0.64 R1 20 du/ac 2-Story
24 feet 13
Church of the
Wayfarer
NWC Lincoln & 7th
Avenue
010-191-002 0.37 RC 88 du/ac 2-Story
26 feet 32
Total 2.02 65
Downtown Carmel
Characteristics and Underutilization
Affordable Housing on Small Lots
While State law assumes sites 0.5 acre or larger are feasible for the development of affordable housing for lower income households, Carmel, by virtue of its original street grid, is primarily composed of small 4,000-square-foot lots. However, downtown Carmel does have a large number of 8,000 square feet lots (0.18 acre), which have been formed over the years through the merging of two 4,000-square-foot lots. As illustrated in Table C-9, excluding hotels, existing multifamily housing, and cultural and recreational facilities, Carmel has 36 lots of 8,000 square feet in size.
Table C-9 Distribution of Lot Sizes
Lot Size # of Parcels
<4,000 sf 120
4,001 to 7,999 sf 50
8,000 to 8,700 sf 36
10,000 to 12,000 sf 4
12,001 to 16,000 sf 3
>21,780 sf (0.5 acre) 1
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Carmel, along with many similar communities, has achieved affordable housing on sites smaller than
0.5 acre. In exploring the feasibility of building affordable housing on small lots, the City has reviewed numerous Housing Elements of:
● Small communities of similar size as Carmel
● Coastal communities with similar market conditions and characteristics This search yielded many examples of affordable housing projects on sites smaller than 0.5 acre.
However, in citing these examples in the Carmel Housing Element, the City only considered projects that are:
● Recent projects (within five years) that can demonstrate recent development trends ● Projects that received credits toward the 6th RHNA for the respective jurisdictions ● Projects on small sites that approximate typical Carmel parcel sizes As shown in Table C-10, affordable housing has been achieved on small sites in the region. For those projects that most closely approximate Carmel lot sizes, an average of 32 percent affordable units was achieved. The density range of these projects span a wide spectrum from fairly low density (15 units per acre) to higher high densities at about 100 units per acre.
Table C-10 Affordable Housing Projects on Small Sites
City Project Site Size
(Acres)
Estimated
Density
Very
Low/
Low
Moderate Above
Moderate
%
Lower
Income
Monterey 480 Cannery Row 0.15 407 11 0 50 22%
Monterey 449 Alvarado St 0.30 90 7 0 27 21%
Santa Cruz 2120 Mission St 0.22 64 3 0 11 21%
Santa Barbara 21 E. Anapamu 0.10 120 12 0 0 100%
Santa Barbara 116 E. Cota 0.25 116 28 0 1 97%
Pacific Grove 301 Grand Ave 0.17 65 3 0 8 27%
St. Helena 963 Hope St 0.19 26 4 1 0 80%
Ojai 408-410 Montgomery St 0.20 15 3 0 0 100%
In Carmel, a project called “Trevvett Court” was built in 2010 on an 8,000-square-foot lot at a density of 76 units per acre and an FAR of 1.09 to achieve 14 affordable units. The project is owned and managed by the Carmel Foundation and was developed without any public funding. However, the requirement for 100 percent affordable housing to qualify for the enhanced density at 88 units per acre represents an obstacle for affordable housing development. To address this impediment, the City will be amending the Municipal Code to reduce the affordable housing requirement (tentatively proposed to be 30 percent) .
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Figure C-2 Trevvett Court
Methodology for Identifying Underutilized Properties in Downtown Downtown Safari
To identify properties with potential to introduce housing in downtown Carmel via adaptive reuse/conversion, infilling, or redevelopment, AHA mobilized its members to conduct a detailed “safari” of all properties in downtown Carmel. The safaris were a highly organized, boots on the ground undertaking that saw 17 volunteers canvassing the entire commercial district of the City to collect a specific set of property data. These volunteers, utilizing a mobile app, catalogued 218 properties and nearly 1,000 leasable spaces, collecting unique data for each site including things like current use, vacancy status, and property condition to help better understand housing development potential.
Objective Criteria for Identifying Underutilized Properties The City uses a number of characteristics to narrow down properties with redevelopment and adaptive reuse potential. These include:
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● Owner Interest: Expressed interest of property owners to pursue residential uses. This represents a key consideration for redevelopment or adaptive reuse to include residential uses.
● Utilization: Vacancy is >10 percent of total leasable spaces OR vacancy + underutilized spaces >20 percent of total leasable spaces.
● Age of Structure: Buildings older than 35 years (built prior to 1990) typically require major system upgrades and are not ADA-compliant. Retrofitting existing structures to meet current ADA standards is usually cost prohibitive or even physically not feasible. Buildings that face such financial or physical constraints rarely invest significantly for modernization or systems upgrades, rendering the buildings progressively not suitable for current trends. ● Conditions of Structure: AHA members conducted a visual survey of building conditions.
Structures that are rated C4, C5, and C6 are considered in less than desirable conditions:
○ C4 (Maintained, But Requires Minor Repairs) - The property improvements show slight deferred maintenance and minor physical decline from regular wear and tear. The structure has been fairly well-kept but needs cosmetic and/or minor repairs. ○ C5 (Functional, But Requires Repairs or Rehabilitation) – Property has not been adequately maintained but is functional. Does not have any significant safety concerns. The structure shows noticeable deferred maintenance and needs substantial repairs. While the functional utility and overall livability are somewhat diminished, the structure remains usable and functional as a residential dwelling. ○ C6 (Poorly Maintained with Significant Damage) – Property has been poorly maintained.
The improvements suffer from significant damage or deferred maintenance, with defects severe enough to impact safety, soundness, or structural integrity. Substantial repairs and rehab are required, encompassing many or most major building components.
● FAR or Building Height Index: <=50 percent of allowable FAR, indicating a substantial potential for increasing the leasable/saleable areas
● Improvement to Land Value Ratio: <1.0, indicating the value of improvements (structures) is less than the value of land.
Communities often use similar factors in identifying nonvacant sites with potential for redevelopment. The factors used by Carmel are similar to those used by other communities in the coastal region.
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Table C-11 Regional Redevelopment Trends
Carmel Capitola Santa Barbara Seaside
Vacancy >10% --- --- ---
Building Conditions Requiring repairs to
significant damage --- --- ---
Age of Structure 35+ Years --- --- 30+ Years
FAR <=50% <=50% --- <= 30%
Improvement to Land Value Ratio <1.0 <1.0 <2.01 <0.5
Based on location, the City further identifies the viable properties based on opportunities for live/work units versus the City’s new Mixed Income Incentive Program, which allows projects to reach up to a total of 88 du/ac inclusive of all state and local bonuses if affordable components are included (tentatively proposed at 30 percent).
In selecting sites that are feasible for additional residential uses (either redevelopment or adaptive reuse), the City follows these rules:
● Live/Work Units – This unit type is created primarily from the conversion of existing space.
As such, among the factors discussed above, FAR or Building Height Index is not critical because the City’s methodology for projecting the potential unit yield does not assume increasing building space. Therefore, a property meeting three of the four factors would qualify a property as a viable site.
● MIIP (Redevelopment) – In contrast to live/work units, for redevelopment projects, the ability for the developer to double the building square footage or height is an attractive factor.
Therefore, FAR or Building Height Index is included as one of the factors for consideration.
A property meeting three of the five factors would qualify a property as a viable site.
Downtown Live/Work Units
Assumptions and Analysis
In cataloguing leasable spaces downtown, the resident volunteers on the Safari teams identified 266 off-street, upper story, or peripherally located storefronts that were either vacant or under-utilized.
The lack of demand for this off-street space translates into surprisingly low rents. The market for commercial space in downtown Carmel has two tiers: the spaces with frontage on main streets, such as Ocean Avenue, which command eye-popping rents (often in excess of $7.00 per square foot NNN), and these less desirable off-street spaces, which have surprisingly low rents (typically $1.50 to $2.00 per square foot NNN). Carmel does not currently allow a live/work use–i.e., a dual purpose space where someone lives and operates a business in the same unit–but if it did, the commercial rents for these off-street commercial spaces are so low, that in most cases, a property owner could C-21
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actually command a higher rent by renting these spaces as deed-restricted affordable live/work units than as strictly commercial space.
As an example, consider a 350 square foot off-street or upper story commercial space. As a purely commercial use, that space would rent for $1.50 to $2.00 per square foot. For the purposes of this illustration, let us assume the more conservative $2.00 per square foot figure, which equates to $700 per month. By contrast, if that same space were converted into a live/work space and deed restricted at a rental rate affordable to a low-income household, the property owner could charge approximately $1,629 per month, or 233% more. Even if the space were converted into a live/work unit affordable to a very low-income household, the property owner would still be able to charge a meaningfully higher rent–$934 vs. $700. The conclusion is striking: a property owner could make more money renting a small, impaired commercial space in downtown Carmel as an affordable live/work unit than as a strictly commercial space. Table C-12 extends this analysis to commercial spaces of various sizes, demonstrating the overall economic viability of the proposed program.
Table C-12 Rent Comparison – Residential versus Commercial The Housing Element includes a program to incentivize the conversion of these underutilized spaces into work/live units, provided that the units would be deed restricted as affordable housing for lower income households. Figure C-3 provides examples of underutilized commercial spaces in Carmel and Figure C-4 illustrates the conversion potential of such spaces into work/live units. These illustrations were developed by local architects who are familiar the City’s development regulations.
This particular case study is located in the CC zone. The property is a two-story building on a 4,000-square-foot lot, with 3,963 square feet of building area. Eight live/work units could be achieved by converting about 3,200 square feet into units between 350 and 430 square feet, while retaining a portion of the existing commercial space.
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Figure C-3 Examples of Underutilized Commercial Spaces
Capacity During 6
th
Cycle Planning Period
Downtown Carmel has a number of examples of an unusual building type that contains multiple, compact, commercial spaces, often arrayed along a narrow passageway or courtyard off the main pedestrian sidewalk. These Carmel compact commercial types would be suitable for full conversion of all their units from work to live/work – making them a live/work site. Downtown Carmel also has a number of conventional commercial or mixed-use buildings that have one or more compact commercial units within the larger building and these, too, would be suitable for conversion from work to live/work – making them scattered live/work units.
Overall, the safari efforts identified 20 properties appropriate for work/live sites, and many more properties that could host live/work units. A total of 259 vacant or underutilized spaces were identified. Specifically, five of the identified sites have expressed owner interest to pursue housing by C-23
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converting the existing leasable commercial spaces into work/live units. Based on the number of leasable spaces, excluding spaces with prime street frontage, existing residences, and local knowledge of feasibility/probability by AHA members, the City estimates at least 148 work/live units can be achieved. Conservatively, the City anticipates only 50 percent of these spaces (85 units, rounding up at each property) would be converted during the 6th cycle Housing Element planning period. Such converted units would be required to be deed restricted as housing affordable to lower income households (43 very low income and 42 low income).
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Figure C-4 Work/Live Adaptive Re-Use Case Study
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Table C-13 Properties with Live/Work Potential
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Opportunities for the Mixed Income Incentives Program
Overall, the Safari efforts identified 20 properties at least 8,000 square feet in size and appropriate for redevelopment/infill to provide housing units on site. These properties meet at least three of the factors used to determine suitability, and at 88 units per acre, these properties have a potential yield of 385 units. If following the Trevvett Court model (at 76 units per acre), these properties could accommodate 320 units.
However, to diversify the City’s strategies for the 6th cycle RHNA, this Housing Element includes only the three properties with expressed owner interest for redevelopment. These three properties have a combined capacity of 27 units at 40 units per acre (the maximum allowable density, excluding density bonus), with an income distribution of 3 very low income, 3 low income, 3 moderate income, and 21 above moderate income units (30 percent lower and moderate income).
Case Study Analysis
Trevvett Court (a recent 100% affordable housing site on a 8,000 square feet lot with 14 units – for a density of 76du/acre) is a single-use senior residence. Both to test the feasibility of even higher densities on similar lots and the feasibility of introducing street-front commercial uses, which are mandatory in some downtown areas, local architects volunteered pro bono analytical services. They studied typical midblock and corner lots both with and without considering parking facilities, as new-builds or re-use projects, and with an eye toward providing a mix of apartment sizes, including family units. Their research showed that within current allowable building envelopes, densities of up to 88 du/acre are possible throughout all downtown zones, even when including street front commercial space (See Figure C-5).
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Table C-14 Mixed Income Incentive Program Sites
APN Property Name GP/
Zoning
Property
Owner
Interest
Utilization
(% Vacant
or
Under-utiliz
ed)
Condition Year
Built
ImprovementLand Value
Ratio
FAR or
Height
Index
Units
(40 du/ac)
010-138-020 Su Vecino Court CC Yes 0% C4 1963 55 No 9
010-191-001 Cottage Restaurant Complex CC Yes 0% C6 1940 .72 Yes 9 010-142-001 GBG building SC Yes 0% C3 1975 .51 Yes 9
Total 27
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Additional Opportunities for Housing
In addition to the various opportunities presented in previous sections, the City also has a number of scattered sites where additional housing could be accommodated. These sites total 56 additional units, including 2 low income and 54 above moderate income units. Detailed descriptions of these sites are included in subsection C.6.
Nonvacant Site Analysis Methodology
Government Code Section 65583.2(g)(2)
Existing Uses
Each site included in the Site Inventory has been selected by the City based on its perceived developability and/or expressed interest by a property owner. All zoning districts within the city allow residential uses.
Many sites included in the Sites Inventory are zoned commercial. This is in part, a result of the City’s Municipal Code requirement that all newly constructed second-story floor area, including area in new buildings, remodeled buildings and replacement, rebuilt or reconstructed buildings, to be occupied by residential dwellings only and shall not be used for any commercial land use (CMC
17.14.050F). Currently, the Commercial District has a number of vacant spaces in need of remodeling and building code updates. Timing is ripe for redevelopment and/or second story additions to accommodate residential units, as remodels and repairs are currently being undertaken and are expected to continue.
These residential unit requirements have not been an impediment to development in the commercial district, and have successfully resulted in two-story structures that support residential development on the second floor and commercial on the ground floor. The City has not received applications or requests for single-story developments in the commercial district. This is in part due to land value and the cost of construction, which does not support the development of single-story commercial buildings in Carmel-by-the-Sea. The City’s effort to support mixed-use development has been a strategy to encourage the development of housing, despite its built-out nature. Many commercial property owners have expressed interest in converting underutilized second floor office space to residential use or constructing a second story to accommodate residential units. To this end, there are several programs in Chapter 2 that seek to take advantage of this emerging opportunity by leveraging the in-depth analytical data collected by the AHA safari efforts including Programs 1.1.C (Live/Work Housing), 1.1.D (Mixed Income Incentive), and 1.1.E (Affordable Housing on Religious Facility Properties).
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A goal in selecting sites has been to minimize displacement. For many sites, the expectation that housing will be developed in the future is based on receipt of property owner interest in adding a second story to existing commercial structures to develop residential units. Conversion of overnight visitor serving units either through redeveloped housing sites (Program 1.1.F: Hotel to Residential Development) or construction of on-site employee housing (Program 1.1.G: Employee Housing) is another viable strategy that the City is employing to develop residential units due to actual interest.
In addition, the conversion of downtown office space and parking lots appears to have a strong possibility of yielding residential units (Program 2.1.A: Incentives for Mixed Use Development and Program 2.3.A: Preserve and Increase Upper Floor Residential Use).
While the City does not anticipate the displacement of low- or very low-income households, the City is prepared to comply with the requirements of Government Code section 65915, subdivision (c)(3). Program 2.1.C in Chapter 2 will be in effect to require replacement housing units subject to the requirements of the Government Code. Additionally, CMC 17.14.050.A prohibits the conversion or demolition of an existing residential unit unless replacement housing is provided subject to the findings in 17.64.070.
Development Trends
Historically, residential development in Carmel-by-the-Sea has been most feasible using densities ranging between 22-33 dwelling units per acre. Development trends in the City reveal successful residential development in the commercial district primarily through office conversion and second- story additions for residential units. In the last 10 years, the City has not had any one-story developments in the commercial districts. All new construction in the commercial districts has consisted of two- story buildings with second-floor residential use (as required in CMC Section 17.14.050.F).
This has been a successful strategy utilized by the City to enable the development of residential units within the constraints of limited developable land. The following projects are examples of 5th cycle residential development in Carmel-by-the-Sea, which have been considered in determining the realistic capacity of sites identified in the Site Inventory.
Some of the most recent mixed-use development projects include:
Great Valley Holdings/Clark Apartments: In 2020, the Planning Commission approved the construction of a new two-story mixed-use building. The 3,600-square-foot site contained a 2,200- square-foot two-story commercial building with surface parking. The project consisted of demolishing the existing building and constructing a new 3,500-square-foot two-story mixed-use building for a ground-floor restaurant and two second-floor rental apartment units. The building was previously occupied on both floors by a restaurant and had been vacant for a few years. The project density is 25 dwelling units per acre.
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This project is an example of redeveloping an underutilized site with a new two-story mixed-use building in the Service Commercial (SC) District. No appeals of the project were filed. The project has been constructed and received final occupancy.
Schultz: In 2020 the Community Planning & Building Director approved an interior and exterior remodel of a commercial space in a 4,500-square-foot multi-tenant two-story mixed-use building in the Service Commercial (SC) District for the conversion of second-floor commercial space to a 1,160-square-foot apartment. The property is 4,000 square feet (0.09 acres). The residential density on this mixed-use parcel is 22 du/acre.
Parashis: In 2020 the Community Planning & Building Director approved minor exterior alterations to a 6,700-square-foot two-story commercial building in the Central Commercial (CC) District to facilitate the conversion of second-floor office space to a 2,118-square-foot apartment.
The property is 6,400 square feet (0.15 acres). The residential density on this mixed-use parcel is 7 du/acre. Other past mixed-use development projects are shown in Table C-15.
Table C-15 Past Mixed-Use Development Projects
Project Name
Year
Approved
Zoning
District
Lot Size
(s.f.)
Residential
Spaces
Units Per
Acre
Del Dono 2016 SC 8,000 8 44
Fink
Condominium 2017 CC 4,000 1 11
Lincoln Lane 2018 SC 8,000 2 11
Marliz Estate 2018 CC 2,750 1 17
Brigantino 2018 RC 3,500 2 25
MDC Real
Estate 2018 CC 4,000 1 11
Brosche
Building 2019 CC 3,470 2 28
Flint-Herman
Residence 2019 RC 3,500 1 25
Der Ling
Building 2019 CC 3,000 1 16
While many of the projects listed above utilized densities between 22-33 dwelling units per acre, some developed at 44 dwelling units per acre (Del Dono I and Del Dono II) and a few developed below 20 dwelling units per acre (Fink Condominium; Lincoln Lane; MDC Real Estate; Marliz Estate; Der Ling Building; and Parashis). Additionally, all but one of the projects listed above are less than 0.5 acres. These factors were taken into consideration when determining appropriate densities to apply to the Sites Inventory, and supports the City’s decision to amend the base zoning for the commercial zoning districts (SC, RC, and CC) and the multi-family residential district (R-4) to C-31
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establish a minimum density of 33 dwelling units per acre. The intention of this zoning code amendment is to facilitate the development of residential units at a higher yield, rather than enabling the development of larger units at a lower yield.
Considerations for Capacity Analysis
Dry Utilities and Water Capacity
Current or planned availability and accessibility of sufficient water, sewer, and dry utilities has also been considered and reported for each site. All sites have sufficient dry utilities. Program 1.2.A has been included to grant priority water and sewer services to proposed developments that include units affordable to lower-income households now that On January 27, 2025, the Monterey Peninsula Water Management District (MPWMD) adopted Ordinance 197 allocating 14 acre feet of water to the City (see Chapter 2).
Site Typology
Government Code Section 65583.2 (c)
This housing plan and Site Inventory provides capacity for a variety of housing types; including multi-family rental housing, factory-built housing, mobile homes, housing for agricultural employees, supportive housing, single-room occupancy units, emergency shelters, and transitional housing. The Zoning Ordinance and General Plan for the sites allow the housing types listed above. Figure C-2 illustrates the anticipated housing development types included in this site inventory.
To enable the development of a variety of housing types, the City has expanded possible options for property owners to construct, rehabilitate, convert, or add to an existing single-story structure including:
● Zoning changes included with Program 1.1.F in Chapter 2 that incentivize existing overnight visitor accommodation sites to be converted into multi-family housing units; and ● Zoning changes with Program 1.1.G in Chapter 2 that incentivize the constriction of employee housing units at overnight visitor accommodation sites ● Zoning changes with Program 1.1.C in Chapter 2 that incentivize the development of “Live/Work” units in underutilized commercial spaces.
Adjustment Factors for Realistic Capacity
Government Code Section 65583.2(c)(2)
Land use controls and site improvement requirements have been analyzed for constraints within C-32
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Appendix B – Housing Constraints, and necessary changes to the review process are included as programs within Chapter 2 – Goals, Policies and Programs. Additionally, the City will amend the Municipal Code base zoning for the commercial zoning districts (SC, RC, and CC) and the multifamily residential (R-4) zoning district to establish a minimum density of 22 dwelling units per acre and a maximum allowable density of 40 units per acre, with a total capacity of 88 units per acre inclusive of local and State density bonuses, to increase the potential yield of residential units. The realistic development capacity for the sites begins with assuming those process changes to be in place by or prior to July 2025. Generally, the following adjustment factors have been considered for determining realistic capacity of the sites:
● Site geometry and on-site improvements;
● Age of structures and building conditions
● Vacancy and under-utilization;
● Improvement-to-land value ratio; and
● Building height and FAR index.
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Table C-16 Additional Scattered Siteus
Site #
Location
(Reference to ECO NW Study) APN Zoning General
Plan Acreage
Applied
Density
(DU/AC)
Minimum
Capacity Very Low Low Moderate Above Moderate
Primary Underutilized Sites
11 Forest Cottages Specific Plan,
NE Corner of Ocean & Mountain View
010085004000
010085005000 R-1 SFR 0.30 20 6 -- 2 -- 4
010085003000
Subtotal Primary Underutilized Sites 0.30 6 0 2 0 4
Sites Recycled from 5th Cycle
12 Court of the Fountains
NW Corner Mission & 7th 010141003000 CC CC 0.37 33 12 -- -- -- 12 13 First American Title
7th 2 SW of Mission 010142013000 SC CC 0.07 33 2 -- -- -- 2 14 Office building
NE Corner Monte Verde & 7th 010191004000 RC RC 0.07 33 2 -- -- -- 2 15 Yafa
NW Corner Junipero & 5th 010097007000 SC CC 0.18 33 5 -- -- -- 5 16 Three Garages Site (#7) 010098004000 SC CC 0.11 33 3 -- -- -- 3 17 Carmel Realty Office Site (#4)
NE Corner 8th & Delores 010145008000 RC RC 0.19 33 6 -- -- -- 6 18 (Parashis) Millard Building
NW Corner Dolores & 6th 010138006000 CC CC 0.13 33 4 -- -- -- 4 19 The Agency
NW Corner Ocean & Dolores 010139001000 CC CC 0.09 33 2 -- -- -- 2 21 Enzo's
San Carlos 2 SW of Ocean 010146001000 CC CC 0.15 33 4 -- -- -- 4 24 Paseo San Carlos Square #1
San Carlos 2 NW of 7th Ave 010146004000 CC CC 0.09 33 2 -- -- -- 2 C-34
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Site #
Location
(Reference to ECO NW Study) APN Zoning General
Plan Acreage
Applied
Density
(DU/AC)
Minimum
Capacity Very Low Low Moderate Above Moderate
25 Carmel Office Supply & Business Center
Lincoln SE of Ocean 010147010000 CC CC 0.09 33 2 -- -- -- 2 Subtotal Recycled Sites 1.54 44 0 0 0 44
Total 1.84 48 0 2 0 48
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C.5 Summary of RHNA Strategies
The revised Housing Element provides a comprehensive strategy to meet the City’s RHNA through diverse housing options and locations.
Table C-17 Summary of Sites Inventory
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C.6 Technical Background Documents
Hotel Conversion Proforma - FORTHCOMING
Legal Analyses for Church Properties - FORTHCOMING
Descriptions of Scattered Sites - FORTHCOMING
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