Carmel-by-the-Sea City Council
November 4, 2025

Appendix A – Housing Needs and Fair Housing Report A-105 Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 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 4

Housing Constraints

APPENDIX B
ATTACHMENT 5

Appendix B – Housing Constraints B-ii
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 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-57 Tables
Table B-1 - Residential Land Use Designations .............................................................................................................. B-4 Table B-2 - Residential Uses Permitted by Zone............................................................................................................. B-6 Table B-3 - Residential Development Standards ........................................................................................................... B-12 Table B-4 - R-1 District Base Floor Area and Bonus Floor Area Standards for Typical Lots .............................. B-13 Table B-5 - Maximum Density Standards ....................................................................................................................... B-15 Table B-6 - Maximum Height Standards ........................................................................................................................ B-16 Table B-7 - Minimum Off-Street Parking Requirements ............................................................................................. B-19 Table B-8 - Summary of Community Planning & Building Fees (2023-2024) ......................................................... B-41 Table B-9 - Jurisdictional Comparison of Average Design Review/Study Fees ...................................................... B-44 Table B-10 - Estimate of Total Development Fees Imposed ..................................................................................... B-45 Table B-11 - Review/Approval Requirements and Processing Times ....................................................................... B-49 Table B-12 - Permit Streamlining Act Processing Times ............................................................................................. B-50 Table B-13 - Summary of Governmental Constraints .................................................................................................. B-56 Table B-14 - Summary of Non-Governmental Constraints ........................................................................................ B-66 ATTACHMENT 5

Appendix B – Housing Constraints B-1
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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-the- Sea.

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 jurisdiction.

Water service by Cal-Am is constrained by State Water Resources Control Board (SWRCB) Order WR 95-10,1 which determined that in 1995 approximately 70 percent of Cal-Am supply was based on 1 See Order No. WR 95-10,
https://www.waterboards.ca.gov/waterrights/board_decisions/adopted_orders/orders/1995/wro95-10.pdf ATTACHMENT 5

Appendix B – Housing Constraints B-2
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 20082to 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 water3for 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 Company.4
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 (program 1.2.A) 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. The City is currently working with the MPWMD to utilize water-saving fixtures for every building permit application, which helps to minimize water usage and thereby conserve water for future allocation in new developments. The City of Carmel is also supportive of Pure Water Monterey’s and Cal-Am’s efforts to provide additional water for new units, and promote desalination.

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 2 See Order WR 2009-0060,
https://www.waterboards.ca.gov/waterrights/board_decisions/adopted_orders/orders/2009/wro2009_0060.pdf 3 See June 2023 MPWMD Monthly Allocation Report
https://www.mpwmd.net/asd/board/boardpacket/2023/20230717/10/Item-10-Exh-10-A.pdf 4 See June 2023 MPWMD Monthly Allocation Report – Entitlements - https://www.mpwmd.net/asd/board/boardpacket/2023/20230717/10/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 5

Appendix B – Housing Constraints B-3
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 6 inches to 27 inches in diameter together with nearly 4 miles of force mains, 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 Carmel-bythe-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 units.5
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.

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 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 5

Appendix B – Housing Constraints B-4
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 on 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 in limited areas of the City identified on the Carmel Zoning Map as the Beach & Riparian Overlay/Coastal Commission Appeal Jurisdiction. Land uses within the appeal jurisdiction are limited to single-family residential and open space. 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.

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 recent remedies brought forward by the California legislature to facilitate housing development are either outright inapplicable in the Coastal Zone or are secondary to California Coastal Commission policies that protect habitat resources (SB 9).

ATTACHMENT 5

Appendix B – Housing Constraints B-5
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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. Essentially, all zoning districts allow residential development. Below are the two 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 districts provide for some residential uses above commercial uses or on ground floor after review and approval of a conditional use 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.  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 ATTACHMENT 5

Appendix B – Housing Constraints B-6
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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.

To encourage the development of multi-family residential development, the City has included Program

3.1.G, which includes an amendment to the Municipal Code to restrict new single-family development in the R-4, CC, RC, and SC Districts (see Chapter 2). Existing single-family dwellings in these districts will be considered legal nonconforming uses.

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/).

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 C – – –
34-44 dwelling units/acre – C 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
ATTACHMENT 5

Appendix B – Housing Constraints B-7
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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
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 – – – – – –
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
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 singlefamily 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.

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 between 23 and 33 du/acre does not have specific findings creating uncertainty for developers of ATTACHMENT 5

Appendix B – Housing Constraints B-8
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 housing projects. Densities between 34 and 44 du/acre also require a UP and special findings are outlined in Municipal Code Section 17.64.190 (Residential Construction at Densities Between 33 and 44 Units Per Acre). Because the City does not have an inclusionary zoning ordinance, the UP findings are used as a tool to require affordable housing within this density range. For example, in the R-4 District, residential projects with densities between 33 and 44 du/acre must provide at least 20 percent of all units for lower-income households, 10 percent of all units for very low-income households, or 50 percent of all units for senior housing. In the CC, SC, and RC Districts, residential projects with densities between 33 and 44 du/acre are eligible for State Density Bonus Law as set forth in Government Code Section 65915 et seq.

Residential projects with densities between 45 and 88 du/acre are also subject to a UP and special findings that require the project to be 100 percent affordable to lower-income households.

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.

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 multi- family 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 onsite 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 diversifying the housing stock by requiring ATTACHMENT 5

Appendix B – Housing Constraints B-9
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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.

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. The existing overlays do not function as constraints to development.

ATTACHMENT 5

Appendix B – Housing Constraints B-10
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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.

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, Building Intensity, and Height
Density, building intensity or floor area ratio (FAR), and building height are established in the Land Use Element and implemented by the Municipal Code. The following details allowed densities, building intensity, and heights in all residential districts (R-1, R-4, CC, SC, and RC). “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 5

Appendix B – Housing Constraints B-12
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 R1 or R-4
26 feet
2 stories
N/A 33 units/acre
44 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

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 percent of each side property line. The remaining 50 percent 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.

ATTACHMENT 5

Appendix B – Housing Constraints B-13
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Floor Area Ratio
Floor Area Ratio (FAR) expresses the ratio of building square footage to land square footage and allows for flexibility in design as long as other development standards (such as height and setbacks) are compliant. The following are floor area ratio standards according to square footage in the R-1 District.  On sites less than 4,000 square feet, the maximum base floor area cannot exceed 45 percent of the area of the building site;
 On sites between 4,000 and 10,000 square feet, the base floor area is restricted to less than 45 percent of the area of the building site. The following formula applies to calculate the exact allowed base floor area: Building Site Area (0.45 – ((Sq. Ft. Over 4,000) (0.02))/1,000; and  On sites larger than 10,000 square feet, the base floor area is as stated in Table B-4. The maximum allowed floor area on any building site 22,000 square feet or larger cannot exceed 6,000 square feet.

Table B-4 - R-1 District Base Floor Area and Bonus Floor Area Standards for Typical Lots Site Area
(Square Feet)
Base Floor Area
(Square Feet)
Maximum Bonus Floor Area
(Square Feet)
Maximum Total Floor Area*
(Square Feet)
4,000 1,800 600 2,400
5,000 2,150 717 2,867
6,000 2,460 820 3,280
7,000 2,730 910 3,640
8,000 2,960 987 3,947
9,000 3,150 1,050 4,200
10,000 3,300 1,100 4,400
11,000 3,450 1,150 4,600
12,000 3,600 1,200 4,800
13,000 3,735 1,245 4,980
14,000 3,870 1,290 4,160
15,000 4,005 1,335 5,340
16,000 4,140 1,380 5,520
17,000 4,255 1,418 5,673
18,000 4,370 1,457 5,827
19,000 4,485 1,495 5,980
Source: City of Carmel-by-the-Sea Municipal Code Title 17 Notes *The “maximum total floor area” equals the base floor area plus the bonus floor area. The numbers in this column would require half of the total floor area to be located in a basement.

In an effort to maximize development of parcels zoned for R-4 uses, the City does not apply FAR as a restriction. Additionally, to encourage the development of multi-family rental units, sites of 4,000 square feet or less in area may be developed with apartments, condominiums, or a combination of both. On sites that are greater than 4,000 square feet or more in size, at least 50 percent of all residential units on the site must be provided as rental apartment units. This encourages the development of rental units and does not pose a constraint to multi-family rental housing.

ATTACHMENT 5

Appendix B – Housing Constraints B-14
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 In the Commercial Districts, the maximum floor area ratio is 10,000 square feet. The following are floor area ratio standards according to square footage in the Commercial Districts.  CC and SC Districts: the basic floor area ratio allowed for one-story buildings is 95 percent of the site area and for two-story buildings is 135 percent of the site area. In addition to the basic floor area ratio, two-story buildings may qualify for a maximum 15 percent bonus, which allows a floor area ratio up to 150 percent of the site area.  RC District: the basic floor area ratio allowed for one-story buildings is 70 percent of the site area and for two-story buildings is 80 percent. In addition to the base floor area ratio, two story buildings may qualify for a bonus of up to 15 percent, which allows a floor area ratio up to 95 percent of the site area.

Additionally, the City allows a floor area bonus for affordable housing projects in all commercial districts and the R-4 District as follows:

A. Moderate Income. Up to five percent for projects if at least 25 percent of the units in a housing project are reserved for persons of moderate income as defined in Chapter 17.70 CMC;
B. Low Income. Up to 10 percent for projects if at least 20 percent of the units in a housing project are reserved for persons of low income as defined in Chapter 17.70 CMC; or C. Very Low Income. Up to 15 percent for projects if at least 10 percent of the units in a housing project are reserved for persons of very low income as defined in Chapter 17.70 CMC.

The City has utilized FAR to restrict the allowed building size of units as a means to retain a village-like character and as an attempt to yield more affordable residential units. However, despite units being smaller in size, the cost of labor and land value outweighs the potential for affordability.

Restricting the building size also renders larger proportions of lots undevelopable. The City should consider increasing the allowed FAR to increase the developability of land.

Density
As shown in Table B-5, maximum base densities range from 0-22 dwelling units per acre, and when density bonuses are enabled, up to 88 dwelling units per acre. The City’s bonus density and density bonus allow higher densities in the Multi-Family (R-4) and Commercial Districts (CC, SC, and RC).

To enable residential development at higher densities, the City included Program 3.1.G, which establishes a minimum density of 33 dwelling units per acre for the R-4, SC, CC, and RC districts. This intention is rooted in facilitating a higher yield of units to enable the development of affordable residential units.

ATTACHMENT 5

Appendix B – Housing Constraints B-15
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Table B-5 - Maximum Density Standards
Permitted Base Zoning Bonus Density Density Bonus
R-1 District 2-11 du/ac - -
R-4 District 0-33 du/ac* (up to 44 du/ac when affordable) Up to 44 du/ac - CC District 0-22 du/ac* (up to 88 du/ac when 100 percent affordable) - Up to 88 du/ac SC District 0-22 du/ac* (up to 88 du/ac when 100 percent affordable) - Up to 88 du/ac RC District 0-22 du/ac* (up to 88 du/ac when 100 percent affordable) - Up to 88 du/ac Source: City of Carmel-by-the-Sea Municipal Code 17.08.040; 17.64.190 Notes: *The City proposes Program 3.1.G to establish a minimum density of 33 dwelling units per acre to enable high densities in the multi-family and commercial districts.

The current maximum density standards for multifamily housing, which is permitted in the R-4, CC, SC, and RC Districts, poses a constraint to the development of affordable rental units due to the limited potential yield of units. This impacts the feasibility of affordable residential projects. To enable the development of affordable residential units at a higher yield, the City proposes to establish a minimum density of 33 dwelling units per acre to the base zoning for the R-4, CC, SC, and RC Districts. This minimum density will eliminate the underutilization of sites, resulting in a higher yield of residential units, which will increase the feasibility to develop affordable units.

Program 3.1.G establishes and monitors the amendment to the Municipal Code to establish the minimum density to the aforementioned districts.

Lot Coverage
As shown above in Table B-5, maximum lot coverage varies according to zoning district. The R-1 District is the most restrictive in lot coverage, allowing a maximum of 22 percent of the base floor area.

The R-4 District does not define lot coverage, rather the City utilizes a maximum density of up to 33 dwelling units per acre, or up to 44 dwelling units per acre when using a density bonus. The CC and SC Districts both allow a maximum lot coverage of 95 percent of the site area for one-story buildings; 135 percent of the site area for two-story buildings; and 150 percent of the site area with a 15 percent bonus.

The RC District allows a maximum lot coverage of 70 percent of the site area for one-story buildings; 80 percent of the site area for two-story buildings; and 95 percent of the site area with a 15 percent bonus.

The City’s development standards for lot coverage in the R-4 District poses a considerable constraint on the development of affordable residential units. However, the City proposes to establish a minimum density of 33 dwelling units per acre for the base zoning, to increase the density and allowed lot coverage on sites. As previously stated, establishing a minimum density will eliminate the underutilization of sites, resulting in a higher yield of residential units, which will increase the feasibility to develop affordable units. Program 3.1.G establishes and monitors the amendment to the Municipal Code to establish the minimum density to the aforementioned Districts.

ATTACHMENT 5

Appendix B – Housing Constraints B-16
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Height
As shown in Table B-6, maximum base height ranges from 18 to 30 feet and a maximum of two stories are allowed in the City’s residential and commercial districts. Maximum height, coupled with FAR, was specifically determined on a neighborhood basis to character and scale, either to preserve existing lower density neighborhoods or encourage medium-density development, such as in the Commercial District.

Table B-6 - Maximum Height Standards
R-1
District
R-1-BR
District
R-1-PO
District
R-4
District RC3 CC3 SC3
Number of stories allowed 2 2 1
1 22 2 2 2
Roof height of first story (ft) 18 18 18 - - - -
Roof height of second story (ft) 24 18 24* 26 26 30 30
Source: City of Carmel-by-the-Sea Municipal Code Title 17 Notes:

1. See CMC 17.20.100, Required Planning Commission Review, and CMC 17.20.110, Review Criteria

2. Block 37, Lots 3, 5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 22 and 24 within R-4 District require development approval by Planning Commission due to potential effects on significant coastal viewshed (CMC 17.12.050).

3. Building sites which face, abut or adjoin any property in the R-1 district shall be limited to a height of 24 feet (CMC 17.14.150).

The R-1 District permits a maximum height of 24 feet. The R-1 Park Overlay District has specific development standards for two story developments. The Planning Commission must make the following required findings for approval:

1. That due to the topography of the site relative to the adjoining park or open space land, the proposed building would not exceed the height or bulk of an 18-foot one-story structure built on a site at the same grade as the adjoining park or that topography and height are irrelevant because of the location of the building on the site avoids view of the buildings from the park; and

2. That those portions of the building visible from the park will exhibit a human scale and residential character through the use of simple building forms and natural materials that will not detract from the enjoyment of the park or open space by the public.

These required findings have not been a constraint to development within the City.

The R-1 Beach and Riparian Overlay District has the lowest maximum height standard at 18 feet. This Overlay District serves to provide review standards applicable to public and private property development located near public beach lands to ensure proposed development is compatible with the City’s coastal resources and the State’s Coastal Act (CMC 17.20.120).

The R-4 District permits a maximum height of 26 feet. Specific requirements pertaining to viewsheds may apply to new developments in the R-4 District (CMC 17.12.050). This is due to the City’s proximity to the coast and areas designated with significant coastal views. Development approval by the Planning Commission is required if development is located in Block 37, including Lots 3, 5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 22, and 24 (CMC 17.12.050). The review process includes the following finding.

ATTACHMENT 5

Appendix B – Housing Constraints B-17
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025  No structure shall be approved for construction and no vegetation shall be planted or maintained within the viewshed at a height that exceeds the 350-foot contour elevation as referenced on the topographic survey dated June 1983 by Clayton B. Neill Jr. (W.O. #6415) (CMC 17.12.050).

The review process and required findings are minimal and developed in accordance with the Local Coastal Program. To ensure height allowance does not impede residential development in the R-4 District in the future, the City should evaluate the impacts of increasing the height allowance.

Currently, the Municipal Code does not pose an undue constraint to the development of multifamily residential units.

The Commercial District (RC, CC, SC) permits a maximum height of 30 feet. All newly constructed second story floor area, including area in new buildings, remodeled buildings and replacement, rebuilt or reconstructed buildings, shall be occupied by residential dwellings only and shall not be used for any commercial land use (CMC 17.14.050F). This requirement for second story development in the Commercial District has resulted in recent residential development and conversations with interested property owners, as many properties within the Commercial District are in need of remodeling.

Therefore, the Municipal Code does not pose an undue constraint on residential development in the Commercial District.

Open Space Courtyards and Intra-Block Walkways
The City’s development standards related to open space courtyards and intra-block walkways have been developed to conserve the City’s unique charm and design character. As a result, the City has established regulatory processes for the construction of new and alterations to existing courtyards and intra-block walkways. Courtyards and intra-block walkways are permitted in the Commercial District (CC, SC, RC).

Courtyards are defined as an open space on private property that is linked to an adjoining sidewalk or walkway in such a manner as to encourage public access. Courtyards are required to be enclosed on at least two sides by buildings and must remain open to the sky. The City allows a floor area bonus for courtyards with a minimum width of 20 feet and a minimum area of 400 square feet.

Intra-block walkways are defined as publicly accessible ground level pedestrian paths providing a connecting route between two or more different streets around a block. The City allows a floor area bonus for intra-block walkways with a minimum width of four feet.

All proposals to alter the size, location or configuration of a courtyard or intra-block walkway require review by the Planning Commission. Generally, such changes are approved only if the Commission finds that the proposed change would be an improvement over existing conditions such as improving public access, allowing for creation of new or better link with courtyards or walkways nearby or eliminating a safety hazard. Existing courtyards and intra-block walkways are not to be removed. This review process includes a single hearing, which can be completed concurrently with design review.

ATTACHMENT 5

Appendix B – Housing Constraints B-18
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 The City’s current development standards for courtyards and intra-block walkways may pose some level of constraint to the development of affordable residential units based on the requirement of Planning Commission review. However, with new construction, the development of courtyards and intra-block walkways will likely improve existing conditions and therefore be approved with ease.

Development standards related to courtyards and intra-block walkways have not impeded development, resulted in fewer units or lower density development in the City. Currently, the City has three ongoing multi-family rental projects that incorporate courtyards and or intra-block walkways: Ulrika Plaza, Scandia Lopez/Hakim, and JB Pastor.

The Ulrika Plaza project is fully entitled and advancing towards development, with building permits anticipated by May 2024. This project aims to develop 12 market-rate rental residential units.

Similarly, the Scandia Lopez/Hakim project is fully entitled, and building permits are in development and expected to be submitted by June 2024. This project is designed to introduce an additional three new rental residential units to the historic Percy Parkes Building. The project did not include any incentives, concessions, or bonuses. The project did benefit from an existing code provision that waives on-site parking in the Central Commercial District.

Regarding the JB Pastor project, the developer has requested a preliminary review by the Planning Commission to gather feedback on the design before submitting a formal application. This project aims to develop eight market-rate rental residential units.

Overall, the development standards related to courtyards and intra-block walkways have not discouraged development within the City.

Parking Requirements
The City’s parking requirements are generally in line with typical parking requirements. In the R-1 District, 1 on-site parking space per dwelling must be provided on sites of 8,000 square feet or less in area and 2 on-site parking spaces per dwelling on sites larger than 8,000 square feet in area. One parking space must be provided for each guesthouse. (CMC 17.10.030(F)(1)).

Under the current Municipal Code, 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 to provide a minimum of one parking space on-site at the time of approval. Upon enlargement or improvement of a Class II unit, one parking space each for the primary dwelling on the site and for the accessory 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, OffStreet Parking Requirements, for other development on the site.

The City’s ADU ordinance was last updated in 2017 (Ord. 2017-10 § 1 (Exh. A), 2017). The City is in the process of updating its ADU Ordinance to incorporate state laws that have expanded since 2017, ATTACHMENT 5

Appendix B – Housing Constraints B-19
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 and to clarify the ADU permitting process for property owners. The City intends to remove all parking requirements for ADUs in the updated ADU Ordinance. Program 1.3.C establishes and monitors the implementation of Municipal Code amendments related to ADUs (see Chapter 2).

Table B-7 summarizes off-street parking requirements as shown in Table A of CMC 17.38.020, for all uses, projects, developments and redevelopments; note that accessory dwelling units are not included in Table A of CMC 17.38.020 but are included in Table B-7 below. The parking requirements outlined in Table B-7 fully satisfy parking requirements for individual projects.

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. Parking can be provided on-site, off-site, or through payment of in-lieu fees.

Table B-7 - Minimum Off-Street Parking Requirements
Land Use Basis for Requirement
Land Use District Parking Factors
CC SC RC R4
Permanent Residential Use Spaces per Dwelling Unit 1 1 1.5 1.5 Accessory Dwelling Units Spaces per Dwelling Unit 0 0 0 0 Affordable Housing for Moderate-,
Low- or Very Low-Income
Spaces per Dwelling Unit 1/2 1/2 1/2 1/2
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 Note: The City follows State ADU law. When an ADU is created through the conversion of a garage or carport, replacement of the off-street parking space(s) are not required. Additionally, because parking is not required to be provided for ADUs located within one half-mile walking distance of public transit, ADUs in Carmel-by-the-Sea do not require parking.

Parking costs contribute significantly to the cost of development in Carmel-by-the-Sea and this flexibility often makes affordable housing more feasible. The City has adopted a reduced parking requirement from one space to one-half space per dwelling unit for affordable housing units (Program

1.1.C, see Chapter 2). This program also establishes waived parking requirements for affordable housing units in the CC District and reduced parking standards for senior housing developments.

Program 3.1.E establishes reduced parking requirements for affordable residential development, ATTACHMENT 5

Appendix B – Housing Constraints B-20
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 including waiving in-lieu fees for affordable units. As a result of these concessions, potential constraints to development associated with existing parking standards will be reduced.

Cumulative Impacts
Overall, the City’s existing land use controls may pose potential constraints on the development of affordable housing as a result of limited building size; limited maximum density and lot coverage standards in the R-4 District; limited height standards in the R-4 District; and open space and intrablock walkway review requirements for new development and altering existing structures. The City should consider the following to reduce potential barriers to developing affordable housing:

1. Currently, FAR requirements for the city’s Commercial Districts do not pose a constraint to the development of multi-family housing. However, to ensure FAR does not result in the underutilization of parcels in the future, the City should consider increasing the allowed FAR;

2. The current maximum density standards for multi-family housing, which is permitted in the R-4 (max. 33 dwelling units per acre), CC, SC, and RC (max. 22 dwelling units per acre) Districts, pose a constraint to the development of affordable rental units due to the limited potential yield of units. This impacts the financial feasibility of affordable residential projects. The City includes Program 3.1.G to establish a minimum density of 33 dwelling units per acre for the base zoning in the R-4, CC, SC, and RC Districts (see Chapter 2);

3. Currently, development standards for maximum building height do not pose a constraint to the development of multi-family housing. However, to ensure height allowance does not impede residential development in the R-4 District in the future, the City should evaluate the impacts of increasing the height allowance;

4. While the City’s parking standards do not inherently pose a constraint to development, parking costs generally impact the cost of development. To offset parking costs associated with development, the City has reduced parking requirements in the CC District for affordable housing units and senior housing units (Program 1.1.C, see Chapter 2).

Additionally, Program 3.1.E reduces parking requirements in the R-4, RC, and SC Districts (see Chapter 2).

Objective Design and Development Standards
The City currently lacks a strictly objective set of design guidelines. Detailed design guidelines for the R-1 District 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 R-1 design guidelines are being updated this year, the City does not currently have plans to develop a set of strictly objective standards for multi-family or mixed-use 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 ATTACHMENT 5

Appendix B – Housing Constraints B-21
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 proposes to develop objective design standards for mixed-use and multi-family residential projects that include affordable housing.

Additionally, the City is proposing to amend the A-2 zoning district which encompasses the Sunset Center, a city-owned property with future housing development potential to establish clear setbacks, height, and objective design standards. This action will add clarity and remove any potential development constraints.

Zoning for a Variety of Housing
California Housing Element Law requires the housing element to provide 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 (Government Code §65583 and §65583.2). Providing development opportunities for a variety of housing types promotes diversity in housing price, style, and size, and contributes to neighborhood stability by offering more affordable housing and accommodating a diverse income mix. Table B-2 (above) shows the housing types permitted in Carmel-by-the-Sea.

Single-Family Dwelling Units
A single-family dwelling is defined as any building containing or more habitable rooms with facilities for living, sleeping, cooking, and eating and containing no more than one kitchen (CMC 17.70).

Single-family dwelling units are permitted in all residential districts (R-1 and R-4); conditionally permitted in commercial zones (CC, SC, and RC) and public and quasi-public Districts.

Multifamily Dwelling Units
A multifamily dwelling is defined as a building or group of buildings on a single building site that, in whole or in part, is designed for, or occupied by, members of two or more families dwelling independently of each other in separate areas or units.

Multifamily and duplex housing units constitute approximately 13 percent of Carmel’s housing stock.

Multifamily dwelling units between 0-22 dwelling units per acre are permitted in the R-4, CC, SC, and RC Districts. Multifamily dwelling units between 22-44 dwelling units per acre are conditionally allowed in the R-4 District, and up to 88 dwelling units per acre is conditionally allowed in the CC, SC, and RC Districts.

The conditional use permit (CUP) for residential developments greater than 22 dwelling units per acre 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. To lessen this regulatory constraint, the City will amend the Code to eliminate unnecessary use permits (Program 1.4.A, see Chapter 2).

ATTACHMENT 5

Appendix B – Housing Constraints B-22
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 homeowners because ADUs will 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 muchneeded affordable smaller housing units.

The City’s ADU ordinance was last updated in 2017 (Ord. 2017-10 §1 (Exh. A), 2017). Carmel-by- theSea is currently following the requirements of State law in the review and approval of ADUs and JADUs. 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 single- family 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 cost- effective 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 Program 1.3.C to establish and monitor the amendment of its Municipal Code to be consistent with ADU and JADU state law, and develop standardized ADU plans (see Chapter 2).

ATTACHMENT 5

Appendix B – Housing Constraints B-23
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Manufactured Housing / Mobile Homes
State law requires manufactured homes be permitted equally anywhere that single-family homes are permitted. Mobile homes are an affordable homeownership for farmworkers and other very low-, low-, and moderate-income households.

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. The City has included Program 1.3.G to establish and monitor the amendment of the Municipal Code to clarify this type of housing as a permitted use in the R-1 District.

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; and  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) Units
Single room occupancy (SRO) housing 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 ATTACHMENT 5

Appendix B – Housing Constraints B-24
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 multi-family 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. The City has included Program

3.3.D to establish and monitor the amendment of the Municipal Code to codify SROs.

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 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, after- school tutoring, career counseling, etc.

The City’s Municipal Code permits transitional and supportive housing by-right in all districts that permit residential uses including the CC, SC, RC and R-4 Districts, regardless of the number of persons the facility serves compliant with SB 2 passed in 2007. The City has included Program 3.3.A to establish and monitor the amendment of the Municipal Code to further clarify transitional and supportive housing in the R-1 district as a permitted use.

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 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.

ATTACHMENT 5

Appendix B – Housing Constraints B-25
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 There are no emergency shelters or homeless services located in the City. However, the Zoning Code allows siting of emergency shelters as community social service facilities, which are defined in CMC

17.68 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 (CMC 17.14.030, Schedule II- B) as well as with a CUP in the R-1 and R-4 districts (CMC 17.08.040, Schedule II-1) and A-3 District (CMC 17.18.070, Schedule II-D). Residential uses are permitted in all of these 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.

AB 2339 passed in 2022, expands the definition of emergency shelters to include low barrier navigation centers and bridge housing. AB 2339 also requires that the zone(s) permitting emergency shelters byright be zones that are also suitable for residential uses.

As described in Appendix A – Housing Needs and 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 who is presently being sheltered at a local religious facility. AB 2339 provides a general guidance of 200 square feet per person. A site area of approximately 2,000 square feet (0.04 acres) would be sufficient to house up to 10 people, and therefore accommodate the City’s homeless population of one person. Overall, a total of 39-acres in the City are zoned for commercial uses (CC, SC, and RC). As later shown in Appendix C –Sites Inventory, the Sites Inventory identifies approximately 3.15 acres of underutilized CC, SC, and RC sites in the Commercial District.

Specifically, 12 of these sites are larger than 0.04 acres, which would be appropriate for a small sized shelter facility and adequate to accommodate the City’s one unsheltered homeless resident, and up to a maximum of 10 people.

New shelters are often installed through adaptive reuse of existing buildings rather than through new construction due to costs and funding limitations. The CC, SC, and RC zones contain older commercial uses that may be renovated for other purposes such as emergency shelters. Recently, the City has seen an uptick in renovations and second flood residential additions in the Commercial District. The CC, SC, and RC sites are centrally located along major transportation routes, and therefore have access to public transportation and services in the community, including faith-based organizations that offer assistance to the needy. As discussed in Appendix A – Housing Needs and Fair Housing Report, the majority of resources for persons experiencing housing insecurity are provided at the county level and by non-profits located outside of Carmel-by-the-Sea due to a lack of need in the city and limited resources at the city level. Existing resources within the region include the following:

ATTACHMENT 5

Appendix B – Housing Constraints B-26
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025  The Carmel Foundation – Located at the Southeast Corner of 8th and Lincoln Street in Carmel- by-the-Sea, the Foundation provides services to resident aged 65 and older who have limited financial resources. Services provided by the Foundation include, blood pressure checks, health counseling, low-income housing, legal services, etc.  Community Human Services: Super Kids/Super Teens Mental Health Services – Located at 835 Forest Avenue, Pacific Grove, the organization provides school-based counseling to elementary, middle school, and high school students. The organization’s services are free of charge and include individual and group counseling, consultation with parents, education workshops, and information.
 Community Human Services: Safe Place Youth Shelter and Navigation Center – Located at 590 Pearl Street, Monterey, the organization provides assistance and resources to youth aged 18 to 24, including street outreach, survival aid, temporary shelter, counseling, family reunification, and aftercare. The organization provides weekly meals; crisis intervention; food, clothing, and hygiene products; drug and alcohol education; and life skills education.  Community Human Services: Casa de Noche Buena – Located at 1292 Olympia Avenue, Seaside, the organization provides services to women and families with children, including shelter, melas, and various supportive services designed to lead to permanent housing.  Monterey County Mobile Clinic – Available at several locations throughout Monterey County, however, the nearest locations are at The Salvation Army Day Center at 800 Scott Street in Sand City and Gathering for Women at 147 El Dorado Street in Monterey. The mobile clinic is available at The Salvation Army Day Center in Sand City every fourth Tuesday and available at Gathering for Women in Monterey every second Tuesday. Services provided include general dentistry and emergency dental care, and medical services such as preventive care, women’s care, and acute and chronic condition management.

To clearly identify emergency shelters as a permitted use in the CC, SC, and RC districts (CMC

17.14.030), the City has included Program 1.3.J to establish and monitor an amendment to the Municipal Code to define emergency shelters in compliance with AB 2339 Statutes of 2022, and to clearly state they are a permitted use by-right, requiring no discretionary review in the CC, SC, and RC commercial districts.

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, lowbarrier, 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. Program 3.3.B has been included in the element to develop by-right procedures for processing low-barrier navigation centers.

ATTACHMENT 5

Appendix B – Housing Constraints B-27
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Community Care Facilities
To maintain compliance with the Lanterman Developmental Disabilities Services Act (Lanterman Act), the City currently permits small licensed residential or community care facilities serving six or fewer individuals in all residential zoning districts by-right and licensed 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 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. The City will amend the Municipal Code to address unlicensed residential care facilities with seven or more persons.

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.

Since 2015, the City has approved seven applications for reasonable accommodations ranging from allowing a pig as a companion animal to a person with a disability, additional site coverage for pathways and driveways, an exterior wheelchair lift, and the provision of a walk-in shower in a detached artist studio. The following findings have not been a constraint to accommodating requests for exceptions to land use, zoning, and building regulations, policies, practices, or procedures.

The City's reasonable accommodation policy contains the following five required findings:

1. That the housing, which is the subject of the request for reasonable accommodation, will be used by an individual with disabilities protected under fair housing laws; and ATTACHMENT 5

Appendix B – Housing Constraints B-28
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

2. That the requested accommodation is necessary to make housing available to an individual with disabilities protected under the fair housing laws and cannot reasonably be accomplished without special accommodations; and

3. That the requested accommodation will not impose an undue financial or administrative burden on the City; and

4. That the requested accommodation will not require a fundamental alteration in the nature of the City's land use, zoning, building or Local Coastal Program; and

5. That the requested accommodation will not result in a significant and unavoidable negative impact on adjacent uses or structures.

The findings requirement, “that the requested accommodation will not result in a significant and unavoidable negative impact on adjacent uses or structures” is a discretionary standard that could impose constraints on improvements to make housing accessible to persons with disabilities. To eliminate subjectivity in the review of requests for reasonable accommodations, the City will amend the Municipal Code to remove the findings requirement for requested accommodations stating, “the requested accommodation will not result in a significant and unavoidable negative impact on adjacent uses or structures.” Program 3.2.A will establish and monitor these amendments to the City’s Municipal Code.

Requests for reasonable accommodation are typically reviewed by the Director of Community Planning and Building. However, if the approval does not require review by a City Board, Commission, or Council, the Director may refer the request to the Planning Commission.

Reasonable accommodation requests are reviewed by the Planning Commission if the request is part of a new development. However, this is not typical for Carmel-by-the-Sea and all requests received have been reviewed at a staff level with the development permits. As set forth in CMC Chapter 17.54, any decision to approve, deny, or conditionally approve any permit made by the Director, City Forester, Planning Commission, or Historic Resources Board may be appealed by any aggrieved party. Municipal Code Chapter 17.70 defines an “aggrieved party” as “any person who, in person or through a representative, appeared at a City public hearing in connection with the decision or action appealed, or who, by other appropriate means prior to a hearing, informed the City of the nature of his/her concerns or who for good cause was unable to do either (i.e., defective notice). “Aggrieved person” includes the applicant for a permit.” If the final reviewing authority is the City Council, the decision shall be final.

To address potential obstacles in the approval process for requests for reasonable accommodation, the City has included Program 3.2.A. This program proposes an amendment to the definition of aggrieved parties in the Municipal Code. An exception for reasonable accommodation appeals will limit the parties eligible to appeal a request for reasonable accommodation to the applicant or the personal beneficiary.

ATTACHMENT 5

Appendix B – Housing Constraints B-29
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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.

To encourage the development of community care facilities, the City has included Program 1.4.A to establish and monitor the elimination of use permit requirements for licensed community care facilities of seven or more persons (see Chapter 2).

Residential Care Facilities
Residential care facilities include facilities that are licensed by the State of California to provide living 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.

The City defines Residential Care Facilities according to size or age as follows:
 Residential Care, General. A residential care facility providing 24-hour nonmedical care for more than six persons in need of personal services, supervision, protection, or assistance.

This classification includes hospices, board and care homes, and similar establishments that are licensed by the State of California. These types of facilities are conditionally permitted in the SC and RC Districts.
 Residential Care, Limited. A residential care facility providing 24-hour nonmedical care for six or fewer persons in need of personal services, supervision, protection, or assistance essential for sustaining the activities of daily living. This classification includes only those facilities licensed for residential care by the State of California. These types of facilities are subject to the same regulations as applied to other family residential dwellings in the CC, SC, and RC Districts. In the R-1 District, they are permitted as single-family homes. In the R-4 District, they are permitted by-right with no restrictions.  Residential Care, Senior. A residential care facility providing 24-hour medical or nonmedical care for more than six persons 60 years of age or older in need of personal services, supervision, protection, or assistance for sustaining the activities of daily living. This classification includes nursing homes for the elderly, life care or continuing care homes, and similar facilities licensed for residential care by the State of California. These types of facilities are conditionally permitted in the SC, RC, and R-4 Districts.

The following include general findings required for all conditional use permits:

1. That the proposed use will not be in conflict with the City’s General Plan; ATTACHMENT 5

Appendix B – Housing Constraints B-30
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

2. That the proposed use will comply with all zoning standards applicable to the use and zoning district;

3. That granting the use permit will not set a precedent for the approval of similar uses whose incremental effect will be detrimental to the City, or will be in conflict with the General Plan;

4. That the proposed use will not make excessive demands on the provision of public services, including water supply, sewer capacity, energy supply, communication facilities, police protection, and fire protection;

5. That the proposed use will not be injurious to public health, safety or welfare;

6. That the proposed use will be compatible with surrounding land uses and will not conflict with the purpose established for the district within which it will be located; and

7. That the proposed use will not generate adverse impacts affecting health, safety, or welfare of neighboring properties or uses.

In addition to the general findings for all use permits listed above, use permits for commercial uses also require all of the following findings:

1. That allowing the proposed use will not conflict with the City’s goal of achieving and maintaining a balanced mix of uses that serve the needs of both local and nonlocal populations;

2. That proposed use will provide adequate ingress and egress to and from the proposed location; and

3. That the capacity of surrounding streets is adequate to serve the automobile and delivery truck traffic generated by the proposed use. (Ord. 2004-02 § 1, 2004; Ord. 2004-01 §1, 2004).

The review process for a CUP in the Commercial District includes one hearing of the Planning Commission. The required findings for a CUP in the Commercial District include a total of 10 required findings that the Planning Commission must make to determine eligibility. The required findings include subjectivity and may pose potential barriers to the development of licensed residential care facilities. Program 1.4.A establishes an amendment to the Municipal Code to remove subjectivity from the required findings for a CUP (see Chapter 2). Additionally, the program establishes the elimination of CUP requirements for licensed residential care facilities of seven or more persons (see Chapter 2).

These modifications to the Municipal Code will remove potential constraints to the development of residential care facilities.

Short-Term Rentals
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 ATTACHMENT 5

Appendix B – Housing Constraints B-31
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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.

Employee Housing Act
The housing needs analysis in Appendix A of this Housing Element indicates that there are no farmworkers or agricultural employment in Carmel-by-the-Sea. Accordingly, the City has not identified a need for specialized farmworker housing beyond overall programs for housing affordability.

The City included Program 1.3.F to amend the Municipal Code in compliance with Health and Safety Code §17021.5, to define and permit employee housing for six or fewer employees to be treated as a single-family structure and permitted in the same manner as other dwellings of the same type in the same zone (see Chapter 2).

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.

The following subsection provides a detailed description of Carmel’s design review process.

Residential Design Review Process
The City has two distinct permitting procedures for projects in the R-1 and projects in all other Districts (CC, SC, RC, and R-4). In the R-1 District, development is comprised of single-family residential projects, typically one custom luxury single-family home (as opposed to subdivisions with multiple residences). There are very specific objective and subjective design standards for single-family homes. Two public hearings at the Planning Commission are required: a Concept Review hearing and a Final Details hearing. In all other Districts, the permit procedure requires additional entitlements in the ATTACHMENT 5

Appendix B – Housing Constraints B-32
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 form of Use Permits but only one public hearing at the Planning Commission, as opposed to two for single-family residences. Note the following two programs aimed to streamline mixed-use and multifamily residential projects.

Program 1.4.A: Eliminate Unnecessary Use Permits proposes to evaluate the current requirements for Use Permits and eliminate them where feasible to streamline mixed-use and multi-family residential projects in the CC, SC, RC, and R-4 Districts.

Program 1.4.B: Objective Design Standards proposes the creation of objective design standards for mixed-use and multi-family residential projects that include affordable housing. Reducing the number of entitlements required and developing objective design standards are expected to reduce the amount of time required to process housing projects. This is an opportunity for the City to express the design aesthetic that is important to preserving the character of the village while providing clear guidance to developers who desire to build in Carmel.

The typical residential development review process for Carmel-by-the-Sea generally falls under two design study “tracks”: Track 1 and Track 2. A Design Study application is a discretionary review that can include both objective and subjective standards. A hearing is limited to single family projects that qualify as a substantial alteration, or additions greater than 10 percent of the existing floor area, or demolitions and new construction.

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. The City Planning Division reviews applications for completeness within 30 days to comply with the Permit Streamlining Act. Carmel Municipal Code Section 17.52.020.D codified the Permit Streamlining Act and requires that within 30 days of the date the City receives any application for a development permit as defined by State law, the Department shall review the application to determine if it is complete and provide written notification to the applicant (see CMC 17.52.020.D). If the application is incomplete or inconsistent with the ATTACHMENT 5

Appendix B – Housing Constraints B-33
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 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. The City Planning Division reviews applications for completeness within 30 days to comply with the Permit Streamlining Act. Carmel Municipal Code Section 17.52.020.D codified the Permit Streamlining Act and requires that within 30 days of the date the City receives any application for a development permit as defined by State law, the Department shall review the application to determine if it is complete and provide written notification to the applicant (see CMC 17.52.020.D).

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. The Coastal Act requires ATTACHMENT 5

Appendix B – Housing Constraints B-34
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 a visual analysis for new development within a coastal zone to ensure significant coastal views are not obstructed – the entire city is within the coastal zone. Story poles not only reflect the scale of a project but also help to identify conflicts with surrounding significant trees, significant view impacts, and solar impacts. 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 that 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 city- retained 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 – A volume standard was codified c. 2004 as an additional development standard for single-family residential homes to regulate mass and bulk. 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. The cost of a volume study averages $700.

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.

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. In the 5th Cycle, no housing projects were appealed to the Coastal Commission.

ATTACHMENT 5

Appendix B – Housing Constraints B-35
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 To remove potential barriers to the development of multi-family housing, the City has included Program 3.1.F, to amend the Municipal Code to allow 3-D modeling or other visual analysis in lieu of story poles for multi-family developments.

Commercial Design Review Process
Per CMC 17.58.030, Commercial Design Review, 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), Residential and Limited Commercial (RC) districts and the Multifamily Residential (R-4) district: Track One and Track Two.

Several factors differentiate residential from commercial design review. Unlike residential development in the R-1 District, development in the CC, SC, RC, and R-4 Districts is not subject to a Preliminary Site Assessment, nor a Volume Study, and it is exceptionally rare for a project in the commercial zones to require review by the Forest & Beach Commission. In the 5th Cycle planning period, only one commercial development project (Del Dono II, in 2018) was required to go to the Forest & Beach Commission for a tree removal permit.

Additionally, while commercial development is subject to the City’s Commercial Design Guidelines (2000) and, if located within Carmel Plaza, the Carmel Plaza Storefront Design Guidelines (2001), these guidelines are notably less stringent than the City’s Residential Design Guidelines. As described in CMC 17.14, Commercial Zoning Districts, proposed projects need not strictly comply with every guideline to be approved, but deviations should be minor and reasonably related to good design principles and site conditions. The basic standard of review in the commercial district is whether the project constitutes an improvement over existing conditions.

Commercial Track One Design Review
The Director may approve Track One applications for design changes in all commercial zoning districts (CC, SC, and RC) 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 one required public hearing. Substantial changes include but are not limited to the construction of new buildings, additions to existing buildings, new parking facilities, and installation of antennas. The major steps involved with a Commercial Track 2 Design Study Application are as follows.

1. Submit a Design Review Application – This is the formal project application. Planning staff will review it for completeness and provide early feedback. The City Planning Division reviews applications for completeness within 30 days to comply with the Permit Streamlining Act. Carmel Municipal Code Section 17.52.020.D codified the Permit Streamlining Act and requires that within 30 days of the date the City receives any application for a development permit as defined by State law, the Department shall review ATTACHMENT 5

Appendix B – Housing Constraints B-36
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 the application to determine if it is complete and provide written notification to the applicant (see CMC 17.52.020.D).

2. 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 not only reflect the scale of a project but also help to identify conflicts with surrounding significant trees, significant view impacts, and solar impacts. Story poles must be installed and heights certified by a California licensed surveyor or civil engineer at least 10 days prior to the scheduled 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.

3. 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 city- retained 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 as part of a Historic Evaluation application, if not already documented.

4. Participate in one Planning Commission Hearing – The Planning Commission (PC) will evaluate the project using the development standards in the Zoning Code and the Commercial Design Guidelines (2000) and, if located within Carmel Plaza, the Carmel Plaza Storefront Design Guidelines (2001).

5. 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.

6. 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. In the 5th Cycle, no housing projects were appealed to the Coastal Commission.

As previously stated, to remove potential barriers to the development of multi-family housing, the City has included Program 3.1.F, to amend the Municipal Code to allow 3-D modeling or other visual analysis in lieu of story poles for multi-family developments.

Residential Design Approval Findings
As applicable to the project, the Planning Director, Historic Preservation Board, or the Planning Commission have authority to approve, approve with modifications and/or conditions, or deny an application for design review based on the following findings.

ATTACHMENT 5

Appendix B – Housing Constraints B-37
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Findings for Design Review Approval
Prior to approving an application for design review in any district, the Planning Director, Historic Preservation Board or the Planning Commission must make the following findings.

1. Conform to the applicable policies of the General Plan and the Local Coastal Program;

2. Comply with all applicable provisions of the Municipal Code; and

3. Are consistent with applicable adopted design review guidelines (CMC 17.58.060).

Additional Findings for Design Review Approval in the R-1 District The Planning Commission shall make all of the following findings before granting design review approval in the R-1 District.

1. The project conforms with all zoning standards applicable to the site, or has received appropriate use permits, variances or exceptions consistent with the Zoning Ordinance.

2. The project contributes to neighborhood character including the type of forest resources present, the character of the street, the response to local topography and the treatment of open space resources such as setbacks and landscaping.

3. The project is compatible with, and sensitive to, the natural features and built environment of the site and of the surrounding area. The project respects the constraints of the site and avoids excessive grading, cuts and fills. Construction on steep slopes is minimized to the extent feasible and abrupt changes in grade is minimized or mitigated.

4. The project maintains the City’s principles of modesty and simplicity and preserves the City’s tradition of simple homes set amidst a forest landscape. The project uses simple building forms and simple roof forms without complexity that would attract undue attention to the site.

5. The project does not present excess visual mass or bulk to public view or to adjoining properties. The project relates to a human scale in form, elements and in the detailing of doors, windows, roofs and walkways.

6. Project details and materials (e.g., windows, doors, chimneys, roofs, and stonework) are fully integrated and consistent throughout the design. Building materials are used in a manner that is visually consistent with the proposed architecture. All fenestration is appropriate in size and consistent with a human scale.

7. The project is consistent with the City’s design objectives for protection and enhancement of the urbanized forest and open space resources. Open space is distributed around buildings to provide visual relief from structural bulk and a distinct separation from buildings on adjacent sites.

ATTACHMENT 5

Appendix B – Housing Constraints B-38
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

8. All demolitions, remodels, and substantial alterations are consistent with the following findings:
a. The design uses simple/modest building forms and a limited number of roof planes, and a restrained employment of offsets and appendages consistent with the City’s design objectives.
b. The mass of the building relates to the context of other homes in the vicinity that are in conformance with the City’s design guidelines related to mass and scale. c. The development is similar in size, scale, and form to buildings on the immediate block and neighborhood.
d. The development does not require removal of any significant trees unless necessary to provide a viable economic use of the property or protect public health and safety. All moderately significant trees have been protected to the maximum extent feasible. All buildings and structures will be set back a minimum of six feet from significant trees.

To eliminate potential subjectivity and provide clarity in the design review and development process, the City intends to adopt Objective Design and Development Standards for multi-family residential developments. Program 1.4.B establishes and monitors the creation and adoption process for the standards.

Forest and Beach Commission Review
Upon submittal of design study, building permit or other application for alteration of a property, the Forest and Beach Commission shall determine if the subject property requires the removal or pruning of a significant tree. A tree removal permit is required for trees on vacant lots or lots planned for new construction, alterations, or rebuilding that meet the following standards (CMC 17.48).

A. Removal, replacement, cutting down, or destruction of any tree identified on the Carmel-bythe-Sea Recommended Tree List (see LUP Appendix G2: Forest Management Plan) having:
i. An average diameter of greater than two inches; or
ii. A circumference greater than six and one-fourth inches, measured at a point four and one- half feet above the ground level.

B. Any alteration of a tree that would remove:
i. Roots greater than two inches in diameter; or
ii. Live limbs greater than four inches in diameter.

Removal of Pine, Redwood, Oak, and Cypress Trees When Not Related to Construction. A tree removal permit shall be required for the removal, replacement, cutting down, or destruction of any pine, redwood, oak, or cypress tree having:

ATTACHMENT 5

Appendix B – Housing Constraints B-39
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 A. A diameter equal to or greater than four inches measured at a height 4.5 feet above the ground; or
B. A circumference greater than 19 inches.

Removal of Other Tree Species When Not Related to Construction. A tree removal permit shall be required for the removal, replacement, cutting down, or destruction of any species of tree capable of growing to a minimum of 25 feet in height growing on private property and having:

A. A diameter equal to or greater than 10 inches; or
B. A circumference greater than 32 inches.

City staff are responsible for informing the applicant of the deficiencies in the application within 15 working days of receipt of the application. Once an application is determined to be complete, the application will be scheduled for review. This consists of one (1) public hearing, unless information is received after the Forest and Beach Commission agenda packet has been distributed, which may provide grounds for continuation of the application.

If a subject property is determined to have significant trees, a permit application must be submitted, which the Forest and Beach Commission review and make a determination whether a significant tree is involved. The Forest and Beach Commission must make the following required findings.

1. That removal of the tree is required to protect public health or safety; or

2. That the following four conditions exist:
a. The existing site is vacant or is developed to an extent less than one-third of the base floor area allowed by the zoning applicable to the site; b. The available land area of the site not occupied by significant trees (including land within six feet of the trunk of significant trees) does not adequately and practically provide space for development of at least one-third of the base floor area allowed by the zoning for the site;
c. The issuance of a variance for development in one or more setbacks has been considered and would not provide a remedy or would be inappropriate due to a significant overriding inconsistency with another policy or ordinance of the LCP; and d. Failure to authorize removal of the tree(s) would deprive the owner of all reasonable economic use of the property. (Ord. 2004-02 § 1, 2004; Ord. 2004-01 §1, 2004).

While the findings of approval for removal of trees are objective, the Forest and Beach Commission may condition a permit on replacement of trees planted at a place, of a species, and of a size designated by the City Forester or Forest and Beach Commission. This may pose a constraint on the development of housing, as the person requesting the permit will be required to pay the cost of obtaining and planting the replacement trees. Further, finding 2.B poses a constraint to the development of multifamily housing on the basis of base floor area. Program 1.3.K has been included in the Housing ATTACHMENT 5

Appendix B – Housing Constraints B-40
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Element to review and modify the required finding to remove constraints to the development of multifamily housing (see Chapter 2).

Additionally, the potential for multiple hearings by different review bodies may pose a barrier to development due to timeliness. To remove barriers to the development of multi-family housing, the City has developed Program 3.1.F, which enables expedited permit processing procedures, including the implementation of a concurrent permitting procedure for projects that require several permits (see Chapter 2). For example, if a project requires Forest and Beach Commission review in addition to general planning entitlements, the highest-level review authority would review the project details and approve or disapprove the project. This will streamline the permitting process and eliminate the potential for multiple hearings.

Historic Resources Review
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.

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. City staff review times typically take between three to six months. 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. Review times by the Historic Resources Board typically take between 6 and 8 months.

The City’s current approach to conserving historic resources does not present a constraint to constructing new residential units. The City values historic resources and has an associate planner on staff that is trained in historic preservation and facilitating rehabilitation of historic properties. The City will ensure that proper record keeping is conducted to track historic resources within the City, and do its due diligence to ensure these resources are utilized efficiently. “I want to keep the village feel of the
town.”
November 17, 2022 Housing Ad Hoc Committee
Community Meeting Attendee
ATTACHMENT 5

Appendix B – Housing Constraints B-41
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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-8, Summary of Community Planning & Building Fees (2023-2024). Note the summary provided in Table B-8 is a summary, and excludes fees related to such items as commemorative bench dedications, signage, public works/forestry, public safety, and administrative services. The full fee schedule is available online at the City’s website.6 Table B-8 - Summary of Community Planning & Building Fees (2023-2024) Application/Permit Type Fee
Design Study and Review
Track 1 Design Review/Study - Minor $690 per application Track 1 Design Review/Study - Major $990 per application Track 1 Design Rev/Study-Streamline $355 per application Track 1 Design Rev/Study - Referral to Planning
Commission
$1,785 per application in addition to the base Track 1 fee Track 1 Design Rev/Study-Referral to Historic Resources Board
$1,785 per application in addition to the base Track 1 fee Track 2 Design Review - Minor $3,910 per application
Track 2 Design Review - Major $5,935 per application
Track 2 Design Rev - Major New Commercial Building $2,830 per application plus a deposit determined by staff with charges at the fully allocated hourly rates for Project Planner Preliminary Site Assessment $1,495 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 $3,060 per application
Use Permit Amendment $2,765 per application
Temporary Use Permit $165 per application
Restricted Comm Use Transfer Request $565 per application Water Credit Transfer Request $3,100 per application
Variance $1,790 per application
Pre-Application Review - Staff $1,365 per application with 50% of this fee credited towards future planning fees for this project.

Preliminary Review - Planning Commission $3,750 per application with 50% of this fee credited towards future planning fees for this project.

Coastal Dev. Permit - Development $175 per application - Added to other Planning fees Coastal Dev. Permit - Event $740 per application
Landscape Plan Check/Inspection $690 per plan/inspection Planning Technical Assistance Fully allocated hourly rate after 15 mins Tobacco Retail License Current fee as adopted by the Monterey County Board of Supervisors
6 https://ci.carmel.ca.us/sites/main/files/file-attachments/fy_23-24_master_fee_schedule.pdf?1694542754 ATTACHMENT 5

Appendix B – Housing Constraints B-42
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Application/Permit Type Fee
Extraordinary Development Deposit amount TBD based on scope of project, with charges at the fully allocated hourly rates plus any outside costs
Amendments, Annexations, and Agreements
Specific Plan/Specific Plan Amendment General Plan
Amendment
Sphere Of Influence Amendment Zoning Code Amendment
$5,000 deposit with charges at the fully allocated hourly rates plus outside costs
Annexation Development Agreement $10,000 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 $495 per application plus County fees Mitigation Monitoring $3,000 deposit with charges at the fully allocated hourly rates plus outside costs.

Tentative/Final Map $4,000 deposit with charges at the fully allocated hourly rates plus any outside costs.

Amended Final Map $1,000 deposit with charges at the fully allocated hourly rates plus any outside costs.

Certificate Of Compliance $750 per application plus actual contract cost Lot Line Adjustment/Subdivision - Planning Commission $1,055 per application plus actual contract cost Lot Merger - Staff Review $855 per application plus actual contract cost Historic Evaluation
Prelim (Phase 1) Historical Evaluation - Staff $310 per application Phase 1 Historic Evaluation - Qualified Professional $405 per application plus actual cost for Historian review with $1,500 deposit
Phase 2 Historic Evaluation-Historic Resources Board
Review
$2,040 per application plus actual cost for Historian review with $1,500 deposit
Appeal To Historic Resources Board $1,500 per application plus actual cost for Historian review with $1,500 deposit
Mills Act Contract Processing $3,430 per application
Mills Act Maintenance Plan Review $1,000 deposit
Mills Act 5-Year Inspection $500 deposit
Mills Act 10-Year Maintenance Plan Review $1,000 deposit Determinations, Extensions, and Appeals
Planning Commission Code Determination $1,740 per application Zoning Compliance Determination Fully allocated hourly rates for all personnel involved with a one hour minimum
Time Extension - Staff $400 per application
Time Extension - Planning Commission $1,080 per application Time Extension - City Council $1,045 per application
Public Hearing Continuance - Planning Commission $830 per continuance Public Hearing Continuance - Council $835 per continuance Appeal To Planning Commission $1,945 per appeal – No charge for appeals of Coastal Development Permits (CDPs) in the Coastal Commission Appeal Jurisdiction (CMC 17.20.140)
Appeal To City Council $2,085 per appeal - No charge for appeals of Coastal Development Permits (CDPs) in the Coastal Commission Appeal Jurisdiction (CMC 17.20.140)
ATTACHMENT 5

Appendix B – Housing Constraints B-43
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Application/Permit Type Fee
Building Services
Building Relocation Deposit determined by staff with charges at the fully allocated hourly rates for all personnel involved plus any outside costs Large Family Day Care (Residential) $2,320 per application General Plan Update 3.5% of all Building & Safety permits Building Plan Check Based on Building and Safety Construction Valuation Building Inspection Based on Building and Safety Construction Valuation Building Re-Inspection $145 per re-inspection
Permit Application Extension $95 per extension (maximum of 4) Permit Extension $150 per extension (maximum of 2)
Building Permit Pre-Applic. Confer. $340 per application Building Single Trade Permit $165 per permit
On-Site Driveway Permit $395 per permit
Solar Plan Check/Inspection Permit Plan Check and Inspection- $450 plus $15 per kW over 15kW Re-Roof Permit $260 per permit
Building Board Appeal $1,135 per appeal
Duplicate Inspection Card $60 per card
Building Technical Assistance Charge the fully allocated hourly rate for all personnel involved after 15 minutes.

Stop Work Investigation $620 per investigation plus double the permit fee Temporary Certificate Of Occupancy $225 per application Alternate Materials/Methods Review $220 per application plus actual cost of City Staff for all time over one hour.

Building Phased Work Request $315 per application
Building Technology Surcharge $8 per permit
Encroachment Permit
Temporary Encroachment Permit $345 per permit
Permanent Encroachment Permit Other - $475 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 $675 per review plus $405 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 September 9, 2023 – June 30, 2024 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-9, provides a comparison between the cities of Carmel-by-the-Sea, Pacific Grove, and Monterey, which are geographically, socioeconomically and demographically similar in size and types of residential development. Data for Monterey County has also been provided for context.

ATTACHMENT 5

Appendix B – Housing Constraints B-44
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Table B-9 - Jurisdictional Comparison of Average Design Review/Study Fees Residential Development
Application Type(s) Carmel-by-the- Sea Pacific Grove City of Monterey Monterey County Staff/Admin $6901/$9902 $2413/9784 $3625/$1,2986 $5507/$1,6508 Non-Staff/Admin (i.e., Planning
Commission)
$3,9109/5,93510 $3,48111/$4,25912 $2,10213/$4,62014 $3,30015 Source: City of Carmel-by-the-Sea Fee Schedule Effective September 9, 2023 – June 30, 2024; City of Pacific Grove Master Fee Schedule Effective July 1, 2023 – June 30, 2024; City of Monterey Master Fee Schedule, Fiscal Year 2024; Monterey County Article IX-Land Use Housing & Community Development Fee Schedule.

Notes:

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. Architectural Review – Admin Minor

6. Architectural Review – Admin Major

7. Design Approval – Over the Counter

8. Design Approval – Administrative, review & approval required, no hearing required

9. Track 2 Design Review/Study – Minor

10. Track 2 Design Review/Study - Major

11. Architectural Permit – Single Family

12. Architectural Permit – Multifamily four units or less

13. Architectural Review – ARC Minor

14. Architectural Review – ARC Major

15. Design Approval, public hearing required
Note: The design study fees provided above do not reflect fees incurred if historic evaluation(s) is required, or a Preliminary Site Assessment, or other potentially relevant fees. See Table B-4 for a Summary of Community Planning & Building Fees, and Table B-6 for Estimate of Total Development Fees Imposed.

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;
 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. ⅝” Meter - $3,000 (single-family)

2. 1” Meter - $5,000 (small multi-family)

3. 1½” Meter - $10,000 (large multi-family

4. 2” Meter - $16,000 (large volume requirement ex. hotel.) ATTACHMENT 5

Appendix B – Housing Constraints B-45
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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-by- theSea 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.

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-10, Estimates of Total Development Fees Imposed, below.

Table B-10 - Estimate of Total Development Fees Imposed Single-Family* Multi-Family (10 units) **
Track 2 Major Design Study $5,935 $5,935
Preliminary Site Assessment (includes fee for
Phase I Historic Evaluation)
$1,495 N/A
Phase II Historic Evaluation (applicable only for
existing historic buildings proposed for expansion)
$2,040 plus $1,500 consultant deposit N/A
Volume Study $135, plus $1,500 consultant deposit N/A
Use Permit N/A $3,060
Building Permit fee $4,872 $9,872
Subtotal $17,477 $18,867
ATTACHMENT 5

Appendix B – Housing Constraints B-46
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Single-Family* Multi-Family (10 units) **
MPWMD $225 $2,250
CUSD $980 $9,800
Cal-Am $3,000 $5,000
CAWD $8,242 $82,426
TAMC $4,036 $17,386
Regional Fees Subtotal $16,483 $116,862
Total Fees $33,960 $135,729
Source: City of Carmel-by-the-Sea Fee Schedule Effective September 9, 2023; MPWMD Fee Schedule, July 2023; CUSD Developer Fees, 2023; Cal-Am Fee Schedule, 2022; CAWD Fee Schedule 2023; TAMC Fee Schedule, 2022.

Notes: *Assumed $350K valuation and 2,000 sq. ft.
**Assumed $5,000,000 valuation and 20,000 sq. ft.

City fees to develop a single-family home roughly equal the regional fees. For multi-family development, regional fees comprise the bulk of the costs. As shown in Table B-9, total development fees for a 10-unit multifamily development would total approximately $135,729, of which regional fees total $116,862 – approximately six times the City fees ($18,867). On a per unit basis, total development fees for a single multifamily unit would total approximately $13,573.

Comparatively, this is significantly less than that of a single-family unit.

While fee types in comparable and neighboring jurisdictions do not precisely align with the fee types in Carmel-by-the-Sea for side-by-side comparison, the total estimated fees as cited in Pacific Grove’s Draft 2023-2031 Housing Element Update (Table 1-42) offer comparative insight. While Carmel estimates a total fee of $33,960 for a single-family home and $135,729 for a 10-unit multi-family home, Pacific Grove estimates $68,928 and $212,350, respectively. This indicates Pacific Grove’s City fees are substantially higher than Carmel-by-the-Sea’s. The City of Monterey’s Draft 2023-2031 Housing Element (Table C-10) does not provide estimated total fees for single-family and a 10-unit multi-family development for an “apples to apples” comparison with Carmel-by-the-Sea and Pacific Grove, however, fees for a four-unit multi-family project in the City of Monterey are estimated at approximately $18,841, which is on par with the City of Carmel-by-the-Sea’s City fees, but no regional fees are included in Monterey’s estimate.

Overall, Carmel-by-the-Sea’s fees are less than neighboring jurisdictions. Regional impact fees pose the greatest constraint to the development of multifamily housing. Despite regional fees being beyond the City’s control, the City is committed to lowering the cost to develop affordable multifamily residential units. Program 3.1.D establishes and monitors the implementation of reduced entitlement and development fees for projects with affordable units (see Chapter 2).

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 ATTACHMENT 5

Appendix B – Housing Constraints B-47
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 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 §65852.2).

Permit applications are generally processed in as an efficient manner as practical in Carmel-by-the-Sea.

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. 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 the degree of completeness of submitted plans, 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.

ATTACHMENT 5

Appendix B – Housing Constraints B-48
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

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 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.

ATTACHMENT 5

Appendix B – Housing Constraints B-49
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

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.

Typical Processing Times
Processing times for development review vary based on the size of the project and the extent of environmental review required, and a can range from six months to over a year if an EIR is required.

When an application is submitted, it is reviewed within 30 days to verify that it is complete or the applicant is notified that it is incomplete. Once the application is complete, typical processing times are as follows, in line with the requirements of the State Permit Streamlining Act of 1992. Table B-11 shows the typical processing time for a residential development application.

Table B-11 - Review/Approval Requirements and Processing Times Development Type 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 1 month if exempt
from Planning
Review under
State Law
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 No Yes 6-9 months
Multi-family residences 0-22 units/acre Yes No 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 No 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 Notes:

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. Program 3.1.F has been included in this Housing Element to establish expedited permitting procedures to remove barriers to the development of multi-family housing (see Chapter 2). The program includes implementation of ATTACHMENT 5

Appendix B – Housing Constraints B-50
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 concurrent permit processing to avoid multiple hearings and review bodies. This will streamline the permitting process allowing for timely review and entitlement of multi-family projects.

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. Table B-12 shows the reviewing authority and typical processing times, in line with the requirements of the State Permit Streamlining Act of 1992.

Table B-12 - Permit Streamlining Act Processing Times
Application Final Authority Typical Processing Time
Subdivision Parcel Map (Tentative) City Council 45-60 days Subdivision Parcel Map (Final) City Council 45 days
Subdivision Tract Map (Tentative) City Council 3-6 months Subdivision Tract Map (Final) City Council 2-4 months
Negative Declaration Planning Commission 3-6 months
Environmental Impact Report Planning Commission 1 year* Source: City of Carmel-by-the-Sea
Note: If the applicant modifies the application, or if the applicant submits a written request for a time extension, the maximum time period for review may be extended for up to 90 additional days.
*Upon mutual consent of the Director and the project sponsor, this one-year time limit may be extended once for a period of not more than 90 days pursuant to CEQA Guidelines Section 15108.

Environmental Review
Environmental review is required for all development projects under CEQA. Carmel-by-the-Sea has a number of environmental constraints due to its coastal location and conservative approach to preserving its unique natural surroundings. Because of these environmental constraints, larger residential projects have required preparation of EIRs. An EIR is required of all developments that have the potential of creating significant impacts that cannot be mitigated. Most residential projects in Carmel-by-the-Sea are either Categorically Exempt or require only an Initial Study and Negative Declaration. The Negative Declaration process typically takes four to eight months to complete, depending on staffing levels and workloads. Categorically Exempt developments such as accessory dwelling units require a minimal amount of time. As a result, State-mandated environmental review does not pose a significant constraint to housing development.

SB 35 Streamlining
Government Code §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. 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.

ATTACHMENT 5

Appendix B – Housing Constraints B-51
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 As previously noted, the entire City is located within the California Coastal Zone and therefore was not subject to early implementation of SB 35 (see Government Code §65913.4(6)), which did not apply to areas located in a coastal zone. However, as of October 2023, SB 423 was signed into order expanding SB 35 measures to apply to coastal zones under specific criteria. The City has included Program 1.3.H in the 6th Cycle Housing Element to address SB 35 and SB 423 measures (see Chapter 2). The City will create a checklist and written procedures for processing SB 35 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 singlefamily (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 single- dwelling units. The City has not received any inquiries of interest for SB 9 lot splits and is not currently processing any SB 9 application.

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 50 percent or greater of the linear length of the walls of the existing building (exterior plus interior) within a 5-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 ATTACHMENT 5

Appendix B – Housing Constraints B-52
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 (e.g., water holding tanks, pumps) to serve the sprinkler system.

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-the- Sea 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.

Building Code and Zoning Code enforcement activities are undertaken on a proactive and complaint basis. The City finds that the adopted Building Code and Zoning Code and associated enforcement activities are not constraints to the development, maintenance or preservation of housing.

On-Site and Off-Site Improvement Standards
Because 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 ATTACHMENT 5

Appendix B – Housing Constraints B-53
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 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.

Summary of Governmental Constraints
The governmental constraints to the development of affordable housing in Carmel-by-the-Sea are summarized below and outlined in Table B-13, along with implementation programs intended to address the constraints.

ATTACHMENT 5

Appendix B – Housing Constraints B-54
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 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 time-consuming review process. For example, the Coastal Act requires visual analysis during the review phase of development to determine if significant coastal views are at risk of being obstructed by proposed development. The City has no control over this development requirement; however, they are able to modify what type of visual analysis is used. Program 3.1.F includes an amendment to the Municipal Code to allow 3-D modeling or other visual analysis in lieu of story poles for multi-family developments.

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);
 Planning Commission: One hearing, minimum, for commercial and multi-family residential projects. Preliminary hearing/review for commercial/multi-family is optional but encouraged.

Two hearings, minimum (one Concept hearing, one Final hearing) for single-family projects;  City Council review on appeal; and
 Coastal Commission review on appeal (Coastal Zone Appeal jurisdiction only).

ATTACHMENT 5

Appendix B – Housing Constraints B-55
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 In addition, the City’s permit process, which includes a use permit above 22 du /acre and includes both objective and subjective standards, could also pose as a constraint to developers, especially of multifamily affordable housing projects. Program 3.1.G has been included in the 6th Cycle Housing Element to establish a minimum density of 33 dwelling units per acre for the base zoning in the CC, SC, RC, and R-4 districts (see Chapter 2). Establishing a minimum density will enable the development of residential units at a higher yield, lending to increased feasibility to develop affordable units.

City Fees and Regional Development Fees
The City’s design review process may be financially prohibitive for lower income households and likely most affordable housing projects. Regional development fees are exorbitant and makeup the bulk of costs for multi-family developments.

Parking Requirements
Parking is limited within Carmel-by-the-Sea. Off-street parking requirements can be prohibitive to building multi-family and affordable housing.

Commercial Overnight Visitor Accommodation
The Municipal Code Section 17.56.060 limits the total number of overnight visitor accommodations (hotel/motel/inn) units which increases the value of the use and acts as a disincentive to redevelop existing older non-conforming overnight visitor accommodations to refurbished permanent multifamily residences. 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.

The City will explore the development of a program to allow the transfer of development rights of overnight visitor accommodation located in key areas of the City and, the City will develop an Employee Housing Program.

Accessory Dwelling Units
The City of Carmel-by-the-Sea last updated it ADU ordinance in 2017, and therefore the City’s regulations addressing ADUs are out of date. The City 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. The City is currently updating their ADU Ordinance to comply with recent changes to state law.

The City is following State ADU law while the ADU Ordinance is being developed. The State ADU Handbook is posted on the City website and distributed to ADU applicants. ADUs/JADUs that are 800 square feet or less, 16' tall or less, with at least 4' rear and side setbacks bypass review by the Planning Division and are routed straight to the Building Division. ADUs/JADUs that do not meet these standards are subject to a ministerial Planning review to confirm the project meets City floor area standards (1,800 square feet of floor area permitted on a standard 4,000 square-foot-lot) and minimum setbacks (3' side setback, 3' rear setback if less than 15' high, 15' front setback).

ATTACHMENT 5

Appendix B – Housing Constraints B-56
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 ADUs/JADUs are not subject to the City's Residential Design Guidelines, which contain both objective and subjective guidelines, nor are they subject to any public hearings. Because parking is not required for ADUs located within one half-mile walking distance of public transit, ADUs in Carmel-bythe-Sea do not require parking.

Manufactured Homes and Mobile Homes
A new program to amend the Municipal Code to clarify that manufactured homes and mobile homes are allowed as a permitted use in the R-1 zoning district is included in the Housing Element.

Use Permits
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, including application to increased densities for affordable multi-family residential projects, and removing this permit requirement where it does not add any necessary regulations 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 Program

1.4.A to eliminate unnecessary use permits.

Transitional and Supportive Housing
The 6th Cycle Housing Element includes Program 3.3.A to update the Municipal Code to further clarify that transitional and supportive housing in the R-1 and R-4 zoning district are permitted uses.

Low Barrier Navigation Centers
The 6th Cycle Housing Element includes Program 3.3.B to develop by-right procedures for processing low-barrier navigation centers.

Development Standards for Senior Housing
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.

The primary governmental constraints and the 6th Cycle Housing Element programs to address them, are shown in Table B-13.

Table B-13 - Summary of Governmental Constraints
Governmental Constraint Programmatic Action
Lack of Water Resources
The primary infrastructure constraint to the development of housing in Carmel is the lack of potable water.

Program 1.2.A: Water Distribution Program 4.1.A: Water
Conservation
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.

Program 3.1.G: Establish Minimum Densities
ATTACHMENT 5

Appendix B – Housing Constraints B-57
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Governmental Constraint Programmatic Action
City Design Review and Permit Processing
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.

The City’s design review (design study) process can be lengthy, impacting the City’s ability to provide housing for lower-income households.

Program 3.1.F: Expedited Processing Procedures
Program 1.3.E: Amend A-2 Zoning District.

Program 1.4.B: Objective Design Standards
Program 2.2.A: Historic Preservation Educational Program Program 3.1.G: Establish Minimum Densities
Program 1.4.A: Eliminate Unnecessary Use Permits
Program 1.3.C: Accessory Dwelling Units
Program 1.3.F: Manufactured Homes on a Foundation System Program 3.1.B: Housing for Extremely-Low Income
Households
Program 3.3.B: Low-Barrier Navigation Centers
City Fees
The City’s design review and permitting process may be
financially prohibitive for lower income households and likely most affordable housing projects.

Program 3.1.D: Reduced Entitlement and Development Fees Program 3.1.E: Reduced Parking Requirements
Parking Requirements
Parking is limited within Carmel-by-the-Sea. Off-street parking requirements can be prohibitive to building multi-family and affordable housing.

Program 3.1.E: Reduced Parking Requirements
Commercial Overnight Visitor Accommodation Program 1.3.B: Overnight Visitor Accommodation (Conversion) Development Transfer Rights
Program 1.2.D: Overnight Visitor Accommodation – Employee Housing Program
The City’s development regulations are consistent with California housing law, and the Zoning Code enables development of affordable housing. However, because housing production has been limited in Carmel-by-the-Sea, primarily due to lack of potable water, the Housing Element Update includes programs to further incentivize development activity. Depending on site-specific conditions - such as the presence of significant trees or historic resources and degree of incompleteness of submitted plans, some applicants may find the City’s design review process to be lengthy. The City’s review fees, while comparable with those of surrounding jurisdictions, can pose a barrier for applicants without sufficient financial resources.

B.3 Non-Governmental Constraints
State law (Government Code §65583(a)(6)) requires an analysis of potential and actual governmental and non-governmental constraints to the maintenance, improvement, and development of housing for all income levels. The Housing Element must identify ways, if any, to reduce or overcome these constraints in order to meet the City’s housing needs.

Land Availability and Cost
Three primary factors contribute to high land costs on the Monterey Peninsula, and in Carmel-by- theSea in particular: 1) the area is considered a desirable place to live, 2) available land is in short supply and 3) land costs vary both between and within jurisdictions based on factors such as the desirability of the location and the permitted density. According to the real estate website, Zillow, the typical land ATTACHMENT 5

Appendix B – Housing Constraints B-58
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 value for a single-family home is between $800,000 and $1.2 million in the city of Monterey, but between $1.5 million and $5 million in Carmel-by-the-Sea.

Because land availability is limited within Carmel-by-the Sea and the City is largely built out, a number of programs have been created to creatively increase density and affordable housing potential within the City.

Construction Costs
Construction costs associated with housing
development generally comprise soft and hard
costs. Soft costs for housing development include
the cost of architectural, engineering, accounting,
legal and other professional services, as well as the
cost of obtaining permits and paying governmentimposed fees. Carrying costs and the cost of construction financing can also be considered soft
costs. Hard costs include the costs of labor and
materials and can also include costs accumulated
through permitting delays.

Hard costs are very high in Carmel-by-the-Sea, and
both the high cost of labor and the high cost of
materials could be considered constraints on housing development. Hard construction costs can vary significantly based on the varied and unique geographic conditions throughout the City. Hard costs can be higher than average in Carmel-by-the-Sea compared to Monterey County.

Hard and soft costs contribute significantly to the overall cost of developing new housing. High hard costs are difficult for an individual jurisdiction to mitigate.

Availability of Financing
As a stable and affluent community, private housing mortgage financing is readily available in Carmelby-the-Sea. There are no mortgage-deficient areas in the City and no identifiable underserved groups in need of financing assistance. At the time this Housing Element was drafted, interest rates for homebuyers were increasing from a low of 2.75 percent in 2020 to almost 7 percent in 2023 for a fixed rate, 30-year mortgage. The current economic climate is uncertain and still affected by increasing inflation, the possibility of a recession, geopolitical tensions, businesses rebounding and responding to changes brought on by the COVID-19 pandemic, and ongoing supply chain disruptions; however, there are a number of ways to finance residential development in the City, some of which are outlined below.
“We’re going to have to tell market- rate
builders they’re going to have to provide
more money for our affordable housing
quotient…we have got to subsidize it...take
the people paying market rate and say, I’m
sorry, if you want to live here you got to
pay to play, and we put that money
towards our affordable housing quotient
and build something that makes sense”
November 17, 2022 Housing Ad Hoc Committee
Community Meeting Attendee
ATTACHMENT 5

Appendix B – Housing Constraints B-59
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Banks, Community Development Financial Institutions Fund (CDFIs), and State Housing Agencies
Banks, Community Development Financial Institutions Fund (CDFIs), and state housing agencies all play a role in providing affordable housing.
 Banks are regulated by the Community Reinvestment Act (CRA), which requires them to provide lending and services to all segments of their communities, including low-and moderate-income borrowers. Banks can meet their CRA requirements through a variety of activities, including making loans to affordable housing developers, providing grants to community development organizations, and investing in CDFIs.  CDFIs are specialized financial institutions that provide loans, investments, and other financial services to low-income communities and individuals. CDFIs are often more flexible than traditional banks, and they can provide loans to borrowers who may not be able to qualify for financing from other sources.
 State housing agencies (SHAs) are government agencies that provide financial assistance for affordable housing development. SHAs can provide loans, grants, and tax credits to developers, and they can also help to promote affordable housing through public education and outreach programs.

Together, banks, CDFIs, and SHAs play a vital role in providing affordable housing. These organizations work to ensure that everyone has access to safe, decent, and affordable housing, regardless of their income. The California Housing Finance Agency (CalHFA) is a SHA that provides financing for affordable housing development in California. These organizations are essential partners in the fight to ensure that everyone has access to safe, decent, and affordable housing.

Housing Credits
Federal
The 4 percent and 9 percent LIHTC (Low-Income Housing Tax Credit) are federal tax credits that can be used to finance the construction or rehabilitation of affordable housing. The 4 percent credit is for the acquisition of existing buildings for rehabilitation and new construction financed by tax- exempt bonds. The 9 percent credit is generally for new construction and substantial rehabilitation with no federal subsidies. The amount of the credit is equal to 4 percent or 9 percent of the project's qualified basis, and it can be used to offset federal income taxes. The credit is claimed over a 10-year period.

The 9 percent LIHTC is more valuable than the 4 percent LIHTC, so it is typically used for larger projects. The 9 percent LIHTC is also more competitive, as there is a limited amount of 9 percent credits available each year. Both the 4 percent and 9 percent LIHTCs are important tools for financing affordable housing. They have helped to create millions of affordable housing units across the country.

ATTACHMENT 5

Appendix B – Housing Constraints B-60
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 State
State housing credit is a state-level program that provides tax credits to developers who build or rehabilitate affordable housing. The credits are similar to the federal Low Income Housing Tax Credit (LIHTC), but they are administered by state housing finance agencies (HFAs).

State HFAs allocate tax credits to developers through a competitive process. The credits are then sold to investors, who use them to offset their state income tax liability. The proceeds from the sale of the credits are used to finance the construction or rehabilitation of affordable housing.

State housing credit benefits both developers and low-income households. For developers, the credits provide a valuable source of financing that can help them make affordable housing projects financially feasible. For low-income households, the credits help to keep rents affordable.

Federal Home Loan Bank System
The Federal Home Loan Banks (FHLBs) are 11 regional banks that provide funding to financial institutions in all 50 states and U.S. territories. They were created by Congress in 1932 to help revitalize the housing market during the Great Depression.

FHLBs are cooperatively owned by their member institutions, which include community banks, credit unions, commercial banks, savings institutions, and insurance companies. These member institutions can borrow money from FHLBs at a discounted rate, which helps them to offer lower interest rates on mortgages and other loans to their customers.

In addition to providing funding, FHLBs also offer a variety of other services to their members, such as:
 Technical assistance on housing and community development  Affordable housing programs
 Letters of credit
 Mortgage purchase programs
FHLBs play an important role in the U.S. housing market. They help to ensure that there is a steady supply of affordable mortgage credit available to borrowers, and they also support community development efforts.

Federal Home Loan Bank and Affordable Housing Program
The Federal Home Loan Bank (FHLB) Affordable Housing Program (AHP) is a grant program that provides funding for the creation and preservation of affordable housing. The AHP is funded by a 10 percent contribution from each FHLB's earnings.

The AHP can be used to finance the following types of affordable housing projects.  Owner-occupied housing: The AHP can be used to finance the purchase, construction, or rehabilitation of owner-occupied housing for low-or moderate-income households.

ATTACHMENT 5

Appendix B – Housing Constraints B-61
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025  Rental housing: The AHP can be used to finance the purchase, construction, or rehabilitation of rental housing where at least 20 percent of the units are affordable for and occupied by very low-income households.
 Mixed-income housing: The AHP can be used to finance the purchase, construction, or rehabilitation of mixed-income housing where a portion of the units are affordable for lowor moderate-income households.

The AHP is a competitive program, and applications are typically reviewed on a quarterly basis. To be eligible for an AHP grant, a project must meet the following criteria:
 The project must be located in a low-or moderate-income census tract.  The project must be affordable to low-or moderate-income households.  The project must be developed by a qualified project sponsor.

The AHP is a valuable resource for developers of affordable housing. The program provides muchneeded funding for the creation and preservation of affordable housing, and it helps to ensure that lowand moderate-income households have access to safe and affordable housing.

Housing First
Supportive housing is a type of housing that provides permanent, affordable housing with on-site supportive services to help people who are homeless or at risk of homelessness. The supportive services can vary depending on the needs of the individual or family, but they may include case management, mental health services, substance abuse treatment, job training, and education.

There are a variety of supportive housing subsidy programs available in the United States. Some of the most common programs include:
 Housing Choice Vouchers (HCVs): HCVs are a federal program that provides rental assistance to low-income households. HCVs can be used to rent apartments on the private market, and they can also be used to pay for supportive housing.  Veterans Affairs Supportive Housing (VASH): VASH is a federal program that provides rental assistance and case management services to homeless veterans.  Rapid Re-housing: Rapid Re-housing is a short-term program that provides rental assistance and case management services to help people who are homeless quickly find and maintain housing.

The Housing First approach to homelessness is a philosophy that emphasizes providing permanent housing to people who are homeless, regardless of their other needs. The Housing First approach has been shown to be effective in reducing homelessness and improving the lives of people who are homeless.

The supportive housing subsidy system in the United States is a complex system, but it is an important part of the Housing First approach to homelessness. The subsidy programs help to make supportive ATTACHMENT 5

Appendix B – Housing Constraints B-62
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 housing affordable for people who are homeless, and they help to ensure that people who are homeless have access to the supportive services they need to succeed.

Requests to Develop at Densities Below Those Permitted
New State Housing Element law now requires the non-governmental constraints analysis to evaluate developer requests to build at densities below the density identified in the Housing Element sites inventory. Carmel-by-the-Sea assumed the base density of 22 dwelling units per acre identified in the Carmel Municipal Code for the CC, SC, and RC Districts for the 5th Cycle sites inventory. Due to small lot sizes throughout the commercial districts, this density results in estimates of 1-8 units per site, with the majority of sites accommodating 1-2 units. A total development potential of 78 units was identified for the commercial districts. While a lack of water resources generally precludes higher-density projects, a review of development trends during the 5th Cycle showed densities ranging from 7 dwelling units per acre to 44 dwelling units per acre for projects in the CC, SC, and RC Districts. Carmel-by-the-Sea did not receive requests during the 5th Cycle to develop below densities identified in the site's inventory; therefore, this is not a constraint to development. Additionally, the City identified a significant surplus of sites in the 5th Cycle Housing Element for a total capacity of 164 housing units (the 2015-2023 RHNA was 31 units), ensuring that any property that developed at a lower density than projected would not adversely impact the City's ability to maintain sufficient sites throughout the planning period to achieve the RHNA.

Small Lots and Large Units
Property within Carmel-by-the-Sea is typically smaller than a half-acre, which can be a constraint for housing production. Lot consolidation incentives may be a solution. Large multi-family units have become commonplace with recent housing proposals. Large units reduce the number of multi-family units overall, which decreases the housing variety available, and increases the number of expensive luxury housing options. The City has proposed a minimum density requirement for sites in the Central Commercial (CC), Service Commercial (SC), Residential and Limited Commercial (RC), and R-4 District (see Program 3.1.G in Chapter 2).

Seasonal Vacancies
Carmel-by-the-Sea has a 50 percent vacancy rate of which 80 percent is attributed to seasonal vacancies, given the community’s strong tourism industry. Second homeowners seeking seasonal homes skews the demand for housing, driving up rents and home prices and making it challenging for those working in Carmel-by-the-Sea to find available housing. Rising housing prices decrease the stock of housing affordable to those living or working in and around Carmel-by-the-Sea, further spurring the statewide housing shortage. Programs to address this issue are incorporated in the 6th Cycle Housing Element and include encouraging Accessory Dwelling Units and establishing of an Affordable Housing Trust Fund which could be funded in part by a vacancy tax.

ATTACHMENT 5

Appendix B – Housing Constraints B-63
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Length of Time between Application Approval and Building Permit Issuance New Housing Element law now also requires an examination of the length of time between receiving approval for a housing development and submittal of an application for building permits. On average (based on City data from seven developments of vacant sites) there are 84 days between approval of a housing development and submittal of a building permit application, and 165 days between submittal of a building permit application and issuance of a building permit. The time between application approval and building permit issuance (249 days on average) is influenced by a number of factors, none of which are directly impacted by the City. Factors that may impact the timing of building permit issuance include required technical or engineering studies; completion of construction drawings and detailed site and landscape design; securing construction and permanent financing; and retention of a building contractor and subcontractors. Generally, building permits are submitted in a timely manner after planning entitlements; however larger projects have experienced longer timeframes given supply chain issues and labor shortages, neither of which the City controls.

Environmental Justice Element Requirement
An Environmental Justice Element or equivalent is not required for Carmel-by-the-Sea because no disadvantaged communities exist within the city’s boundaries (as defined in Gov. Code, §65302, (h)(4)(A)). “Disadvantaged communities” means an area identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code or a low-income area that is disproportionately affected by environmental pollution and other hazards that can lead to negative health effects, exposure, or environmental degradation.

Environmental Constraints
Environmental constraints affecting housing include geologic and seismic conditions and fire hazards, which are a threat to the built environment. These constraints are discussed in detail below. However, the primary environmental constraint to the development of housing in Carmel-by-the- Sea is the limited water supply, as already discussed.

Fire Hazards
Carmel-by-the-Sea is often referred to as a “Village in the Forest,” due to its extensive urban forest.

The high density of structures within the Carmel residential areas and business district among numerous trees increases the fire hazard. In addition, the Pescadero Canyon, Del Monte Forest, and Mission Trails Nature Preserve, located adjacent to the City, introduce the possibility of a wildland fire.

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. In such zones, roofs and exterior walls of new buildings must be made of noncombustible materials. 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.

ATTACHMENT 5

Appendix B – Housing Constraints B-64
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Obtaining insurance for structures is increasingly difficult given the Very High Fire Hazard Severity Zone, posing a constraint to residential development.

The City of Carmel-by-the-Sea is part of a regional coordination effort with other Monterey County cities, including Pacific Grove and Monterey. These neighboring agencies provide aid to each other on an as-needed basis. Fire protection for the City is provided by the City of Monterey Fire Department based out of the Carmel Fire Station located on 6th Avenue.

Emergency and Evacuation Planning
Emergency response is provided through coordinated efforts by the cities of Monterey, Pacific Grove, and Carmel. Emergency planning and evacuation pose many challenges for the City due to the precarious topography and narrow City roads. The General Plan Safety Element (both the currently adopted version and the updated Safety Element being prepared in conjunction with the 6th Cycle Housing Element) provides an in-depth analysis of emergency and evacuation planning and protocols, as well as scenario mapping and evacuation route mapping. City staff generally note that particularly in Carmel, where small lots make meeting egress requirements difficult at higher densities, incentivizing lot mergers in the commercial district will help address concerns and challenges associated with emergency and evacuation planning across the City.

Seismic
The entire California Coast and Coast Range area is prone to earthquakes. Based on history, the probability of a moderate or high magnitude earthquake occurring in the greater Monterey region in the next few decades is quite likely. Faults that could present hazards to Carmel-by-the-Sea during an earthquake event include the following active or potentially active faults: San Andreas, San GregorioPalo Colorado, Chupines, Navy, and Cypress Point. The San Andreas and San Gregorio faults are two dominant faults within the Monterey County region that are considered active with evidence of historic or recent movement.

While the seismic hazards cannot be eliminated, there are a number of regulations that reduce the impact of these hazards. The Alquist-Priolo Earthquake Fault Zoning Act was passed in 1972 to mitigate the hazard of surface faulting to structures for human occupancy, by preventing the construction of buildings used for human occupancy on the surface trace of active faults. The California Building Code includes provisions associated with engineering design and building requirements that address seismic hazards. In addition, the City of Carmel-by-the-Sea General Plan includes policies addressing hazards from seismic activity.

Tsunami
The City would be minimally affected by a moderate to extreme tsunami event. This can be accredited to coastal topography along Carmel’s western boundary. The steep cliff, or a step-down in elevation between the Scenic Road and the beach, acts as a protective boundary during a tsunami event.

However, low lying portions of Carmel-by-the-Sea are susceptible to inundation from tsunami, known as waves produced from a seismic event. Only the southernmost portion of the City and the low-lying ATTACHMENT 5

Appendix B – Housing Constraints B-65
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Carmel Lagoon neighborhood (within unincorporated Monterey County) could be impacted if a 21- foot-high tsunami wave were to enter the Carmel River lagoon. Impacts from tsunami could include damage to improvements from wave inundation and from wave-carried debris.

Tsunami is a potential safety hazard as well as a hazard to property. The actual areas that will be impacted from a tsunami will vary depending on factors such as the size of the tsunami wave, tide level at the time of the tsunami, the wave source location and the wave direction. In general, areas adjacent to the shoreline that are below an elevation of approximately 15 to 20 feet above mean sea level appear to have a higher level of risk.

Flooding
Carmel is located on a sloping terrain that offers good storm water runoff into both the Pacific Ocean and the Carmel River. Only a small portion of the City’s southern tip is designated as a FEMA 100- year Flood Zone. Carmel Beach is subject to flooding during high tide and beach sand is lost yearly during winter storms. The beach is clearly separated from adjacent roads and houses by a moderately steep hill. Due to that topographical feature, the coastal flooding rarely extends past the beach. There are several areas of the City, which have been identified in the City’s general plan as being prone to localized flooding. The main area subject to localized flooding is located within the Mission Trail Nature Preserve. The Mission Trail site is owned by the City and used as a park, and the City recently approved a CDP to correct flooding issues within Mission Trails Nature Preserve. This use mitigates some of the damage that would normally result from the retention of water on the site and the City recently approved a Coastal Development permit to correct some flooding issues in this area.

The City’s General Plan includes a Safety Element with policies and programs which address flooding (see policies P8-27 through P8-31). The Safety Element Update will also include and update where necessary the City’s policies and programs related to flooding. The City’s Municipal Code (Chapter

15.56 Community Floodplain) further addresses flood risks and hazards found in the City as well as identifying methods for reducing flood losses. In order to accomplish its purposes, this chapter of the municipal code includes regulations to:
1) Restrict or prohibit uses which are dangerous to health, safety, and property due to water or erosion hazards, or which result in damaging increases in erosion or flood heights or velocities;
2) Require that uses vulnerable to floods, including facilities which serve such uses, be protected against flood damage at the time of initial construction; 3) Control the alteration of natural floodplains, stream channels, and natural protective barriers, which help accommodate or channel floodwaters; 4) Control filling, grading, dredging, and other development which may increase flood damage; and
ATTACHMENT 5

Appendix B – Housing Constraints B-66
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 5) Prevent or regulate the construction of flood barriers which will unnaturally divert floodwaters or which may increase flood hazards in other areas. (Ord. 2018-03 § 1 (Exh. A §4), 2018).

Coastal Erosion and Landslides
Erosion on sloped inland areas and at the shoreline (beach) has been a problem for much of Monterey County, including Carmel. The hazards due to erosion are difficult to separate from those due to flooding and landsliding. In some cases, erosion is a result of flood and landslide conditions; in others, rapid water runoff and landsliding can occur in areas subject to prolonged erosion. The preventive costs of erosion are generally included within flood control measures and the overall costs of hillside development. Adoption of the present state of the art procedures for erosion prevention in hillside areas will, in most cases, eliminate losses.

Losses due to coastal erosion can be reduced most economically by avoiding construction in areas subject to severe erosion. Erosion of the beach bluffs is addressed in the City's Shoreline Management and Emergency Operations plans.

Summary of Non-Governmental Constraints
In summary, while Carmel-by-the-Sea is subject to the environmental constraints described above, the City’s General Plan sets forth a series of actions to minimize these constraints. Carmel-by-the- Sea incorporates this information into its land use planning and development review processes. In an effort to continue to reduce constraints to housing development, the Housing Element Update includes specific policies and programs in Chapter 2 to reduce or eliminate non-governmental constraints to the extent feasible and practical.

The primary non-governmental constraints and the 6th Cycle Housing Element programs to address them are shown in Table B-14 below:

Table B-14 - Summary of Non-Governmental Constraints
Non-Governmental Constraint Programmatic Action
Land Availability and Cost
Carmel-by-the-Sea’s limited availability of land coupled with its desirable coastal location and world-renowned architecture has resulted in high cost of land and a lack of affordable housing.

Some of the primary factors that have contributed to high land costs in Carmel-by-the-Sea are its limited availably of land.

Program 3.1.A: Mixed Use Affordable Housing
Program 3.1.B: Overnight Visitor Accommodation (Conversion) Transfer of Development Rights.

Program 1.1.C: Development on Small Sites Program 3.1.C:

Density Bonus
Construction Costs
Costs of labor and materials are very high in Carmel-by-the-Sea and could be considered constraints on housing development.

Program 3.1.C: Density Bonus
Availability of Financing Program 2.1.D: Establish Affordable Housing Trust Fund Program 5.1.C: Shared Housing Information
Program 5.1.B: Housing Choice Voucher Program
Program 5.2.A: Support Community Organizations
Small Lots and Large Units Program 3.1.G: Establish Minimum Densities Seasonal Vacancies Program 2.1.D: Establish Affordable Housing Trust Fund ATTACHMENT 5

Sites Inventory
C

APPENDIX
ATTACHMENT 6

Appendix C – Sites Inventory C-ii
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table of Contents
Appendix C Sites Inventory ................................................................................................................................................ C-1 C.1 Introduction ........................................................................................................................................................ C-1 C.2 Regional Housing Needs Allocation ............................................................................................................... C-2 C.3 Regulatory Framework for Meeting the RHNA ........................................................................................... C-7 C.4 Carmel-by-the-Sea Strategies for Meeting RHNA ........................................................................................ C-8 C.5 Summary of RHNA Strategies ....................................................................................................................... C-57 C.6 Technical Background Documents ...................................................................................................... C-57C-58 Tables
Table C-1 - Regional Housing Needs Allocation (RHNA) – 2023-2031 .................................................................... C-2 Table C-2 - Remaining RHNA ........................................................................................................................................... C-3 Table C-3 - Projects Eligible for RHNA Credits ............................................................................................................. C-4 Table C-4 - ADU Development Trends ........................................................................................................................... C-9 Table C-5 - Proforma of Sample Hotel-to-Residential Conversion ........................................................................... C-10 Table C-6 - Analysis of Hotel Key Value ........................................................................................................................ C-11 Table C-7 - Carmel Hotels Grouped by Performance (RevPAR) .............................................................................. C-12 Table C-8 - Carmel Hotels and Hotel Room Inventory ............................................................................................... C-12 Table C-9 - Hotel Room Conversion Potential ............................................................................................................. C-14 Table C-10 - Affordable Housing Potential on Church Properties ................................................................... C-19C-18 Table C-11 - Distribution of Lot Sizes ................................................................................................................... C-20C-19 Table C-12 - Affordable Housing Projects on Small Sites .................................................................................. C-21C-20 Table C-13 - Regional Redevelopment Trends ..................................................................................................... C-23C-22 Table C-14 - Rent Comparison – Residential versus Commercial..................................................................... C-26C-25 Table C-15 - Properties with Live/Work Potential for Lower-Income Housing ........................................... C-28C-27 Table C-16 - Mixed Income Incentive Program Sites ......................................................................................... C-33C-32 Table C-17 - Past Mixed-Use Development Projects .......................................................................................... C-36C-35 Table C-18 - Additional Scattered Sites .................................................................................................................. C-40C-39 Table C-19 - Site #S-1, Forest Cottages Specific Plan: Site Description .......................................................... C-41C-40 Table C-20 - Site #S-2 Court of the Fountains: Site Description ...................................................................... C-42C-41 Table C-21 - Site #S-2 Court of the Fountains: Capacity Assumptions ........................................................... C-43C-42 Table C-22 - Site # S-3 First American Title: Site Description .......................................................................... C-44C-43 Table C-23 - Site # S-3 First American Title: Capacity Assumptions ............................................................... C-44C-43 Table C-24 - Site #S-4 Office Building: Site Description ................................................................................... C-45C-44 Table C-25 - Site #S-4 Office Building: Capacity Assumptions ........................................................................ C-46C-45 Table C-26 - Site #S-5 Yafa: Site Description ...................................................................................................... C-47C-46 Table C-27 - Site #S-5 Yafa: Capacity Assumptions ........................................................................................... C-47C-46 Table C-28 - Site #S-6 Three Garages: Site Description ..................................................................................... C-48C-47 Table C-29 - Site #S-6 Three Garages: Capacity Assumptions ................................................................................... C-48 Table C-30 - Site #S-7 Carmel Realty Office: Site Description .................................................................................. C-49 Table C-31 - Site #S-7 Carmel Realty Office: Capacity Assumptions .............................................................. C-50C-49 Table C-32 - Site #S-8 Parashis/Millard Building: Site Description ................................................................. C-51C-50 Table C-33 - Site #S-8 Parashis/Millard Building: Capacity Assumptions ............................................................... C-51 Table C-34 - Site #S-9 The Agency: Site Description .................................................................................................. C-52 Table C-35 - Site #S-9 The Agency: Capacity Assumptions ....................................................................................... C-52 Table C-36 - Site #S-10 Enzos: Site Description .......................................................................................................... C-53 Table C-37 - Site #S-10 Enzos: Capacity Assumptions ............................................................................................... C-54 Table C-38 - Site #S-11 Paseo San Carlos Square: Site Description .......................................................................... C-55 Table C-39 - Site #S-11 Paseo San Carlos Square: Capacity Assumptions ............................................................... C-55 Table C-40 - Site #S-12 Carmel Office Supply & Business Center: Site Description ............................................. C-56 Table C-41 - Site #S-12 Carmel Office Supply and Business Center: Capacity Assumptions ...................... C-56C-57 ATTACHMENT 6

Appendix C – Sites Inventory C-iii
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table C-42 -Summary of Sites Inventory ....................................................................................................................... C-57 Table C-43 - Basic Pro Forma of Hotel Program 1.1.F ...................................................................................... C-57C-58 Figures
Figure C-1 - Trevvett Court ..................................................................................................................................... C-21C-20 Figure C-2 - Examples of Underutilized Commercial Spaces ............................................................................ C-25C-24 Figure C-3 - Live/Work Adaptive Re-Use Case Study ........................................................................................ C-27C-26 Figure C-4 - Mixed Income Case Study - “Midblock” ........................................................................................ C-31C-30 Figure C-5 - Mixed Income Case Study - “Corner Site” ..................................................................................... C-31C-30 Figure C-6 - Mixed Income Case Study - “Adaptive Reuse” .............................................................................. C-32C-31 ATTACHMENT 6

Appendix C – Sites Inventory C-1
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Appendix C
Sites Inventory
C.1 Introduction
The Association of Monterey Bay Area Governments (AMBAG) forecasts that the two-county (Monterey and Santa Cruz) Monterey Bay Area will add 32,867 new households between 2020 and 2045.1 For the 8-year time frame covered by this 6th Cycle Housing Element Update, the State 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 abovemoderate income (market rate) housing. This calculation, known as the Regional Housing Needs Allocation (RHNA), is based on population projections produced by the California Department of Finance (DOF) as well as adjustments that incorporate the region’s existing housing need. The adjustments result from recent legislation requiring HCD to apply additional adjustment factors to the baseline growth projection from the DOF in order for the regions to get closer to healthy housing markets. To this end, adjustments focus on the region’s vacancy rate, level of overcrowding, and the share of cost burdened households, and seek to bring the region more in line with comparable ones.

These new laws governing the methodology for how HCD calculates the 6th Cycle RHNA resulted in a significantly higher number of housing units for which the Monterey Bay Area must plan compared to previous Housing Element cycles.

Revised Sites Inventory Strategy
In April 2024, the City of Carmel-by-the-Sea adopted the 6th Cycle Housing Element, which was found to be compliant with state law by the California Department of Housing and Community Development (HCD) on April 25, 2024. In pursuing the implementation of its adopted Housing Element, the City has come to realize that certain sites may be challenging to develop and that diversifying its housing stock and better integrating new housing throughout the community will yield faster and more successful affordable housing. In response, a group of resident volunteers came together called the Affordable Housing Alternatives Group, or “AHA.” AHA is composed of a highly motivated group of residents that have devoted their energy and talents to crafting policies tailored to Carmel that will address the City’s housing needs. In partnership with City staff, the AHA Group provided thousands of volunteer hours, met with City staff on a weekly basis (often more frequently), leveraged community connections to identify property owners interested in adding new housing on their properties, attended meetings with HCD, and genuinely dedicated themselves to finding housing solutions with the best chance of becoming reality. One of the many benefits that grew out of this collaboration was the development of an alternative sites strategy for meeting the City’s RHNA that provides a more viable path to the creation of affordable housing opportunities within the village. This new Appendix C 1 Source: Final 2022 Regional Growth Forecast, AMBAG, November 18, 2020 ATTACHMENT 6

Appendix C – Sites Inventory C-2
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 replaces the previously adopted Appendix C (April 2024) and represents the culmination of efforts by AHA members, the Carmel community, and City staff to refine the Housing Element in a way that maximizes the potential for affordable housing development in the City.

C.2 Regional Housing Needs Allocation
RHNA Summary
AMBAG adopted its Final 6th Cycle Regional Housing Needs Allocation Plan 2023-2031 on October 12, 2022. The Plan was approved by HCD on November 8, 2022. For Carmel-by-the-Sea, the RHNA to plan for in this cycle is 349 units. Details are provided below.

Carmel-by-the-Sea’s share of the regional housing need for the 8-year period from 2023 to 2031 is 349 units, which is a 1,025 percent increase over the 31 units required during the 2014 to 2023 RHNA cycle. The housing need is divided into four income categories: Very Low Income, Low Income, Moderate Income, and Above Moderate Income (i.e., market rate). Table C-1 shows Carmel-by-theSea’s RHNA for the 2023-2031 planning period.

Table C-1 - Regional Housing Needs Allocation (RHNA) – 2023-2031 Income Group
Carmel-bythe-Sea Units PercentMonterey
County Units Percent
Monterey Bay
Area Units Percent
Very Low Income
(<50% of AMI)
113 32.3% 4,412 21.8% 7,868 23.6%
Low Income
(50%-80% of AMI)
74 21.2% 2,883 14.2% 5,146 15.5%
Moderate Income
(80%-120% of AMI)
44 12.6% 4,028 19.8% 6,167 18.5%
Above Moderate Income
(>120% of AMI)
118 33.9% 8,972 44.2% 14,093 42.4%
Total 349 100.0% 20,295 100.0% 33,274 100.0%
Source: AMBAG 2021
Note: The Association of Monterey Bay Area Governments (AMBAG) Executive Board adopted the 2023-2031 Regional Housing Needs Allocation Plan (RHNA) on October 12, 2022 (Resolution No. 2022-24). The plan was approved by the California Housing and Community Development on November 8, 2022.

Progress Toward RHNA
The RHNA planning period for the 2023-2031 Housing Element (6th Cycle) is June 30, 2023 through December 15, 2031. The statutory adoption date for the 6th Cycle Housing Element is December 15, 2023 – 6 months after the beginning of the RHNA planning period. To account for this discrepancy, the City of Carmel-by-the-Sea can receive credits for the number of housing units entitled, permitted, or under construction since the beginning of the projection period, up to the data cutoff date for the writing of this Housing Element (December 31, 2024) and apply these to the RHNA. Accordingly, the units permitted in this 18-month period count toward the 2023-2031 Housing Element (6th Cycle) and are subtracted from the City’s RHNA of 349 units.

ATTACHMENT 6

Appendix C – Sites Inventory C-3
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table C-2 provides a summary of the City’s remaining RHNA obligations after accounting for eligible credits. Table C-3 lists three housing projects (totaling 23 units) that are either permitted, underway, or constructed during the RHNA projection period, eligible for RHNA credits. Eligible credits also include 45 ADUs that have earned approval for entitlements and/or permits and will begin construction during the 6th Cycle Housing Element. Therefore, the City has a remaining RHNA of 281 units for which the City must identify adequate sites.

Table C-2 - Remaining RHNA
Very LowIncome UnitsLow- Income
Units
ModerateIncome Units
Above
ModerateIncome Units Total Units
2023–2031 RHNA 113 74 44 118 349
Units permitted between June 30, 2023
and December 31, 2024
13 13 13 29 68
Remaining RHNA 100 61 31 89 281
Source: City of Carmel-by-the-Sea, Community Planning & Building Department ATTACHMENT 6

Appendix C – Sites Inventory C-4
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table C-3 - Projects Eligible for RHNA Credits
APN Project Name Zoning
General Plan Land
Use Area
Min. Density
(du/ac) VLI LI MI AM Tenure Entitlement Status
010138003000 Ulrika Plaza Service
Commercial
(SC)
Core Commercial 0.37 33 -- -- -- 12 Rental Approved
010138021000
010145012000 JB Pastor Service
Commercial
(SC)
Core Commercial 0.27 33 -- -- -- 8 Rental Conditionally 010145024000 Approved
010145023000
010146010000 Scandia Lopez Central
Commercial
(CC)
Core Commercial 0.09 33 -- -- -- 3 Rental Permitted and under construction
Subtotal 0 0 0 23
ADUs 13 13 13 6 Rental Approved/Permitted/
Constructed
Totals 13 13 13 29 Total RHNA Units = 68
Source: City of Carmel-by-the-Sea, 2025
Notes: VLI = very low-income; LI = low-income; MI = moderate-income; AM = above moderate-income.

ATTACHMENT 6

Appendix C – Sites Inventory C-5
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Projects Eligible for RHNA Credits
Ulrika Plaza (Site No. P-1)
The Planning Commission approved the Ulrika Plaza project on August 9, 2023. On December 13, 2024, a building permit application was submitted to the City for demolition of existing improvements to prepare the site for new construction. On March 3, 2025, a building permit application for the construction of a new mixed-use building was submitted to the City and is currently in plan check review. Demolition work to prepare the site began in early September under a separate building permit.

The project is slated to begin full construction by the end of 2025. The 16,000-square-foot (0.37 acre) project site includes a 22,400 square foot mixed-use building with 9,000 square feet of ground-floor retail, 12 market rate residential units, and 28 parking spaces in an underground garage. The project density is 33 dwelling units per acre.

The project, previously known as Del Dono and Del Dono II, resulted from merging two 8,000- square-foot lots to create a 16,000-square-foot site. In this first incarnation of the project, the original developer planned to construct a mixed-use building containing ground-floor commercial space and 16 residential units, two of which were to be affordable to moderate income households. The project density was 44 dwelling units per acre. The project was approved and broke ground in 2019. A twostory commercial building with underground parking was demolished on the north lot, and a one-story commercial building with a surface parking lot was demolished on the south lot. The developer lost their funding during construction of the underground parking structure and the property was subsequently sold and redesigned as Ulrika Plaza.

This project is an example of the redevelopment of underutilized commercial buildings and a surface parking lot in the Service Commercial (SC) District. All land use entitlements have been obtained.

JB Pastor Building (Site No. P-2)
The Planning Commission approved the JB Pastor project on April 9, 2025. The project site is a 12,000-square-foot (0.27 acre) commercial parcel. The site is composed of three legal lots of record and is currently developed with a two-story, historic community room building, surface parking, a one-story commercial building, and a two-story mixed-use building (office & residential). The developer proposes demolishing all existing site improvements, excluding the historic community room, and constructing two 2-story mixed use buildings totaling approximately 12,900 square feet with ground floor commercial space, eight market rate second-floor apartments, and 12 on-site parking spaces. The project density is 29 dwelling units per acre.

On April 23, 2025, an appeal of the Planning Commission’s approval of the project was filed and on August 4 and September 8, 2025, the City Council heard the appeal, denying portions of the appeal and upholding others. The City Council remanded the project back to the Planning Commission with specific direction so that the applicant has the opportunity to make revisions to the project.

This project is an example of the redevelopment of underutilized commercial properties, including a surface parking lot in the Service Commercial (SC) District.

ATTACHMENT 6

Appendix C – Sites Inventory C-6
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Scandia Lopez/Hakim (Site No. P-3)
The Planning Commission approved additions to the historic Percy Parkes Building for three (3) new market rate apartments on July 13, 2022. The 4,000-square-foot (0.09 acres) project site includes a 2,750 square foot one-story historic commercial building. The project consists of a second floor addition to the existing commercial building and the construction of a two-story building in the courtyard behind the existing building. The project density is 33 dwelling units per acre.

This project is an example of additions to a one-story historic commercial building in the Central Commercial (CC) District to provide housing. The commercial tenant relocated to another retail space within the village prior to approval of the project. All land use entitlements have been obtained. No appeals of the project were filed. A building permit was issued in April 2025 and the project is currently under construction.

Accessory Dwelling Units
Between July 1, 2023 and December 31, 2024, the City issued certificates of occupancy and building permits, and is in the process of reviewing additional ADU applications, for a total of 45 ADUs and JADUs as documented in the City’s Housing Element Annual Progress Reports submitted to HCD.

The City continues to see a strong interest in ADUs and expects that trend to continue throughout the planning period.

In reviewing the City’s ADU construction activities between 2017 and 2024, 64 ADU applications were processed in the City. Among these units, 15 (24 percent) were for units smaller than 300 square feet and 20 (32 percent) were between 301 and 500 square feet. Also 31 (49 percent) were for conversion from existing spaces (these units tend to be smaller and less expensive to construct, and therefore are more likely to be affordable). Based on a review of rental unit sizes in Monterey County, average unit sizes in the region are:
 Studio - 420 square feet
 One-bedroom - 646 square feet
 Two-bedroom - 938 square feet
Overall, 41 percent of the City’s ADUs between 2017 and 2024 were significantly smaller than the average sized ADU in the region for that bedroom count. Rental rates for these smaller ADUs are reasonably expected to be lower than market rate, regularly sized units. Furthermore, discussions with local realtors indicate that many ADUs are occupied by caretakers at reduced or no costs. Therefore, the City uses the 30/30/30/10 income/affordability distribution approved for the ABAG jurisdictions and also used by most AMBAG jurisdictions for the 6th cycle Housing Element update. Overall, the 45 ADUs permitted are distributed into 13 very low income, 13 low income, 13 moderate income, and 6 above moderate income.

ATTACHMENT 6

Appendix C – Sites Inventory C-7
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 C.3 Regulatory Framework for Meeting the RHNA
The purpose of the Sites Inventory is to identify and analyze specific sites that are available and suitable for residential development to accommodate Carmel-by-the-Sea’s remaining assigned 281 housing units. The City is not responsible for building the housing, but must provide adequate capacity through land use policies and zoning regulation to accommodate the remaining RHNA.

Sites to Accommodate Lower-Income RHNA
Sites Used in Previous Housing Element Planning Periods Government Code §65583.2(c)
Each site includes information about whether it was used in a prior Housing Element planning period, if it is currently vacant, and the number of anticipated housing units by income category.

Appropriate Zoning
Government Code §65583.2(c)(3)
Under state law, the “default density” for suburban jurisdictions such as Carmel-by-the-Sea, is at least 20 dwelling units per acre. At this density, a project site is deemed appropriate to accommodate lowerincome housing. The General Plan designation that meets this requirement is Multi-Family Residential (and/or zoning at R-4), with a maximum density of 33 dwelling units per acre, or 44 dwelling units per acre with a local Bonus Density when affordable units are provided.

Residential uses are also permitted in the City’s CC, SC, and RC zones, up to 22 units per acre by right and 33 units per acre with a conditional use permit. Projects meeting the local Bonus Density incentive may reach 44 units per acre. A 100 percent affordable housing project may reach 88 units per acre, inclusive of all state and local bonuses.

The City is implementing Program 3.1.G to change the maximum allowable density of 33 dwelling units per acre to a maximum allowable base density of 40 units per acre in the Commercial (CC, SC, and RC) Districts and the Multi-Family Residential (R-4) District. Combining local and state density bonuses, the total capacity can reach 88 units per acre. The City is also instituting a minimum density of 22 dwelling units per acre in the Commercial (CC, SC, and RC) Districts and in the Multi-Family Residential (R-4) District. These changes will enable a higher yield of residential units, rather than larger units at a lower yield, which is likely to result in increased financial feasibility for the development of affordable units.

In addition, the City is modifying the Municipal Code to broaden the eligibility for receiving up to a total of 88 du per acre, inclusive of all state and local bonuses, in commercial zones from 100 percent affordable housing projects to projects that qualify for the Mixed-Income Incentive Program.

ATTACHMENT 6

Appendix C – Sites Inventory C-8
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Site Size
Government Code Section 65583.2(c)(2)(A), (B), and (C)
Several factors outside of the City of Carmel-by-the-Sea’s control impact the availability and developability of land throughout the village. The incorporated area of Carmel-by-the-Sea is onesquare-mile, bordered by Pescadero Canyon to the north and Carmel Bay to the west. The City is located entirely within the Coastal Zone and has a certified Local Coastal Program that complies with the policies of the California Coastal Act. It is also built-out and composed of small lot sizes. The original subdivision maps for the City (recorded in 1888 and 1902) established a grid pattern of commercial lots ranging in size from 2,500 square feet (0.057 acres) to 4,000 square feet (0.09 acres).

While some parcels have been combined, many remain in their original configuration today.

No Net Loss
Government Code Section 65863
Through the 8-year RHNA planning period of the 6th Cycle Housing Element, pursuant to the State of California’s No Net Loss Law, the City is required to identify an alternative site(s) if a site on the Sites Inventory is developed at a lesser ratio of lower-income units than planned. Program 1.1.A will regulate this requirement of No Net Loss for the 6th cycle (see Chapter 2).

Reliance on Nonvacant Sites to Accommodate More than 50 Percent of the RHNA for LowerIncome Units Government Code Section 65583.2(g)(2)
Per state law, when more than 50 percent of the sites intended to accommodate the RHNA for lowerincome households are nonvacant sites, the resolution adopting the Housing Element must include findings stating that the uses on these sites are likely to be discontinued during the planning period and outline the factors used to make that determination.

C.4 Carmel-by-the-Sea Strategies for Meeting RHNA
To fully accommodate the remaining RHNA and to foster housing opportunities throughout the community, the City is pursuing the following strategies:
 Promote the development of Accessory Dwelling Units (ADUs)  Facilitate the conversion of underperforming hotels into affordable housing  Pursue the development of affordable housing on religious facility sites  Facilitate conversion of underutilized commercial spaces into affordable live/work housing  Incentivize mixed-income affordable projects downtown ATTACHMENT 6

Appendix C – Sites Inventory C-9
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Accessory Dwelling Units (ADUs)
Assumptions and Analysis
ADUs represent a significant opportunity for Carmel-by-the-Sea to provide affordable housing throughout the community. Pursuant to state law, local jurisdictions are able to project the number of ADUs over the 8-year planning period based on the demonstrated trend of recent ADU production.

Between 2019 and 2024 (Table C-4), the City issued building permits for 61 ADUs, with a sharply rising trend over the past 2 years, yielding an annual average of 10.2 units.

Table C-4 - ADU Development Trends
2019 2020 2021 2022 2023 2024 Average
Permitted ADUs 4 8 9 8 13 19 10.2
Source: City of Carmel-by-the-Sea, Community Planning & Building Department Capacity During 6th Cycle Planning Period
Based on a historical average of 10 ADUs per year, the City estimates that 70 ADUs could be constructed over the remaining 7 years (2025-2031) of the 8-year planning period.

Proactive Efforts to Accelerate Affordable ADU Development The City recognizes the significant potential role that ADUs can play in providing affordable housing.

This Housing Element includes a program to accelerate the development of ADUs, particularly affordable ADUs, during the planning period. These efforts are designed to accelerate the City’s ADU trend, which has already risen sharply in recent years. The City anticipates that this program will generate a potential 10 percent boost to its trends, resulting in an additional 7 ADUs, for a total of 77 ADUs over the remaining seven years (2025-2031) of the 8-year planning period.

Occupancy and Income/Affordability
Based on local knowledge, some ADUs are not used as rentals. Conservatively, the City discounts the ADU trend by 10 percent to account for potential ADUs with nonresidential uses. The 10 percent discount on the trend produces a conservative projected number of 70 ADUs. Using the previously discussed income/affordability distribution of 30 percent very low income, 30 percent low income, 30 percent moderate income, and 10 percent above moderate income, ADUs are projected to contribute 7 extremely low, 14 very low income, 21 low income, 21 moderate income, and 7 above moderate income units to the City’s future housing stock over the course of the planning period.

Hotel-to-Residential Conversion
Assumptions and Analysis
Hotel-to-Residential Conversion Program (Hotel ‘Key’ Transfer) – How it Works As noted in the description in Chapter 2, the goal of the Hotel-to-Residential Conversion Program is to incentivize hotel owners to convert underperforming hotels into mixed-income multifamily residential ATTACHMENT 6

Appendix C – Sites Inventory C-10
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 by creating a new legal right to sell the “hotel keys” associated with the converted hotel rooms (which are particularly valuable in light of the cap on the number of hotel rooms in the City). The intention is to provide property owners that undertake conversion projects with an above market return by allowing them to “sell the property twice” – i.e., by profiting from both the residual market value of the converted hotel and the market value of the hotel keys. The sample proforma in Table C-5 below illustrates the mechanics.

Consider a hypothetical 19-room hotel property with an average daily rate (ADR) of $211 and a 68% occupancy rate, equating to $143 in revenue per available room (RevPAR). In relation to other hotels in Carmel-by-the-Sea, such a hotel would operate below the 16th percentile in terms of performance (see the following section), making it a prime candidate for the Hotel-to-Residential Conversion Program.

Assume further that the hotel’s 19 rooms are converted into 16 mixed-income apartment units (a roughly 85% conversion ratio) with the following income distribution: 4 very low, 4 low, 4 moderate, and 4 above moderate income. If a developer were to acquire the hotel from the existing hotel owner at a 4.50% cap rate for $7,675,580 and invest $1,600,000 in capital expenditures to convert the hotel rooms into apartments ($100,000 per unit), the developer’s total cost basis would be $9,275,580.

Assuming a projected net operating income of $302,717 and a cap rate of 6.00%, the former hotel (now mixed-income apartments) would sell for $5,045,280, which would result in an approximately $4.2 million loss for the developer. However, when the proceeds from the sale of the 19 hotel keys is taken into consideration (an estimated $438,656 per key multiplied by 19 keys equals $8,334,464 (see below for further analysis on how the value of keys is estimated), the gross proceeds from the overall investment rises to $13,379,744, resulting in a total profit of $4.1 million and a return on investment (ROI) of approximately 44%. Such a return is substantially above market for a commercial real estate investment with this risk profile, and has already generated a high degree of interest in the program on the part of developers and local hotel owners.

Table C-5 - Proforma of Sample Hotel-to-Residential Conversion Conversion of 19-Room Hotel to 16-Unit Affordable Housing Purchase Price of Hotel $7,675,580
Housing Conversion Costs (@ $100,000 per room) $1,600,000 Total Developer Investment $9,275,580
Sale of Hotel Keys (@ $438,656 per key) $8,334,464
Sale of Affordable Housing Building $5,045,280
Total Developer Return $13,379,744
Profit $4,104,164
Return on Investment (ROI) 44%
Analysis of Hotel Key Value
To estimate the value that a Carmel hotel key could be sold for – the $438,656 per key used in the proforma above – a residual land value analysis was performed with respect to the keys (Table C-6). A common valuation method in the commercial real estate space, a residual land value analysis is used to calculate how much a developer can pay for land while still hitting their target return. Here, we assume that the hotel key is being purchased by a hotel developer or operator that already owns land in Carmel, ATTACHMENT 6

Appendix C – Sites Inventory C-11
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 so the relevant question becomes: how much can the purchaser of the hotel key pay for the key while still hitting their target return? Let’s assume that the buyer of the hotel key projects an average daily rate of $450 and a 65% occupancy rate, equating to revenue per available room (RevPAR) of $293 and annual revenue of $106,763 for this to-be-built hotel room. If we assume that operating expenses are 45% of revenue, that would result in an annualized net operating income of $58,719. At a 6.00% cap rate, this hotel room would be worth $978,656 once constructed. Given this value, how much can the purchaser of the hotel key pay for the key while still hitting their return target? Conservatively assuming $1,000 per square foot in construction costs, the cost of a typical 400 square foot hotel room would be $400,000 If the buyer of the hotel key has an industry-standard target ROI of 35%, this equates to a target profit of $140,000. In such a scenario, the residual value of the hotel key – i.e., the most the purchaser of the hotel key could pay for the key – is $438,656, which is the number used in the proforma in Table C-5 above. It is important to note that the City has no plan to set or regulate the price of hotel keys, but is only performing an analysis to estimate what the market value of a key would be.

Table C-6 - Analysis of Hotel Key Value
Residual Key Value Analysis
Average Daily Rate $450
Occupancy 65%
RevPAR $293
Annual Revenue $106,763
Operating Expenses as % of Revenue 45%
Net Operating Income $58,719
Value (@ 6% Cap Rate) $978,656
Construction Cost $400,000
Profit (@ 35% ROI) $140,000
Residual Key Value $438,656
Return on Investment (ROI) 35%
Capacity During the 6th Cycle Planning Period
Outreach and Developer and Hotel Owner Interest
In recent months the City and members of the AHA Group have held several meetings with hotel owners, affordable housing developers, and hotel developers to discuss the Hotel-to-Residential Conversion Program. These groups have expressed strong interest in the program.

The City and AHA Group have met with a mix of sophisticated, experienced developers, ranging from regional players to national firms with a broader focus. These include firms specializing in affordable housing, employee housing, and hospitality property redevelopment. They have provided valuable input on how to make the City’s incentives more attractive, highlighted similarities between the program and successful models elsewhere, and expressed active interest in participating once the program launches.

In addition to engaging with developers, the City and the AHA Group have also met with a number of hotel owners. These owners have shown a strong interest in exploring opportunities under the Hotelto-Residential Conversion Program. Hotel owners recognize that the program will allow participating ATTACHMENT 6

Appendix C – Sites Inventory C-12
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 developers to pay a higher price for their properties and are enticed by the potential for above-market returns.

This outreach demonstrates that there is a strong pool of capable and interested partners—both local and nonlocal—ready to collaborate with the City on converting underused hotel properties into muchneeded mixed-income housing.

Identification of Hotel Room Opportunities Based on Existing Conditions Based on data collected by the City from Transient Occupancy Tax (TOT) for Fiscal Year 2023-24, hospitality properties were graded on a curve (norm-referenced grading), based on revenue per available room or “RevPAR” (Table C-7).

Table C-7 - Carmel Hotels Grouped by Performance (RevPAR) RevPAR Hotels Rooms % of Total Rooms
Group 1 >$319 7 117 12%
Group 2 $231 - $318 12 287 30%
Group 3 $188 - $230 8 169 18%
Group 4 $144 - 187 8 239 25%
Group 5 $100 - $143 7 140 15%
Total 42 952
Groups 4 and 5 in the table above include properties whose revenue per available room (RevPAR) falls between 0.5 and 1.5 standard deviations below the market average. Specifically, with a market average RevPAR of $231.31 and a standard deviation of $87.56, this range encompasses properties with RevPARs between approximately $100 and $187. These hotels are considered underperformers relative to the broader market and operate below the 16th percentile of market performance. All told, there are 15 hotels that are underperforming (i.e., in groups 4 and 5). These underperforming hotels have 379 total rooms, representing approximately 40 percent of Carmel’s total hotel room inventory.

Table C-8 - Carmel Hotels and Hotel Room Inventory
Site No. APN Address
Overnight Visitor Accommodation
Establishment Name
No. of
Rooms*
H-1 010148015000 Dolores & 8th Adobe Inn 20
H-2 010095010000 Junipero between 5th & 6th Best Western Carmel Bay View Inn 56 H-3 010136023000 5
th & San Carlos Best Western Carmel’s Townhouse Lodge 28 H-4 010131011000 San Carlos between 4th & 5th Briarwood Inn 12 H-5 010131013000 E/S San Carlos between 4th & 5th Briarwood Inn II/Holland Court Inn 11 H-6 010136022000 San Carlos between 4th & 5th Candle Light Inn 20 H-7 010286015000 San Antonio & 13th Carmel Beach Hotel & Spa 22 H-8 010268008000 San Antonio & 8th Carmel Cottage Inn LLC 5 H-9 010124009000 SE Dolores & 3rd Carmel Country Inn LLC 12 H-10 010136021000 San Carlos @ 4th Carmel Fireplace Inn 22 H-11 010104002000 4
th & Torres Carmel Garden Inn 10
H-12 010195501500 7
th & Casanova Carmel Green Lantern Inn 17
H-13 010097007000 Junipero & 5th Carmel Inn & Suites 20 ATTACHMENT 6

Appendix C – Sites Inventory C-13
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Site No. APN Address
Overnight Visitor Accommodation
Establishment Name
No. of
Rooms*
H-14 010097018000 Mission & 5th Carmel Oaks 17
H-15 010021024000
010021025000
010021002000
010021003000
010021026000
010021027000
010021028000
010021029000
Carpenter between 1st & 2nd Carmel Resort Inn 30
H-16 010094002000 Ocean & Junipero Carmel Village Inn/Le Petit Pali 34 H-17 010123005000 4
th @ Mission Street Carmel Wayfarer Inn 17
H-18 010087002000 Junipero between 7th & 8th Carriage House Inn 13 H-19 010142002000 San Carlos @ 7th Coachman’s Inn 30
H-20 010094001000 Torres & Ocean Ave Comfort Inn Carmel by the Sea 19 H-21 010147008000 7
th & Lincoln Ave Cypress Inn 44
H-22 010287008000 San Antonio, 4 SE of 13th Edgemere Cottages Closed H-23 010085005000 SW Ocean/Torres Forest Lodge 4
H-24 010124001000
010124014000
2 NW of 4th on San Carlos Hofsas House 37
H-25 010109015000 SWC 3rd & Junipero Horizon Inn 20
H-26 010123014000 4
th & San Carlos Hotel Carmel 27
H-27 010191005000 Monte Verde @ 7th L’Auberge Carmel 20 H-28 010264007000 8
th & Camino Real La Playa Hotel 75
H-29 010261014000 SE Camino Real & Ocean Lamplighter Inn 6 H-30 010214032000 Ocean @ Monte Verde Lobos Lodge 30
H-31 010196027000 Monte Verde & 7th Monte Verde Inn 10
H-32 010201013000 Monte Verde @ 7th Monte Verde Inn East 7 H-33 010196001000 Ocean & Monte Verde Normandy Inn 48
H-34 010104005000 SEC 3rd & Junipero Ocean View Lodge 6 H-35 010273014000 Camino Real between 11th & 12th Sea View Inn 8*** H-36 010131028000 San Carlos at 5th Stilwell Hotel 42** H-37 010261015000 Camino Real 2 SE of Ocean Sunset House 5 H-38 010124012000 4
th & San Carlos Svendsgaard’s Inn 35
H-39 010214029000 Monte Verde & 6th Tally-Ho Inn 12
H-40 010087003000 Junipero between 7th & 8th The Hideaway/Le Petit Pali @ 8th 24 H-41 010148007000 NE Corner Lincoln & 8th The Homestead 12 H-42 010213003000 Ocean between Lincoln/Monte Verde The Pine Inn 49 H-43 010109016000 Mission @ 3rd Ave Tradewinds Carmel 28 H-44 010136016000 Dolores & 7th Vagabond House 13
H-45 010087013000 7
th & Mission Wayside Inn 22
Note: Hotels organized in alphabetical order only, not ranked. *The total number of rooms currently available in the City exceeds the cap of 948 established in the General Plan and Carmel Municipal Code Section 17.56.020
**Closed for remodel during data gathering and not included in program analysis. *** B&B and not included in the program analysis.

ATTACHMENT 6

Appendix C – Sites Inventory C-14
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Capacity Calculations
There are 379 hotel rooms in the 15 underperforming hotels in Groups 4 and 5 (see Table C-7). While some of Carmel’s hotels were actually originally apartments with kitchenettes, a portion of these hotel rooms may need to be merged with other hotel rooms to accommodate modern apartment living or to create additional bedrooms. On the other hand, hotels have additional square footage dedicated to lobby space and back of house operations, which can be repurposed into apartment units. Due to high construction costs and developers expressing interest in maximizing density under an adaptive reuse scenario, the City anticipates a hotel to housing conversion ratio of 85% (i.e., that 85 mixed-income apartments will be generated for every 100 hotel rooms converted through the program).

A sampling of three existing hotels, ranging from 13 to 22 rooms, was conducted and identified room sizes ranging from 498 to 635 square feet. This, coupled with public and back of house spaces utilized for housing (as noted above) validates the assumption of an 85% conversion rate. Based on this information, conversion of the underperforming hotel rooms could yield a total of 322 apartments.

The City’s proposed program would require that at least 75 percent of the converted units become deed-restricted affordable units. More specifically, the proposed income distribution is 25 percent very low income; 25 percent low income; 25 percent moderate income; and 25 percent above moderate income.

While initial outreach efforts have generated overwhelming support and interest, the City recognizes that not every owner of a hotel in Groups 4 and 5 will pursue this option during this Housing Element cycle. A more conservative estimate is that 50 percent of the hotel rooms will be converted to mixedincome housing through this program. Applying the conservative assumption of an 85 percent hotel room to apartment conversion ratio (379 to 322), and then a further 50 percent reduction on those hotel rooms expected to convert during the 6th Cycle Housing Element planning period (322 to 161), the City is assuming that 161 housing units could result from this program in the 6th Cycle. The foregoing notwithstanding, it should be noted that all hotels are eligible to participate in the program.

The incentives are not restricted to only the underperforming hotels.

Table C-9 - Hotel Room Conversion Potential
Rooms/Units
Hotel Rooms within Groups 4 and 5 379
Hotel Rooms to Housing Units Conversion (85%) 322
Hotel Conversions During 6th Cycle Planning Period (50%) 161 Income Mix of 161 Rooms
Very Low Income (25%) 40
Low Income (25%) 40
Moderate Income (25%) 40
Above Moderate Income (25%) 41
ATTACHMENT 6

Appendix C – Sites Inventory C-15
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Zoning, Infrastructure, and Environmental Constraints
Hotels identified for potential participation in this program are all located in zoning districts where residential uses are permitted. No zoning constraints are identified.

Hotel-to-residential conversions are most likely to occur through adaptive reuse of existing buildings.

These are developed properties that are currently served with infrastructure and utilities. Given that this program is unlikely to include ground-up new construction, the City does not anticipate any environmental conditions or impacts that would preclude or significantly constrain the adaptive reuse of existing properties.

Affordable Housing on Religious Facility Properties
Capacity During 6th Cycle Planning Period
Outreach and Owner Interest
The City engaged with the five churches in the community and received strong interest in exploring opportunities to develop affordable housing.

On November 19, 2024, the Affordable Housing Alternatives (AHA) Group hosted the Faith & Homes community meeting at the Sunset Center. Representatives from all five Carmel-by-the-Sea churches attended the meeting and showed interest in the group's effort to integrate workforce housing throughout the community. Also in attendance were architects and developers interested in partnering with AHA and the church community to facilitate housing in Carmel. The program included presenters from various backgrounds and disciplines, all speaking with a focus on the goal of finding ways to make development of affordable housing on church sites easier.

Following the meeting, the AHA Group reached out via email to provide church representatives with additional resources and offered to meet again with representatives from individual churches to answer follow-up questions.

Two members of the AHA group formed a subcommittee to focus on engagement with the church community. In coordination with City staff, a regulatory analysis of the five church properties was undertaken to provide churches with a better understanding of the opportunities available for housing development on their sites. The analysis included a summary of state legislation and local regulations applicable to properties owned by religious institutions. The goal was to give local churches a head start on their planning efforts as they approach design professionals to start sketching out possibilities.

On March 5, 2025, AHA and city staff met with representatives of the First Church of Christ Scientist to provide a tailored regulatory analysis of their 0.64 acre property to facilitate the development of a housing project under Senate Bill 4. The church's existing sanctuary is too large for their congregation’s current needs and they are looking to downsize their facility. They would like to give back to the community by developing the underutilized portions of their property as housing.

On March 7, 2025, AHA and City staff met with representatives of the All Saints Episcopal Church to provide a tailored regulatory analysis of their 1 acre property to facilitate the development of a housing ATTACHMENT 6

Appendix C – Sites Inventory C-16
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 project under Senate Bill 4. The church currently operates a day school in Monterey County and has considered building housing for its teachers, as well as other local workers, on a portion of its property.

On April 1, 2025, AHA and City staff met with representatives of the Church of the Wayfarer to provide a tailored regulatory analysis of their 0.37-acre property. This religious institution is located in a commercial zoning district and is permitted a density of up to a total of 88 du/ac, inclusive of all state and local bonuses, than what is possible under SB 4. The church is considering both adaptive reuse of existing buildings and demolition and reconstruction of portions of its site. AHA and City staff have continued to meet and communicate with the Church of the Wayfarer since their initial April meeting.

To assist the churches in understanding their potential for development, the City conducted a preliminary site analysis for each church property. Churches may choose to pursue any of these options, other related options, or any combination thereof:
 Multi-family housing
 Transitional housing
 Supportive housing
 Single-room occupancy housing
To qualify for SB 4, 100 percent of the units must be affordable and deed-restricted for 55 years. Up to 20 percent of the units may be rented to moderate-income households, and up to 5 percent (per state law) may be occupied by church staff. Discussions with individual churches yielded confirmation of their intention to develop housing for lower income households.

Capacity Calculation
Two of the three church properties, which are currently zoned R-1 (All Saints and First Church of Christ), will pursue affordable housing through an SB 4 application. For residentially zoned properties, SB 4 allows the church properties to develop housing at the State-established default density for lower income housing (20 units per acre for Carmel), without the need to rezone or amend the General Plan.

The third church property (Church of the Wayfarer) is zoned RC, which allows affordable housing development up to 88 du/ac. The City has been in communication with the three churches and anticipates preliminary applications from All Saints and First Church of Christ by the end of November 2025. The City estimates capacity based on gross density (under SB 4 for All Saints and First Church of Christ and based on RC zoning for Church of the Wayfarer), allowing a flexible approach to accommodating housing. The churches could pursue a combination of infilling and adaptive reuse to maximize the number of units on site. Below are descriptions of the existing structures on church properties based on discussions with the churches and local knowledge. These descriptions demonstrate how additional units can be achieved on site through a combination of adaptive reuse and new construction.

All Saints’ Episcopal Church. This church property consists of several attached and detached oneand two-story buildings with pitched roofs in a loose courtyard formation on a 1.01-acre irregular, steeply sloped site, which is the equivalent of around 11 standard Carmel lots, or 44,000 sf, in the R-1 ATTACHMENT 6

Appendix C – Sites Inventory C-17
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 district. The current building footprints occupy nearly one-third, or about 13,000 sf, of the site, and much of their interiors contain underutilized office, classroom, and accessory spaces. Landscaping and five parking spaces occupy the remainder of the site. Because church service parking cannot be accommodated on site, the congregation is considering eliminating some or all existing parking spaces and sponsoring a ride-share service instead. The congregation is considering both adaptive-reuse and new-construction design options and could accommodate 20 du/acre with either or both strategies.

First Church of Christ, Scientist. This church property consists of three semi- or fully-detached buildings of one and two stories, arrayed back-to-back but offset along two streets on a 0.63-acre site– the equivalent of around seven standard Carmel lots, or 28,000 sf, in the R-1 district. The current building footprints occupy approximately one quarter or 7,000 sf of the site, and consist of a freestanding “Reading Room,” a large Sunday school facility that is underutilized, and a large sanctuary that is now well over-sized for accommodating service attendance. About seventeen parking spaces occupy the remainder of the site. The congregation is considering substantially down-sizing their sanctuary, adaptively re-using other spaces, and adding new construction on their underutilized surface parking lots, which would accommodate 20 du/acre in multiple configurations.

Church of the Wayfarer. This church property consists of an L-shaped, two-story building with a pitched-roof attic space on a 0.37-acre rectangular sloped site, which is the equivalent of around four standard Carmel lots, or 16,000 square feet, in the RC district. The current building footprint occupies approximately two thirds, or 12,000 square feet, of the site, and much of its interior contains underutilized classroom and accessory spaces. There is no on-site parking and landscaping currently occupies the remainder of the site. The original church plans, which are still to be fully realized, include another wing that would transform the L-shape to a U-shape courtyard plan. The congregation is considering both adaptive-reuse and new-construction design options, yet could accommodate 88 du/acre within the envelope of the existing structure depending on unit types.

While this property is smaller than 0.5 acre, the City has experience developing 100 percent affordable housing on small properties (e.g., Trevvett Court at 0.18 acre). Regionally, similar communities have also successfully achieved affordable housing on small sites (see Table C-10, Affordable Housing Projects on Small Sites). The Church of the Wayfarer site is in fact larger than the sites identified in Table C-10.

Zoning, Infrastructure, and Environmental Constraints
Two of the church properties are currently zoned R-1 and one is zoned RC. All three churches have stated their intention to submit (or have submitted) preliminary applications to pursue affordable housing development on site. All Saints and First Church of Christian Science will be pursuing affordable housing using SB 4 provisions. Church of the Wayfarer will be pursuing affordable housing as permitted by the RC zoning.

These church properties are developed with existing structures and paved parking on much of the property space. They are currently served with infrastructure and utilities. There are no known ATTACHMENT 6

Appendix C – Sites Inventory C-18
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 environmental conditions or impacts that would significantly constrain or preclude residential development on these sites.

ATTACHMENT 6

Appendix C – Sites Inventory C-19
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table C-10 - Affordable Housing Potential on Church Properties Site No.

Church
Address APNs
Site
Size
General Plan
Land Use Zoning
Allowable
Density Height
Estimated
Capacity
(Excluding
Density Bonus) Income
C-1 All Saints’ Episcopal
SWC Dolores Street & 9th Avenue
010-157-012
010-157-013

1.01 Single Family
Residential
Single Family
Residential (R-1)
20 du/ac 2-Story
24 feet
20 20 Lower
Income
C-2 First Church of Christian Science
Monte Verde 2 NE of 6th Avenue
010-212-004
010-212-021
010-212-026
010-212-027
010-212-028
010-212-029
010-212-030

0.63 Single Family
Residential
Single Family
Residential (R-1)
20 du/ac 2-Story
24 feet
13 13 Lower
Income
C-3 Church of the Wayfarer
NWC Lincoln & 7th Avenue
010-191-002 0.37 Residential/Com
mercial
Residential and
Limited
Commercial (RC)
88 du/ac 2-Story
26 feet
32 32 Lower
Income
Total 2.01 65 65 Lower
Income
(6 ELI/ 29
VL/ 30 L)
ATTACHMENT 6

Appendix C – Sites Inventory C-20
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Downtown Carmel
Characteristics and Underutilization
Affordable Housing on Small Lots
State law assumes sites 0.5 acres or larger are feasible for the development of affordable housing for lower income households, but Carmel, by virtue of its original development pattern, is primarily composed of small 4,000-square-foot lots. Indeed, while Carmel has only one parcel larger than 0.5 acre when hotel and cultural/recreational sites are excluded, downtown Carmel has a large number of 8,000- square-foot 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-11, excluding hotels, existing multifamily housing, and cultural and recreational facilities, downtown Carmel has 36 lots of approximately 8,000 square feet in size.

Table C-11 - 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
Carmel, along with many similar communities, has successfully produced 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; and
 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 demonstrate recent development trends;  Projects that received credit toward the 6th cycle RHNA for the respective jurisdictions; and  Projects on small sites that approximate typical Carmel parcel sizes.

As shown in Table C-12, affordable housing has been either built, entitled, or is otherwise in the approval pipeline on numerous small sites in the region. For those projects that most closely approximate Carmel lot sizes, an average of 32 percent of the units are affordable. 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.

ATTACHMENT 6

Appendix C – Sites Inventory C-21
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table C-12 - 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 0.15 340 11 0 40 28%
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%
Like these other communities in the table above, Carmel has successfully produced affordable housing on small sites. The most recent such project, a 14-unit affordable development 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 (see Figure C-1). The project is owned and managed by The Carmel Foundation and was developed without any public funding.

Figure C-1 - Trevvett Court
Currently in Carmel only projects that are 100 percent affordable qualify for the enhanced density of 88 units per acre, while the maximum density on mixed-income projects is 44 units per acre. This represents an impediment to the production of affordable housing within the City. To address this, the ATTACHMENT 6

Appendix C – Sites Inventory C-22
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 City will be amending the Municipal Code to offer this same increased density to mixed-income projects (tentatively, those in which at least 30 percent of the units are affordable). See the description of the Mixed-Income Incentive Program in Chapter 2.

Methodology for Identifying Underutilized Properties Downtown Downtown Safari
To identify properties with the potential to generate new housing units via adaptive reuse/conversion or redevelopment, AHA mobilized its members to conduct site visits on every property in downtown Carmel. These site visits, which came to be known as “safaris,” were a highly organized, months-long, boots-on-the-ground undertaking in which 17 volunteers canvassed the entire commercial district of the City. Utilizing a mobile app, these AHA volunteers catalogued 218 properties and nearly 1,000 leasable spaces, collecting data for each site (e.g., current use, occupancy, and property condition).

When coupled with datasets from the City, the County, and from subscription-based commercial real estate data firms such as Reonomy, this data provided the City with an unprecedented level of precision and granularity in its effort to identify sites with housing development potential.

Objective Criteria for Identifying Underutilized Properties The City used a number of characteristics to identify properties with redevelopment and adaptive reuse potential. These include:
 Owner Interest: The expressed interest of property owners in pursuing residential uses indicates that the current uses on the site are not so valuable to the owner that it would hinder potential redevelopment or adaptive reuse for residential purposes—an important factor in considering a non-vacant site for inclusion in the Sites Inventory.  Utilization: 10 percent or more of total leasable spaces are vacant, or 20 percent or more of total leasable spaces are vacant or under-utilized (e.g., used as storage, reduced hours, by appointment only).
 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 infeasible. Buildings that face such financial or physical constraints rarely receive significant investment for modernization or systems upgrades, rendering the buildings progressively unsuitable for current trends.  Condition of Structure: AHA members used a rubric derived from the Uniform Appraisal Dataset (UAD) “Appraisal Condition Rating” standardized scale to conduct a visual survey of the physical condition of every commercial property in downtown Carmel. The scale ranges from a score of “C1” to “C6”, with C6 representing properties in the worst condition.

Structures rated C4, C5, and C6 are considered to have some level of impairment to their condition that makes them a more viable candidate for redevelopment:

ATTACHMENT 6

Appendix C – Sites Inventory C-23
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025  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) – The 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) – The 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: Existing FAR is less than or equal to 50 percent of allowable FAR, indicating a substantial potential for increasing leasable space.2
 Improvement to Land Value Ratio: An improvement to land value ratio of less than 1.0, indicating the value of the improvements (structures) is less than the value of land.

Communities often use similar factors in identifying nonvacant sites with potential for redevelopment.

As illustrated in Table C-13, the factors used by Carmel are similar to those used by other communities in the coastal region.

Table C-13 - 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
After applying the factors outlined above, the City categorized viable sites as either a prospect for the City’s new Live/Work Program or for the City’s new Mixed-Income Incentive Program (See program descriptions in Chapter 2).

In evaluating the feasibility of adding residential uses (either through redevelopment or adaptive reuse), the City followed the rules described below:
2 For properties where an FAR calculation was unavailable, we created a Building Height Index as a proxy for FAR. The Building Height Index is a weighted average that takes the percentage of the site that is 0 stories and assigns a value of 0; the percentage of the site that is 1 story and assigns a value of 1, and the percentage of the site that is 2 stories and assigns a value of 2. Thus, a site with 100% lot coverage with a single-story building would have a Building Height Index of 1.0. A site with 100% lot coverage with a two story building would have a Building Height Index of 2.0.

ATTACHMENT 6

Appendix C – Sites Inventory C-24
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025  Live/Work Sites – The City anticipates that live/work units will primarily be created through the conversion of existing commercial square footage. As such, among the factors discussed above, FAR is not relevant because the City’s methodology for projecting the potential unit yield does not assume increasing building square footage. Therefore, for sites tagged as Live/Work sites, a site meeting three of the four factors would qualify a property as a viable site.
 MIIP Sites (Redevelopment) – In contrast to live/work sites, for redevelopment projects, the ability for the developer to substantially increase the building square footage or height is an important consideration. Therefore, FAR is included as one of the factors for consideration for sites tagged as Mixed-Income Incentive Program sites. For these MIIP sites, meeting three of the five factors would qualify a property as a viable site.

Downtown Live/Work Units
Assumptions and Analysis Based on Existing Uses
In cataloguing leasable spaces downtown, the resident volunteers on the safari teams identified 266 offstreet, 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). (See Figure C-2 for illustrations of underutilized commercial spaces in the commercial district.) 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 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 $1,800 per month, or 157% 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–$1,040 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-14 extends this analysis to commercial spaces of various sizes, demonstrating the overall economic viability of the proposed program.

ATTACHMENT 6

Appendix C – Sites Inventory C-25
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Figure C-2 - Examples of Underutilized Commercial Spaces ATTACHMENT 6

Appendix C – Sites Inventory C-26
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table C-14 - Rent Comparison – Residential versus Commercial Downtown Carmel-by-the-Sea
Live / Work Feasibility Analysis
1 Person Household
250 sf 350 sf 450 sf 550 sf
Moderate Income
Max affordable live/work rent (net of Utility Allowance) $1,970 $1,970 $1,949 $1,949 Current market rate commercial rent @ $2/sf $500 $700 $900 $1,100 Low Income
Max affordable live/work rent (net of Utility Allowance) $1,800 $1,800 $1,779 $1,779 Current market rate commercial rent @ $2/sf $500 $700 $900 $1,100 Very Low Income
Max affordable live/work rent (net of Utility Allowance) $1,040 $1,040 $1,019 $1,019 Current market rate commercial rent @ $2/sf $500 $700 $900 $1,100 To be clear, the Live/Work Program does not propose the discontinuance of all existing uses, only allowing vacant and/or underutilized spaces to be renovated/converted in such a way that a new use (residential) can be added to enhance the financial viability of the overall properties. The buildings identified for conversion have high vacancies and underutilization rates. There are no known long-term leases that would preclude owner improvements to the spaces.

Live/Work Case Study
Downtown Carmel has a number of examples of an unusual building type, typically two-stories, that contains multiple, compact, commercial spaces arrayed along a narrow passageway or courtyard off the main pedestrian sidewalk. In an effort to explore the physical feasibility of live/work units within this unusual configuration, local architects familiar with the City’s development regulations volunteered to conduct conversion exercises. They were asked to pursue three goals for solutions that would: 1) apply widely to different variations of this building type, 2) maintain the compact floor areas of their original commercial spaces in order to reinforce rent affordability, and 3) take advantage of existing commercial entrances in order to keep improvement costs low and comparable to typical commercial tenant improvements. Figure C-3 shows a case study on a 4,000 square-foot lot in the Central Commercial (CC) zone. Using the original commercial units and their original entrances, the architects demonstrated how the building yields eight off-street live/work units, between 350 to 430 square feet in size, while keeping the on-street commercial space intact. This adaptive-reuse approach maximizes the dwelling unit yield of this building and demonstrates how other similar buildings can do the same.

ATTACHMENT 6

Appendix C – Sites Inventory C-27
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Figure C-3 - Live/Work Adaptive Re-Use Case Study
ATTACHMENT 6

Appendix C – Sites Inventory C-28
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table C-15 - Properties with Live/Work Potential for Lower-Income Housing Site No.

APN Property Name GP/ Zoning
General Plan
Land Use
Property
Owner
Interest Condition Year Built
Improveme
nt to Land
Value Ratio
Potential
Live/ Work
Spaces
Conversion
Rate
Applied
Total
Potential
Units
L-1
010-135-026
Serena Court Central Commercial
(CC)
Core
Commercial
Yes C4 1972 0.69 7 100% 7
L-2
010-146-017
Doud Arcade Central Commercial
(CC)
Core
Commercial
Yes C5 1930 2.02 12 100% 12
L-3
010-131-027
Villa Carmel mixed
use
Residential & Limited
Commercial (RC)
Residential/C
ommercial
Yes C4 1987 0.66 13 100% 13
L-4
010-135-028
Eastwood Building Service Commercial
(SC)
Core
Commercial
Yes C4 1972 0.69 8 100% 8
L-5
010-138-010
El Prado de Su
Vecino
Service Commercial
(SC)
Core
Commercial
Yes C4 1968 1.07 10 100% 10
L-6
010-145-018
Stonehouse Terrace Service
Commercial (SC)
Core
Commercial
Yes C3 1978 5.49 12 100% 12
L-7
010-132-003
Tejido Building Central
Commercial (CC)
Core
Commercial
No C4 1973 1.26 10 75% 8
L-8
010-132-016
Ivy Courtyard Central
Commercial
Core
Commercial
No C4 1976 0.50 10 75% 8
Totals 82 78
(6 ELI/ 29 VL/ 39 L)
ATTACHMENT 6

Appendix C – Sites Inventory C-29
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Capacity During 6th Cycle Planning Period
Overall, the safari efforts identified 259 potential live/work spaces in downtown Carmel – i.e., vacant or under-utilized off-street or upper story commercial spaces. The City believes that all of these spaces are potential candidates for live/work conversion; however, the City and AHA have conservatively identified eight properties with a higher concentration of potential live/work spaces which have expressed t owner interest, to designate as potential live/work “sites” for RHNA credit. For these sites, due to strongly expressed owner interest, the City assumed that all of the potential live/work units would be converted. To be eligible for participation in this Live/Work Housing program, the converted units would be required to be deed restricted as housing affordable to lower income households (8 extremely low, 35 very low income, and 35 low income).

Zoning, Infrastructure, and Environmental Constraints
Properties identified for potential conversion from commercial/retail spaces into live/work units are all located on commercially zoned properties where residential uses are permitted. No direct zoning constraints are identified. However, in an effort to make the development process easier, the City will amend the Zoning Code to specify that live/work housing is a permitted residential use.

Live/work units are expected to be created through adaptive reuse of existing vacant or underutilized commercial/retail spaces in Downtown Carmel. These are developed properties located in the City’s urban core, which is currently served with infrastructure and utilities. With little to no new construction activities associated with this program, the City does not anticipate any environmental conditions or impacts that would preclude or significantly constrain the adaptive reuse of existing properties to include residential uses.

Opportunities for the Mixed Income Incentive 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, this Housing Element conservatively includes only the two properties with expressed owner interest for redevelopment. These two properties have a combined capacity of 18 units at 40 units per acre (the maximum allowable density, excluding density bonus), with an income distribution of 2 very low income, 2 low income, 2 moderate income, and 12 above moderate income units (30 percent lower and moderate income).

ATTACHMENT 6

Appendix C – Sites Inventory C-30
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Case Study Analysis
Trevvett Court (a recent 100% affordable housing site on an 8,000 square foot lot with 14 units – for a density of 76 du/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 newbuilds 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 Figures C-4, C-5, and C-6).

Zoning, Infrastructure, and Environmental Constraints
Properties identified for potential conversion from commercial/retail spaces into mixed income housing are all located in commercially zoned properties where residential uses are permitted. No zoning constraints are identified.

These are developed properties located in the City’s urban core, which is currently served with infrastructure and utilities. The City does not anticipate any environmental conditions or impacts that would preclude or significantly constrain the redevelopment of existing properties to residential uses.

ATTACHMENT 6

Appendix C – Sites Inventory C-31
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Figure C-4 - Mixed Income Case Study - “Midblock”
Figure C-5 - Mixed Income Case Study - “Corner Site”
ATTACHMENT 6

Appendix C – Sites Inventory C-32
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Figure C-6 - Mixed Income Case Study - “Adaptive Reuse” ATTACHMENT 6

Appendix C – Sites Inventory C-33
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table C-16 - Mixed Income Incentive Program Sites
Site No.

APN/
Parcel Size
Property
Name Zoning
General Plan
Land Use
Property
Owner
Interest
Utilization
(% Vacant or
Underutilized) ConditionYear
Built
Improvement to
Land Value Ratio
FAR < / =
50% of
Allowable
Units @
40 du/ac
Income
Distribution
M-1
010-138-020
8,000 SF
Su Vecino
Court1
Central
Commercial
(CC)
Core
Commercial
Yes 0% C4 1963 0.55 No 7 1/1/1/4
M-2
010-142-001
8,000 SF
GBG
Building2
Service
Commercial
(SC)
Core
Commercial
Yes 0% C3 1975 0.51 Yes 5 1/1/1/2
Total 12
Note: 1/1/1/4 = 1 Very Low, 1 Low, 1 Moderate, 4 Above Moderate

1. Su Vecino Court: The site contains a two-story commercial building with a mix of office uses on both floors. A total of ten commercial tenant spaces were identified, with seven appearing largely vacant or used for storage. The entries to the tenant spaces are off-street and inward-facing, fronting on a courtyard with limited to no visibility from the public way. A similar two-story building (Schultz) to the north, mirroring Su Vecino Court, is currently undergoing renovation to add an apartment to the second floor. Su Vecino Court has underground parking and is in a transition zone from Service Commercial (SC) to Single-Family Residential (R-1).

2. GBG Building: The site contains a two-story mixed-use building on one-half of the site and a parking lot on the other one-half. A retail clothing store occupies the first floor of the building with residential uses above. The owner has expressed interest in redeveloping the parking lot into apartments; however, the site lacks a sufficient water supply.

ATTACHMENT 6

Appendix C – Sites Inventory C-34
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 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 53 additional units, including 2 low-income and 51 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, be occupied by residential dwellings only and not used for any commercial purpose (CMC 17.14.050.F). 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).

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 ATTACHMENT 6