at-risk projects, different options may be used to preserve or replace the units. Preservation options typically include: 1) construction of replacement units; 2) provision of rental assistance to tenants 3) transfer of the project to nonprofit ownership; and 4) purchase of affordability covenants. These options are described below and the City’s focus is on construction of replacement units and rental assistance.

Construction of Replacement Units
The construction of new affordable housing units is a means of replacing the at-risk units should they be converted to market-rate units. The cost of developing housing depends on a variety of factors, including density, size of the units (i.e. square footage and number of bedrooms), location, labor, materials and land costs, and type of construction. The City is implementing a number of programs to encourage development of new affordable units to increase the City’s affordable housing stock.

Rental Assistance
Rental subsidies using non-federal (state, local, or other) funding sources can be used to maintain affordability of at-risk units. These rent subsidies can be structured to mirror the federal Housing Choice Voucher (Section 8) program. Under Section 8, HUD pays the difference between what tenants can pay (defined as 30 percent of household income) and what HUD estimates as the fair market rent on the unit. The feasibility of this alternative is highly dependent on the availability of other funding sources necessary to make rent subsidies available and the willingness of property owners to accept rental vouchers if they can be provided. Housing Choice Vouchers are available through the Housing Authority of Monterey County.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-69 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Transfer of Ownership
Transferring ownership of an at-risk project to a nonprofit housing provider is generally one of the least costly ways to ensure that at-risk units remain affordable for the long term. By transferring property ownership to a nonprofit organization whose mission includes affordable housing, the risk of losing the low-income restrictions is minimized, and the project would become potentially eligible for a greater range of governments assistance.

Purchase of Affordability Covenants
Another option to preserve the affordability of at-risk projects is to provide an incentive package to the owners to maintain the projects as affordable housing. Incentives could include bringing down the interest rate on the remaining loan balance, providing loans for capital improvements, and/or supplementing subsidies. The feasibility of this option depends on whether the complex is too highly leveraged. By providing lump sum financial incentives or ongoing subsidies in the form of rents or reduced mortgage interest rates to the owner, the City can ensure that some of all of the units remain affordable.

Displacement
Because of increasing housing prices, displacement is a major concern in the Monterey Bay Area.

Displacement has the most severe impacts on low- and moderate-income residents. When individuals or families are forced to leave their homes and communities, they also lose their support network.

According to the California Department of Housing and Community Development (HCD) AFFH Data Viewer and the Urban Displacement Project 2022 estimates, Carmel-by-the-Sea renteroccupied households earning between 0-80 percent AMI are at low risk of potential displacement or gentrification in the northern region of the City. Mapping of the central and southern regions of the City show sufficient data was not captured to definitively report displacement risk. Figure A-46 illustrates displacement risk in Carmel-by-the-Sea.

Housing Age and Condition
Housing age and condition are factors considered in overall housing quality as they may affect the structural integrity and ability to adequately function for a household. Thus, the age and condition of a house may indicate the need for major repairs to the foundation, plumbing, or roof.

Figure A-47 illustrates housing stock by age in Carmel-by-the-Sea. In Carmel-by-the-Sea, 95 percent of the housing stock was built prior to 1999 and is over 20 years old. Thirty-seven (37) percent of the housing stock was built between 1940-1959 and 2 percent was built in 2010 or later.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-70 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-46 Displacement Risk, Carmel-by-the-Sea, 2022
SOURCE: California Department of Housing and Community Development AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-71 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-47 Housing Stock by Age, Carmel-by-the-Sea, 2019 SOURCE: U.S. Census Bureau, ACS 5-Year Estimate, 2019
According to historical data from Carmel-by-the-Sea’s Code Enforcement Office and Housing Authority, the City estimates that there are approximately five (5) units in need of rehabilitation.

This 6th Cycle Housing Element proposes the following policies and programs to address and facilitate the rehabilitation of these units.
 Policy 2.1: Maintain and encourage expansion of permanent residential housing stock in the Commercial, R-1, and R-4 Districts;
 Policy 2.2: Preserve and protect the scale and character of established neighborhoods while encouraging property improvement;
 Policy 2.3: Preserve and expand affordable and rental housing opportunities to enable local employees to live in the community where they work; and  Policy 2.4: Preserve the existing housing stock.

All programs and policies can be found in Chapter 2 of the Housing Element.

Housing Costs and Affordability
Identifying the cost of owning or renting a home in a city helps determine the affordability of housing at different income levels. Understanding housing affordability also informs what types and sizes of housing are needed by the community’s households.

Home Prices and Rental Costs
Table A-25 show changes in median home values between 2019-2022 in Carmel-by-the-Sea, the County and nearby cities. According to Zillow Home Value Index data, the median home value in 28%
37%
17%
13%
4%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Built 1939 Or
Earlier
Built 1940 To
1959
Built 1960 To
1979
Built 1980 To
1999
Built 2000 To
2009
Built 2010 Or
Later
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-72 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Carmel-by-the-Sea was estimated at $1,299,387 in December 2019. By 2022, the median home value in Carmel-by-the-Sea increased approximately 59 percent due to market demand. By comparison, the median home value in the County was valued at $561,490 in December 2019 and experienced a 39 percent increase by 2022.

Table A-25 Median Home Value by Jurisdiction, 2019-2022 Jurisdiction
Median Home Value Percent Change
2019-2022 2019 2020 2021 2022
Monterey County $561,490 $632,834 $735,469 $778,164 39% Carmel-by-the-Sea $1,299,387 $1,450,127 $1,912,421 $2,070,835 59% Del Rey Oaks $630,204 $701,060 $779,099 $840,663 33%
Seaside $550,015 $616,786 $690,126 $729,055 33%
Pacific Grove $943,900 $1,032,675 $1,237,054 $1,294,881 37% SOURCE: Zillow Home Value Index, 2019-2022
NOTE: Housing value estimates were taken from December for years 2019-2022.

Rental Affordability
Similar to home value prices, rental prices have also increased over the last decade. This significantly affects lower-income households as they are typically majority renters. High rental prices can exacerbate housing challenges such as overcrowding and cost burden if adequate rental stock is not available to suit household needs.

Table A-26 shows average rent estimates by unit size in Carmel-by-the-Sea based on 2023 Zillow rental market data. Included in the table is Housing and Urban Development’s (HUD) Fair Market Rents (FMR) for 2023, which establishes rental subsidy limits for Section 8 housing voucher recipients.

Table A-26 Average Rent by Number of Bedrooms, Carmel-by-the-Sea, 2023 Unit Type Average Rents Fair Market Rents (HUD)
Studio $2,200 $2,112
One bedroom $2,500 $2,194
Two bedrooms $4,000 $2,675
Three bedrooms $5,459 $3,790
Four+ bedrooms n/a $4,144
SOURCE: Zillow, 2023; HUD, Fair Market Rent Documentation System, 2023 NOTES: Zillow rental value estimates were taken from March 2023. No rental units with four + bedrooms are listed as available within the Carmel-by-the-Sea City boundary. Fair Market Rent values are based on Salinas, CA MSA Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-73 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-27 reports the maximum monthly housing costs affordable to households according to income group in Monterey County. Income groups are based on the HCD 2022 State Income Limits Report, which considers housing affordable assuming a household can pay up to 30 percent of its monthly income toward housing. In Table A-27, maximum affordable sales prices are based on the following assumptions: 6.42 percent interest rate,27 30-year fixed loan, and a 5 percent down payment.

Table A-27 Housing Affordability, Carmel-by-the-Sea, 2022 Income Group HCD Income Limits
Maximum Affordable Price
Monthly Rental Ownership
Extremely Low (0-30% AMI)
One Person $23,900 $598 $100,340
Two Person $27,300 $683 $114,614
Three Person $30,700 $768 $128,889
Four Person $34,100 $853 $143,163
Very Low (30-50% AMI)
One Person $39,800 $995 $167,093
Two Person $45,500 $1,138 $191,024
Three Person $51,200 $1,280 $214,954
Four Person $56,850 $1,421 $238,675
Low (50-80% AMI)
One Person $63,700 $1,593 $267,433
Two Person $72,800 $1,820 $305,638
Three Person $81,900 $2,048 $343,843
Four Person $91,000 $2,275 $382,048
Moderate (80-120% AMI)
One Person $75,650 $1,891 $317,603
Two Person $86,500 $2,163 $363,155
Three Person $97,300 $2,433 $408,497
Four Person $108,100 $2,700 $453,839
SOURCE: California Department of Housing and Community Development, State Income Limits, 2022, Monterey County As mentioned in Table A-24, the median home price in Carmel-by-the-Sea in December 2022 was $2,070,835 which is only affordable to above moderate-income households earning approximately $495,000 or more annually (62 percent of Carmel-by-the-Sea households are categorized as above moderate-income).
27 Interest rate based on December 29, 2022 interest rate according to Freddie Mac Primary Mortgage Market Survey Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-74 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 A.7 Fair Housing Enforcement and Outreach Capacity
This section discusses fair housing legal cases and inquiries, fair housing protections and enforcement, and outreach capacity.

Fair Housing Legal Cases and Inquiries
California fair housing law extends beyond the protections in the Federal Fair Housing Act (FHA).

In addition to the FHA protected classes—race, color, ancestry/national origin, religion, disability, sex, and familial status—California law offers protections for age, sexual orientation, gender identity or expression, genetic information, marital status, military or veteran status, and source of income (including federal housing assistance vouchers).

The California Department of Fair Employment in Housing (DFEH) was established in 1980 and is now the largest civil rights agency in the United States. According to their website, the DFEH’s mission is, “to protect the people of California from unlawful discrimination in employment, housing and public accommodations (businesses), and from hate violence and human trafficking in accordance with the Fair Employment and Housing Act (FEHA), Unruh Civil Rights Act, Disabled Persons Act, and Ralph Civil Rights Act”.28
DFEH receives, evaluates, and investigates fair housing complaints. DFEH plays a particularly significant role in investigating fair housing complaints against protected classes that are not included in federal legislation and therefore not investigated by HUD. DFEH’s website provides detailed instructions for filing a complaint, the complaint process, appealing a decision, and other frequently asked questions.29 Fair housing complaints can also be submitted to HUD for investigation.

Additionally, Monterey County has a number of local resource and enforcement organizations:
 The Housing Authority of the County of Monterey: A public agency that provides rental assistance and develops and manages affordable housing throughout Monterey County, California;
 South County Housing: A non-profit community development corporation. The organization’s mission is to promote viable neighborhoods that enhance healthy, sustainable communities by collaboratively providing affordable housing and promoting neighborhood services;
28 From State of California Civil Rights Department
29 From State of California, Civil Rights Department Complaint Process Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-75 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  Public Interest Law Project: a nonprofit support center for California legal services and other public interest law programs. The California Affordable Housing Law Project (CAHLP) is a project of the Public Interest Law Project. CAHLP concentrates primarily on the enforcement of California’s Housing Element and redevelopment statutes and of state and federal relocation assistance and fair housing laws;
 Coalition of Homeless Service Providers: Advocate on the subject of homelessness with policy makers, public funders, and those with lived experience; and  California Rural Legal Assistance (CRLA): a nonprofit legal service program created to help California’s low-income individuals and communities. CRLA provides low-income rural Californians with free legal assistance and a variety of community education and outreach programs. Half of its resources are committed to multi-client cases that grapple with the root causes of poverty, with the goal of improving conditions for farmworkers, single parents, school children, the elderly, people with disabilities, and entire communities.

Between 2012 and 2017, 53 fair housing complaints in Monterey County had been filed with the California Department of Fair Employment and Housing (DFEH). Among the complaints countywide, most were related to physical disabilities (23 instances) and familial/marital status (ten instances). Discrimination based on race was also common (seven instances). A complaint may involve multiple acts of discrimination and vice versa. A total of 57 acts of discrimination were recorded in Monterey County. Refusal to rent (17 instances), discriminatory statements (12 instances), and denial of reasonable accommodation/modifications (12 instances) were the most common discriminatory acts in the County.30
In 2020, a total of six (6) discrimination cases were found with the Office of Fair Housing and Equal Opportunity. Fifty percent of the cases were filed on the basis of disability bias. None of the complaints alleged racial bias. Figure A-48 illustrates that out of all of the FHEO cases filed in the state of California in 2020 (398), only between 1 and 2.5 percent of the cases were filed in Monterey County. None of the discrimination cases filed in Monterey County in 2020 took place in Carmelby-the-Sea. 31 A total of six discrimination complaints were filed within Monterey County during 2020. Of those cases, three of them alleged discrimination based on disability. Figure A-49 illustrates this statistic by showing that 40.01 to 65 percent of the cases filed in Monterey County during 2020 reflected disability bias. None of the FHEO complaints occurred in the City of Carmel-by-the-Sea. 30 From California Department of Fair Employment & Housing, 2018; Monterey County Regional Analysis of Impediments to Fair Housing Choice, 2019
31 City of Carmel-by-the-Sea, 2023
Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-76 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-48 FHEO Cases Total, Monterey County, 2020
SOURCE: California Department of Housing and Community Development AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-77 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Figure A-49 FHEO Cases, Disability Bias, Monterey County, 2020 SOURCE: California Department of Housing and Community Development AFFH Data Viewer Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-78 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 NFHA identifies three significant trends in 2020 that are relevant for this AFFH:
 First, fair lending cases referred to the Department of Justice from federal banking regulators has been declining, indicating that state and local government entities may want to play a larger role in examining fair lending barriers to homeownership;  Second, NFHA identified a significant increase in the number of complaints of harassment— 1,071 complaints in 2020 compared to 761 in 2019; and
 Finally, NFHA found that 73 percent of all fair housing complaints in 2020 were processed by private fair housing organizations, rather than state, local, and federal government agencies— reinforcing the need for local, active fair housing organizations and increased funding for such organizations.32
Outreach and Capacity
Currently, Carmel-by-the-Sea’s website contains information about local fair housing ordinances.

The website describes the steps residents should take if they feel they have faced discrimination and are seeking information about filing complaints (e.g., link to HUD’s and State of California fair housing pages). The site also references the organizations that provide fair housing services and assistance to City residents.

The following organizations offer fair housing services and assistance to the residents of Carmel-bythe-Sea:
 Conflict Resolution and Mediation Center;
 Legal Services for Seniors;
 California Rural Legal Assistance;
 ECHO Fair Housing Services
 HUD Housing Assistance;
 Central Coast Center for Independent Living; and
 Center for Community Advocacy.

Compliance with state law. Carmel-by-the-Sea is compliant with the following state laws that promote fair and affordable housing. The City has not been alleged or found in violation of the following:
 Housing Accountability Act (Gov. Code. Section 65589.5) requiring adoption of a Housing Element and compliance with RHNA allocations;
32 From Gentry, A. (2021, September 4). Annual fair housing report shows increase in housing harassment. NFHA.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-79 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  No Net Loss Law (Gov. Code Section 65863) requiring that adequate sites be maintained to accommodate unmet RHNA allocations;
 Least Cost Zoning Law (Gov. Code. Section 65913.1);
 Excessive Subdivision Standards Law (Gov. Code. Section 65913.2); and  Limits on Growth Controls Law (Gov. Code. Section 65302.8).

Housing Specific Policies Enacted Locally
The City of Carmel-by-the-Sea identified the following local policies that contribute to the regulatory environment for affordable housing development in the City:

Policy 1.1: Ensure adequate sites are available to meet the City’s projected housing growth needs.

Policy 1.3: Reduce or eliminate governmental constraints on the provision of affordable housing. Direct public funding resources to the conservation of existing housing units in neighborhoods where continued residential use is appropriate.

Policy 2.3: Preserve and expand affordable and rental housing opportunities to enable local employees to live in the community where they work.

Policy 2.4: Preserve the existing housing stock.

Policy 3.2: Recognize the special needs of persons with disabilities and the need to retain flexibility in the design review process to accommodate these needs.

A.8 Fair Housing Recommendations
Contributing Factors and Fair Housing Action Plan
The disparities in housing choice and access to opportunity discussed above stem from historical actions, socioeconomic factors that limit employment and income growth, barriers to open housing choice, and until recently, very limited resources to respond to needs.

Local Knowledge of Contributing Factors to Fair Housing In order to better inform this Housing Element to meet the needs of residents of Carmel-by-theSea, the City solicited the input of the public with prompted questions. All responses were taken into consideration for incorporation into the Housing Element to guide policies and programs that address the housing needs of existing and future residents.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-80 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Question: How can the supply of affordable housing be increased to meet the needs of our community?
Community members offered the following solutions:
 Encourage ADUs;
 Encourage second-story additions to single-story buildings downtown specifically for affordable housing;
 Change the zoning code to allow 3-story buildings downtown specifically for affordable housing;  Set a maximum square footage limit on housing units in downtown to spur the creation of more small units rather than just a few large units;
 Create objective (yes/no checklist-style) design standards for new housing projects that include affordable units;
 Less short-term rental places, more long-term rental options;  Build housing on the outskirts and empty parking lots;  Annex land outside City for affordable housing; and
 Continue to ensure the built environment is subordinate to the natural environment.

Question: In your experience in Carmel-by-the-Sea, what has contributed to the fair housing issues? What solutions do you envision to address these issues?  Information about affordable units.
 Down payment assistance.
 Tenant assistance resources.

Priority of Contributing Factors
The City of Carmel-by-the-Sea has prioritized the following contributing factors to the Fair Housing issues mentioned above. Table A-28 presents prioritized fair housing issues and contributing factors, as well as the City’s programs to support a solution-oriented approach to affirmatively furthering fair housing.

Attachment 1
Appendix A – Housing Needs & Fair Housing Report A-81 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table A-28 Fair Housing Issues, Contributing Factors, and AFFH Programmatic Actions Fair Housing Issue Contributing Factor(s) AFFH Programmatic Action Priority Household Characteristics
Carmel-by-the-Sea has significantly lower
proportions of racial and ethnic minorities
compared to Monterey County and the
AMBAG region. Lack of inclusionary
housing may contribute to the lack of
protected classes in the community.
 Lack of racial and ethnic diversity within the City;
and
 Lack of adequate affordable housing options.

Program 1.1.B: Underutilized Sites
Program 3.1.C: Density Bonus
Program 3.1.D: Reduced Entitlement and
Development Fees
Program 1.3.D: Employee Housing Program
Program 2.1.A: Incentives for Mixed-Use
Development
High
Disproportionate Housing Needs
Forty-six (46) percent of Carmel-by-the-Sea
households are cost burdened households,
of which 24 percent are renter-occupied
households and 23 percent are owneroccupied.
 Lack of affordable housing;
 Lack of adequate housing stock that meets the
needs of residents; and
 Jobs-worker imbalance.

Program 1.1.B: Underutilized Sites
Program 1.3.D: Employee Housing Program
Program 2.4.A: Housing Rehabilitation and
Maintenance Information
Program 3.1.B: Housing for Extremely-Low
Income Households
Program 3.1.C: Density Bonus
Program 3.1.G: Affordable Housing Overlay
District
High
Special Needs Groups
In Carmel-by-the-Sea, extremely lowincome and special needs groups  Lack of affordable housing;
 Jobs-worker imbalance;
Program 1.3.E: Amend the A-2 Zoning District
Program 3.1.B: Housing for Extremely-Low
Income Households
High
Appendix A – Housing Needs & Fair Housing Report A-82 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Fair Housing Issue Contributing Factor(s) AFFH Programmatic Action Priority experience disproportionate impacts of
poverty, increasing the challenge of
obtaining adequate housing in the City.
 Lack of accessible units for individuals with
disabilities; and
 Lack of Transitional and Supportive
Housing/Emergency Shelters.

Program 3.2.A: Reasonable Accommodation
Procedures
Program 3.3.A: Zoning for Transitional and
Supportive Housing
Program 3.3.B: Low-Barrier Navigation
Centers
Housing Stock
Carmel-by-the-Sea’s lack of affordable
housing production, limited variety of
housing types, and increasing housing
costs create barriers to enter the local
housing market.
 Since 2015, there have been 18 housing permits in
the City for only above moderate-income
households; and
 Lack of developable land, and the City is subject to
coastal zone ordinances.

Program 1.3.A: Condominium Conversions
Program 1.3.B: Overnight Visitor
Accommodation (Conversion)
Development Transfer Rights
Program 1.3.C: Accessory Dwelling Units
Program 1.4.A: Remove Use Permit
Requirement for Multi-Family
Development
Program 1.4.B: Objective Design Standards
Program 2.1.B: Permanent Housing
Program 2.3.A: Preserve and Increase Upper
Floor Residential Uses
Program 3.1.E: Reduced Parking
Requirements
Program 3.1.F: Expedited Processing
Procedures
High
Access to Opportunity
Low production of affordable housing in
Carmel-by-the-Sea limits housing choices
for low-income households, and has a
disproportionate impact on Hispanic or
Latino, Asian, and Black/African American
households.
 Of the 18 housing permits issued in Carmel-by-theSea since 2015, zero were issued for lowerincome households; and  Costs of land, materials, and labor which limit
profitability of affordable housing.

Program 1.2.A: Water Distribution Policy
Program 1.3.A: Condominium Conversions
Program 1.3.D: Employee Housing Program
Program 2.1.D: Establish Affordable Housing
Trust Fund
Program 3.1.C: Density Bonus
Program 4.1.A: Water Conservation
High
Appendix A – Housing Needs & Fair Housing Report A-83 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Fair Housing Issue Contributing Factor(s) AFFH Programmatic Action Priority Fair Housing Enforcement
No residents filed fair housing complaints in
Carmel-by-the-Sea, indicating a lack of
cause for complaint, or, alternatively, a
potential lack of awareness about fair
housing rights.
 Lack of access to information about fair housing
rights; and
 Limited knowledge of fair housing by residents.

Program 2.1.C: Monitor Affordable Housing
Stock
Program 5.1.A: Fair Housing Services
Program 5.1.B: Housing Choice Voucher
Program
Program 5.1.C: Shared Housing Information
Program 5.2.A: Support Community
Organizations
Medium
SOURCE: City of Carmel-by-the-Sea; EMC Planning Group
Appendix A – Housing Needs & Fair Housing Report A-84 EMC Planning Group Inc.

Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft July 2023 A.9 Conclusion
To address the fair housing issues identified in this Housing Needs and Fair Housing report, the programs listed in the above section are included in Chapter 2 of this Housing Element.

Attachment 1
Housing Constraints

APPENDIX
B
Attachment 1
Attachment 1
Table of Contents
APPENDIX B HOUSING CONSTRAINTS ............................................................................. B-1 B.1 Introduction ........................................................................................................................... B-1 B.2 Governmental Constraints ................................................................................................... B-1 B.3 Non-Governmental Constraints ....................................................................................... B-38 Tables
Table B-1 Residential Land Use Designations ......................................................................... B-4 Table B-2 Residential Uses Permitted by Zone....................................................................... B-7 Table B-3 Residential Development Standards..................................................................... B-12 Table B-4 Summary of Community Planning & Building Fees (2022-2023).................... B-23 Table B-5 Comparison of the City of Carmel-by-the-Sea and the City of Pacific Grove Average Design Review Fees........................................................ B-26 Table B-6 Estimate of Total Development Fees Imposed.................................................. B-28 Table B-7 Review/Approval Requirements and Processing Times................................... B-31 Table B-8 Minimum Off-Street Parking Requirements ....................................................... B-34 Table B-9 Summary of Governmental Constraints .............................................................. B-38 Table B-10 Summary of Non-Governmental Constraints ..................................................... B-47

Attachment 1
Attachment 1
Appendix B – Housing Constraints B-1 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Appendix B
Housing Constraints
B.1 Introduction
Housing development is affected by public regulations and other forces. This chapter discusses both governmental and non-governmental constraints that affect housing in the City of Carmel-by-theSea. Governmental constraints consist of policies, requirements, or other actions imposed by various levels of government on land, housing ownership, and development. In addition to local standards, the City follows building and design requirements put forth by state laws, the California Building Code, Subdivision Map Act, energy conservation requirements, as well as other regulatory standards.

However, Federal and State agency regulations that may constrain development are beyond the City’s control and are therefore not addressed in this document. Non-governmental constraints are other conditions that impact housing development such as market factors, environmental setting, land availability, and construction costs.

B.2 Governmental Constraints
Governmental constraints are policies, standards, requirements, or actions imposed by the various levels of government upon land, housing ownership and development. Although Federal and State agencies play a role in the imposition of governmental constraints, these agencies are beyond the influence of local government and are therefore not addressed in this document. As appropriate, the City will monitor federal and state legislation that impacts housing. The City will update its Municipal Code, as needed to comply with any new housing related planning or zoning laws enacted by the State during the 6th Cycle Planning Period (2023-2031).

Infrastructure Constraints
Water Supply
The primary infrastructure constraint to the development of housing in Carmel is the lack of potable water. The lack of a reliable available water supply continues to limit growth in Carmel and throughout the Monterey Peninsula region.

Carmel is under the jurisdiction of the Monterey Peninsula Water Management District (MPWMD) and receives its water from the California-American Water Company (Cal-Am). The MPWMD has permit authority over the production and distribution of all water supplies within the Monterey Peninsula region, and allocates water supplies to cities and unincorporated County areas within its Attachment 1
Appendix B – Housing Constraints B-2 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 jurisdiction. Water service by Cal-Am is constrained by State Water Resources Control Board (SWRCB) Order WR 95-101, which determined that in 1995 approximately 70 percent of Cal-Am supply was based on unlawful diversion from the Carmel River. Order 95-10 requires that any new water supply be used to reduce diversions from the Carmel River prior to allowing new users.

Furthermore, SWRCB issued a Cease-and-Desist order to Cal-Am in 20082 to further restrict water use which limits the placement of new water meters to service new development.

According to the MPWMD June 1, 2023 Technical
Memorandum – Summary of Water Supply Requirements
for Housing, the City requires 40 acre feet (AF) to meet the City’s RHNA (349 units). The City has approximately 2.661 acre-feet of available water3 for general distribution which represents a water deficit of approximately 37.339AF. There is also Malpaso Water Company water entitled to certain limited properties whose owners were previously able to purchase water directly from the Water Company4. The
Sites Inventory clearly identifies whether water is a
constraint for each identified property. This is the only water available to the City until the District supplies increase and new allocations are made to each city in the District.

Based on current supplies, sufficient water is not widely available to fully accommodate additional development commensurate with the City’s total RHNA.

The City will continue to work with local and regional agencies to explore options for additional water supplies during the 6th Cycle Housing Element planning period.

The 6th Cycle Housing Element includes a program to work with local and regional agencies to pursue new water supplies and includes prioritizing allocation of the City’s 2.661 acre-feet of water for affordable housing through the development of a water distribution policy. 1 See Order No. WR 95-10, chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.waterboards.ca.gov/waterrights/board_decisions/adopte d_orders/orders/1995/wro95-10.pdf
2 See Order WR 2009-0060, chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.waterboards.ca.gov/waterrights/board_decisions/adopte d_orders/orders/2009/wro2009_0060.pdf
3 See June 2023 MPWMD Monthly Allocation Report chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.mpwmd.net/asd/board/boardpacket/2023/20230717/1 0/Item-10-Exh-10-A.pdf
4 See June 2023 MPWMD Monthly Allocation Report – Entitlements - chromeextension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.mpwmd.net/asd/board/boardpacket/2023/20230717/1 0/Item-10-Exh-10-B.pdf
We have competing mandates.

One of the mandates we have
from the State of California is
Order 95-10, which basically
says we have no more
water…the other mandate is
the [RHNA units]…if we don’t
have water, we can’t build
them. It doesn’t matter how
you slice or dice it – no water,
no construction.

April 6, 2023 Housing Ad Hoc
Committee Community
Meeting Attendee
Attachment 1
Appendix B – Housing Constraints B-3 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Wastewater
The Carmel Area Wastewater District (CAWD) collects and conveys wastewater from a business or residence to the wastewater treatment plant using underground pipes and lift stations. The CAWD collection system is comprised of approximately 81 miles of gravity sewers ranging in size from 6 inches to 27 inches in diameter together with nearly four (4) miles of force mains, seven (7) pump stations, and over 1,500 manholes.

Two trunk sewers serve the City of Carmel and the Hatton Fields areas. Within the City of Carmelby-the-Sea pump stations are located at (1) the westerly terminus of 8th Avenue (at Scenic Drive), (2) the intersection of Monte Verde Street and Sixteenth Avenue, (3) west side of Scenic Road approximately 200 feet south of Ocean View Avenue All pump stations have been upgraded to allow remote monitoring and have capabilities for standby power and emergency bypass.

The District’s permitted capacity is 3.0 million gallons per day (MGD) and their current average daily dry weather flow is approximately 1.2 to 1.3 MGD.

The City is required to plan for an additional 349 residential housing units in this planning cycle.

Based on capacity and communication with the District, the CAWD has adequate treatment capacity to serve these units5.

General Plan and Land Use Controls
Each city and county in California must prepare a comprehensive, long-term General Plan to guide its future. The Land Use Element of the General Plan establishes the basic land uses and density of development within each jurisdiction. Under state law, the General Plan elements must be internally consistent, and each jurisdiction’s zoning must be consistent with its General Plan. Thus, the Land Use Element must provide suitable locations and densities to implement the policies of the Housing Element.

The City’s development policies, standards and requirements were established with the intent of maintaining the long-term health, safety, and welfare of the community. To achieve this, the City has implemented a range of procedures, regulations and fees associated with all local development.

Specific land use and development constraints, such as zoning regulations, governmental fees, building code standards, design review, and processing and permitting time can greatly influence the type and cost of construction that occurs.
5 May 17, 2023 email correspondence with CAWD
We are primarily,
essentially, and
predominantly a
residential city. I want
to see us preserve our
residential character.

February 28, 2023
Housing Ad Hoc
Committee
Community
Meeting Attendee
Attachment 1
Appendix B – Housing Constraints B-4 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 The City of Carmel-by-the-Sea General Plan/Coastal Land Use Plan (General Plan) was adopted in 2003 and most recently amended in 2015. The General Plan Land Use Element identifies land use designations and development intensities for all land within City boundaries. Land Use designations include Core Commercial, Residential/Commercial, Multi-Family Residential, Single Family Residential, and Open Space/Recreation/Cultural. The Residential/Commercial land use designation encourages mixed use buildings and is intended to provide for a mix of residential dwellings and a limited range of office and service uses in scale with the character of the community.

Table B-1, Residential Land Use Designations, identifies the residential land use designations and their maximum permitted densities.

Table B-1 Residential Land Use Designations
Designation Maximum Density
Single-Family Residential 11 du/acre
Multi-Family Residential 33 du/acre, 44 du/acre (with affordable housing) Commercial/Residential 33 du/acre
Core Commercial 33 du/acre
SOURCE: Carmel-by-the-Sea 2003 General Plan
The range of residential densities provided by Carmel-by-the-Sea’s General Plan is sufficient to accommodate a range of housing types and affordability levels. It does not, therefore, pose an undue governmental constraint the development of housing for the community.

Local Coastal Program and Coastal Land Use Plan
The California Coastal Act was established to balance landowners’ rights to develop and the public’s right to enjoy the coastline. This resulted in an area defined as the Coastal Zone which is regulated to ensure orderly, long-range conservation, use, and management of the natural, scenic, cultural, recreational, and manmade resources of the coast. All of the Carmel-by-the-Sea is located within the Coastal Zone, which in this area extends from the coast of Carmel Bay east to California State Highway 1.

Carmel-by-the-Sea’s Local Coastal Program (LCP) was certified by the Coastal Commission in 2004, enabling the City to issue Coastal Development Permits (CDPs). This gives the City authority over local development applications, with appeal oversight maintained by the Coastal Commission. The Commission also retains permanent coastal permit jurisdiction over development proposed on tidelands, submerged lands, and public trust lands.

The LCP includes the following General Plan Elements: Land Use, Circulation, Coastal Access and Recreation, and Coastal Resource Management; the Zoning Ordinance (Implementation Plan); and, Appendices A through I of the General Plan and Zoning Ordinance.

Attachment 1
Appendix B – Housing Constraints B-5 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 The presence of land use regulation via the LCP, in general, means that housing development in Carmel-by-the-Sea faces a high bar to succeed. Most of the recent remedies brought forward by the California legislature to facilitate housing development are either outright inapplicable in the Coastal Zone (SB 35) or are secondary to California Coastal Commission policies that protect habitat resources (SB 9).

Zoning Code
The City of Carmel-by-the-Sea Zoning Code (City Municipal Code Title 17, Chapter 17.08- Residential Zoning Districts) establishes regulatory standards that dictate the type, location, density, and scale of residential development within the City’s boundaries. Below are the four primary zoning districts within the city that allow for residential uses:
 R-1 Single-Family Residential District; and
 R-4 Multifamily Residential District.

In addition, the following zoning district provides for some residential uses above commercial uses or on ground floor after review and approval of a conditional uses permit.  SC Service Commercial;
 CC Central Commercial District; and
 RC Residential and Limited Commercial.

The following public and quasi-public zoning districts also permit limited residential uses:
 P-2 Improved Parklands (Park and Recreation District);  A-2 Community and Cultural (Other Public District); and  A-3 Senior Citizen Facility (Other Public District).

The City of Carmel-by-the-Sea Municipal Code (CMC) provides zoning regulations that are more specific than the General Plan Land Use designations. The R-1 (Single-Family Residential) district provides an appropriate land area for permanent single-family residential uses and structures and to enhance and maintain the residential character of the City. The R-4 (Multifamily Residential) district is intended to serve two purposes: 1) to provide an appropriate location for a mix of multifamily residential dwelling units convenient to the commercial area; and 2) to serve as a buffer or transitional zone between the commercial area and the single-family residential district.

Commercial zoning districts that permit residential uses include:
 The Central Commercial (CC) District, which is intended to provide an appropriate location for a broad range of retail, residential and service uses. Uses which generate high pedestrian traffic and which do not have large space requirements are appropriate in this district. Residential uses are appropriate on the second floor of structures.

Attachment 1
Appendix B – Housing Constraints B-6 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  The Service Commercial (SC) District, which is intended to provide an appropriate location for services, offices, residential and limited retail activities that primarily serve local needs. This district is intended to provide a distinct transition between the more intense activities in the CC district and the less intense activities in the districts on its periphery. Mixed uses of commercial and residential activities are appropriate throughout this district.  The Residential and Limited Commercial (RC) District seeks to provide an appropriate location for permanent and transient residential uses, service and office uses, and limited retail uses that do not adversely impact the residential neighborhood. This district is intended to provide a transition and buffer between the more intense activities in the CC and SC districts and the less intense activities in the R-1 and R-4 districts.

Certain public and quasi-public zoning districts also permit limited residential uses. The Park and Recreation (P-2) District permits single-family, senior citizen housing, and family day care uses which are limited to the use and maintenance of existing buildings for nonprofit organizations, governmental buildings and uses, and residential use. Sites located in the Community and Cultural Center (A-2) District and Senior Citizen Facility (A-3) District permit senior citizen housing outright.

Table B-2, Residential Uses Permitted by Zone, shows residential uses, the zoning districts in which they are permitted, and whether they are permitted by right (without discretionary action) or with a conditional use permit (CUP). The City’s Municipal Code is available online:
(https://www.codepublishing.com/CA/CarmelbytheSea/).

Use Permits
The use permit (UP) (or conditional use permit (CUP)) requirement is implemented as an additional regulatory tool and adds extra regulations, review, and required findings, to a variety of development standards that affect multi-family development. The UP requirement for residential developments greater than 22 du/ac is a multi-family residential and affordable housing constraint, particularly considering UP specific findings are applied to affordable developments. Municipal Code Sections

17.64.190 Residential Construction at Densities Between 33 and 44 Units per Acre and 17.64.230 Affordable Housing – Residential Construction at Densities Between 45 and 88 Units Per Acre outline criteria and findings for developments that request a bonus density (City program) or a density bonus. Municipal Code Section 17.14.150 Building Height requires a use permit for additional underground floors used for parking vehicles, storage and mechanical equipment. The additional use permit requirement can affect how much parking can be accommodated which limits the number of units, particularly for smaller projects, and affects the financial feasibility of the proposed development.

Attachment 1
Appendix B – Housing Constraints B-7 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table B-2 Residential Uses Permitted by Zone
Residential Use
Residential Zoning
Districts Commercial Zoning Districts
Public and Quasi-Public Districts
(Park and Recreation & Other
Public Districts)
R-1 R-4 CC SC RC P-2 A-2 A-3
Single-Family P P C-L-5 C C P-L-1 - -
Accessory Dwelling Units
Accessory Dwelling Unit (Interior) P P - - - - - -
Accessory Dwelling Unit
(New Structure) P P - - - - - -
Class I Accessory Dwelling Unit P - - - - - - -
Class II Accessory Dwelling Unit P - - - - - - -
Studio P P - - - - - -
Guesthouse (Noncommercial) C - - - - - - -
Multifamily Dwellings
0-22 dwelling units/acre - P P P P - - -
22 dwelling units/acre - C - - -
23-33 dwelling units/acre - - C C C - - -
34-44 dwelling units/acre - - C C C - - -
45-88 dwelling units/acre - - C C C - - -
Senior Citizen Housing R-L-5 P P P P P-L-1 P P
Family Day Care
Small Family R-L-5 P - P P-L-1 - -
Large Family - C-4 - C C P-L-1 - -
Group Residential - C - - - - - -
Appendix B – Housing Constraints B-8 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Residential Use
Residential Zoning
Districts Commercial Zoning Districts
Public and Quasi-Public Districts
(Park and Recreation & Other
Public Districts)
R-1 R-4 CC SC RC P-2 A-2 A-3
Transient Rental, Legal Nonconforming - R-L-6 C-L-7 C-L-7 C-L-7 - - - Transient Rental, Housing Incentive - R-L-7 C-L-8 C-L-8 C-L-8 - - - SOURCE: CMC Title 17 Zoning 2023
NOTE: Key:
(P) permitted use classifications.
(L) use classifications that are permitted, subject to certain specific limitations noted by the number designations and listed at the end of Schedule II-1 (CMC Section 17.08.040) and Schedule II-B (CMC Section 17.14.030). (C) use classifications permitted after review and approval of a conditional use permit by the Planning Commission. Conditions or standards may apply to these uses, noted by the number designations and listed at the end of Schedule II-1.
(—) prohibited
Residential Districts Specific Limitations and Conditions R-L-1. Limited to advertising, consumer credit reporting, secretarial and court reporting, equipment maintenance and repair, personnel supply services, and nonretail computer services and repair.

R-L-2. Allowed only on existing quasi-public use sites established prior to December 1, 1980, or added as an accessory use to such existing uses.

R-L-3. Limited to existing units established prior to January 1, 1967, and/or authorized by a use permit issued between 1967 and 1990. *Note: These provisions approved by voter referendum.

R-L-4. Limited to existing commercial spaces established prior to 1993 and occupied by commercial uses continuously since that time.

R-L-5. Limited to occupancy within a single-family residence.

R-L-6. Limited to permits approved prior to the adoption of Ordinance 2019-03.

R-L-7. Limited to transient rental units approved through the issuance of a conditional use permit as an incentive for the creation of new housing units. See CMC 17.14.040(W)(2)(b).

Commercial Districts Specific Limitations and Conditions C-L-1. Limited to advertising, consumer credit reporting, secretarial court reporting, equipment maintenance and repair, personnel supply services, and nonretail computer services and repair.

C-L-2. Allowed only as accessory use to gasoline stations and limited to a maximum of 300 square feet. No sales of alcohol are permitted. See CMC 17.14.040(D)(2) and (J)(2).

C-L-3. Any establishments with activities generating noise, odors, deliveries by large vehicles, high traffic by customers, or requiring large storage needs are not permitted.

C-L-4. Limited to offices for the following categories: operators of nonresidential buildings, apartment buildings, dwellings, real estate agents and managers, and title companies.

C-L-5. Limited to sites that are already developed with a single-family dwelling, or that were originally developed as, or used as, a single-family dwelling but have since been converted to another use. Existing single-family dwellings can be maintained, altered, repaired and/or redeveloped. R-1 district floor area ratio standards shall apply to these sites.

C-L-6. Subject to the same regulations as apply to other family residential dwellings in the same zone.

C-L-7. Limited to permits approved prior to the adoption of Ordinance 2019-03.

C-L-8. Limited to transient rental units approved through the issuance of a conditional use permit as an incentive for the creation of new housing units. See CMC 17.14.040(W)(2)(b).

Public and Quasi-Public Districts Specific Limitations and Conditions P-L-1: Limited to the use and maintenance of existing buildings for nonprofit organizations, governmental buildings and uses, and residential use.

P-L-2: Limited to facilities serving only park visitors and/or tenants of park buildings.

P-L-3: Limited to schools for theater arts.

P-L-4: Limited to workshops and classes connected with the arts.

P-L-5: Only as an accessory use, when in connection with any other authorized use.

Appendix B – Housing Constraints B-9 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 There are opportunities to reduce redundancies and facilitate residential construction while still enabling development to meet City regulations. Taking an overall critical look at the application of use permits and removing this permit requirement where it does not add any necessary regulations related to safety and welfare will remove a regulatory constraint that adds to residential developer uncertainty, extends the permit entitlement process, and overall residential development costs. The 6th Cycle Housing Element includes a program to eliminate unnecessary use permits.

Commercial Overnight Visitor Accommodation
Pursuant to Coastal Zone requirements, the City has recognized existing overnight visitor accommodation (hotel/motel/inn) as an important coastal visitor asset and economic base in the community. There are a number of older (some non-conforming) hotels/motels/inns in the R-1, CC, RC, and SC zoning districts, located in key areas of the City. These commercial establishments can be targeted for transition and the existing buildings rehabilitated converted to permanent multifamily residences.

In an effort to maintain a strong residential component within the City, the Municipal Code Section

17.56.060 includes numerical limits on the total number of hotel/motel/inn units; however, the numerical limits increase the value of the existing commercial units and act as a disincentive for older establishments to be refurbished into multi-family units. The limit also acts as a disincentive to add on-site employee housing because scarce square footage is more valuable as an overnight visitor accommodation use rather than a residential use that serves lower-income employees.

Enabling older overnight visitor accommodation commercial uses to relocate to more appropriate commercial sites while allowing the establishments to retain the current number of hotel/motel/inn rooms, would facilitate continued overnight tourism while diversify the housing stock by requiring the refurbishment of existing buildings to permanent rental housing. In order to encourage these properties to transition into permanent multi-family residences, and to retain the same number of existing overnight visitor accommodation rooms for coastal visitor access (as desired by the California Coastal Commission), the City will develop program 1.3.B to incentivize both the transfer of development rights of overnight visitor accommodations to other appropriate commercial sites while requiring the conversion of existing overnight visitor accommodation properties to permanent rental multi-family residences.

Additionally, the City has a number of overnight visitor accommodation properties that would greatly benefit from incorporating affordable on-site employee housing. These new rental permanent residential units would alleviate the current lack of housing options that many lower income employees that work at hotels/motels/inns in Carmel face. As an incentive to commercial overnight visitor accommodation property owners to provide on-site affordable employee housing, the City will offer an additional overnight accommodation room for every onsite housing unit created. This incentive will serve to increase affordable rental housing, offset the loss of revenues for the business owners, and maintain visitor-serving coastal access.

Attachment 1
Appendix B – Housing Constraints B-10 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Overlay Zoning Districts
Overlay districts are zoning districts established by the City to carry out specific purposes. They are governed by a set of regulations that address specific subjects such as archaeologically significant resources or environmentally sensitive habitat areas. The City currently has overlay districts that address the following:
 Archeological significance;
 Parks;
 Beach and Riparian areas;
 Environmentally Sensitive Habitats;
 Annexed County Lots; and
 Downtown Conservation District.

Overlay districts can be constraints to development, or they can be used as a tool to encourage certain types of development. Currently, the City does not have an overlay district to encourage affordable housing. The City will craft a housing priority overlay district that requires a minimum density of 33 du/ac in the Central Commercial (CC), Service Commercial (SC), and Residential and Limited Commercial (RC) District. This will encourage a higher unit yield and will thus improve the financial viability of projects by increasing the unit count.

Development Standards
With the exception of building heights, development
standards in Carmel-by-the-Sea are typical for a small
residential community. As for building heights, the City limits building heights to two stories above ground and 30 feet or less, which can render higher allowable densities (up to 44 du/ac with affordable housing) unachievable.

The City has discussed the possibility of increasing height limits, but community resistance to increasing the height limit has been consistent and is primarily based on a desire to protect the historic character of the downtown. Some community members have suggested allowing mezzanines
as a third interior story, if it could be accomplished
without appearing as a three-story building. The Zoning Code permits multi-family dwellings in all commercial
districts and existing underutilized commercial spaces can be repurposed for residential uses.

I would even venture to say – as an
architect – if we protect the
character of the village and if we do
that well, we will actually be able to
create a planning document that will
more than cover the 349
number...that’s my professional
opinion on what the power of design
can do without an iota of sacrifice of
the character of this community. It’s
a hope, it’s a belief, and we just need
to work towards it together
November 17, 2022 Housing Ad Hoc
Committee Community Meeting Attendee
Attachment 1
Appendix B – Housing Constraints B-11 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 The Community and Cultural Center District (A-2) allows senior citizen housing (55+) as a permitted use in addition to uses that provide cultural and community activities associated with the arts, education and recreation; however, development standards are not specified for the A-2 district and design review is required. The lack of development standards adds uncertainty to the development process. Amending the A-2 zoning district with clear setbacks, height, and landscaping requirements will add clarity and remove a development constraint. The City of Carmel-by-the-Sea has included a new program in this 6th Cycle Housing Element to amend the A-2 District to include clear development standards as a means to encourage affordable senior housing.

Table B-3, Residential Development Standards, summarizes residential development standards in Carmel-by-the-Sea.

Density Bonus
Floor area bonuses are available for projects in the commercial zones that include an intra-block walkway and/or a courtyard (see CMC 17.14.140.D.2). The same floor area bonus is available for projects that include affordable units. This indicates that the City equally values walkways or courtyards and affordable units. The City may consider making walkways and/or courtyards a requirement, and keep or increase the floor area bonus for affordable units.

Site Plan and Design Review
Architectural design is important in Carmel-by-the-Sea. The historic character of Carmel’s built environment has been shaped by decades of careful and deliberative design review (referred to as “design study” in Carmel) that addresses such features as site design, architectural style, building materials, color palettes, fenestration, tree placement and landscaping. This attention to detail has resulted in a beautiful, forested village atmosphere that continues to capture the imagination of people from around the world who visit and even choose to make Carmel their home.

The same design review process that has contributed to Carmel becoming a world-famous destination, however, has also impacted its ability to provide housing for lower-income households and by extension housing for a less affluent and diverse population. In this way, Carmel has in some ways become a victim of its own success. Many of the actors, artists, and writers who made Carmel their home in the early 20th century came from modest beginnings and travelled to the area not to live in custom luxury homes, but to experience and become part of a “rich” artistic community.

They came for inspiration, not exclusivity.

Part of the challenge, then, is for Carmel to find a way back to its roots—to provide space again for the next generation of the artistically gifted who have yet to make their mark on the world, a space that contains a full mix of incomes and backgrounds within which the artist can find meaning and inspiration.

Attachment 1
Appendix B – Housing Constraints B-12 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table B-3 Residential Development Standards
Zoning Minimum Lot
Area (sq ft)
Setbacks
Maximum
Height1,2,3
Maximum
Floor Area
(sq ft)
Maximum Lot Coverage or
Density (R-4) Front (in feet) Minimum Side Yard
(in feet) Rear
Residential Districts
R-1 2,5001
4,000 15
Interior Street
Side
15 24 feet
2 stories
Less than 45
percent of the area
of the building site2
2,4003
22% of the base floor area
3 5
R-4 4,000
No setback.
5 – if across from R-4, RC;

7.5 across from R-1
No setback4, 5 N/A
No setback.
10 – if abutting
R-1 or R-4
26 feet
2 stories N/A 33 units/acre44 units/acre with density bonus Commercial Districts
CC N/A
No setback.
5 – if across from R-4, RC;

7.5 across from R-1
No setback4 N/A
No setback
10 – if abutting
R-1 or R-4
30 feet
2 stories
N/A1
One story – 95% of the site area
Two story – 135% of the site area
150% with 15% bonus
SC N/A
No setback.
5 – if across from R-4, RC;

7.5 across from R-1
No setback4 N/A
No setback
10 – if abutting
R-1 or R-4
30 feet
2 stories
N/A
One story – 95% of the site area
Two story – 135% of the site area
150% with 15% bonus
RC N/A
No setback.
5 – if across from R-4, RC;

7.5 across from R-1
No setback4 N/A
No setback
10 – if abutting
R-1 or R-4
26 feet
2 stories
N/A
One story – 70% of the site area
Two story – 80% of the site area
95% with 15% bonus
SOURCE: CMC Title 17 2023
NOTE: 1. Lots of record in existence on February 4, 1948.

2. Applies to sites less than 4,000 square feet.

3. The maximum potential floor area on a site is the sum of the base floor area plus any bonus floor area. The City uses a sliding scale to determine maximum floor area and site coverage.

4. If abutting R-4 or RC district a side yard setback of at least 5 feet along at least 50% of each side property line. The remaining 50% requires no setback unless the faces a public street. Any site abutting R-1 district requires a setback of five feet along entire side yard.

5. Buildings shall not be less than six feet from any other buildings on the same site.

Appendix B – Housing Constraints B-13 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 The following subsection provides a detailed description of Carmel’s design review process.

Residential Design Review Process
The typical residential development review process for Carmel-by-the-Sea generally falls under two design study “tracks” Track 1 and Track 2.

Residential Track 1 Design Study
Track 1 Major Design Study Applications are projects that can be approved at the staff level and typically do not require a public hearing. “Track 1 Major” projects are projects involving additions of less than 10 percent of the existing floor area, or projects with multiple minor components (Track 1 Minor) that together add complexity and require a more detailed review.

The Track 1 Major review is also limited to projects that: 1) do not require significant cuts to the roots/limbs of any “significant” or “moderately significant” trees; 2) do not require the demolition or substantial alteration of any dwelling unit; and 3) are sited and designed to protect public views to and along the ocean and scenic coastal access.

The major steps involved with a Track 1 Design Study Application are as follows:

1. Submit a Design Study Application – This is the formal project application.

2. Staff Review and Decision – Staff will review the application for completeness and consistency with the Zoning Code and the Residential Design Guidelines. If the application is incomplete or inconsistent with the Zoning Code or the Design Guidelines, staff will notify the project applicant of the changes that are required. If the application is complete and approvable, staff will notify the applicant that the application has been approved. If approved, an approval packet is completed and issued. The approval packet consists of (1) an Approval Letter, (2) Conditions of Approval, (3) a Notice of Approval, (4) an Affidavit of Posting of the Notice of Approval, and (5) stamped approved plans. The Approval Letter will inform the applicant if a Building Permit or Notice of Authorized Work is required.

3. Noticing/Appeal Period - The Notice of Approval is required to be posted on-site by the applicant for a 10-calendar day appeal period. For Track 1 Major projects, the approval notice is also mailed by the City to neighbors within 100 feet of the property.

4. Building Permit/Notice of Authorized Work – Following the end of the appeal period, and assuming no appeals are filed, the applicant may apply for either a Building Permit or, if not applicable, will receive a Notice of Authorized Work.

Residential Track 2 Design Study
Track 2 Design Study Applications are for new residential construction, large additions and substantial alterations that require Planning Commission approval. The purpose of the Track 2 Design Study is to promote orderly development, to ensure high quality neighborhood design that is Attachment 1
Appendix B – Housing Constraints B-14 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 harmonious with its surroundings, to implement the General Plan, and to preserve and promote the visual character of the City. The major steps involved with a Track 2 Design Study Application are as follows:

1. Submit a Preliminary Site Assessment Application – This is required for all Track 2 Projects.

After the assessment is completed by Planning and Forestry staff, the applicant will move on to submitting their project application.

2. Submit a Design Study Application – This is the formal project application. Planning staff will review it for completeness and provide early feedback.

3. Participate in a Forest and Beach Commission Hearing (if tree removal is proposed): A request to remove or prune a significant tree must be approved by the Forest and Beach Commission (FBC) prior to determining completeness of the application. The removal or pruning of any tree will require a separate tree removal application be submitted (Permit Type: Tree with Construction).

4. Install Staking and Flagging (story poles) – “Story poles” provide a visual representation of the proposed project for the public and the Planning Commission. Story poles must be installed and heights certified by a California licensed surveyor or civil engineer at least 10 days prior to the scheduled Concept Hearing. To avoid having to relocate or reposition the story poles, it is recommended story poles be installed after the application has been deemed complete.

5. Participate in a Historic Resource Board Hearing (properties located on the City’s Inventory of Historic Resources) – Projects on historic sites are subject to additional review from a cityretained historical consultant and review by the Historic Resources Board (HRB) prior to consideration by the Planning Commission. The historic status of a property will be determined during the Preliminary Site Assessment, if not already documented.

6. Participate in a Concept Hearing – The Concept Review phase by the Planning Commission (PC) will address site planning, access, building massing and neighborhood design issues, such as privacy and view impacts. Projects are evaluated using both the development standards in the Zoning Code and the Residential Design Guidelines – Introduction and Design Concept Review.

7. Obtain a Volume Study – Each site is permitted a certain amount of exterior volume. Volume is defined as the total space occupied by all structures located above average grade. Following Concept acceptance by the Planning Commission, staff will send the architectural design plans to a City-retained architect/engineer to calculate the volume. A deposit will be collected at the time of application submittal and the unused balance will be returned to the applicant.

8. Participate in a Final Details Hearing – In this review by the Planning Commission (PC), the project is reviewed for compliance with the City’s Residential Design Guidelines – Final Details Review. Issues such as landscaping, architectural character, and exterior materials are evaluated.

Attachment 1
Appendix B – Housing Constraints B-15 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023

9. Final Approval and Appeal Period – The Planning Commission’s approval is subject to a 10- working day appeal period. Story poles must remain in place until the appeal period has expired.

At the conclusion of the appeal period, and assuming no appeals are filed, the applicant may proceed with submitting an application for a Building Permit. If an appeal is filed, the appeal will be considered by the City Council at the next available council meeting.

10. Decisions of the City Council are final unless the project is located within the Coastal Commission appeal jurisdiction. In such cases, the decision of the City Council can be appealed to the Coastal Commission.

Commercial Design Review Process
The City has established two tracks for design review of projects proposing new construction, alterations, rebuilds, additions, demolitions, and other exterior design changes in the central commercial (CC), service commercial (SC) and residential and limited commercial (RC) districts and the multifamily residential (R-4) district. Commercial development is subject to the City’s Commercial Design Guidelines (2000) and Carmel Plaza Storefront Design Guidelines (2001) as applicable.

Commercial Track One Design Review
The Director may approve Track One applications for design changes in all commercial zoning districts and the R-4 district based on a determination that such projects comply with the Zoning Code and all applicable commercial design guidelines.

Commercial Track Two Design Review
The Planning Commission reviews and approves Track Two applications. This is a discretionary process for reviewing substantial design changes in commercial zoning districts and the R-4 district and involves at least one public hearing.

Historic Resources
Upon submittal of a design study, building permit or other application for alteration of a property, the City shall determine if the subject property contains historic
resources and is therefore eligible for the Carmel Inventory of Historic Resources (updated annually). If it is
determined that the property contains historic resources, the applicant shall be required to obtain a determination of consistency with the Secretary of the Interior’s Standards for the Treatment of Historic Properties as part of the project review process, as required by CEQA and state law.

I want to keep the village feel of
the town.

November 17, 2022
Housing Ad Hoc
Committee Community
Meeting Attendee
Attachment 1
Appendix B – Housing Constraints B-16 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Minor Alterations
Determinations of consistency for minor alterations shall be reviewed by City staff for compliance with the Secretary of the Interior’s Standards for the Treatment of Historic Properties. Minor alterations that are found not to comply with the Secretary’s Standards shall be considered and processed as major alterations requiring an evaluation by a qualified professional and final action by the Historic Resources Board. Decisions of the Board are appealable to the City Council.

Major Alterations
Determinations of consistency for major alterations shall require an evaluation by a qualified professional and shall be reviewed and approved by the Historic Resources Board. Decisions of the Board are appealable to the City Council.

The City’s current approach to conserving historic resources does not present a constraint to constructing new residential units.

Building and Fire Code
Building and safety codes are adopted to preserve public health and safety, and ensure the construction of safe and decent housing. These codes and standards also have the potential to increase the cost of housing construction or maintenance. The City’s Building Code is currently based on the latest, 2022 version of the California Building Code, along with all required updates (City Ordinance No. 2022-004). The City has not made any amendments to the Code that might diminish the ability to accommodate persons with disabilities or other special-needs groups.

The 2022 California Fire Code as adopted by the City and effective January 1, 2023 (found in Chapter 15.55 of the CMC), prescribes the issuance of Fire Code Operational Permits for operations, processes, and/or activities that present higher levels of risk to life and property.

Operational permits allow the City to better track specific hazards and to assure that safeguards for hazardous operations, processes, and activities are maintained in accordance with local, State and Federal Regulations.

Carmel Municipal Code Title 8.32.100, Section 102.1(5) requires new structures, or existing structures to which additions, alterations or repairs are made that involve the addition, removal or replacement of fifty percent or greater of the linear length of the walls of the existing building (exterior plus interior) within a five-year period, are required to be outfitted with an automatic fire sprinkler system. Fire sprinklers shall be addressed as part of the building permit review. It is recognized that the costs of an automatic fire sprinkler system can vary considerably based on various factors including water service capabilities, whether a new meter is required, and the type of fire suppression system required for the application in question. However, it is generally recognized by City staff that installing fire sprinklers can be expensive and can present challenges from a water flow standpoint. Parts of Carmel have low water pressure affecting the ability to install sprinklers, which in-turn significantly increases construction costs if additional on-site infrastructure is needed (water holding tanks, pumps, etc.) to serve the sprinkler system.

Attachment 1
Appendix B – Housing Constraints B-17 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Additionally, vehicular access within the community is affected by steep, hilly terrain and many secondary ridge lines. Many streets are narrow and winding, restricting the speed at which a fire apparatus may safely respond and also increasing the time lapse between fire detection and apparatus arrival, during which a household will face the fire or other emergency on their own.

The State Fire Marshal’s Office, and the City of Carmel-by-the-Sea, have adopted regulations for protection of structures built in areas susceptible to wildland fires under California Building Code Chapter 7A (2019 edition). Exterior wildfire exposure protection within the City of Carmel-by-theSea is prescribed in Municipal Code Title 15, Buildings and Construction. Protective features include such active measures as combustible vegetation management and sprinkler systems; and passive protection features such as fire resistive roofing and building opening protection. The extent of protection is determined by the location of the property. The currently adopted (October 2008) California Department of Forestry and Fire Protection (CAL FIRE) Very High Fire Hazard Severity Zones in Local Responsibility Areas (LRA) map for Carmel-by-the-Sea, identifies a large area encompassing northern and eastern portions of the City as a “Very High Fire Hazard Severity Zone.” It should be noted that all LRA maps across the state of California are undergoing updates and according to CAL FIRE are anticipated to be released sometime in 2024. Within the areas identified in the “Very High Fire Hazard Severity Zone,” additional construction features are mandated. These typically include ignition resistant materials, spark protection for ventilation openings, and exterior window and door protection. Detailed requirements are contained in Chapter 7A of the California Building Code and in Carmel Municipal Code Titles 8 and 15.

The City finds that the adopted Building Code and Zoning Code enforcement activities are not constraints to the development, maintenance or preservation of housing.

Special Housing Topics
This section discusses several special housing topics that have been the subject of recent attention in the California Legislature.

Accessory Dwelling Units (ADUs)
An accessory dwelling unit (or ADU) is defined as an attached or detached residential dwelling which provides complete independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, and sanitation, which is located on the same parcel as a single-family dwelling (CMC 17.68.030). Based on their relatively small size, and because they do not require paying for land or major new infrastructure, ADUs and Junior ADUs (JADU) are considered affordable by design. ADUs can provide affordable housing options for family members, seniors, students, in-home health care providers, and other small household types. ADUs can also be useful to generate additional rental income for the homeowner, making homeownership more financially feasible. Additionally, the City has a high rate of second home (vacation) ownership.

Encouraging ADUs and JADUs may be appealing to second home owners because ADUs will Attachment 1
Appendix B – Housing Constraints B-18 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 provide a higher level of security to the property if there is a full-time resident, and will add an income stream to a property that lies vacant for a high proportion of the year. Most importantly, ADUs and JADUs can provide much-needed affordable smaller housing units.

The City’s ADU ordinance was last updated in 2017 (Ord. 2017-10 § 1 (Exh. A), 2017). Carmel-bythe-Sea is following the requirement of the state law. The City is in the process of updating its ADU Ordinance to incorporate state laws that have expanded since 2017, and to clarify the ADU permitting process for property owners.

In recent years, the California Legislature has passed a series of bills aimed at encouraging singlefamily homeowners to add ADUs to their property by requiring local jurisdictions to adopt regulations to facilitate their production and streamline their approval. The State passed legislation in 2017, 2019, 2020, and 2021 to further assist and support the development of ADUs, including By Right approval for units less than 800 square feet. ADUs are also permitted in commercial structures per state law.

The City permits one guesthouse on sites of 6,000 square feet or greater upon approval of a use permit. Guesthouses shall contain no food preparation facilities of any kind, but are permitted to have a bathroom with a toilet, sink and bathing facility. A guesthouse on any building site may be converted to an accessory dwelling unit, generally requiring the permitting of kitchen sink and facilities. Converting existing guesthouses to fully functional ADUs, or JADUs, represents a costeffective method to increase the City’s housing stock, requiring only a building permit. These opportunities could be strong candidates for prioritization of the City’s limited water distribution.

The City is also exploring the development of standardized pre-approved ADU plans. Standardized plans can eliminate the costs of designing a custom ADU, and assures property owners the unit type and size is already approved by the City. Pre-approved plans can also make construction more affordable if the designs are using materials that are easily sourced and standard-sized.

The City of Carmel-by-the-Sea has included a new program in this 6th Cycle Housing Element to revise its Municipal Code to be consistent with ADU and JADU state law, and develop standardized ADU plans.

Manufactured Housing / Mobile Homes
There are no mobile home parks located in Carmel-by-the-Sea. The City permits mobile homes on a permanent foundation as a single-family residential use, subject only to the design review requirements as any other single-family residential use in the same zone pursuant to state law California Government Code 65852.3. Such housing is subject to the same development standards and design review criteria as traditional forms of housing construction. A new program to amend the Municipal Code to clarify this type of housing as a permitted use in the R-1 zoning district is included in the Housing Element.

Attachment 1
Appendix B – Housing Constraints B-19 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Multi-Family Rental Housing
Multi-family and duplex housing units constitute approximately 13 percent of Carmel’s housing stock. Multi-family housing up to 22 du/ac is a permitted use in the R-4, CC, SC, and RC Districts.

Multi-family housing greater than 22 du/ac is a conditionally allowed use in all those same districts.

Senior housing is allowed in all districts.

The conditional use permit (CUP) for residential developments greater than 22 du/ac is a development constraint to higher density development. Site design review is required for multifamily projects and the CUP process adds very limited value to the review process for projects of this size and scale. In order to lessen this regulatory constraint, the City will amend the Code to eliminate unnecessary use permits.

Objective Design and Development Standards
The City currently lacks a strictly objective set of design guidelines. Detailed design guidelines for R-1 and high-level design guidelines for commercial zones are presently in place; however, the current design guidelines include a mix of objective and subjective criteria. While the City’s existing design guidelines are being updated this year, the City is not developing a set of strictly objective standards for multi-family affordable projects.

The lack of “Objective Design Standards” currently poses a constraint to residential development.

Guidelines that are subjective, or zoning districts that lack clear development standards, increase uncertainty and risk for housing developers. Objective Design Standards will provide a measure of clarity that proposed developments will be measured against and will provide the community with assurance that developments will conform with measurable objective standards. Amending the A-2 zoning district with clear setbacks, height, and objective design standards will add clarity and remove a development constraint.

Community Care Facilities
To maintain compliance with the Lanterman Developmental Disabilities Services Act (Lanterman Act), the City currently permits small residential or community care facilities serving six or fewer individuals in all residential zoning districts By Right and facilities serving seven or more individuals in all residential zoning districts with approval of a Conditional Use Permit (CUP). Larger community care facilities (greater than six (6) persons) may be required to meet certain conditions, including restrictions on hours of operation, security, loading requirements, and management. These conditions are comparable to all similar uses within the designated zoning district and would not impose constraints to the development of care facilities.

Transitional and Supportive Housing
Transitional housing is generally defined as a facility that provides shelter for homeless individuals, and generally involves integration with other social services and counseling programs to assist in the transition of self-sufficiency through the acquisition of permanent income and housing. Transitional Attachment 1
Appendix B – Housing Constraints B-20 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 housing is temporary housing (generally six months to two years) for a homeless individual or family who is transitioning to permanent housing. This housing can take several forms, including group housing or multi-family units, and often includes a supportive services component to allow individuals to gain necessary life skills in support of independent living. There are no known transitional housing facilities in the City.

Supportive housing is generally defined as permanent, affordable housing with on-site services that help residents transition into stable, more productive lives. Services may include childcare, afterschool tutoring, career counseling, etc.

The City’s Municipal Code permits transitional and supportive housing By Right in all residential zoning districts, regardless of the number of persons the facility serves compliant with SB 2 passed in 2007. The 6th Cycle Housing Element includes a program to update the Municipal Code to further clarify transitional and supportive housing in the R-1 and R-4 zoning district as permitted uses.

Emergency Shelters
Emergency shelters are generally defined as a facility which provides immediate short-term housing for homeless individuals.

Emergency shelters for the homeless is defined as a residential facility, lodging house, or dwelling, where no rent is paid, that provides temporary accommodation to homeless persons and/or families. Pursuant to state law (Senate Bill (SB) 2), jurisdictions with an unmet need for emergency shelters are required to identify a zone(s) where emergency shelters will be allowed as a permitted use without a conditional use permit or other discretionary permit. The identified zone must have sufficient capacity to accommodate the shelter need, and at a minimum provide capacity for at least one year-round shelter. Permit processing, development and management standards for emergency shelters must be objective and facilitate the development of, or conversion to, emergency shelters.

As described in Appendix A – Housing Needs & Fair Housing Report, the 2022 Monterey Homeless Count and Survey Comprehensive Report prepared by Applied Survey Research estimated there was only one transient resident in the City as of 2022. There are no emergency shelters located in the City.

However, the Zoning Code allows siting of emergency shelters as community social service facilities, which are defined as “Any noncommercial housing facility, such as homeless shelters or emergency shelters, which may also provide meals, showers, and/or laundry facilities. Specialized programs and services related to the needs of the residents may also be provided. This classification excludes transitional housing facilities that provide long-term living accommodations.” Community social service facilities are permitted By Right in the CC, SC, and RC districts as well as with a CUP in the R-1 and R-4 districts. In addition, shelters for families and single women with children are permitted at all churches in the community as a part of their social outreach functions. Religious facilities are conditionally permitted in the R-1 district (only on existing quasi-public use sites established prior to December 1, 1980, or added as an accessory use to such existing uses) and allowed with a conditional use permit (CUP) in the RC district.

Attachment 1
Appendix B – Housing Constraints B-21 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Low Barrier Navigation Centers
Assembly Bill (AB) 101, adopted in 2019, requires approval “by right” of low barrier navigation centers that meet the requirements of state law. A “Low Barrier Navigation Center” is a housing first, low-barrier, service-enriched shelter focused on moving people into permanent housing that provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter, and housing. If the City receives applications for these uses, it will process them as required by state law. A program has been included in the element to develop By Right procedures for processing low-barrier navigation centers.

Senior Housing
As previously noted, several zoning districts within the City already permit and accommodate for senior housing. The A-2 zoning district (Cultural and Community District, i.e., the Sunset Center) and the A-3 zoning district (Senior Citizen Facility District) permits By Right housing for seniors. A program is included to address the lack of development standards in the A-2 zone in order to provide greater clarity and certainty to guide and future development design.

Constraints for People with Disabilities
Both the Federal Fair Housing Act and the California Fair Employment and Housing Act impose an affirmative duty on local governments to make reasonable accommodations (i.e., modifications or exceptions) in their zoning and other land use regulations when such accommodations may be necessary to afford disabled persons an equal opportunity to use and enjoy a dwelling. For example, it may be a reasonable accommodation to allow covered ramps in the setbacks of properties that have already been developed to accommodate residents with mobility impairments. The City adopted a reasonable accommodation policy (City Council Policy C11-01) in July 2011. This policy provides a reasonable accommodation in the land use and zoning context to ensure equal access to housing and facilitate the development of housing for individuals with disabilities. The policy provides individuals with disabilities or developers of housing for people with disabilities flexibility in the application of land use, zoning and building regulations, policies, practices and procedures.

Community Care Facilities
The City currently permits community care facilities in several zoning districts. Community care facilities refers to facilities providing non-medical care and supervision under license from the California Department of Social Services. This classification excludes hospitals, residential care facilities, family day care homes, day care centers, and transitional housing. Community care facilities are permitted in the CC, SC, and RC districts as well as by conditional use permit in the R-4 district.

Residential Care Facilities
The City also permits residential care facilities within certain zoning districts. Residential care facilities include facilities that are licensed by the State of California to provide living Attachment 1
Appendix B – Housing Constraints B-22 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 accommodations and 24-hour, primarily non-medical care and supervision for persons in need of personal services, supervision, protection, or assistance. Living accommodations are shared living quarters with or without separate kitchens or bathrooms for each room or unit. This classification includes facilities that are operated for profit as well as those operated by public or nonprofit institutions.

Group Homes
The Zoning Code defines group residential as “Shared living quarters without separate kitchens or bathrooms for each room or unit, including boardinghouses, dormitories, and private residential clubs, but excluding guesthouses.” As described above, state-licensed group homes are permitted under the regulations for Community Care Facilities and Residential Care Facilities. Unlicensed group homes are not currently identified as a permitted use in any zoning district.

The City has not identified any zoning or other land-use regulations that could discriminate against persons with disabilities or impede the availability of such housing for these individuals. Examples of the ways in which the City facilitates housing for persons with disabilities through its regulatory and permitting procedures are:
 As discussed above, the City Zoning Code allows residential care facilities for six or fewer persons subject to the same standards and procedures as apply to other residential dwellings of the same type in the same zone.
 The City has also adopted reduced parking requirements (0.33-space per unit or bed) for Senior Housing, Cooperative Housing, Group Care Facilities, Nursing Homes and Other Residential Care Facilities. Retrofitting of dwellings to meet the needs of persons with disabilities is also an eligible activity under the City’s Housing Rehabilitation Program. Construction and rehabilitation activities are also subject to the Federal Americans with Disabilities Act requirements and the City is active in promoting ADA compliance.
 The City defines family as “an individual or two or more persons living together as a single nonprofit housekeeping unit and sharing common living, sleeping, cooking, and eating facilities,” which is consistent with state law.

Single-Room Occupancy (SRO)
Single room occupancy (SRO) hotels are one-room units intended for occupancy by a single individual. It is distinct from a studio or efficiency unit, in that a studio is a one-room unit that must contain a kitchen and bathroom. Although SRO units are not required to have a kitchen or bathroom, many SROs have one or the other. The City’s Zoning Code does not explicitly define single room occupancy housing, although CMC 17.08.050(F) allows guesthouses, studios, and multifamily units as small as 400 square feet. The Code also requires that all multi-family projects of three or more units include a mix of unit sizes, and at least 25 percent of all units are required to be 400 to 650 square feet in size.

Attachment 1
Appendix B – Housing Constraints B-23 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Short-Term Rentals
In order to preserve Carmel-by-the-Sea’s residential character, no home or accessory dwelling unit may be rented for less than 30 consecutive days in a residential zoning district. This current restriction is intended to ensure that residential units are available for full-time residential use. The City has a high number of motels and hotels to service the tourism industry and transient guests.

Community Planning and Building Fees
The City charges fees and assessments to cover the costs of processing permits. Processing fees are commensurate with the fees for the rest of the County of Monterey. Compared to the high costs of undeveloped, unimproved land and high site development costs in the City, processing and connection fees are negligible and, therefore, do not present a constraint to development. However, the partial waiving of such fees would help reduce the cost of any proposed affordable housing. The City’s current fee schedule is shown below in Table B-4, Summary of Community Planning & Building Fees (2022-2023).

Table B-4 Summary of Community Planning & Building Fees (2022-2023) Application/Permit Type Fee
Design Study and Review
Track 1 Design Review/Study - Minor $448 per application Track 1 Design Review/Study - Major $813 per application Track 1 Design Rev/Study-Streamline $203 per application Track 1 Design Rev/Study - Referral to Planning
Commission $1,120 per application in addition to the base Track 1 fee Track 1 Design Rev/Study-Referral to Historic
Resources Board $1,120 per application in addition to the base Track 1 fee Track 2 Design Review - Minor $2,360 per application
Track 2 Design Review - Major $5,392 per application
Track 2 Design Rev - Major New Commercial Building $2,438 per application plus a deposit determined by staff with charges at the fully allocated hourly rates for Project Planner Preliminary Site Assessment $1,183 per application
Volumetric Analysis $135 per application plus $1,500 deposit with charges at the fully allocated hourly rates plus any outside costs.

Use Permit and Other Services
Use Permit $2,730 per application
Use Permit Amendment $1,818 per application
Temporary Use Permit $365 per application
Restricted Comm Use Transfer Request $521 per application Water Credit Transfer Request $3,663 per application
Variance $2,235 per application
Attachment 1
Appendix B – Housing Constraints B-24 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Application/Permit Type Fee
Pre-Application Review - Staff $1,683 per application with 50% of this fee credited towards future planning fees for this project.

Preliminary Review - Planning Commission $3,485 per application with 50% of this fee credited towards future planning fees for this project.

Coastal Dev. Permit - Development $135 per application - Added to other Planning fees Coastal Dev. Permit - Event $1,417 per application
Tobacco Retail License Current fee as adopted by the Monterey County Board of Supervisors
Amendments, Annexations, and Agreements
Specific Plan/Specific Plan Amendment
General Plan Amendment
Sphere Of Influence Amendment
Zoning Code Amendment
$5,210 deposit with charges at the fully allocated hourly rates plus outside costs
Annexation
Development Agreement
$10,420 deposit with charges at the fully allocated hourly rates plus outside costs
Environmental Review, Maps, and Lot Lines
Environmental Review (IS/ND/EIR) Contract cost plus 10% Environmental Notice of Exemption $156 per application plus County fees Mitigation Monitoring $3,126 deposit with charges at the fully allocated hourly rates plus outside costs.

Tentative/Final Map $4,168 deposit with charges at the fully allocated hourly rates plus any outside costs.

Amended Final Map $1,042 deposit with charges at the fully allocated hourly rates plus any outside costs.

Certificate Of Compliance $610 per application plus actual contract cost Lot Line Adjustment/Subdivision - Planning Commission $542 per application plus actual contract cost Lot Merger - Staff Review $938 per application plus actual contract cost Historic Evaluation
Prelim (Phase 1) Historical Evaluation - Staff $474 per application Phase 1 Historic Evaluation - Qualified Professional $271 per application plus actual cost for Historian review with $1,500 deposit
Phase 2 Historic Evaluation-Historic Resources Board
Review
$1,579 per application plus actual cost for Historian review with $1,500 deposit
Appeal To Historic Resources Board $2,120 per application plus actual cost for Historian review with $1,500 deposit
Mills Act Contract Processing $3,584 per application
Determinations, Extensions, and Appeals
Planning Commission Code Determination $1,214 per application Zoning Compliance Determination $573 per application
Time Extension - Staff $313 per application
Time Extension - Planning Commission $907 per application Attachment 1
Appendix B – Housing Constraints B-25 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Application/Permit Type Fee
Time Extension - City Council $1,099 per application
Public Hearing Continuance - Planning Commission $886 per continuance Public Hearing Continuance - Council $938 per continuance Appeal To Planning Commission $2,084 per appeal - Appeal in the Coastal Zone Appeal To City Council $2,084 per appeal - Appeal in the Coastal Zone Building Services
Building Relocation $1,938 per application
Large Family Day Care (Residential) $761 per application General Plan Update 3.5% of all Building & Safety permits Planning Technical Assistance Charge the fully allocated hourly rate for all personnel involved after 15 minutes.

Building Plan Check Based on Building and Safety Construction Valuation Building Inspection Based on Building and Safety Construction Valuation Building Re-Inspection $146 per re-inspection
Permit Application Extension $94 per extension (maximum of 4) Permit Extension $146 per extension (maximum of 2)
Building Permit Pre-Applic. Confer. $318 per application Building Single Trade Permit $167 per permit
On-Site Driveway Permit $271 per permit
Solar Plan Check/Inspection Permit Plan Check - $318
Inspection - $135
Re-Roof Permit $255 per permit
Building Board Appeal $1,052 per appeal
Duplicate Inspection Card $63 per card
Building Technical Assistance Charge the fully allocated hourly rate for all personnel involved after 15 minutes.

Stop Work Investigation $568 per investigation plus double the permit fee Temporary Certificate Of Occupancy $224 per application Alternate Materials/Methods Review $214 per application plus actual cost of City Staff for all time over one hour.

Building Phased Work Request $302 per application
Landscape Plan Check/Inspection $281 per plan/inspection Building Technology Surcharge $8 per permit
Encroachment Permit
Temporary Encroachment Permit $219 per permit
Permanent Encroachment Permit Street Excavation - $766 per permit and $4.25/lineal foot Attachment 1
Appendix B – Housing Constraints B-26 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Application/Permit Type Fee
Other - $432 per permit and $4.25/lineal foot or $432 per permit and $2.13/lineal foot (aerial installation) Plus cost of damage to public right-of-way or street as determined by the Public Works Director.

Traffic control plan review/inspection $370 per review plus $210 per each additional review Use of credit card/ debit card 2.5% of charged amount
SOURCE: City of Carmel-by-the-Sea Fee Schedule Effective July 3, 2022 – June 30, 2023 In comparison with other jurisdictions in the County of Monterey, the fees in Carmel-by-the-Sea for new residential projects – both single-family and multi-family units – are generally in line. Table B-5, provides a comparison between the cities of Carmel-by-the-Sea and Pacific Grove, which are geographically, socioeconomically and demographically similar in size and types of residential development.

Table B-5 Comparison of the City of Carmel-by-the-Sea and the City of Pacific Grove Average Design Review Fees
Application Type(s) Carmel-by-the-Sea Pacific Grove
Staff Level Design/Counter Review $4481/$8132 $2303/9324 Design Review/Architectural Permit –
Single Family & Multi-Family $2,3605/5,3926 $3,3187/$4,0608 Planning Commission/Historic
Resources Board Referral or Appeal
$1,120 in addition to the base Track 1
fee
25 percent of base permit fee or $1,136
(whichever is greater)
SOURCE: City of Carmel-by-the-Sea Fee Schedule Effective July 3, 2022 – June 30, 2023; City of Pacific Grove Master Fee Schedule Fiscal Year 2022-23 NOTE:

1. Track 1 Design Review/Study - Minor

2. Track 1 Design Review/Study – Major

3. Counter Review & Determination – no new square footage

4. Counter Review & Determination - new square footage

5. Track 2 Design Review – Minor

6. Track 2 Design Review - Minor

7. Architectural Permit – Single Family

8. Architectural Permit – Multifamily four units or less

6. Architectural Permit – Single Family
The City is not a full-service municipality; several agencies and special districts levy fees on new development for the provision of basic urban services. These agencies and special districts include the following:
 California American Water (Cal-Am);
 Monterey Peninsula Water Management District;
 Carmel Unified School District;
Attachment 1
Appendix B – Housing Constraints B-27 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  Carmel Area Wastewater District;
 Carmel Fire Department (service provided by contract with Monterey Fire Department; and  Transportation Agency for Monterey County (TAMC).

Special district fees add to development costs in the City. Carmel is under the jurisdiction of the Monterey Peninsula Water Management District (water district) and receives its water from the California-American Water Company (Cal-Am).

Cal-Am charges non-refundable Connection Fees as determined by CPUC guidelines. The fee is based on the meter size which is as follows:

1. 5/8” Meter - $3,000 (single-family)

2. 1” Meter - $5,000 (small multi-family)

3. 1-1/2” Meter - $10,000 (large multi-family

4. 2” Meter - $16,000 (large volume requirement ex. hotel.) The MPWMD has permit authority over the production and distribution of all water supplies within the Monterey Peninsula region, and allocates water supplies to cities and County areas within its jurisdiction. According to the water district, the City, as of June 2023, has a total available water allocation of 2.661-acre feet, which represents only three (3) percent of the water district’s total available allocation across the district, which includes all of the Monterey Peninsula south to Carmel Valley and portions of the Santa Lucia Range. The current MPWMD permit fees are governed by the Fees and Charges Table (effective August 16, 2021) and start at $1,800 plus $90 per hour for more than 20 hours.

The Carmel Unified School District requires the payment of an impact fee of $0.49 per square foot for new residential construction. The school district does not offer any discounts for the payment of impact fees.

The Carmel Area Wastewater District charges a new residential connection fee of $8,242.66 and charges an annual rate of $1,005.94 for residential uses.

TAMC established a Regional Impact Fee (RDIF) program to address required mitigation for traffic impacts. Accessory Dwelling Units under 750 square feet are exempt from impact fees. Carmel-bythe-Sea is located with Zone 3: Peninsula/South Coast benefit zone and also subject to additional infill fee. Impact fees are calculated using an online spreadsheet and fees range from $4,599.04 for an Above Moderate single-family home, to $9,313.70 for a 5-unit Low-Income apartment to $28,161 for a 10-unit Above-Moderate condo or townhome. Impact fee discounts are applied to affordable units and are dependent on the affordability level.

Attachment 1
Appendix B – Housing Constraints B-28 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Fees charged by these outside agencies vary according to project types and size and increase development costs. The City does not control fees for outside agencies; but outside agency fees are a constraint and add to the overall cost of development. See Table B-6, Estimates of Total Development Fees Imposed, below.

Table B-6 Estimate of Total Development Fees Imposed
Single-Family* Multi-Family (10 units)**
Planning permit fee (incl. CEQA) $2,808 $6,205
Building Permit fee $4,872 $9,872
Subtotal $7,680 $16,077
MPWMD $225 $2,250
CUSD $980 $9,800
Cal-Am $3,000 $5,000
CAWD $8,242 $82,426
TAMC $4,036 $283,425
Regional Fees Subtotal $16,483 $382,901
Total Fees $24,163 $398,978
*assumed $350K valuation and 2,000 sq. ft.
**assumed $5,000,000 valuation and 20,000 sq. ft.

City fees generally comprise approximately 30 percent of the cost of development of a single-family home and four (4) percent of the cost of a small multi-family development. Fees from other districts comprise the bulk of the costs for muti-family development. As part of the 6th Cycle Housing Element the City includes program 3.1.D Reduced Entitlement and Development Fees to lower costs for projects with affordable units.

Processing and Permit Procedures
The processing time needed to obtain development permits and required approvals varies depending on the scope of the project. The size of projects in Carmel-by-the-Sea is typically limited to the remodeling or construction of a single-family home, a minor commercial modification, or the construction of an accessory dwelling unit. The City strives to keep its permit procedures streamlined and processing times short. The Planning Division is the lead agency in processing residential development applications and coordinates the processing of those applications with other City departments such as the Building Safety Division and Public Works Department and other outside agencies as deemed appropriate, such as the fire and water districts.

Carmel-by-the-Sea has traditionally encouraged high architectural standards for new development.

City zoning regulations require design review approval for any proposed additions to or the Attachment 1
Appendix B – Housing Constraints B-29 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 construction of new single-family homes, duplexes or multi-family developments. However, accessory dwelling units are exempt from design review by state law and must only meet the location and development standards outlined by state law (Government Code section 65852.2).

Permit applications are generally processed in as an efficient manner as practical in Carmel-by-theSea. Although the Historic Resources Board, the Planning Commission, and the City Council only meet once a month, determination on a project is usually reached in one or two meetings (if the City Council is required to hear the matter). However, for Track 2 Design Study applications, the City does require applicants to take part in a Forest and Beach Commission if tree removal is proposed, as well as a separate Concept hearing and Final Details hearing with the Planning Commission prior to formal approval. There is no separate Design Review Board in Carmel, with the Planning Commission conducting design review. The typical processing time for Track 2 discretionary review is four to six months, depending on, whether tree removal or replacement is proposed, whether the property is deemed historic or eligible for historic listing, whether the property falls within the “Beach and Riparian Overlay” (Coastal Commission Appeal Jurisdiction), and whether the project requires a volume study or any other technical study be conducted. While this review procedure assists in achieving project acceptability and allows for neighborhood participation through multiple public hearings, the overall scale and level of complexity of review does provide a barrier to applicants without the financial resources and time to see a residential project through to completion.

However, the City does have a practice of moving projects with affordable housing ahead of other projects in the development processing queue when setting development review agendas. Due to Permit Streamlining law, this incentive is less powerful than it once was. However, it may reduce review time by as much as a month. Even this minor benefit attracts developer attention during preapplication meetings. Projects that include affordable housing are also expedited through the plan check process.

Carmel-by-the-Sea’s development process can be summarized in the following nine steps. All of these steps may not be necessary depending on the nature of a project:

1. Application Submittal - The planning application submittal process begins when a developer, architect, property owner, or other applicant authorized by the property owner (Project Applicant) submits a development application, required fees, and application materials. Often times the developer will have met informally with the Planning Division to review the project and receive preliminary feedback on the proposal in advance of the formal project submittal.

2. Plan Review - After the application is received, it is routed to the relevant City Departments, including the Planning Division, Building Safety Division, Fire Prevention, and Public Works. A planner is assigned to serve as the liaison to the Project Applicant, helping to expedite the permit Attachment 1
Appendix B – Housing Constraints B-30 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 process and coordinating the department reviews. During a 30-day review period for completeness, individual departments assess the completeness of the application, work with the Project Applicant to correct any project deficiencies, and prepare preliminary Conditions of Approval.

3. Application Assessment - The application is assessed for its compliance with the standards of the Zoning Code (Title 17 of the municipal code) as well as the City’s Residential or Commercial Design Guidelines.

4. Environmental Review - A review of the environmental issues associated with the proposed project (as required by the California Environmental Quality Act) will also be completed during the Plan Review stage of the process.

5. Forest and Beach Commission/Historic Resources Board – If a project proposes to remove a significant tree(s), it will require review by the Forest and Beach Commission. If the property is a listed historic resource or has potential eligibility for listing as a historic resource, the project is required to be reviewed by the Historic Resources Board.

6. Planning Commission/City Council Approval - If a project is determined to require discretionary action, it will be scheduled for review by the Planning Commission. A Public Notice will be provided and all property owners within 300 feet of the project site will be notified by mail. After projects receive approval by the Planning Commission there is a ten‐ working-day appeal period during which the project may be appealed to the City Council. The City Council decision is final, unless the project is located within the Coastal Commission appeal jurisdiction. There are different levels of planning review/approval depending on the scope of work proposed.

7. Plan Check - After the project receives all required approvals, construction plans may be submitted to the Building Safety Division for a plan check for building permits. The plans will be routed to the City’s Planning Division and Public Works Department. The project planner will review the plans for conformance with the Zoning Code, any required Conditions of Approval, and with plans approved by the Planning Commission or City Council. The Building Safety Division will verify that all building, fire, mechanical, plumbing and electrical code requirements are fulfilled in compliance with the California Code and other State requirements.

8. Building Permit - After the construction plans receive approval from the relevant departments, the Building Safety Division issues a building permit. Construction can begin after this point.

Regular inspections are required throughout the construction process. The final inspection requires clearance from all relevant City departments and the Carmel Fire Department.

9. Occupancy Permit - Once the final inspection is complete, the developer needs to secure a certificate of occupancy. New buildings or structures cannot be used or occupied until the Building Official has issued a certificate of occupancy.

Attachment 1
Appendix B – Housing Constraints B-31 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 Table B-7 shows the typical processing time for a residential development application.

Table B-7 Review/Approval Requirements and Processing Times Zoning District Design
Study Use Permit CDP1
Typical
Processing
Time2
R-1 Single-Family Residential District
Single family residence Yes No Yes 6-9 months
ADU (Subordinate Unit) Yes No Yes 4-6 months
Guest house Yes Yes Yes 4-6 months
Building sites exceeding 30 percent slope Yes Yes Yes 6-9 months R-4 Multi-Family Residential District
Single family residences Yes Yes 6-9 months
Multi-family residences 0-22 units/acre Yes Yes 8-10 months Multi-family residences 23-44 units/acre Yes Yes Yes 8-10 months Commercial Districts
Multi-family residences 0-22 units/acre Yes Yes 8-10 months Multi-family residences 23-44 units/acre Yes Yes Yes 8-10 months Public and Quasi-Public Districts (A-2 and A-3)
Senior Citizen Housing Yes Yes Yes 8-10 months
SOURCE: City of Carmel-by-the-Sea Community Planning and Building Department 2023 NOTE:

1. CDP – Coastal Development Permit – required for all projects that increase the height and/or floor area on an existing structure by 10 percent or more.

2. Includes time for building plan check
Single-family homes, duplexes and multi-family projects go through the same zoning compliance and design review process. The review and approval of multi-family projects typically takes longer due to the complexity of a more intense development and the myriad issues that need to be considered including adequate site servicing, design review, potential tentative map review, and the more active involvement of other departments and agencies outside of Planning. Although there is a high level of public input on some planning applications, Carmel-by-the-Sea’s zoning standards and design review ordinance are fairly detailed. There is a level of certainty on behalf of the project applicants that if the project meets the standards and goals of the ordinances, the project will receive City support.

SB 35 Streamlining
Government Code section 65913.4 allows qualifying development projects with a specified proportion of affordable housing units to move more quickly through the local government review Attachment 1
Appendix B – Housing Constraints B-32 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 process and restricts the ability of local governments to reject these proposals. The bill creates a streamlined approval process for qualifying infill developments in localities that have failed to meet their RHNA, requiring a ministerial approval process, removing the requirement for CEQA analysis, and removing the requirement for discretionary entitlements. Since the adoption of this section of the Government Code, the City has not received an application under these provisions.

As previously noted, the entire City is located within the California Coastal Zone and is therefore not subject to SB 35 (see Government Code Section 65913.4(6)). The City has included a program in the 6th Cycle Housing Element to address SB-35 if the law becomes applicable to Coastal Zone areas. The City will create a SB35 checklist and written procedures for processing SB35 applications to ensure efficient and complete application processing.

SB 10 Building Opportunities for All
SB 10 makes it easier for cities to zone for smaller, lower-cost housing developments of up to 10 units to address California’s housing crisis. SB 10 provides tools for local governments to zone for up to ten homes per parcel in transit-rich areas, or urban infill sites. SB 10 maintains local control, as a local legislative body must pass a resolution to adopt the plan. The City has included a program in the 6th Cycle Housing Element to address SB-10 and encourage urban infill on large properties zoned single-family (R-1).

SB 9 California Housing Opportunity and More Efficiency (HOME) Act SB 9, also known as the California Housing Opportunity and More Efficiency (HOME) Act, is a state bill that requires cities to allow one additional residential unit on parcels zoned for singledwelling units. The City has not received any inquiries of interest for SB 9 lot splits and is not currently processing any SB 9 application.

On and Off-Site Improvement Standards
Since the City is largely built-out, all infrastructure, including curbs, gutters, sidewalks, streets and utilities are in place. Development of residential units involves hooking up to the existing utilities, which already exist in the right-of-way. All electrical distribution lines, telephone, cable television, and similar service wires or cables, which provide services to new development, are to be installed underground. Typical infrastructure costs in the CC, SC, RC, and R-4 districts are limited to sidewalk, curb, and gutter improvements, undergrounding of utility wires, stormwater drainage improvements, and landscaping. The City’s Municipal Code does not contain requirements for subdivision off-site improvements. However, the Code includes a chapter on requirements related to streets, sidewalks, and public places.

Sidewalks
Construction of sidewalks is not required in residential areas of the City. If sidewalk construction is proposed, a permit is required. The proposal must show that the construction of the sidewalk or Attachment 1
Appendix B – Housing Constraints B-33 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 walkway will preserve public safety, health or welfare, resolve a serious drainage problem, or that it would otherwise benefit the general public. The construction of the sidewalk or walkway must follow the natural contours of the land, and 50 percent or more of the sidewalk area in front of any building site must be retained in planting. It shall continue to be the policy of the City to avoid formal sidewalks in favor of meandering and unpaved footpaths where possible.

Driveways
Construction of a driveway requires a permit from the Department of Community Planning and Building in conjunction with the Director of Public Works and the Director of Forest, Parks and Beach.

Landscaping
Sidewalk street trees are encouraged by the City, with the City Forester determining the number of trees, species, and exact location. Sidewalk street trees should be located near the head of, and adjacent to, parallel parking spaces with the trunk of the tree located 4.5 feet back from the head of the parking space. For trees at the curb line there should be at least four feet between the trunk and the facing building or planters in front of the building. All tree planters are encouraged to be as large as possible so that additional landscaping can be incorporated into the planters.

The City also encourages including “mini-parks”, which is a park that protrudes into the street from the curb line or is in the street. The design of mini-parks must be consistent with the standards in the Forest and Beach Management Plan.

Streets
The improved portion of residential streets in Carmel are narrow in width, 26 to 34 feet, with no gutters or sidewalks. This lack of formal development of streets throughout Carmel’s residential neighborhoods has been a conscious effort on the part of residents to maintain a “village in a forest” atmosphere. As Carmel is a built-out city and new development will occur as infill or redevelopment on parcels within the established street grid, construction of new streets is not anticipated.

Therefore, street standards will have no impact on the cost and supply of housing.

Parking Requirements
The City’s parking requirements are generally in line with typical parking requirements. In the R-1 District, one (1) on-site parking space per dwelling must be provided on sites of 8,000 square feet or less in area and two (2) on-site parking spaces per dwelling on sites larger than 8,000 square feet in area. One (1) parking space must also be provided for each guesthouse. (CMC 17.10.030(F)(1)). R-1 zone sites with Class II accessory dwelling units (accessory dwelling units that are legal nonconforming units that were established prior to April 5, 1988) are required provide a minimum of one (1) parking space on-site at the time of approval. Upon enlargement or improvement of a Class II unit, one (1) parking space each for the primary dwelling on the site and for the accessory Attachment 1
Appendix B – Housing Constraints B-34 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 dwelling unit are required. Improvements to accessory dwelling units are allowed even if one or both parking spaces encroaches into a setback. Accessory dwelling units built after 1988, or that were improved, are required to provide one parking space behind all setbacks for the accessory dwelling unit and are required to comply with all parking requirements established in Chapter 17.38 CMC, Off-Street Parking Requirements, for other development on the site. These parking standards are low enough to avoid posing a constraint to development. To the degree that these standards conflict with new state law regarding accessory dwelling units, they will be corrected as the City brings its ADU regulations into line with the most recent changes in state law (see the discussion above under the heading “Special Housing Topics”).

Table B-8, summarizes off-street parking requirements as shown in Table A of 17.38.020, for all uses, projects, developments and redevelopments. New projects or developments shall only be allowed when meeting all parking requirements of this chapter and the requirements of any conditional use permit, subdivision approval or specific plan applicable to the property. Proposed uses within existing buildings may replace existing uses as long as any existing parking deficiencies on the property are not increased by the replacement. Proposed additions of floor area, new shops or dwelling units, or other similar changes in land use resulting in a net increase in parking requirements, as set forth in this chapter, shall provide all required parking generated by the new activities on the site.

Table B-8 Minimum Off-Street Parking Requirements
Land Use Basis for Requirement Land Use District Parking Factors CC SC RC R4
Permanent Residential Use Spaces per Unit 1 1 1.5 1.5
Affordable Housing for
Moderate-, Low- or Very
Low-Income
Spaces per Dwelling Unit ½ ½ ½ ½
Senior Housing, Cooperative
Housing or Group Care
Facilities
Spaces per Dwelling Unit 1/3 1/3 1/3 1/3
Guest Spaces per Each Four
Full Units 1 1 1 1
Nursing Home or Other
Resident Care Facility
Spaces per Patient or
Resident N/A 1/3 1/3 1/3
Commercial Retail or
Service Uses Not Otherwise
Specified in This Table
Spaces per 600 Square Feet
of Commercial Floor Area or
per Business/Shop Space,
whichever is Greater
1 1 1 1
SIC 701: Hotels and Motels Spaces per Rental Unit,
Including Manager’s Unit 1 1 1 1
SOURCE: CMC 17.38.020(C) Table A: Minimum Parking Requirements Attachment 1
Appendix B – Housing Constraints B-35 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023 The City has adopted a reduced parking requirement from one space to one-half space per dwelling unit for developments that include affordable housing. Parking costs contribute significantly to the cost of development in Carmel-by-the-Sea and this flexibility often makes affordable housing more feasible.

Summary of Governmental Constraints
The governmental constraints to the development of affordable housing in Carmel-by-the-Sea are summarized below.

Lack of Water Resources
The primary infrastructure constraint to the development of housing in Carmel is the lack of potable water. The lack of a reliable available water supply continues to limit growth in Carmel and throughout the Monterey Peninsula region.

Location in the Coastal Zone
Carmel-by-the-Sea is located in the California Coastal Zone and is therefore subject to a host of regulations that are not present in communities outside the Coastal Zone. The presence of additional land use regulation via the Local Coastal Program, in general, means that housing development in Carmel-by-the-Sea faces a high bar to succeed. The additional hurdles presented by Coastal Zone regulations represent an additional layer of complexity to the City’s already timeconsuming review process.

City Design Review and Permit Processing
Architectural design is important in Carmel-by-the-Sea. The historic character of Carmel’s built environment has been shaped by decades of careful and deliberative design review (referred to as “design study” in Carmel) that addresses such features as site design, architectural style, building materials, color palettes, fenestration, tree placement and landscaping. This attention to detail has resulted in a beautiful, forested village atmosphere that continues to capture the imagination of people from around the world who visit and even choose to make Carmel their home. The same design review process that has contributed to Carmel becoming a world-famous destination, however, has also impacted its ability to provide housing for lower-income households.

The City’s design review (design study) process may be lengthy for projects involving significant trees, historic resources, and/or underdeveloped plans. The following are governmental bodies responsible for decision-making through the course of development review:
 Forest and Beach Commission if removal of a significant tree is proposed (one hearing);  Historic Resources Board for historic properties and also for non-historic properties in the Conservation District (one hearing to ensure development is compatible with neighborhood context);
Attachment 1
Appendix B – Housing Constraints B-36 EMC Planning Group City of Carmel-by-the-Sea 6th Cycle Housing Element Update HCD Initial Draft August 2023  Planning Commission: One hearing, minimum, for commercial and multi-family residential projects. Preliminary hearing/review for commercial/multi-family is optional but encouraged.