Agenda packet — Carmel-by-the-Sea City Council, November 4, 2025 (part 1 of 6)

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL AGENDA
Contact: 831.620.2000 www.ci.carmel.ca.us
Mayor Dale Byrne
Councilmembers Jeff Baron, Hans Buder, Bob Delves, and
Alissandra Dramov
All meetings are held in the City Council Chambers
East Side of Monte Verde Street
Between Ocean and 7th Avenues
Regular Meeting
Tuesday, November 4, 2025
4:30 PM
AGENDA PACKET AMENDED 11-3-2025

HYBRID MEETING ATTENDANCE OPTIONS
This meeting will be held in person and via teleconference ("hybrid"). The public is welcome to attend the meeting in person or remotely via Zoom, however, the meeting will proceed as normal even if there are technical difficulties accessing Zoom. The City will do its best to resolve any technical issues as quickly as possible. To view or listen to the meeting from home, you may also watch the live stream on the City's YouTube page at: https://www.youtube.com/@CityofCarmelbytheSea/streams. To participate in the meeting via Zoom, copy and paste the link below into your browser and enter the passcode. https://ci-carmel-ca-us.zoom.us/j/86890317537
Webinar ID: 868 9031 7537
Passcode: 100836
Dial in: (253) 215-8782

HOW TO OFFER PUBLIC COMMENT
The public may give public comment at this meeting in person, or use the Zoom teleconference module, provided that there is access to Zoom during the meeting. Zoom comments will be taken after the inperson comments. The public can also email comments to [email protected]. Comments must be received at least 2 hours before the meeting in order to be provided to the legislative body. Comments received after that time and up to the beginning of the meeting will be made part of the record.

CALL TO ORDER AND ROLL CALL

PLEDGE OF ALLEGIANCE
EXTRAORDINARY BUSINESS (Estimated time - 20 minutes)
Carmel High School Report Out
Non-Profit Spotlight - I Cantori di Carmel
IT Intern Projects Report

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PUBLIC APPEARANCES
Members of the public are entitled to speak on matters of municipal concern not on the agenda during Public Appearances. Each person's comments shall be limited to 3 minutes, or as otherwise established by the Chair. Persons are not required to provide their names, however, it is helpful for speakers to state their names so they may be identified in the minutes of the meeting. Under the Brown Act, public comment for matters on the agenda must relate to that agenda item and public comments for matters not on the agenda must relate to the subject matter jurisdiction of this legislative body. If a member of the public attending the meeting remotely violates the Brown Act by failing to comply with these requirements of the Brown Act, then that speaker will be muted.

ANNOUNCEMENTS (Estimated time - 5 min)
City Administrator Announcements
City Attorney Announcements
Councilmember Announcements

PUBLIC HEARINGS
1) Consider for introduction of one of the following two Regular Ordinances regarding usage of tennis and pickleball courts in Forest Hill Park:

Ordinance No. 1: Uncodified Regular Ordinance of the City Council of the City of Carmel-by-the-Sea Regulating Usage of the Tennis And Pickleball Courts in Forest Hill Park, or
Ordinance No. 2: Codified Regular Ordinance of the City Council of the City Of Carmel-by-the-Sea Adding Chapter 12.50 to the City Municipal Code Regulating Usage of the Tennis And Pickleball Courts in Forest Hill Park; and consideration of related CEQA exemptions (i.e., Common Sense Exemption [CEQA Guidelines § 15061(b)(3)] and Class 2 Existing Facilities Categorical Exemption [CEQA Guidelines § 15301]) (Estimated time - 60 min)
RECESS
The City Council will take a 30-minute break around 6:30 p.m.

ORDERS OF BUSINESS
Orders of Business are agenda items that require City Council discussion, debate, direction to staff, and/or action.
2) Review and Provide Comments on Draft Amendments to the Adopted 6th Cycle Housing Element Prior to Submittal to the California Department of Housing and Community Development (HCD) (Estimated time - 60 min)
ATTACHMENT #2 HAS BEEN UPDATED 11-3-2025
3) Resolution 2025-099, Approving a Construction Contract with Avila Construction Company in the amount of $143,335.26 for the Fire Station Upgrade Project and Authorizing the City Administrator to Execute the Contract and Approve Change Orders up to a 15% Contingency (Estimated time - 10 min)

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4) Discuss and Provide Direction on a Proposed Policy Prohibiting New Installations of Architectural Copper to Protect Water Quality, and Provide Direction on Preparation of an Ordinance Adding Chapter 17.43 (Water Quality Protection) to the Carmel Municipal Code (Estimated time - 20 min)
ADDED ATTACHMENT #6 – AMS TECHNICAL MEMOS 2022-2025
5) Discussion Regarding Downtown Speed Limits and Request for Direction to the City Administrator on Whether to Retain a Traffic Engineer to Conduct a Traffic Study (Estimated time - 40 min)

FUTURE AGENDA ITEMS

ADJOURNMENT
This agenda was posted at City Hall, Monte Verde Street between Ocean Avenue and 7th Avenue, Harrison Memorial Library, located on the NE corner of Ocean Avenue and Lincoln Street, the Carmel-bythe-Sea Post Office, 5th Avenue between Dolores Street and San Carlos Street, and the City's webpage (http://www.ci.carmel.ca.us) in accordance with applicable legal requirements.

CORRESPONDENCE AND SUPPLEMENTAL MATERIAL
Any correspondence or supplemental materials related to items on this agenda that are received after the agenda has been posted will be distributed to the City Council and made available for public review at City Hall (Monte Verde Street between Ocean and Seventh Avenues) during regular business hours.

Written comments emailed to the City Clerk will not be read aloud, but will be posted online with the related agenda at: https://carmelbytheseaca.portal.civicclerk.com/.

SPECIAL NOTICES TO PUBLIC
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk's Office at 831-620-2000 at least 48 hours prior to the meeting to ensure that reasonable arrangements can be made to provide accessibility to the meeting (28CFR

35.102-35.104 ADA Title II).

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CITY OF CARMEL-BY-THE-SEA
City Council
Staff Report
November 4, 2025

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Brian Pierik, City Attorney
APPROVED BY: Chip Rerig, City Administrator
SUBJECT: Consider for introduction of one of the following two Regular Ordinances regarding usage of tennis and pickleball courts in Forest Hill Park:

Ordinance No. 1: Uncodified Regular Ordinance of the City Council of the City of Carmel-by-the-Sea Regulating Usage of the Tennis And Pickleball Courts in Forest Hill Park, or
Ordinance No. 2: Codified Regular Ordinance of the City Council of the City Of Carmel-by-the-Sea Adding Chapter 12.50 to the City Municipal Code Regulating Usage of the Tennis And
Pickleball Courts in Forest Hill Park; and consideration of related CEQA exemptions (i.e., Common Sense Exemption [CEQA
Guidelines § 15061(b)(3)] and Class 2 Existing Facilities Categorical Exemption [CEQA Guidelines § 15301]) (Estimated time - 60 min)
RECOMMENDATION:

The recommendation is that the City Council consider for introduction of one of the following two Regular Ordinances regarding usage of tennis and pickleball courts in Forest Hill Park and consideration of related CEQA exemptions:

Ordinance No. 1: Uncodified Regular Ordinance of the City Council of the City Of Carmel-by-the-Sea Regulating Usage of the Tennis And Pickleball Courts in Forest Hill Park (Attachment 1)
Ordinance No. 2: Codified Regular Ordinance of the City Council of the City Of Carmel-by-the-Sea Adding Chapter 12.50 To The City Municipal Code Regulating

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Usage Of The Tennis And Pickleball Courts in Forest Hill Park (Attachment 2) BACKGROUND / SUMMARY:

Discussion
A. March 13, 2025 Forest and Beach Commission Meeting
On March 13, 2025, the Forest and Beach Commission recommended that the City Council approve a proposed Policy 2025-003 to regulate usage of the tennis and pickleball courts in Forest Hill Park (“Park”). A true copy of this Policy is attached to the Uncodified Ordinance (Attachment 1)
B. September 3, 2025 City Council Meeting
On September 3, 2025, there was a special meeting of the City Council to discuss the proposed Policy and to provide guidance for City staff to bring an ordinance to the Council which would reference athletic usage at the Forest Hill Park courts (“Courts”).

The Council received a Staff Report and a presentation by City staff regarding the pickleball issues at the Park, received written and verbal public comments and deliberated on how to proceed in regard to the pickleball issues including, but not limited to, how to address the complaints by neighbors of the noise associated with pickleball upon impact by the pickleball with a pickleball paddle.

At the meeting on September 3, 2025, the Council directed staff to return to the City Council with a proposed Ordinances including a proposed Ordinance which would prohibit playing pickleball at the Park pending study by the City of sound attenuation options including, but not limited to, sound barrier fencing and pickleball equipment (balls and paddles) which might reduce the sound level.

C. October 7, 2025 City Council Meeting
On October 7, 2025, the City Council considered four proposed Ordinances on the subject of pickleball at the courts at Forest Hill Park and adopted Urgency Ordinance No. 2025-004 to prohibit pickleball at Forest Hill Park pending study by the City of sound attenuation options (Attachment 3). Ordinance No. 2025-004 will remain in effect until it is rescinded by the City Council which must be done by Ordinance.

On October 7, 2025, the City Council also gave direction to return to the Council with a regular ordinance requiring that pickleball be played at Forest Hill Park only with equipment provided by the City which is designed to reduce the noise of pickleball.

Options
A. Selection of Ordinance:

The Council may select one of proposed Ordinances regarding usage of the courts in

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Forest Hill Park. The differences between the two Ordinance are:

Ordinance No. 1 is not codified which means that this Ordinance would not be added to the City Municipal Code at this time. This would allow the flexibility for the City Council to make changes to the Ordinance without the necessity of changing the City Municipal Code. The Council can, at a later date, take action to codify this Ordinance either as written or with amendments.

Ordinance No. 2 contains the same rules on use of the courts at Forest Hills Park as Ordinance No. 1 and would be codified in Chapter 12.50 of the City Municipal Code.

B. Procedure for Ordinance Adoption
The procedure for the adoption of the selected Ordinance will be the same regardless of which Ordinance is selected which will be:

1. If the Council selects one of these Ordinances, then the action would be to request the City Attorney to read the title of the selected Ordinance and then a motion to waive further reading and introduce the Ordinance.

2. If an Ordinance is introduced on the first reading on November 4, 2025, then the second reading and adoption can be at the Council regular meeting on December 2, 2025 and the ordinance will become effective 30 days later which would be January 1, 2026.

3. Each Ordinance provides that Urgency Ordinance No. 2025-004 would be rescinded as of the date the Regular Ordinance becomes effective, i.e.

January 1, 2026.

C. Alternatives
Alternatively, the Council could decide: (1) Not to adopt either of the proposed Ordinances; (2) Propose a modification to the selected Ordinance and/or (3) Take other action related to this Agenda item including providing direction to staff. Unless Urgency Ordinance No. 2025-004 prohibiting pickleball at Forest Hill Park is rescinded, that Ordinance will remain in effect.

CEQA
Both Ordinances are exempt from the California Environmental Quality Act (CEQA) under the California Code of Regulations, Title 14, Chapter 3 (“CEQA Guidelines”).

Specifically, they fall under the exemptions found in CEQA Guidelines Section 15061(b)(3), which is the common sense exemption that applies when it can been seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, and/or Section 15301, which is the Class 2 Existing Facilities Categorical Exemption that applies when the activity in question

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consists of the minor alteration of existing public facilities involving negligible or no expansion of existing or former use. The common sense exemption applies here because whichever Ordinance is selected, pickleball use at Forrest Hill Park would be limited/reduced. Similarly, the Class 2 Existing Facilities Categorical Exemption also applies because the facilities themselves will either stay as they currently are or be altered slightly in ways that it can also be seen with certainty will involve negligible or no expansion of existing or former use.

FISCAL IMPACT:

No direct fiscal impact for this action. If the Council adopts one of the two proposed Ordinances, there would be a fiscal impact in the future for the cost of the equipment provided by the City, designed to reduce the noise of pickleball, in an amount not currently known.

PRIOR CITY COUNCIL ACTION:

City Council discussion and direction at Special Meeting on September 3, 2025 and October 7, 2025 as described in this Staff Report.

Adoption of Urgency Ordinance No. 2025-004 on October 7, 2025 Prohibiting Pickleball At Forest Hill Park Pending Study By The City Of Sound Attenuation Options.

ATTACHMENTS:

1. DRAFT Uncodified Regular Ordinance Regarding Pickleball at Forest Hill Park

2. DRAFT Codified Regular Ordinance Regarding Pickleball at Forest Hill Park

3. Urgency Ordinance 2025-004 - Prohibiting Pickleball at Forest Hill Park

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ATTACHMENT 1 – NOT CODIFIED

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
ORDINANCE NO. 2025-XX

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA

REGULATING USAGE OF THE TENNIS AND PICKLEBALL COURTS IN FOREST HILL PARK

WHEREAS, on March 13, 2025, the Forest and Beach Commission recommended that the City Council approve a proposed Policy 2025-003 to regulate usage of the tennis and pickleball courts in Forest Hill Park (“Park”); and
WHEREAS, a true copy of proposed Policy 2025-003 is attached hereto as Exhibit A (“Policy”); and
WHEREAS, on September 3, 2025, there was a special meeting of the City Council to discuss the proposed Policy and to provide guidance for City staff to bring an ordinance to the Council which would reference athletic usage at the Forest Hill Park courts (“Courts”); and WHEREAS, at the meeting on September 3, 2025, the Council received a Staff Report and a presentation by City staff regarding the pickleball issues at the Park, received written and verbal public comments and deliberated on how to proceed in regard to the pickleball issues including, but not limited to, how to address the complaints by neighbors of the noise associated with pickleball upon impact by the pickleball with a pickleball paddle; and WHEREAS, at the meeting on September 3, 2025, the Council directed staff to return to the City Council with a proposed Ordinances including an proposed Ordinance which would prohibit playing pickleball at the Park pending study by the City of sound attenuation options including, but not limited to, sound barrier fencing and pickleball equipment (balls and paddles) which might reduce the sound level; and
WHEREAS, on October 7, 2025, the City Council considered four proposed Ordinances on the subject of pickleball at the courts at Forest Hill Park and adopted Urgency Ordinance No. 2025-004 to prohibit pickleball at Forest Hill Park pending study by the City of sound attenuation options; and
WHEREAS, on October 7, 2025, the City Council also gave direction to return to the Council with a regular ordinance requiring that pickleball be played at Forest Hill Park only with equipment provided by the City which is designed to reduce the noise of pickleball; and WHEREAS, the City Council may consider at a future date whether to adopt an Ordinance to codify in the City Municipal Code rules regulating usage of tennis and pickleball courts in Forest Hill Park; and
WHEREAS, based upon the foregoing, this Ordinance is necessary for the preservation of the public, health and welfare.

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Ordinance 2025-XX ATTACHMENT 1 – NOT CODIFIED

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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The City Council of the City of Carmel-by-the-Sea incorporates the Recitals above by reference as though fully set forth here.

SECTION 2. Codification. This Urgency Ordinance shall not be codified in the City of Carmel-by-the-Sea Municipal Code.

SECTION 3. Rules Regulating Usage of the Tennis and Pickleball Courts in Forest Hill Park. The City Council hereby adopts the proposed Policy 2025-003 attached hereto as Exhibit A and adds to that Policy the Rule that Pickleball shall be played at Forest Hill Park only with equipment provided by the City which is designed to reduce the noise of pickleball which had been added in bold text in Exhibit A.

SECTION 4. CEQA/Environmental Findings. This Ordinance is exempt from the California Environmental Quality Act (CEQA) under the California Code of Regulations, Title 14, Chapter 3 (“CEQA Guidelines”) based on CEQA Guidelines Section 15061(b)(3), which is the common sense exemption that applies when it can been seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment and/or CEQA Guidelines Section 15301, which is the Class 2 Existing Facilities Categorical Exemption that applies when the activity in question consists of the minor alteration of existing public facilities involving negligible or no expansion of existing or former use.

SECTION 5. Enforcement. Violations of this Ordinance may be enforced by the City pursuant to the provisions of City Municipal Code Section 1.16.010 Violation – Penalties which provides in subsection A that the violation of any provision or section of this code, or any code adopted herein by reference, or the failing to comply with any mandatory requirement of an ordinance of the City, shall be an infraction or misdemeanor.

SECTION 6. Authorization of City Administrator. The City Administrator and his/her designee(s) are hereby authorized to take all necessary action to implement and enforce this Ordinance.

SECTION 7. Severability. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of Ordinance. The City Council declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of this Ordinance would be subsequently declared invalid or unconstitutional.

SECTION 8. Effective Date. This Ordinance shall be effective 30 days after adoption.

SECTION 9. Urgency Ordinance No. 2025-004. Urgency Ordinance No. 2025-004 shall remain in effect until the Effective Date of this Ordinance regarding the use of courts at Forest Hill Park for pickleball and shall hereafter be deemed rescinded.

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Ordinance 2025-XX ATTACHMENT 1 – NOT CODIFIED

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SECTION 10. Publication. The City Clerk is directed to certify this Ordinance and cause it to be published in the manner required by law.

INTRODUCED at a Regular City Council Meeting on November 4, 2025.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL BYTHE-SEA this ____ day of __________ 2025, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
___________________________ _______________________________ Dale Byrne, Mayor Nova Romero, MMC, City Clerk

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Ordinance 2025-XX ATTACHMENT 1 – NOT CODIFIED

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EXHIBIT A
City of Carmel-by-the-Sea

POLICY REGULATING USAGE OF THE TENNIS AND PICKLEBALL COURTS IN FOREST

HILL PARK
Statement of Purpose:

The purpose of this policy is to establish a balanced approach to the use of the Forest Hill Park courts for both pickleball and tennis while addressing neighboring concerns related to noise, scheduling, and enforcement. This policy ensures that both sports remain accessible to the community while minimizing impacts on surrounding residential areas.

Policy:

To achieve this balance, the City of Carmel-by-the-Sea shall implement the following measures at the Forest Hill Park courts:

Court Designation:

The courts shall be permanently divided into designated areas for tennis-only and pickleball-only use. The City shall install two permanent pickleball courts with fixed nets on one side of the courts, effectively removing one tennis court. The other side of the courts shall be reserved for tennis-only use, with the removal of pickleball striping, effectively eliminating two pickleball courts.

Scheduled Play Hours:

Pickleball play shall be permitted only on Tuesdays, Thursdays, and Saturdays from 10:00 AM to 4:00 PM. Tennis play shall be permitted daily from 10:00 AM to 4:00 PM.

Noise and Compliance Measures:

If necessary, automatic locks shall be installed on both court entrances to regulate access and enforce scheduled playtimes. A fence partition may be installed roughly near the midpoint of the courts, ensuring the tennis area is slightly larger to accommodate the larger court dimensions.

The purpose of this partition is to provide a clear separation between the pickleball and tennis areas and to facilitate compliance with the designated play areas.

Pickleball shall be played at Forest Hill Park only with equipment provided by the City which is designed to reduce the noise of pickleball.

City Resources and Maintenance:

The City shall be responsible for the purchase, installation, and maintenance of pickleball nets, fencing, and any necessary locking mechanisms. The Public Works Department shall oversee the implementation of these measures and ensure ongoing compliance with the policy.

This policy is intended to promote fair access to recreational opportunities while reducing noise concerns, promoting compliance with City noise standards, and maintaining the village character of Carmel-by-the-Sea.

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ATTACHMENT 2 - CODIFIED

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
ORDINANCE NO. 2025-XX

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ADDING CHAPTER 12.50 TO THE CITY MUNICIPAL CODE REGULATING USAGE OF THE TENNIS

AND PICKLEBALL COURTS IN FOREST HILL PARK
WHEREAS, on March 13, 2025, the Forest and Beach Commission recommended that the City Council approve a proposed Policy 2025-003 to regulate usage of the tennis and pickleball courts in Forest Hill Park (“Park”); and
WHEREAS, on September 3, 2025, there was a special meeting of the City Council to discuss the proposed Policy and to provide guidance for City staff to bring an ordinance to the Council which would reference athletic usage at the Forest Hill Park courts (“Courts”); and WHEREAS, at the meeting on September 3, 2025, the Council received a Staff Report and a presentation by City staff regarding the pickleball issues at the Park, received written and verbal public comments and deliberated on how to proceed in regard to the pickleball issues including, but not limited to, how to address the complaints by neighbors of the noise associated with pickleball upon impact by the pickleball with a pickleball paddle; and WHEREAS, at the meeting on September 3, 2025, the Council directed staff to return to the City Council with proposed Ordinances regarding pickleball including a proposed Ordinance which would adopt the rules in proposed Policy 2025-003 to regulate usage of the tennis and pickleball courts in the Park; and
WHEREAS, on October 7, 2025, the City Council considered four proposed Ordinances on the subject of pickleball at the courts at Forest Hill Park and adopted Urgency Ordinance No.2025-004 to prohibit pickleball at Forest Hill Park pending study by the City of sound attenuation options; and
WHEREAS, on October 7, 2025, the City Council also gave direction to return to the Council with a regular ordinance requiring that pickleball be played at Forest Hill Park only with equipment provided by the City which is designed to reduce the noise of pickleball; and WHEREAS, based upon the foregoing, the City Council finds that this Ordinance is necessary to promote public health, safety and welfare.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The City Council of the City of Carmel-by-theSea incorporates the Recitals above by reference as though fully set forth here.

SECTION 2. Codification. This Ordinance shall be codified in the City of Carmel-by-theSea Municipal Code in Chapter 12.50 as set forth in Exhibit A attached hereto.

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Ordinance 2025-XX ATTACHMENT 2 - CODIFIED

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SECTION 3. CEQA/Environmental Findings. This Ordinance is exempt from the California Environmental Quality Act (CEQA) under the California Code of Regulations, Title 14, Chapter 3 (“CEQA Guidelines”) based on CEQA Guidelines Section 15061(b)(3), which is the common sense exemption that applies when it can been seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment and/or CEQA Guidelines Section 15301, which is the Class 2 Existing Facilities Categorical Exemption that applies when the activity in question consists of the minor alteration of existing public facilities involving negligible or no expansion of existing or former use.

SECTION 4. Enforcement. Violations of this Ordinance, and Chapter 12.50, may be enforced by the City pursuant to the provisions of City Municipal Code Section 1.16.010 Violation – Penalties which provides in subsection A that the violation of any provision or section of this code, or any code adopted herein by reference, or the failing to comply with any mandatory requirement of an ordinance of the City, shall be an infraction or misdemeanor.

SECTION 5. Authorization of City Administrator. The City Administrator and his/her designee(s) are hereby authorized to take all necessary action to implement and enforce this Ordinance.

SECTION 6. Severability. If any section, subsection, sentence, clause, or phrase of this Ur Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of Ordinance. The City Council declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of this Ordinance would be subsequently declared invalid or unconstitutional.

SECTION 7. Effective Date. This Ordinance will take effect thirty (30) days after adoption by the City Council.

SECTION 8. Urgency Ordinance No. 2025-004. Urgency Ordinance No. 2025-004 shall remain in effect until the Effective Date of this Ordinance regarding the use of courts at Forest Hill Park for pickleball and shall hereafter be deemed rescinded.

SECTION 9. Publication. The City Clerk is directed to certify this Ordinance and cause it to be published in the manner required by law.

INTRODUCED at a Regular City Council Meeting on November 4, 2025.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL BYTHE-SEA this ____ day of __________ 2025, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

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Ordinance 2025-XX ATTACHMENT 2 - CODIFIED

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APPROVED: ATTEST:
___________________________ _______________________________ Dale Byrne, Mayor Nova Romero, MMC, City Clerk

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Ordinance 2025-XX ATTACHMENT 2 - CODIFIED

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EXHIBIT A
Chapter 12.50 is hereby added to Title 12 Streets, Sidewalks and Public Places, of the City of Carmel-by-the-Sea Municipal Code to read as follows:

CHAPTER 12.50 RULES REGULATING USAGE OF THE TENNIS AND PICKLEBALL

COURTS IN FOREST HILL PARK

12.50.010 Title.

This chapter shall be known as the City of Carmel-by-the-Sea “Rules Regulating Usage Of The Tennis And Pickleball Courts In Forest Hill Park Ordinance.”

12.50.020 Purpose and intent.

The purpose of this chapter is to establish a balanced approach to the use of the Forest Hill Park courts for both pickleball and tennis while addressing neighboring concerns related to noise, scheduling, and enforcement. This chapter ensures that both sports remain accessible to the community while minimizing impacts on surrounding residential areas. To achieve this balance, the City adopted this chapter setting forth the rules for use of the Forest Hill Park tennis and pickleball courts. This chapter is intended to promote fair access to recreational opportunities while reducing noise concerns, promoting compliance with City noise standards, and maintaining the village character of Carmel-by-the-Sea.

12.50.030 Court Designation.

The courts shall be permanently divided into designated areas for tennis-only and pickleball-only use. The City shall install two permanent pickleball courts with fixed nets on one side of the courts, effectively removing one tennis court. The other side of the courts shall be reserved for tennisonly use, with the removal of pickleball striping, effectively eliminating two pickleball courts.

12.50.040 Scheduled Play Hours.

Pickleball play shall be permitted only on Tuesdays, Thursdays, and Saturdays from 10:00 AM to 4:00 PM. Tennis play shall be permitted daily from 10:00 AM to 4:00 PM.

12.50.050. Pickleball Equipment.

Pickleball shall be played at Forest Hill Park only with equipment provided by the City which is designed to reduce the noise of pickleball.

12.50.060 Noise and Compliance Measures.

The purpose of this partition is to provide a clear separation between the pickleball and tennis areas and to facilitate compliance with the designated play areas.

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Ordinance 2025-XX ATTACHMENT 2 - CODIFIED

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12.50.070. City Resources and Maintenance.

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CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL

URGENCY ORDINANCE
ORDINANCE NO. 2025-004

URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA

PROHIBITING PICKLEBALL AT FOREST HILL PARK PENDING STUDY BY THE CITY OF

SOUND ATTENUATION OPTIONS
WHEREAS, on March 13, 2025, the Forest and Beach Commission recommended that the City Council approve a proposed Policy 2025-003 to regulate usage of the tennis and pickleball courts in Forest Hill Park ("Park"); and
WHEREAS, a true copy of proposed Policy 2025-003 is attached hereto as Exhibit A ("Policy"); and
WHEREAS, on September 3, 2025, there was a special meeting of the City Council to discuss the proposed Policy and to provide guidance for City staff to bring an ordinance to the Council which would reference athletic usage at the Forest Hill Park courts ("Courts"); and WHEREAS, at the meeting on September 3, 2025, the Council received a Staff Report and a presentation by City staff regarding the pickleball issues at the Park, received written and verbal public comments and deliberated on how to proceed in regard to the pickleball issues including, but not limited to, how to address the complaints by neighbors of the noise associated with pickleball upon impact by the pickleball with a pickleball paddle; and WHEREAS, the Council directed staff at the meeting on September 3, 2025 to return to the City Council with a proposed Urgency Ordinance which would prohibit playing pickleball at the Park pending study by the City of sound attenuation options including, but not limited to, sound barrier fencing and pickleball equipment (balls and paddles) which might reduce the sound level; and
WHEREAS, following the study of sound attenuation options, the City may consider potential adoption of ordinances to add to the City Municipal Code rules regarding playing of pickleball in the City; and
WHEREAS, based upon the foregoing, the City Council finds pursuant to Government Code Section 36937 (b) that this Urgency Ordinance is necessary for the immediate preservation of the public peace, health and safety to allow the City sufficient time to the complete a noise attenuation study at the Park Courts and consider potential adoption of ordinances to add to the City Municipal Code rules regarding playing of pickleball in the City.

ATTACHMENT 3

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Urgency Ord. 2025-004
Page2 of4

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The City Council of the City of Carmel-by-the-Sea incorporates the Recitals above by reference as though fully set forth here.

SECTION 2. Codification. This Urgency Ordinance shall not be codified in the City of Carmel-by-the-Sea Municipal Code.

SECTION 3. CEQA/Environmental Findings. This Ordinance is exempt from the California Environmental Quality Act (CEQA) under the California Code of Regulations, Title 14.

Chapter 3 ("CEQA Guidelines") based on CEQA Guidelines Section 15061(b)(3), which is the common sense exemption that applies when it can been seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment and/or CEQA Guidelines Section 15301, which is the Class 2 Existing Facilities Categorical Exemption that applies when the activity in question consists of the minor alteration of existing public facilities involving negligible or no expansion of existing or former use.

SECTION 4. Prohibition of Pickleball at Forest Hill Park. Playing of pickleball at Forest Hill Park is hereby prohibited unless and until the City takes action in the future to allow the playing of pickleball at Forest Hill Park.

SECTION 5. Sound Attenuation Options. The City Administrator is hereby directed to take appropriate action to study potential sound attenuation options at Forest Hill Park related to the playing of pickleball.

SECTION 6. Enforcement. Violations of this Urgency Ordinance may be enforced by the City pursuant to the provisions of City Municipal Code Section 1.16.01 O Violation - Penalties which provides in subsection A that the violation of any provision or section of this code, or any code adopted herein by reference, or the failing to comply with any mandatory requirement of an ordinance of the City, shall be an infraction or misdemeanor.

SECTION 7. Authorization of City Administrator. The City Administrator and his/her designee(s) are hereby authorized to take all necessary action to implement and enforce this Urgency Ordinance.

SECTION 8. Severability. If any section, subsection, sentence, clause, or phrase of this Urgency Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of Urgency Ordinance. The City Council declares that it would have passed this Urgency Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of this Urgency Ordinance would be subsequently declared invalid or unconstitutional.

ATTACHMENT 3

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Urgency Ord. 2025-004

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SECTION 9. Effective Date and Duration. This Urgency Ordinance enacted under California Government Code Section 36937 will take effect immediately upon adoption by a four fifths (4/5) vote of the City Council. This Urgency Ordinance will remain in effect unless and until rescinded by the City Council.

SECTION 10. Publication. The City Clerk is directed to certify this Urgency Ordinance and cause it to be published in the manner required by law.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL BYTHE-SEA this 7th day of October, 2025, by the following vote:

AYES: Councilmembers Baron, Buder, Delves, Dramov, and Mayor Byrne NOES: None
ABSENT: None
ABSTAIN: None
APPROVED:

ATTACHMENT 3

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Urgency Ord. 2025-004

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EXHIBIT A
City of Carmel-by-the-Sea

POLICY REGULATING USAGE OF THE TENNIS AND PICKLEBALL COURTS IN FOREST

HILL PARK
Statement of Purpose:

Policy:

To achieve this balance, the City of Carmel-by-the-Sea shall implement the following measures at the Forest Hill Park courts:

Court Designation:

Scheduled Play Hours:

Pickleball play shall be permitted only on Tuesdays, Thursdays, and Saturdays from 10:00 AM to 4:00 PM. Tennis play shall be permitted daily from 10:00 AM to 4:00 PM.

Noise and Compliance Measures:

The purpose of this partition is to provide a clear separation between the pickleball and tennis areas and to facilitate compliance with the designated play areas.

City Resources and Maintenance:

ATTACHMENT 3

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CITY OF CARMEL-BY-THE-SEA
City Council
Staff Report
November 4, 2025

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Marnie Waffle, Principal Planner, AICP
APPROVED BY: Chip Rerig, City Administrator
SUBJECT: Review and Provide Comments on Draft Amendments to the Adopted 6th Cycle Housing Element Prior to Submittal to the California Department of Housing and Community Development (HCD) (Estimated time - 60 min)
RECOMMENDATION:

Staff recommends the City Council:

1. Find that reviewing and discussing the draft Housing Element Amendment is not a project under CEQA as defined in Public Resources Code Section 21065 and CEQA Guidelines Section 15378;

2. Review and Discuss the Draft Housing Element Amendment; and

3. Receive public comment and provide comments on the draft amendment.

BACKGROUND / SUMMARY:

Executive Summary:

The proposed amendments to the City's adopted 6th-cycle Housing Element are a response to a City Council directive from July 9, 2024, which sought alternative strategies for affordable housing due to community concerns over the potential redevelopment of two city-owned sites, Vista Lobos and Sunset Center.

The City's 6th Cycle Housing Element, adopted on April 8, 2024, and certified by the state on April 25, 2024, outlines the responsibility to plan for 349 new housing units by 2031 to meet the Regional Housing Needs Allocation (RHNA). The draft amendment seeks to meet this obligation by removing the city-owned sites from the housing plan

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and introducing or expanding the following strategies: a hotel-to-residential transfer program, an accessory dwelling units (ADU) program, a religious facilities program, a live/work program, and a mixed-income incentive program.

These strategies have resulted in significant revisions, primarily to Chapter 2 (Goals, Policies, and Programs) and a complete rewrite of Appendix C (Housing Sites Inventory Analysis). The new site's inventory analysis identifies a capacity for 439 total units, exceeding the City's RHNA of 349 units.

The proposed amendments were developed in collaboration with the Affordable Housing Alternatives (AHA) community group and have undergone preliminary reviews by the Planning Commission, the City Council, and the State Department of Housing and Community Development (HCD).

Staff recommends that the City Council:
• Determine that reviewing the draft amendment is not a project under CEQA. • Review and discuss the draft amendment.
• Receive and consider public input.
• Provide comments on the draft amendment, including any direction to make changes, prior to submitting the amendment to HCD for formal review.

Background
On April 8, 2024, the City Council adopted the 6th Cycle Housing Element, which covers the 2023-2031 planning period. The city is responsible for planning for 349 new housing units by 2031.

On April 25, 2024, the State Department of Housing and Community Development (HCD) certified the City's Housing Element. Two city-owned sites, Vista Lobos and Sunset Center, were included as potential affordable housing sites to achieve certification (Housing Element Program 1.1.B: City-Owned Sites).

On July 8, 2024, in response to community concerns regarding the redevelopment of the city-owned sites, the City Council passed Resolution 2024-062 directing staff to begin work immediately on exploring and developing alternative affordable housing sites and programs, and submit a formal general plan housing element amendment that provides alternative affordable housing opportunities and removes the need for housing units at Vista Lobos and Sunset Center. Additionally, City staff were directed to return to the City Council in September and October of 2024 with updates on progress.

On September 10, 2024, and October 1, 2024, the City Council received updates on the joint efforts of the Affordable Housing Alternatives (AHA) community group and City staff to explore strategies to provide affordable housing in lieu of developing city-owned sites.

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A third update was provided on December 3, 2024, and focused on four strategies that City staff and the AHA Group were working on to provide affordable housing that reflected the village's character: 1) Accessory Dwelling Units, 2) Hotel-to-Residential Conversions, 3) Church Sites, and 4) Downtown Housing Opportunities.

Since December 2024, five strategies have emerged from extensive analysis (Housing Element, Appendix C), resulting in revised housing element programs (Housing Element, Chapter 2).

May 14, 2025, Planning Commission Meeting
The proposed revisions to Chapter 2 and Appendix C were presented for review and feedback at the Planning Commission's regular meeting on May 14, 2025.

The Commission expressed interest in exploring whether the City could obtain RHNA credit for ADUs without requiring a deed restriction. While a deed restriction is the most common method for implementing and monitoring affordable housing units, there may be other ways to justify affordability. Guidance published by HCD states that a jurisdiction can describe how the units are affordable without deed restrictions “based on various methods considering rents relative to income levels of households, such as through a survey of comparable units in the area that show the unit would be affordable to very-low-, low-, or moderate-income households.”
A member of the public shared the 2025 state income limits and offered to share the information with the Planning Commission. The Commission requested that this information be provided for the joint City Council/Planning Commission meeting on May 20th. City staff included both income and rent limits in the PowerPoint presentation for the May 20th meeting (Attachment 8).

Commissioner Stephanie Locke, also an employee of the Monterey Peninsula Water Management District (MPWMD), commented that water should no longer be a constraint to housing development. The recent allocation of 14-acre-feet of water to the City should support development within Carmel for the next 25 years. Draft Program

1.2.A regarding water distribution for affordable housing should be reviewed and updated accordingly.

Chair Michael LePage expressed support for the live/work program and the diversity it would add to the downtown area. There were also a number of questions about the financial viability of the hotel-to-residential program that the AHA group addressed at the joint City Council/Planning Commission meeting on May 20th. Lastly, Chair LePage expressed concern about removing the city-owned sites entirely from the housing element. These sites allow a broader mix of housing, providing more opportunities on city-controlled sites. Staff notes that these sites remain under the City's control, which can entertain development proposals at any time. Removing them from the housing element reduces the pressure on the city to conform to a strict timeline for developing those sites. Such a timeline would restrict public participation in the process and hinder the implementation of other portions of the Housing Element due to a fixed amount of

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staff resources.

Overall, the Planning Commission expressed its support for the revised programs.

May 20, 2025, Joint City Council/Planning Commission Meeting The proposed revisions to Chapter 2 and Appendix C were presented for review and feedback at a joint meeting of the City Council and the Planning Commission on May 20, 2025.

Community members expressed support for retaining the city-owned parking lots as part of the overall housing strategy. There was also a shared concern that accessory dwelling units are not affordable, and many are unoccupied. The City Council shared similar concerns regarding ADUs.

State HCD ‘Friendly’ Review
Since December 2024, regular meetings with the State HCD have provided an opportunity to present and receive feedback on the revised strategies, ensuring that the amendment retains the necessary components to meet state law requirements.

On June 2, 2025, the city provided an informal copy of the revised Chapter 2 and new Appendix C to the State HCD for a ‘friendly’ review. The purpose of this review was to get more substantive comments from the state as we move towards a complete submittal for a formal amendment to the housing element.

On July 11, 2025, city staff met with HCD to receive feedback on the revised strategies.

HCD identified areas requiring additional analysis to ensure the required elements of state law were met.

Housing Element Process and Public Comment Submission
When submitting a subsequent revision to an adopted housing element, the City is required to post the draft revision on its website and email a link to its distribution list at least seven days before submitting the draft revision to HCD. The draft revisions were posted on the City’s website on October 15, 2025, in advance of the special Planning Commission meeting on October 20, 2025, and a link to the website was emailed to the distribution list on October 16, 2025. The draft revisions are available on the City’s website at: https://ci.carmel.ca.us/post/current-planning-applications, under PUBLIC MEETINGS/HEARINGS.

October 20, 2025, Special Planning Commission Meeting
At the October 20, 2025, special Planning Commission meeting, seven members of the public spoke, including members of the AHA community group. Their comments are summarized below.

Public Comments:
• Commenters expressed their appreciation to the AHA community group for its

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work on the five strategies.
• Commenters expressed concerns regarding the state of parking and the impact adding 349 new housing units will have on the village.
• A commenter asked about the number of people per housing unit and how the number of cars per household would be accommodated.
• A commenter stated that water needs to be allocated to all land use categories to support the five housing element strategies; water will be required for any program that includes commercial square footage.
• A commenter expressed concern about whether current staffing resources are adequate to process the amount of development projected in the housing element.
• A commenter expressed concern that developers have not been sufficiently included in the process.
• Commenters expressed support for the release of a Request for Proposals (RFP) as planned in the adopted housing element for the city-owned sites. • A commenter expressed concern about a lack of public review and questioned whether there was any interest by hotel owners in participating in the hotel-toresidential program. • A commenter expressed concern that environmental review has not been undertaken yet and suggested that an Environmental Impact Report may be required to evaluate issues such as water and parking.
• The City received a letter (Attachment 9) from CalHDF on the afternoon of October 20th, ten minutes before the start of the special Planning Commission meeting at 3:30 pm. As a result, the Planning Commission did not have the benefit of receiving or reviewing the correspondence during its review of the draft housing element amendment.

Planning Commission Comments:

Commissioner Stephanie Locke was unable to attend the special meeting on October 20, 2025, but provided written comments on the draft housing element amendment (Attachment 10).

The Commission expressed support for the five strategies outlined in the draft housing element amendment and extended its appreciation to the AHA community group for its involvement. The strength of the draft housing element amendment is in its diversification of strategies, which were described as being unique to Carmel, creative, realistic, and very doable. The Commission acknowledged the parking issue in the village and expressed support for taking action to address it. The Commission also expressed continued support for its recommendation to the City Council on water allocation. Additional comments are summarized below, and the meeting video is linked here.
• Water, parking, and construction costs are constraints that will hinder the development of housing and a property owner’s ability to obtain a return on their

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investment
• Water needs to be allocated to the commercial category to support the hotel program
• Request for the City Council to add a strategic parking management plan to its priorities
• Ensure that residents living in the high fire hazard severity zones have adequate access to year-round parking
• Request for the City Council to add a strategic impact report on the RHNA to its priorities to ensure that future resident needs, such as daycare, laundry, medical services, and parking, can be met
• Support for removing City-owned sites, but still look at the highest and best use of those properties to meet the needs of the community today, which could include releasing a Request for Proposals (RFP)
6 th Cycle Housing Element Amendment: Formal Submittal
Chapter 1: Introduction (Attachment 1): Footers are proposed to be updated, and scattered quotes removed. Section 1.6 Public Participation includes minor edits. New text is proposed on page 1-15 to address public outreach for the 2025 housing element amendment.

Chapter 2: Goals, Policies, and Programs (Attachments 2 and 3): Several changes have been made, including removing existing programs and adding or substantially revising others. As a result, the numbering of some of the programs has changed. For example, Program 1.1.B City-Owned Sites is proposed to be removed, and in its place is Program 1.1.B Development on Small Sites, which is currently 1.1.C. You will see similar changes throughout Chapter 2. For a side-by-side comparison of program changes, refer to Attachment 7.

Other program deletions include:
• Program 1.3.E Amend the A-2 Zoning District
• Program 1.3.I Implement State Law SB 10 Opportunities to Maximize Feasibility of Development in Strategic Locations
• Program 3.2.C Local Universal Design Standards
In addition to the more substantive revisions to the housing element programs related to the five strategies (discussed in more detail below), other minor modifications to Chapter 2 are proposed, including grammar, sentence structure, and formatting.

A more visually prominent formatting change involves moving the “Quantified Objectives, Timeframe, Responsible Party, and Funding Source” section from the end of each program to the beginning, following the program title.

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Since the review in May 2025, all Quantified Objectives have been added and are summarized in Chapter 2, Section 2.5 Summary of Quantified Objectives, Table 21 – Quantified Objectives (2023-2031).

The "Timeframe" to complete program implementation has been updated for many programs to account for the time devoted to this housing element amendment. For example, many of the December 2024 deadlines are proposed to be extended to June 2026. For a side-by-side comparison of deadline modifications, refer to Attachment 7.

Another minor change to Chapter 2 is the removal of scattered quotes.

Appendix A: Housing Needs and Fair Housing Report (Attachment 4): Based on the revised strategies and programs to achieve the Regional Housing Needs Allocation (RHNA), portions of Appendix A were amended to include additional analysis in accordance with Government Code Section 65583(c)(10). The revisions can be found on pages A-90 through A-104. Additionally, the footer has been updated, and the scattered quotes are proposed for deletion.

Appendix B: Housing Constraints (Attachment 5): The footer in Appendix B has been updated, and the scattered quotes are proposed for deletion.

Appendix C: Housing Sites Inventory Analysis (Attachment 6): Appendix C has been entirely rewritten due to the extensive analysis required to support the identification of alternative sites for affordable housing.

A summary table of the proposed site inventory is provided below. A draft site’s inventory map is included as Attachment 11. Across the five strategies, several sites have been identified that can accommodate the city’s RHNA and allow for the removal of Sunset Center and Vista Lobos from the sites inventory. These changes still require formal review and approval by HCD and are therefore subject to change.

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Environmental Review:

The agenda item before the City Council consists of presenting information to facilitate a discussion and receiving direction on the draft Housing Element Amendment. It is not an activity that would result in either a direct or indirect physical change to the environment. Therefore, it is not a project under CEQA as defined in Public Resources Code Section 21065 and CEQA Guidelines Section 15378.

FISCAL IMPACT:

On September 6, 2024, the City entered into a Professional Services Agreement with Veronica Tam & Associates to provide technical assistance to inform an amendment to the adopted 6th cycle Housing Element. The contract is based on hourly rates with a not-to-exceed amount of $59,999. The total cost expended to date is $48,475.

PRIOR CITY COUNCIL ACTION:

On April 8, 2024, the City Council adopted Resolution 2024-029, adopting a General Plan Amendment to repeal the 2015-2023 Housing Element and adopt the 2023-2031 Housing Element of the General Plan in compliance with state housing element law.

On July 9, 2024, the City Council adopted Resolution 2024-062, directing staff to immediately explore and develop alternative affordable housing sites and programs to submit a formal general plan housing element amendment that provides alternative affordable housing opportunities and removes the need for housing units at Vista Lobos and Sunset Center.

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ATTACHMENTS:

1. Chapter 1 Redlines 11.04.2025

2. Chapter 2 Redlines 11.04.2025

3. Chapter 2 Clean 11.04.2025

4. Appendix A Redlines 11.04.2025

5. Appendix B Redlines 11.04.2025

6. Appendix C - NEW 11.04.2025

7. Chapter 2 Programs Comparison

8. Annual Income and Rent 2025

9. CalHDF Letter dated October 20, 2025

10. Commissioner Stephanie Locke Comments 10.20.2025

11. Revised Site's Inventory Map

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Introduction
1 CHAPTER
ATTACHMENT 1

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Chapter 1.0 – Introduction 1-ii
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table of Contents

1.0 Introduction ..................................................................................................................................................................... 1-1

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

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

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

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

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

1.6 Public Participation .......................................................................................................................................... 1-10 ATTACHMENT 1

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Chapter 1.0 – Introduction 1-1
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025

1.0 Introduction

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

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

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

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

Per State Housing Element law, the document must be periodically updated to:
 Outline the community’s housing production objectives consistent with State and regional growth projections;
 Describe goals, policies and implementation strategies to achieve local housing objectives;  Examine the local need for housing with a focus on special needs populations; ATTACHMENT 1

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Chapter 1.0 – Introduction 1-2
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025  Identify adequate sites for the production of housing serving various income levels;  Analyze potential constraints to new housing production;  Evaluate the Housing Element for consistency with other General Plan elements; and  Evaluate Affirmatively Furthering Fair Housing.

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

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

This is commonly referred to as Affirmative Furthering Fair Housing, or AFFH (more on this in Section 1.4 below).

Carmel-by-the-Sea has had moderate success in meeting its housing needs. In the last Housing Element cycle (2015 to 2022-2023 pending2), for example, 18 housing units were constructed in the City, which represented 58 percent of its Regional Housing Needs Allocation (RHNA) of 31 new housing units. Of the units built, none were affordable to lower- and moderate-income households,3 and 100 percent were affordable to above moderate-income households.
1 Source: AMBAG, November 18, 2022. “Final 2022 Regional Growth Forecast”. 2 Source: November 8, 2022 HCD letter to AMBAG. Local governments may credit new units approved, permitted, and/or built beginning from the start date of the RHNA projection period, June 30, 2023, towards their RHNA. 3 Source: City of Carmel-by-the-Sea HCD Annual Reports and City staff. “There's a movement in California now
called 'Yes, In My Backyard,' and I'd love
to see us join that.”
May 24, 2023 Housing Ad Hoc Committee
Community Meeting Attendee
ATTACHMENT 1

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Chapter 1.0 – Introduction 1-3
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025

1.3 Regional Housing Needs Allocation
For the 8-year time frame covered by this Housing Element Update (2023-2031), the Department of Housing and Community Development (HCD) identified the region’s housing need as 33,274 units.

The total housing units assigned by HCD is separated into four income categories that cover housing types for all income levels, from very low-income households to market rate housing.4 This calculation is based on population projections produced by the California Department of Finance as well as adjustments that incorporate the region’s existing housing need. Per Government Code §65583(a), the Housing Element must also provide quantification and analysis of projected housing needs for extremely low-income households. The number of units for the extremely low-income level is not assigned by HCD, but is left for quantification by the local jurisdiction. This calculation is based on the HCD approved methodology,5 assuming that 50 percent of very low-income households qualify as extremely low-income households.

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

On November 8, 2022, AMBAG’s adopted RHNA Methodology was approved by HCD. For Carmelby-the-Sea, the RHNA to be planned for this cycle is 349 units, a substantial increase from the last cycle. Table 1-1, Regional Housing Needs Allocation shows the RHNA for Carmel-by-the-Sea for the period 2023 through 2031.

Regional Housing Needs Allocation
Income Group
Percentage of Area Median Income
(AMI) Share
Extremely Low Income* <30 57
Very Low Income <50 56
Low Income 51-80 74
Moderate Income 81-120 44
Above Moderate Income 121 + 118
Total 349
Source: AMBAG
*Extremely low-income RHNA is found as a subset within the very low-income category for all other tables in this document 4 HCD divides the RHND into the following four income categories:

Very Low income: 0-50% of Area Median Income; Low income: 50-80% of Area Median Income; Moderate income:
80-120% of Area Median Income; Above Moderate income: 120% or more of Area Median Income 5 https://www.hcd.ca.gov/planning-and-community-development/housing-elements/building-blocks/extremely-lowincome-housing-needs ATTACHMENT 1

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Chapter 1.0 – Introduction 1-4
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025

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

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

The requirement to Affirmatively Further Fair Housing (AFFH) is derived from The Fair Housing Act of 1968, which prohibited discrimination concerning the sale, rental, and financing of housing based on race, color, religion, national origin, or sex—and was later amended to include familial status and disability. The 2015 U.S. Department of Housing and Urban Development (HUD) Rule to Affirmatively Further Fair Housing and California Assembly Bill (AB)686 (2018) mandate that each jurisdiction takes meaningful action to address significant disparities in housing needs and access to opportunity. AB 686 requires that jurisdictions incorporate AFFH into their Housing Elements, which includes inclusive community participation, an assessment of fair housing, a site inventory reflective of AFFH, and the development of goals, policies, and programs to meaningfully address local fair housing issues.

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

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

Neighborhood-level segregation (within a jurisdiction, or intra-city): Segregation of race and income groups can occur from neighborhood to neighborhood within a city. For example, if a local ATTACHMENT 1

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Chapter 1.0 – Introduction 1-5
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 jurisdiction has a population that is 20 percent Latinx, but some neighborhoods are 80 percent Latinx while others have nearly no Latinx residents, that jurisdiction would have segregated neighborhoods.

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

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

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

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

Segregation has resulted in vastly unequal access to public goods such as quality schools, neighborhood services and amenities, parks and playgrounds, clean air and water, and public safety (Trounstine 2015).

This generational lack of access for many communities, particularly people of color and lower income residents, has often resulted in poor life outcomes, including lower educational attainment, higher morbidity rates, and higher mortality rates (Chetty and Hendren 2018, Ananat 2011, Burch 2014, Cutler and Glaeser 1997, Sampson 2012, Sharkey 2013).

Segregation Patterns in the Monterey Bay Area
Across the Monterey Bay Area, Hispanic and Black residents are significantly more segregated from other racial and income groups. The highest levels of racial segregation occur between the Hispanic and Black populations. The analysis completed for this report indicates that the amount of racial segregation both within Monterey Bay Area cities and across jurisdictions in the region has slightly increased since the year 2010.

Segregation and Land Use
It is difficult to address segregation patterns without an analysis of both historical and existing land use policies that impact segregation patterns. Land use regulations influence what kind of housing is built in a city or neighborhood (Lens and Monkkonen 2016, Pendall 2000). These land use regulations in turn impact demographics: they can be used to affect the number of houses in a community, the number of people who live in the community, the wealth of the people who live in the community, and where within the community they reside (Trounstine 2018). Given disparities in wealth by race and ethnicity, the ability to afford housing in different neighborhoods, as influenced by land use regulations, is highly differentiated across racial and ethnic groups (Bayer, McMillan, and Reuben 2004).6 6 For the source data, see U.S. Census Bureau, American Community Survey 5-Year Data (2015-2019), Table B19013B, Table B19013D, B19013H, and B19013I.

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Chapter 1.0 – Introduction 1-6
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Segregation in the Carmel-by-the-Sea
The following are highlights of demographics as they apply to Carmel-by-the-Sea. For further information regarding the history of racial segregation, please refer to Appendix A (AFFH).  As of 2019, White residents are the most segregated compared to other racial groups as measured by the isolation index. White residents live in neighborhoods where they are less likely to come into contact with other racial groups;
 As of 2019, Non-Hispanic White individuals comprise 87 percent of Carmel-by-the-Sea’s population followed by Hispanic or Latino (8 percent) and Asian populations (5 percent);  The City has no populations identifying as American Indian, Alaska Native, Native Hawaiian or Other Pacific Islander; and
 Black or African American non-Hispanic individuals represent less than 1 percent of the City’s population.

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

Regional Segregation
The following are highlights of regional segregation metrics as they apply to Carmel-by-the-Sea.  The City has a higher share of White residents than other jurisdictions in the Monterey Bay Area as a whole, a lower share of Latinx residents, a lower share of Black residents, and a lower share of Asian/Pacific Islander residents; and
"I urge you to enthusiastically embrace
this opportunity to do exactly what you've
come up with because Carmel really
needs it, and it didn't happen that Carmel
turned out to be a wealthy white exclusive
community by accident. It was
purposeful.”
May 24, 2023 Housing Ad Hoc Committee
Community Meeting Attendee
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Chapter 1.0 – Introduction 1-7
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025  Regarding income groups, the City has a lower share of very low-income residents than other jurisdictions in the Monterey Bay Area as a whole, a lower share of low-income residents, a lower share of moderate-income residents, and a higher share of above moderate-income residents.

1.5 Overview of Planning Efforts
This section provides an overview of planning and legislative efforts that provide the context for development of the 6th Cycle Housing Element.

Effectiveness of Previous Housing Element
The 2015 Housing Element identified a Regional Housing Needs Allocation of 31 housing units in Carmel-by-the-Sea between 2015 and 2023. The RHNA was divided into the following income categories.
 7 units affordable to extremely low- and very low-income households;  5 units affordable to low-income households;
 6 units affordable to moderate-income households; and  13 units affordable to above moderate-income households.

During the 2015–2023 planning period, 18 new above moderate-income units were added to the City’s housing stock, and no units were added in the moderate, low or very low-income categories.7 This indicates that residential growth for extremely and very low-income households was slower than anticipated, which may be in part due to a lack of water resources, the COVID pandemic, the cost of land and construction, and the overall lack of interest to develop affordable housing in the community.

As a result, housing costs continued to increase substantially due to low supply, and affordability became more elusive.

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

New State Laws Affecting Housing
While the City has taken steps throughout the 5th Cycle to increase housing production locally, the State passed numerous laws to address California’s housing crisis during the same period. As the State passes new legislation in the remainder of the 5th Cycle and during the 6th Cycle, the City will continue to 7 RHNA Progress Report -5th Cycle RHNA Progress Report - California Open Date Portal ATTACHMENT 1

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Chapter 1.0 – Introduction 1-8
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 amend the Municipal Code; to monitor and evaluate policies and programs designed to meet State requirements; and to proactively implement new policies and programs to help increase housing production citywide.

In 2019, several bills were signed into law that include requirements for local density bonus programs, the Housing Element, surplus lands, accessory dwelling unit (ADU) streamlining, and removing local barriers to housing production. The City implemented changes required by state law, through amendments to the Municipal Code. The following is a summary of recent legislation and proposed City activities that will further the City’s efforts to increase housing production during the 6th Cycle.

Please see the section above for a discussion of Assembly Bill (AB) 686 (Affirmatively Furthering Fair Housing).

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

Incentives for Accessory Dwelling Units
In 2020, AB 686, AB 587, AB 671, AB 881, and
SB 13 further incentivize the development of
accessory dwelling units (ADUs) through
streamlined permits, reduced setback
requirements, increased allowable square footage,
reduced parking requirements, and reduced fees.

The City last amended the Municipal Code in 2017
to address ADUs and is currently following state law while preparing additional amendments to the Municipal Code.

In 2023, the City intends to further amend the standards for ADUs and JADUs, consistent with state Law, to encourage conversion of guest houses to ADUs and promote construction of new units.

Further the City will develop pre-approved, standardized ADU plans to make construction more affordable and will continue to include the HD ADU handbook on the City’s website.

Low-Barrier Navigation Centers
AB 101 (2019) requires jurisdictions to allow “low-barrier navigation centers” ByRight by-right in areas zoned for mixed uses and in nonresidential zones permitting multifamily uses, if the center meets specified requirements. A low-barrier navigation center is a service-enriched shelter focused on moving unhoused people into permanent housing. The center provides temporary living facilities while case- "ADUs and JADUs make economic sense
for many of us and could account for
scores of new units in the next 8 years.”
November 17, 2022 Housing Ad Hoc Committee
Community Meeting Attendee
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Chapter 1.0 – Introduction 1-9
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 managers connect individuals to public benefits, health services, and housing. The City’s Municipal Code will be amended to comply with state law.

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

In 2019, Governor Gavin Newsom signed an executive order to identify State owned sites to help address the California housing crisis.

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

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

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

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

ATTACHMENT 1

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Chapter 1.0 – Introduction 1-10
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Disadvantaged Communities
In 2011, the Governor signed SB 244 which requires local governments to make determinations regarding “disadvantaged unincorporated communities,” defined as a community with an annual median income that is less than 80 percent of the statewide annual median household income. The City has determined that there are no unincorporated islands or fringe or legacy communities that qualify as disadvantaged communities inside or near its boundaries.

Consistency with General Plan
The City of Carmel-by-the-Sea adopted a comprehensive update to its General Plan in 2003 in conjunction with the adoption of their Local Coastal Plan. Additional, element-specific, updates were completed in 2009 and 2015. The General Plan is a long-range planning document that serves as the “blueprint” for development for local jurisdictions in California. All development-related decisions in the City must be consistent with the General Plan, and if a development proposal is not consistent with the plan, then it must be revised or the plan itself must be amended.

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

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

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

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

ATTACHMENT 1

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Chapter 1.0 – Introduction 1-11
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 The 6th Cycle RHNA numbers are a monumental
change for all California communities, and the
success of the update process hinges in part on a
community outreach and engagement program
that was robust, inclusive, and meaningful. The
City’s community engagement program has
included an initial presentation to the City
Council, a series of Housing Ad Hoc Committee
community meetings, stakeholder outreach,
direct contact with interested residents and
property owners, and online/virtual
participation. The Housing Element update
process and engagement efforts are documented
at: https://ci.carmel.ca.us/post/long-rangeplanning-initiativesKey components of the interactive engagement plan included the Housing Element website, http://www.HOMECarmelbytheSea.com8 where all updates were are provided, as well as community engagement opportunities.

H.O.M.E. Carmel-by-the-Sea Website
Housing Opportunities Made Easier (HOME) at H.O.M.E. Carmel (homecarmelbythesea.com8) was a dedicated website that provided a portal to all of the Housing Element-related public engagement activities that were available to members of the public. This included information on housing element basics, a community ideas board, property owner interest forms, site surveys, site selection details, and materials from community workshops.
 Q&A. Received questions in a managed space that accommodated messages throughout the iterative brainstorming process.
 Ideas Board. Promoted brainstorming among community members to suggest creative ways to achieve our RHNA goals.
 Interactive Site Inventory Mapping. Allowed community members an opportunity to examine proposed housing sites and suggest alternative solutions via an interactive online mapping tool. The site inventory mapping tool was advertised on the H.O.M.E. Carmelby-the-Sea8 website in addition to other City communication outlets. and made available through engage.emcplanning.com/homecarmelpotentialsitesinventory.  Surveys. Encouraged community members to voice their opinions in a convenient way that also helped City staff understand what areas of the City need more encouragement to 8 This website was active during the Housing Element development process. It is no longer active after the adoption of the Housing Element. All relevant documents have migrated to https://ci.carmel.ca.us/post/long-range-planninginitiatives. “The mission of the Housing Ad Hoc
Committee is to provide guidance as the City
updates the Housing Element of its General
Plan. The Committee will participate in
public outreach and education; consider
opportunities and incentives for the
development of affordable housing; and
explore creative, tailored solutions to meet
the City’s workforce and range of other
housing needs while preserving the character
of Carmel by-the-Sea.”
Karen Ferlito and Bobby Richards,
Housing Ad Hoc Committee Councilmembers
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Chapter 1.0 – Introduction 1-12
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 participate. Aggregate data also helped the City understand generally who was participating with the outreach tools. All surveys were advertised on the H.O.M.E. Carmel-by-the-Sea website in addition to other City communication outlets. City staff also walked the City and handed out flyers to hospitality workers in an effort to increase the demographics of community members taking the Stakeholder Survey. The Stakeholder Survey was available in English and Spanish.
 Stakeholder Survey. Released for public engagement on May 24, 2023 to solicit input from Carmel-by-the-Sea residents, property owners, business owners, employees, community activists, and visitors. The stakeholder survey closed July 6, 2023. The Housing Element will contain updated policies and programs as guided by the public’s perspective.  Property Owner Interest Form. Released for public engagement on April 6, 2023 to develop a list of property owners interested in building an accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU). A list of interested property owners will be added to Appendix C (Sites Inventory) when the survey is closed July 6, 2023.

Community Meetings
The City hosted a series of community meetings to
inform and educate the public on the 2023-2031
6 th Cycle Housing Element Update planning
process and collect community feedback. These
meetings are ongoing and continue to guide the
policies and programs to ensure Carmel-by-theSea’s character and values are upheld.  November 17, 2022 Housing Ad
Hoc Committee Community
Meeting. Hosted to introduce the
2023-2031 6th Cycle Housing Element
Update to community residents.
 February 7, 2023 City Council Meeting. Presentation on preliminary housing feasibility report and Housing Element update status.
 February 28, 2023 Housing Ad Hoc Committee Community Meeting. Hosted to discuss development constraints and potential incentives.  April 6, 2023 Housing Ad Hoc Committee Community Meeting. Hosted to discuss current 5th Cycle Housing Element policies and programs, H.O.M.E. Carmel unveiling and walk through, and introduction to AFFH.
 May 24, 2023 Housing Ad Hoc Committee Community Meeting. Hosted to discuss housing needs, fair housing, sites inventory, and policies and programs to address the needs.
"If you rewind the clock 30 years, we did
have 4,000 or more full-time residents in
this town so it’s not like that’s
impossible. But the world is different
now, the number of cars has increased,
etc., so there will be interesting balances
and challenges as we add people to our
community, which is going to be a great
thing.”
November 17, 2022 Housing Ad Hoc Committee
Community Meeting Attendee
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Chapter 1.0 – Introduction 1-13
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025  June 15, 2023 Joint City Council/Planning Commission/Housing Ad Hoc Community Meeting. Hosted to discuss the Public Draft Housing Element, the 30-day Public Comment Period, and next steps in the planning process.  July 11, 2023 City Council Meeting. Update on the Housing Element Public Review Draft and discuss revision to the document after the 30-day comment period and review the City’s response to public comments on the Public Draft.  August 1, 2023 City Council Meeting. Update on the Housing Element planning process and review of full Initial Draft Housing Element prior to submittal to HCD for 90-day review.
 November 13, 2023 Housing Ad Hoc Community Meeting. Hosted to review the comment letter from HCD.
 January 9, 2023 City Council Meeting. Update on revisions to the Housing Element in response to the comment letter from HCD, and next steps in the certification process.  March 5, 2024 City Council Meeting. Update on revisions to the Housing Element in response to February 7, 2024 review meeting with HCD, and next steps in the certification process.

Public Participation to Affirmatively Furthering Fair Housing The Carmel-by-the-Sea public participation program was also responsive to AFFH, which requires local jurisdictions to conduct public outreach to equitably include all stakeholders in the Housing Element public participation program (see the discussion above for more complete information on AFFH).

The organizations listed in Appendix HE (Stakeholder Survey) were contacted initially with an invitation to further connect. There were more opportunities for deeper connection with some of the Community Based Organizations (CBOs) included with the list.

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

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

Further, the City has maintained outreach with interested community members through constant contact email blasts, updating the community on the progress of the Housing Element Update planning process. This includes updates related to community workshops; Housing Ad Hoc Committee, Planning Commission, and City Council meetings; draft housing element revisions; meetings with HCD reviewers; and CEQA noticing. Additionally, the City has made extensive efforts to ensure the community is able to easily understand the content within this Housing Element and follow the revisions process by providing “Reader’s Summary Guides,” which breakdown complex sections of the element. These include sections such as, the AFFH analysis; goals, policies, and programs; and the sites inventory.

ATTACHMENT 1

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Chapter 1.0 – Introduction 1-14
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Tribal Consultation
This public participation effort also includes formal consultation, pursuant to Government Code §65352.3, with representatives from the Esselen Nation that is present and active in Monterey County.

Consultation is in process.

Public Review of Draft and Final Housing Element
Public Comment Review Period
As required by HCD, the Draft Housing Element was available for 30-days of public review from June 5, 2023 to July 6, 2023. The Draft Housing Element was posted on the City of Carmel website and the dedicated Housing Element website (homecarmelbythesea.com9), and a number of public comments were received. Additionally, a joint City Council and Planning Commission Committee meeting was held on June 15, 2023 where verbal public comments were accepted on the Draft Housing Element.

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

Stakeholder Survey
The City of Carmel-by-the-Sea published a Stakeholder Survey to gather input from community members. The goal of the survey was to inform the City of Carmel-by-the-Sea what housing needs exist and to solicit community members input on how to achieve the RHNA. The survey was made available in English and Spanish and was posted on the dedicated Housing Element website (homecarmelbythesea.com9). The Stakeholder Survey was available from May 24, 2023 to July 6, 2023.

One response was received in Spanish, and 156 responses were received in English. See Appendix H for an in-depth discussion of the Stakeholder Survey results.

Overall, survey respondents indicated a need for more diverse housing types within the City (apartments, condominiums, ADUs and senior housing). Survey respondents encourage the use of second story buildings for housing within the Commercial District, especially for affordable units, and indicate a need for expanded City services to distribute information about affordable units.

When asked if property owners would consider adding an ADU to their property, many responded that lots are too small, however, a number of property owners did indicate interest if the permitting was streamlined, fees were lowered, or financial assistance was provided. 9 This website was active during the Housing Element development process. It is no longer active after the adoption of the Housing Element. All relevant documents have migrated to https://ci.carmel.ca.us/post/long-range-planninginitiatives.

ATTACHMENT 1

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Chapter 1.0 – Introduction 1-15
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 2025 Amendment to the Adopted Housing Element Public Review of Draft and Final Housing Element
Outreach
Beginning iIn 2024, the City of Carmel-by-the-Sea began exploring strategies to further enhance the City’s ability in delivering affordable housing opportunities throughout the community, and developing alternative strategies that present near-term potential for affordable units. The detailed additional public outreach conducted during the development stage of these alternative strategies has been summarized in Chapter 2 and Appendix C (Sites Inventory).

Public Review of the 6th Cycle Revised Draft and Final Housing Element Amendment Pursuant to State law, the 6th Cycle Revised Draft Housing Element Amendment will bewas made available for a 7-day public review from October 16 through October 23, October 1 through October 7, 2025. Prior to this review period, The City conducted a special Planning Commission meeting on October 20, 2025, and a City Council meeting on November 3, 2025, to review the 6th Cycle Housing Element Amendment and to receive public comments. will conduct a jointheld Planning Commission and City Council meetings on October 820, 2025 and November 3, 2025, respectively.to review the Both bodies reviewed the Revised Draft Housing Element and treceivedo receive public comments.

Following the public review, the 6th Cycle Revised Draft Housing Element Amendment will bewas submitted to the State Department of Housing and Community Development (HCD) for a mandatory 60-day review.

ATTACHMENT 1

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Chapter 2.0 – Goals, Policies, and Programs
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted 2-1 EMC Planning Group
April 8, 2024
A
d
o
p
2 .
0 Goals, Policies, and Programs
Goals, Policies, and Programs 2

CHAPTER

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Chapter 2.0 – Goals, Policies, and Programs 2-ii
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Table of Contents

2.0 Goals, Policies, and Programs ....................................................................................................................................... 2-1

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

2.2 AFFH in the 6th Cycle ........................................................................................................................................ 2-2

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

2.4 Goals, Policies, and Programs ........................................................................................................................... 2-3

2.5 Summary of Quantified Objectives ............................................................................................................... 2-39 Tables
Table 2-1 - Quantified Objectives (2023-2031) ............................................................................................................. 2-39

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Chapter 2.0 – Goals, Policies, and Programs 2-1
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

2.0 Goals, Policies, and Programs

2.1 Introduction
The Under state Housing Element Law, the City is responsible for enabling the production of housing by reducing regulatory barriers, providing incentives, and supporting programs that create or preserve housing, especially for vulnerable populations. To enable the construction of quality housing, the City has identified the following goals:
 Goal HE-1H-1 Facilitate Housing Construction
 Goal HE-2H-2 Protect Affordable Housing and Improve the Housing Stock  Goal HE-3H-3 Provide Opportunities for New Affordable and Other Special Needs Housing
 Goal HE-4H-4 Exemplify Sustainable Development and Energy Conservation  Goal HE-5H-5 Publicize Housing Needs and Resources
The City’s demographic and housing needs assessment, including which included an analysis of factors contributing factors to housing disparities, formed an integral part of played a major role in informing program development. Highlights include: the predominant age group in 2019 was between 65 to 74 years of age; the population was comprised composed of over 85 percent White individuals; the unemployment rate was 0.1 percent; above-moderate income households made up the majority of households at 62 percent; and 57 percent of total households were owner occupied and 43 percent renter occupied. Of note, 23 percent of household households are cost burdened and a further 23 percent are severely cost burdened. Detailed information is provided in Appendix A.

Additionally, the The majority of the sites identified in the Site Sites Inventory were not identified in the 5th Cycle Housing Element. The Policies policies and Programs programs below are intended to reduce the regulatory barriers to redevelop redevelopment of these sites and to demonstrate that the City is taking measures to ensure construction of more units, in the 6th cycleCycle. 2.2 What’s New 2025 Amendment Process
The 6th Cycle Housing Element (2023-2031) for Carmel-by-the-Sea was adopted on April 8, 2024 and deemed in substantial compliance with State law by the State HCD on April 25, 2024. Beginning in Summer 2024, the City of Carmel-by-the-Sea began exploring strategies to further enhance the City’s ability in delivering affordable housing opportunities throughout the community, and developing alternative strategies that present near-term potential for affordable units. These efforts culminated in the amendment to the adopted Housing Element.

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Chapter 2.0 – Goals, Policies, and Programs 2-2
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 The City is proud of the policies and programs that follow below. They represent an honest desire by both the local government and residents of Carmel to create real affordable housing opportunities in what, by all accounts, is an unaffordable place to live. This shared desire is evidenced by how these policies and programs came together. Of course, creation of the 6th Cycle Housing Element included all of the requisite community meetings (over 14) and outreach (e.g., tabling at the City’s farmer’s market), which yielded a wealth of feedback that helped to shape the City’s approach. However, this Housing Element also benefited from something uniquely Carmel – a highly motivated group of residents willing to learn and be deeply involved in crafting policies that will actually work. Concerned about the housing challenges confronting the village, these residents partnered with City staff in an effort to help the City find creative solutions tailored to Carmel’s unique circumstances. Calling themselves the Affordable Housing Alternatives Group, or “AHA”, the AHA Group provided literally thousands of volunteer hours, met with City staff on a weekly basis, leveraged community connections to identify property owner interest, attended meetings with HCD, and genuinely dedicated themselves to finding housing solutions with the best chance of becoming reality. The list of direct positive contributions from the AHA Group is long. One of their most notable contributions was the ‘safari’ effort, which is likely one of the most unique l community-driven Housing Element research projects ever undertaken. The safaris were a highly organized, boots-on-the-ground effort in which 17 volunteers canvassed the commercial district of the City to collect data on every property and leasable space in downtown Carmel. These volunteers, utilizing a mobile app set up by a lead AHA member, catalogued 218 properties and nearly 1,000 leasable spaces, collecting unique data for each site, such as current use, vacancy status, and property condition, to help better understand housing development potential.

When compiled with City and Assessor records, this data helped form the most complete understanding of Carmel’s downtown inventory in history, and ultimately helped to inform the development of many of the creative policies and programs described below.

It is hard to overstate the value of the collaborative community approach taken to develop the City’s 6th Cycle Housing Element. Aside from supercharging capacity to gather data, the approach also garnered massive community buy-in for creating real housing solutions. Most of all though, it leveraged the knowledge of both residents and City staff, making it possible to turn Carmel’s unique constraints into opportunities for the creation of new housing.

2.2 AFFH in the 6th Cycle
This section provides an overview of significant new policy and program directions being taken by how the City of Carmel-by-the-Sea to address is working to affirmatively further fair housing issues in the community and in the larger broader Monterey Bay Area.

Affirmatively Furthering Fair Housing
The new policy direction that the City will undergo during the 6th Cycle Housing Element Update involves addressing process includes a new state mandate to address historic patterns of economic and racial segregation patterns. In 2018, the California Legislature established an independent state mandate passed legislation requiring communities in California to take proactive steps to affirmatively further

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Chapter 2.0 – Goals, Policies, and Programs 2-3
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 fair housing (AFFH). The 6th Cycle Housing Element is the first time that the City of Carmel-by-theSea has addressed AFFH. Affirmatively furthering fair housing is defined specifically as taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity by replacing segregated living patterns with truly integrated and balanced living patterns; transforming racially and ethnically concentrated areas of poverty into areas of opportunity; and fostering and maintaining compliance with civil rights and fair housing laws.

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

High Priority
 Lack of affordable housing;
 Lack of adequate housing stock that meets the needs of residents;  Jobs-worker imbalance;
 Lack of accessible units for individuals with disabilities;  Lack of Transitional and Supportive Housing/Emergency Shelters;  There is a lack Lack of developable land, and the City is subject to additional coastal zone regulations;
 Lack of racial and ethnic diversity within the City; and  Cost of land, materials, and labor which limit profitability of affordable housing, which drive up the cost of housing development.

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

More detailed AFFH information is located in Appendix A. The City of Carmel-by-the-Sea is adopting new policies and programs through the update of this 6th Cycle Housing Element, The City of Carmelby-the-Sea is adopting new policies and programs through the update of this 6th Cycle Housing Element to align with the state’s new AFFH mandate. Policies and programs that support this alignment are identified with the letters “AFFH.” More detailed AFFH information can be found in Appendix A.

2.3 Program Overview and Quantified Objectives
Quantified Objectives estimate the number of units likely to be constructed, rehabilitated, or conserved/preserved preserved, by income level , during the planning period. The Quantified Objectives do not represent a ceiling on development, but rather set a target are not required to match the City’s Regional Housing Needs Allocation (RHNA). They are a goal for the jurisdiction to achievework towards, based on identified needs, resources, and constraints, and available resources.

These objectives will focus communication between the City and HCD with vis-a-vis future Annual Progress Reports (APRs). HCD does not require that all objectives must be met, rather, it is a goal that

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Chapter 2.0 – Goals, Policies, and Programs 2-4
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 enables objective assessments about ; instead, these objectives create a framework for evaluating program effectiveness , so the City can make informed determinations to as to whether it should continue, modify, or delete eliminate programs with in the next Housing Element update Cyclecycle.

Table 2-1, Quantified Objectives, provides an estimate of the number of units likely to be constructed, rehabilitated or conserved/preserved in Carmel-by-the-Sea in the 6th Cycle.….

Table 2-1 Quantified Objectives Summary
Income Category New Construction Rehabilitation* Conservation/ Preservation**
Extremely Low 61 - -
Very Low 60 5 -
Low 93 5 50
Moderate 61 6 -
Above Moderate 135 400 -
Total 410 416 50
SOURCE: City of Carmel-by-the-Sea 2023
NOTES: *The City has approximately 3,800 residential units, 60 (or about one percent) of which are affordable units.

Each year the City processes approximately 100 building permits for remodels, additions, and other construction, which rehabilitates the existing housing stock. For the lower-income categories rehabilitation goals, the City assumes that one percent of the total permits processed will be for affordable units. Under these assumptions, the City would rehabilitate two units of affordable housing a year or approximately 16 units throughout the 2023-2031 planning cycle. This represents approximately 30 percent of the City’s existing affordable housing inventory.
**The City has no units at risk of converting to market rate during this planning cycle.

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

GOAL H1 FACILITATE HOUSING

CONSTRUCTION
Community input has always been an integral part of crafting public policy in the City of Carmel-bythe-Sea. The development of the 6th Cycle Housing Element was no exception. The policies and programs below were informed by feedback received through community outreach events, correspondence with individual residents, over a dozen formal public meetings, and direct input from Commented [1]: @vtam1
[email protected] - Please
add formatted summary
table of quantified
objectives and place at
end of document as an
appendix.
_Assigned to
[email protected]_
Commented [2R1]: @mw
[email protected] -
Adding you in here, Marnie

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Chapter 2.0 – Goals, Policies, and Programs 2-5
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 the AHA resident volunteer group. These programs and policies represent the desire of the residents of Carmel to create high quality affordable housing within the City.

Goal H1 Facilitate Housing Construction
Policy 1.1: Ensure adequate sites are available to meet the City’s projected housing growth needs.
"... The land as it exists now, the way it's zoned, could support the 349 units, plus the buffer. So, the question then is how do we get people excited about developing some of those units? That's where these programs and processes come into play and that's why we need to amend the Municipal Code, to codify those things..."
May 24, 2023 Housing Ad Hoc
Program 1.1.A: Adequate Sites
The City has a RHNA or growth need of 113 units affordable to Extremely Low- and Very Low- Income households. The City’s General Plan and Municipal Code provide for housing types at appropriate densities to accommodate the RHNA. The City will encourage and facilitate the development of new units consistent with the RHNA by continuing to work with housing providers such as the Carmel Foundation and will actively find new organizations to partner with. The City also offers incentives and concessions outlined in Programs listed below.

The Planning Division shall annually evaluate and report to the City Council on the City’s progress in meeting its Housing Element objectives, as well as remain in compliance with the no-net loss requirements of Government Code Section 65863.

Quantified Objective: 61 Extremely Low, 60 Very Low, 93 Low, 61 Moderate and 135 Above ModerateIncome housing units

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Chapter 2.0 – Goals, Policies, and Programs 2-6
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Quantified Objective: 113 Very Low, 74 Low, 44 Moderate, and 118 Above Moderate income housing units
Timeframe: Maintain adequate sites to meet the RHNA through June December 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund(Formerly Program 3-3.1.a: Adequate Sites) The City has a Regional Housing Needs Allocation (RHNA) of 349 units, of which 187 units must be affordable to lower income households, 44 units must be affordable to Moderate income households, and 118 units must be made available as Above Moderate income units.

The Sites Inventory identifies adequate sites to meet the City’s RHNA throughout the planning period.

The City’s Community Planning and Building Department will actively monitor the sites identified on the Sites Inventory to remain in compliance with no-net loss requirements of Government Code Section 65863 and will report to the Planning Commission and the City Council annually on the City’s progress in meeting its Housing Element objectives.

Program 1.1.B: City-Owned Development on Small Sites - AFFH The City plans to pursue three (3) sites (#1, #2, and #3 in the Sites Inventory) over the next five years for the potential development of 149 total units over the three sites (124 affordable to lower- income households and 25 for moderate-income households). These sites would remain in City ownership and are anticipated to be made available for development through long-term leases. These sites are locations for affordable housing that would advance the City’s goal of providing diverse housing types, including senior housing. Projects undertaken throughout the 2023-2031 Housing Element planning period will be processed in accordance with the requirements of the Surplus Land Act and all other applicable State laws. Please note there are no State-owned or Federally-owned sites within Carmel-by-the-Sea.

The City will assess the appropriateness of and consider implementing the following: outreach opportunities with housing developers, requests for proposals, development incentives, fee waivers, priority process, and financial assistance (when available) to facilitate and incentivize developers to develop housing units on City-owned sites.

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Chapter 2.0 – Goals, Policies, and Programs 2-7
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Quantified Objective: 2 Very Low, 2 Low, 2 Moderate, and 12 Above Moderate Income Housing Units (these units are also accounted for under Program 1.1.D)
Timeframe: Adopt Municipal Code amendments by June 2028.

The City has an existing long-term lease with the Carmel Foundation, which manages 50 affordable apartment units for seniors (55+). The lease has benefitted the community, and the City would like to expand the number of affordable housing in the City through the use of the three identified sites. Specific planned actions by the City include the establishment of development standards (for the Sunset Center sites, specifically), development of a project description, publication of an RFP, selection of a development partner, entering into an Exclusive Negotiation Agreement, processing land use entitlements and development agreements, building permit issuance, and construction.

Council approval is required and public participation will take place for each step in this process.

Specific actions the City is committed to:

1. Establish and implement development standards for Sunset Center (Sites #1 and #2) by December 2025;

2. Develop project description and establish an RFP process and solicit developers by December 2025;

3. Target Exclusive Negotiating Agreement by December 2026; and

4. Target land use entitlements issuance by December 2028.

If by December 2026, the City has not established the necessary developer agreements, the City will pursue the following alternative actions to enable the development of the sites for affordable housing:

5. Increase outreach efforts with non-profit affordable housing developers beginning January 2027;

6. Re-issue RFP and solicit developers by December 2027;

7. Identify additional/alternative sites;

8. Pursue funding opportunities such as Permanent Local Housing Allocation (PLHA), Multifamily Super NOFA, IIG Small
Jurisdictions, CDBG Funds, and HOME Investment Partnerships to assist with entitlement and building permit fees (ongoing); and

9. Develop incentives for developers, including 60-day approval timeline; clear development standards; full cooperation with

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Chapter 2.0 – Goals, Policies, and Programs 2-8
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 City staff and elected and appointed officials; accelerated approval process; waiving parking standards for multi-family development.

The length of time it takes to gain entitlement approvals can drastically impact the financial feasibility of development projects. The developer incentives outlined above are intended to shorten the period of time between submittal of entitlement applications and issuance of occupancy, in order to enable the development of multi-family residential units.

Quantified Objective: 39 Extremely Low, 39 Very Low, 46 Low, 25 Moderate Income units Timeframe: Complete
investigations and potential partnerships by December 2026; Pursue alternative actions by August 2027
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly 3-3.1.b: Surplus Sites)
Program 1.1.C: Development on Small Sites
Small In recognition of the fact that small sites can be difficult to develop particularly when development standards don’t adequately take into account small lot dimensions. The , the City will continue to offer incentives and concessions that facilitate development on small sites in the commercial and multi-family districts, including density bonuses that allow multifamily districts. Most notable among these incentives is a density bonus for mixed-income projects that include deedrestricted affordable units allowing for development up to a total of 88 du/ac, inclusive of all state and local bonuses.

Another challenge in developing small sites is achieving compliance with parking requirements.

Presently, Carmel Municipal Code Section 17.14.060 (- “Central Commercial (CC) District Regulations Applicable) ”, waives off-street parking entirely for apartments in the CC district. In the Service Commercial (SC) District, the required parking for a market rate unit is 1 space per unit, and in the Residential and Limited Commercial (RC) District and Multi-Family (R4) District it is 1.5 spaces per market rate unit. However, for an affordable housing unit is ½ in any of these four Districts, the requirement is already reduced to one-half space per unit and is reduced even further to one-third space per unit for senior housing it is ⅓ space per unit. Senior units (senior housing also has a guest parking requirement of 1 space per 4 housing units). The City will further evaluate the residential parking requirements in the Service Commercial (SC) and Residential & Limited Commercial (RC) zoning districts to help facilitate the development of market rate housing. Alternative parking programs such as bike and/or car share, or and free or discounted bus passes, will also be evaluated to offset reduced potential reductions in parking requirements.

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Chapter 2.0 – Goals, Policies, and Programs 2-9
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Program 1.1.C: Live/Work Housing - AFFH
Quantified Objective: 35 Very Low-Income units with reduced parking Timeframe:Complete evaluations by December 2024 8 Extremely Low, 35 Very Low, 35 Low Income Units
Timeframe: Adopt Municipal Code amendments by June 2026.

If by June 2028 the City is not trending to meet its established objectives for this program, the City will modify the program and/or utilize alternative strategies within six months to ensure that the City could fully accommodate its RHNA.

Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly 3-3.1.c: Development on Small Sites)
Issues and Opportunities
At first glance, downtown Carmel appears to be thriving, but a closer inspection reveals “a tale of two downtowns.” The prime street-front commercial spaces are, in fact, healthy, with high foot traffic and low vacancy, but Carmel’s numerous alleys and courtyards contain a great many small, impaired commercial spaces that are not a good fit for traditional retail or commercial uses, as evidenced by the high proportion of these spaces that are either vacant or under-utilized. Walking through these offstreet areas, it is common to see empty and for lease storefronts, by-appointment-only signs, storefronts being used for storage, and other evidence of inactivity and a lack of economic viability.

Indeed, in cataloguing leasable spaces downtown, the resident volunteers on the Safari teams identified 266 off-street, upper story, or peripherally located storefronts that were either vacant or under-utilized.

Program Description
The City will add a new “live/work” classification to the existing categories of approved uses for space in the downtown. These live/work spaces will be hybrid units, with a storefront with commercial space in front and residential space in the rear. Property owners will only be allowed to convert a space to a live/work use if they deed restrict the residential portion of the live/work unit at an affordable rental level. As detailed in the analysis in Appendix C, the lack of demand for under-utilized off-street and upper-story commercial spaces results in rents that are sufficiently low that a property owner could make more money renting that space as a deed-restricted live/work unit than as a strictly commercial space.

The City will offer the following incentives to spur participation in the program:
 Prioritize water allocations. The City will prioritize water allocations for any commercial spaces that are converted into deed-restricted live/work units through this program.  Expedited processing. Expedited processing (i.e., jumping to the front of the queue for review by City staff) will be made available to applications for conversion of existing commercial space into one or more live/work units. In the event that a project which

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Chapter 2.0 – Goals, Policies, and Programs 2-10
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 includes the creation of a live/work unit requires Planning Commission review, that project will also jump to the front of the queue for Planning Commission review.  Waived or reduced fees. The City will waive or reduce permitting fees associated with the conversion of existing commercial spaces to live/work units.  Free Pre-Application Development Meeting. The City will offer an in-person pre-application meeting, at no charge to applicants, which will bring together all departments responsible for review of the project (e.g., Planning, Building, Public Works, Fire). Applicants will receive early feedback on the project concept in order to help expedite the submission and review process.

Program Benefits
The live/work program will have the following benefits:
 By creating an economic incentive for property owners to convert existing commercial space into live/work space, the program is designed to create affordable housing without requiring any public funding (which tends to be either scarce and/or competitive). Indeed, there would be a high likelihood of property owners opting into these conversions, because of the opportunity that the program would afford to achieve a higher rent, and to increase the net operating income, and thereby the value of, their property. Given prevailing cap rates, every incremental dollar of net operating income for a building in downtown Carmel translates into a building that is 25-30 dollars more valuable. Thus, it would make economic sense for the building owner to invest the funds to convert the space from a purely commercial use into a live/work space.
 This program has the potential to return Carmel to its roots by once again making it a haven for local creatives, shopkeepers, and entrepreneurs who could showcase their wares or services in these unique live/work spaces.
 While the live/work units would command a higher rent than the existing purely commercial space, renting such a unit would actually reduce the overall rent burden on a local artist or shopkeeper because they would go from paying two rents (a commercial rent and a residential rent) to paying a single rent, with their total monthly rent payment going down substantially.
 The program has the potential to activate the less well-trodden alleys and courtyards that are a unique staple of the physical fabric of downtown Carmel.  By combining a tenant’s commercial rent and residential rent into one lower rent, and by capping that rent, the program has the potential to bring service businesses back to Carmel that cater to local residents rather than tourists (e.g., a single chair salon, a small tutoring space for local children, a therapist’s office, a tailor, or a cobbler).

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Chapter 2.0 – Goals, Policies, and Programs 2-11
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025  To the extent that the program reduces the level of vacancy and under-utilization in these off-street commercial spaces, it will boost the City’s sales tax revenue and generate additional resources to support the development of affordable housing.

Program 1.1.D: Allow Religious Institution Affiliated Housing DevelopmentMixed-Income Incentive Program - AFFH
Quantified Objective: See Program 1.1.B
Timeframe: Adopt Municipal Code amendments by June 2028 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Issues and Opportunities
In keeping with the community’s expressed desire to distribute new housing throughout the community, the City and the AHA Group explored a variety of potential strategies for incentivizing the creation of new housing units in the downtown area. Since the Live/Work Program and the Hotel-toResidential Conversion Program (described in Program 1.1.F below) tend to have relevance for a narrower subset of properties, one of the goals that emerged was to create a program with broader applicability—i.e., that virtually any downtown property owner could opt into. After extensive discussion and analysis, the City and AHA determined that such a program should be guided by four core principles:

1. It should be inspired by the physical layout of Trevvett Court. A 14-unit senior housing development built in 2010 on an 8,000 square foot parcel near the Post Office in downtown Carmel, Trevvett Court demonstrates that higher density housing can be designed in such a way as to seamlessly blend into the built environment of the village. While Trevvett Court itself has a density of 76 du/ac, space programming work by local architects on the AHA team pointed to 88 du/ac as an ideal density that would maximize housing creation while retaining a Trevvett Court-like feel and many of the most important hallmarks of properties in downtown Carmel: e.g., first floor commercial space, a two story floor plan, and an interior courtyard.

2. It should incentivize the creation of mixed-income housing. Newly constructed units should be a blend of Above Moderate income (i.e., market rate), Moderate income, Low income, and Very Low income units.

3. It should be designed to make projects economically viable in the absence of public funding. Given the scarcity and competitiveness of public funding and the importance of ensuring that housing ultimately gets built, it was determined that the program should be designed to make projects financially viable for a property owner without reliance on public funding.

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Chapter 2.0 – Goals, Policies, and Programs 2-12
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 from 53 to 65. Similarly, between 2012 and 2024, the number of students from Carmel-bythe-Sea attending the local public elementary school (Carmel River School) declined from 270 to 129 students. In light of these alarming trends, creating new housing that can accommodate families with children was determined to be an important priority.

Program Description
The City will develop a Mixed-Income Incentive Program to incentivize the creation of mixed-income housing in the downtown area, either through adaptive re-use or redevelopment. Units created through this program will include a range of income levels, including both market rate units and deed-restricted affordable units. In exchange for deed-restricting a subset of the newly created units at affordable levels, the City will offer qualified projects one or more of the following incentives:
 Higher density. The City will offer qualified projects up to a total of 88 du/ac, inclusive of all state and local bonuses and incentives.
 FAR bonus. The City will offer projects that qualify under the Mixed-Income Incentive Program an incremental FAR bonus over and above the existing FAR bonus that the City offers for qualifying affordable development.
 Prioritize water allocations. The City will prioritize the necessary water allocations required to build both the deed-restricted affordable units as well as the market rate units needed to make the investment economically viable.
 Expedited processing. The City will offer expedited processing to applications taking advantage of this program, with those applications jumping to the front of the queue for review by City staff, and, if applicable, by the Planning Commission.  Waived or reduced fees. The City will waive or reduce permitting fees for projects that participate in this program.
 Free Pre-Application Development Meeting. The City will offer an in-person pre-application meeting, at no charge to applicants, which will bring together all departments responsible for review of the project (e.g., Planning, Building, Public Works, Fire). Applicants will receive early feedback on the project concept in order to help expedite the submission and review process.

Program Benefits
 The program will help to incentivize the creation of mixed-income housing in downtown Carmel, and is in keeping with the City’s desire to distribute housing for various income groups throughout the village.
 The income mix and the incentives in the program will be carefully calibrated to ensure that potential projects will be economically viable without any public funding required. Making these projects profitable for property owners will help to ensure that new housing ultimately gets built.

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Chapter 2.0 – Goals, Policies, and Programs 2-13
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025  This program will give the City the opportunity to incentivize the construction of muchneeded larger bedroom count units, which will help to reverse the decline in the number of families with children in the village.

Consistent with AB 1851 and AB 2244, the City will amend the Zoning Ordinance to allow religious institution-affiliated housing development projects by-right as an accessory use to a permitted religious institution use, allow these uses at densities up to 33 dwelling units per acre, and update the parking requirements consistent with State law. The City commits to modifying standards and make making other modifications as needed to achieve the maximum allowed densities.

If no application for housing on a religious institution/faith-based site is received by December 2025, the City will expand outreach efforts to be conducted annually. This may include direct mailings to faith-based sites highlighting current successful affordable housing units on other faith- based sites, as well as available City grants and loans for such housing and human services endeavors.

Quantified Objective: 1 Extremely Low, 1 Very Low, 1 Low, 3 Moderate, and 3 Above Moderate Income
units
Commented [3]: @bswan
[email protected]
@[email protected]
s
If we are reducing the
numbers for Wayfarer and
Christian Science we need
to reduce this.

Commented [4R3]: @vta
[email protected] and
@[email protected]
s - Can you please
address Hans' question
when you finalize this doc?

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Chapter 2.0 – Goals, Policies, and Programs 2-14
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Timeframe:Amend the Zoning Ordinance by December 2026; Annual Outreach Responsible Party: Community Planning & Building Department Funding Funding Source: General Fund
Issues and Opportunities
The State of California and the City of Carmel-by-the-Sea have both adopted new rules, regulations, and policies in recent years to facilitate the development of housing on properties owned by religious institutions. For example, eligible housing proposals on property owned by religious institutions qualify for:
 Exemptions from environmental (CEQA) review [2023 Senate Bill SB-4]  Reduction or elimination of parking requirements [2022 Assembly Bill AB-1851]  Increased density [2023 Assembly Bill AB-1287 & Government Code §§65915-65918]  “By-right” design approvals without planning commission review [2023 SB-4 & Government Code §§65589.5]
 Priority water allocations [Housing Element Program 1.2.A.]  Expedited application processing [Housing Element Program 3.1.F.]  Reduction in entitlement and development fees [Housing Element Program 3.1.D.]  Direct financial support through Carmel’s affordable housing trust fund [Housing Element Program 2.1.D.]
 Partnership facilitation for tenant selection and program management [City of Carmel] If the above accommodations prove insufficient, Government Code §§65915-65918 allows a church to receive bonuses and concessions for projects that are 100 percent affordable. These include:
 Additional density bonuses to establish more residential units;  Reductions in setback and building height requirements;  Reductions in parking requirements;
 Approval of mixed-use zoning compatible with the location; and  Other regulatory incentives or concessions proposed by the developer.

Program Description
In 2023
Funding
Source: General Fund (NEW)
Program 1.1.E: City Partnership with the Carmel Foundation to Develop Affordable Housing
To ensure the City is able to meet its RHNA, the City is committed to working with the Carmel Foundation to enable the development of 21 lower-income residential units (identified as Site #8 in Appendix C). The City will meet annually with the Carmel Foundation to identify funding sources to support redevelopment of the site with affordable residential

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Chapter 2.0 – Goals, Policies, and Programs 2-15
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 units; provide guidance on the housing needs of the community to construct housing types/units that meet the need; and support the Foundation’s efforts to serve Carmel-by-the-Sea community members.

If at mid-cycle the necessary land entitlements and building permits are not completed, the City will reallocate the anticipated 21 lower-income units for Site #8 by utilizing City-owned sites or another available public or private site to construct the residential units to accommodate the RHNA. The City is committed to the following actions:

10. Distributing the 21 lower-income units on City-owned sites including but not limited to Sunset Center Sites #1 and #2, Vista Lobos Sites #3, or another available public or private site by June 2028; and

11. Conducting outreach to non-profit developers and identifying funding sources such as, CDBG, HOME, PLHA, and the Housing Trust Fund to support the development of affordable residential units (ongoing; beginning with the City’s partnership with the Carmel Foundation).

Quantified Objective: 11 Very Low-Income units and 10 Low-Income units Timeframe: Review Site #8 development status by
December 2027; Implement alternative
measures by June 2028
, the California legislature passed Senate Bill (SB) 4, the Affordable Housing on Faith and Higher Education Lands Act of 2023. The Act requires a housing development project be allowed by-right when located on land owned by a religious institution. The housing units, exclusive of manager’s units, must be 100 percent affordable to lower income households, except that 20 percent may be for Moderate-income households and 5 percent may be for staff of the religious institution that owns the land. Projects submitted pursuant to SB4 are also eligible for a density bonus, incentives, concessions, and waivers or reductions of development and parking standards.

The City will continue conducting outreach to the five religious institutions located within the jurisdictional boundaries of Carmel-by-the-Sea to evaluate potential housing opportunities. The City will educate the local churches about the benefits of SB4 and Density Bonus Law and look for opportunities to connect them with resources and interested affordable housing developers that will support the development of housing on their property.

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Chapter 2.0 – Goals, Policies, and Programs 2-16
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025  The program provides a vehicle for translating the expressed interest and enthusiasm of the local religious community into concrete action.

Program 1.1.F: Hotel- to-Residential Conversion (Hotel ‘Key’ Transfer) - AFFH Quantified Objective: 40 Very Low, 40 Low, 40 Moderate, 41 Above Moderate Income Units Timeframe: Outreach for developer interest by December 2025 Create/amend Municipal codes to support the program by May 2026.

Monitor and report to the City Council the City’s progress in facilitating hotel-to-residential conversions annually. Based on results of the monitoring, if by June 2028 the City is not trending to meet its established objectives for this program, the City will modify the program and/or utilize alternative strategies within six months to ensure that the City could fully accommodate its RHNA.

Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly 3-3.1.c: Development on Small Sites)
Issues and Opportunities
Carmel has a significant number of older, underperforming overnight visitor accommodations (hotels/motels, inns, bed and breakfasts, and other various lodging options) distributed throughout the City in the CC, RC, and SC, and R-1 zoning districts. These properties are ideal candidates for conversion to multifamily housing, both because they tend to have physical layouts that lend themselves to such a conversion (indeed, several hotels and motels in Carmel were originally built as apartment buildings), and because their relatively low net operating income means that they can be acquired at a more modest price point.

One unique feature of the hospitality landscape in Carmel-by-the-Sea is that the City has a self-imposed cap in the General Plan on the number of hotel rooms permitted to operate in the city (948 rooms as of January 1, 2025.) Were the City to allow a hotel owner to sell the rights to these hotel rooms in the event of a hotel-to-residential conversion, these “hotel keys” would command a significant market value (approximately $438,000 per room).

Program Description
The City will create a program providing opportunities for property owners and developers to convert underperforming hotels into mixed-income multifamily rentals with a deed restricted affordable component. Such conversions would be accomplished through adaptive re-use or redevelopment. To incentivize participation in the program, the City will allow the owners of converted hotel properties to sell and transfer the hotel keys from the converted hotel to facilitate the construction of the same number of new hotel rooms on other sites within Carmel-by-the-Sea’s commercial zoning districts (CC, SC, or RC)–either as new hotels or as additions to existing hotels. While such conversions could be partially financed through public funding programs such as the Low-Income Housing Tax Credit (LIHTC) program, the City’s intent in allowing the sale of the hotel keys is to maximize housing Commented [5]: @vtam1
[email protected] - Please
double check that all
sections which need to
AFFH included, have it.

Commented [6R5]: @mw
[email protected] -
adding you in here, Marnie

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Chapter 2.0 – Goals, Policies, and Programs 2-17
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 production by making these conversions economically viable without any reliance on public funding.

The ultimate goal is to make conversion to multifamily residential the highest and best use of the property, and one that would allow purchasers with this business plan to outbid other purchasers.

In the absence of any public subsidy, a property owner would be unlikely to convert a hotel into deedrestricted affordable housing because the result would be lower net operating income and a reduction in the value of the property. However, as the analysis in Appendix C illustrates, by combining the value of the hotel keys with the residual value of the converted hotel, participating property owners and developers will be able to achieve an above market return. Put another way, the program is designed to allow participating owners and developers to “sell the property twice.” The program is designed to be flexible and to allow for a variety of potential scenarios. For example, the existing owner could convert the hotel to mixed-income residential themself and sell the hotel keys to a hotel developer to be used to construct a new hotel or to add hotel rooms to another property within the City’s commercial districts (CC, SC, or RC). Or the existing owner could convert the hotel to mixed-income residential themself and retain the keys to add hotel rooms to another property within the City’s commercial districts (CC, SC, or RC). Alternatively, and perhaps most likely, the existing owner—who may lack expertise in development – could sell the underperforming hotel to an affordable or multifamily developer, who could in turn convert the hotel to mixed-income residential and then either sell the hotel keys or retain them for use on another site within the City’s commercial districts (CC, SC, or RC). These various permutations are outlined visually in the following graphic.  Transferable development rights. Hotel owners that convert their hotel into mixed-income multifamily housing through the program will be allowed to sell the hotel keys and transfer

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Chapter 2.0 – Goals, Policies, and Programs 2-18
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 the hotel rights to other parcels in the City’s commercial districts (CC, SC, or RC) (particularly valuable due to Carmel's General Plan cap of 948 hotel rooms).  Water rights. In recognition of the fact that the sale of the hotel keys drives the production of affordable housing, the City will create opportunities for purchasers of hotel keys to receive the water allocation required to create new hotel rooms on other sites within the village. The City will require that the water rights associated with the converted hotels stay with the property–i.e., once the property is converted into mixed-income multifamily housing through the program.
 Increased development potential. The City will grant a modest increase in FAR on hotel sites that are converted into mixed-income multifamily housing through the program.  Hotel residential suites (HRS). The City will explore the possibility of allowing purchasers of hotel keys to designate a subset of the newly established hotel rooms as “hotel residential suites” – hybrid units that would be owner-occupied as market rate residential suites for a portion of the year and that would be required to be added to the hotel inventory for the rest of the year. The ability to sell these hotel residential suites would help to expand the universe of potential hotel key purchasers to include existing hotel owners (as opposed to just ownership groups newly acquiring hotels) by providing a near-term opportunity to recoup the capital invested to purchase the hotel keys and construct the new hotel rooms. These hotel residential suites are not included in the Sites Inventory or towards the City’s RHNA.  Qualified projects will benefit from streamlined review, expedited permitting, and reduced permit fees.

Program Benefits
By unlocking the value associated with the limited number of hotel keys available in the City, the program will offer property owners an above market rate of return, which will encourage widespread participation and significantly increase the likelihood of generating a substantial number of new housing units.

With its focus on the conversion of small, scattered site hotel properties, the program will integrate affordable housing into the physical and social fabric of the village.

The program is mixed-income at the property level, and is designed to create housing units for Above Moderate (i.e., market rate), Moderate, Low, and Very Low income households.

By creating an investment opportunity with a return on investment that is substantially higher than what the market would typically offer, the City can explore ways to divert resources from these transactions to other affordable housing programs with less financial viability.

The Hotel residential suites created through this program have the potential to help stem the tide of population loss by providing an alternative to the purchase of a single-family residence as a second home, many of which remain vacant for much of the year, and which would be better utilized as homes

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Chapter 2.0 – Goals, Policies, and Programs 2-19
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 for permanent residents. Hotel residential suites would offer prospective second home buyers an alternative that would be dramatically less expensive and that would offer a number of other benefits:
e.g., lower maintenance requirements, enhanced security, easy access to restaurants and shops in the downtown area, and shared amenities.

The same number of overnight visitor accommodating rooms to serve coastal visitor access in the City will be retained while increasing the amount of multifamily housing in the village.

The transfer of hotel keys from underperforming hotels to upgraded hotel rooms at new or existing hotels will dramatically increase the City’s transient occupancy tax (TOT) revenue.

Program 1.1.G – Hotel Employee Housing Program - AFFH
Quantified Objective: 5 Affordable Units (not included in RHNA capacity) Timeframe: Amend the Carmel Municipal Code by June 2027 Responsible Party: Community Planning and Building Department Funding Source: General Fund
The City has a number of overnight visitor accommodation properties (motels, hotels, inns) that would benefit from incorporating affordable on-site employee housing. These units would alleviate the current lack of housing many Carmel hospitality employees face. Therefore, the City will create a voluntary program to incentivize the generation of on-site employee housing at hotels, motels, and inns around the village. These potential units are not used to meet the City’s RHNA adequate sites requirements.

If the owner of an overnight visitor serving accommodation converts one or more legal guestrooms into a deed restricted affordable employee unit, the City will grant the owner the legal right to replace the hotel room on-site, sell the “hotel key”, or transfer it to another site, similar to Program 1.1.F, the Hotel-to-Residential Conversion (Hotel ‘Key’ Transfer) Program.

As noted above, Carmel’s General Plan caps the number of hotel rooms permitted to operate in the city (948 rooms as of Jan 1, 2025.) This cap is currently exceeded, meaning no additional rooms can be built in the City. This program leverages the scarcity of hotel rooms created by the General Plan cap to incentivize the development of affordable rental housing and offset the loss of revenues for participating hotel owners–all while maintaining visitor-serving coastal access. Qualifying projects may also be eligible for priority access to water allocations, expedited review, and reduced permit fees.

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Chapter 2.0 – Goals, Policies, and Programs 2-20
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Program 1.1.H: Accessory Dwelling Units - AFFH
Quantified Objective: 7 Extremely Low, 14 Very Low, 21 Low, 21 Moderate, 7 Above Moderate Income Units
Timeframe: December 2025 to December 2031
Monitor and report to the City Council the City’s progress in facilitating ADU production annually. Based on results of the monitoring, if by June 2028 the City is not trending to meet its established objectives for this program, the City will modify the program and/or utilize alternative strategies within six months to ensure that the City could fully accommodate its RHNA.

Responsible Party: Community Planning and Building Department Funding Source: General Fund
Issues and Opportunities
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.

Program Description
The City recognizes that ADUs provide affordable housing options for family members, seniors, students, in-home health care providers, couples, small families, and friends. ADUs can also be useful to generate additional rental income for the homeowner. The City also recognizes that there are many misconceptions surrounding development regulations and water restrictions for ADUs. For example, it is not widely known that ADUs do not need a new water meter, or that the Monterey Peninsula Water Management District (MPWMD) does not charge a service connection fee for an ADU. To help combat this lack of public knowledge, the City maintains a dedicated housing webpage that includes the California Department of Housing and Community Development Accessory Dwelling Unit Handbook and that serves as a source of technical assistance to property owners.

To facilitate ADU development the City will complete the following actions between 2024 and 2031:
 The City will complete revisions to its local ADU Ordinance and incorporate guidance from the recent Senate Bill 1077 (December 2026).
 As new relevant state laws are adopted during the planning cycle, the City will amend the Carmel Municipal Code in a timely manner to reflect applicable changes in the law.  The City will develop a process for reviewing plans submitted for pre-approval pursuant to AB 1332 (2023). (June 2026)
 The City will develop a procedure for the review and approval of unpermitted ADUs pursuant to AB 2533 (2024) also known as the amnesty program. (June 2026)

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Chapter 2.0 – Goals, Policies, and Programs 2-21
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025  The City will pursue implementing a pre-sales inspection program to identify unpermitted ADUs and refer them to the amnesty program. (December 2027)  If the program is determined to be feasible, establish a program within six months. (June 2028)
 The City will establish a renter match program for ADUs. (December 2029)  The program may also employ a citywide survey of ADU rental rates to help connect tenants with property owners charging more affordable rates.  Outreach activities will include promoting ADU availability to local workers.  The City will promote affordability and increase workforce housing by developing a program to incentivize homeowners to create ADUs that are affordable to, and occupied by, lower income households. One incentive could be providing the necessary water credits to serve the ADU. Other incentives would also be explored during the development of the program. (December 2026)
 The City will conduct outreach and education on an ongoing basis, including but not limited to the following efforts: holding community workshops, promoting the Property Owners Guide to Building an ADU (prepared by the AHA community group in coordination with the City of Carmel) and updating it as needed, maintaining a dedicated webpage on the City’s website with information on ADUs, conducting outreach and providing education to local architects andrealtors, and sending educational information through the mail to property owners about working with the City to develop ADUs, and clarifying common misconceptions about water availability.

Program Benefits
 Legalize unpermitted ADUs to ensure they meet minimum health and safety regulations.  Provide affordable housing options for the local workforce.  Provide additional housing options for local seniors.  Increase the proportion of ADUs that are occupied through a renter match program.  Increase the permanent housing stock.
 Encourage full-time residency within the village.

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Chapter 2.0 – Goals, Policies, and Programs 2-22
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Policy 1.2: Continue to monitor and work cooperatively with regional agencies to augment infrastructure in a manner that provides adequate capacity for existing and new housing needs while preserving and improving the unique visual character of the City.

Program 1.2.A: Water Distribution Prioritization for Affordable Housing – AFFH Quantified Objective: 13 Extremely Low, 98 Very Low, 113 Low, 50 Moderate, 59 Above Moderate Income Units
Timeframe: Adopt Water Allocation Resolution by December 2025 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Perhaps Historically, the greatest constraint to housing production in Carmel-by-the-Sea is the lack of has been limited water resources. The City’s Regional Housing Needs Allocation (RHNA) of 349 units for the 2023-2031 planning period is estimated to require approximately 40 acre feet of water. On January 27, 2025, the Monterey Peninsula Water Management District (MPWMD) adopted Ordinance 197 allocating 14 acre feet of water to the City of Carmel-by-the-Sea. The Ordinance took effect on March 1, 2025 and the water is estimated to become available at the end of 2025 or early 2026.

Potable water is a fundamental infrastructure need for housing and is has historically been a limited resource in Carmel- Carmel-by-the-Sea. Water is regulated by the State Water Resources Control Board (SWRCB) and the Monterey Peninsula Water Management District (MPWMD). Few developed sites have available water credits sufficient to accommodate construction of additional residential units, and the City’s own water allocation is quite limited. Further, due to . Although additional water resources are anticipated to become available in late 2025/early 2026, the current State imposed cease-and-desist order in Carmel, remains in effect and California American Water (Cal-Am) is not permitted to set install new water meters at this time. In an effort to address water constraints, the City will:
 Support efforts by the MPWMD to expand the water supply with new water sources that will support affordable housing development (December 2027).  Work cooperatively with MPWMD to implement water conservation methods through the building permit process (e.g., low-flow fixtures, instant hot water heaters, cisterns/rain gardens) to augment water for new development projects. The City has already received many building permit applications for remodels and refurbishments of older homes, which would result in water conservation implementation, and is supportive of new water supplies.

The City and MPWMD will measure the amount of water conserved on an annual and ongoing basis..
 Update the City’s water allocations by land use in accordance with the Water Management Program (Carmel Municipal Code Chapter 17.50) to include the recent allocation from MPWMD of 14 acre feet. In establishing these allocations, the City will prioritize the allocation of water for affordable housing.

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Chapter 2.0 – Goals, Policies, and Programs 2-23
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

1. Work cooperatively with MPWMD to establish a procedure to prioritize water allocation for housing developments that include affordable units for lower-income households (December 2026).

From its own modest water allocation of approximately 1.6 acrefeet, the City will grant water allocation priority to those projects that assist the City in meeting its share of the regional housing need for lower- and moderate-income households. A City policy to clearly reflect water allocation priority and incentives for Extremely Low, Very Low, Low and Moderate-Income households will be adopted (December 2026).

Quantified Objective: Prioritize 193
affordable units for water
Timeframe: Adopt policy
by June 2025
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-3.2: Address Infrastructure Constraints) Program 1.2.B: Address Infrastructure Constraints
Quantified Objective: See below in bullets
Timeframe: City’s 5-Year Capital Improvement Plan through December 2031 Responsible Party: Public Works Department
Funding Source: General Fund
Ensuring the City’s infrastructure is modernized and can accommodate future growth is a critical charge of local governments. Much of the City’s infrastructure is nearing the end of its lifecycle and crafting Capital Improvement Programs that effectively manage infrastructure is imperative.

Additionally, the City experienced significant power outages during the 2022-2023 winter season that negatively impacted the City at large. The City’s infrastructure is continuously aging, with deferred maintenance still remaining from the COVID Pandemic. Crafting capital improvement programs to effectively address this maintenance backlog and manage the City’s infrastructure into the future is imperative. The City’s Public Works Department continues to improve City infrastructure , including road maintenance roads and storm drains, through the City’s 5-Year Capital Improvement Plan process. The City will continue to work cooperatively with outside agencies, including the Pacific Gas and Electric Company (PG&E), the Carmel Area Wastewater District (CAWD), and California American Water (Cal-AM), to continue to maintain and upgrade the City’s infrastructure.

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Chapter 2.0 – Goals, Policies, and Programs 2-24
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 The City of Carmel proposes the following actions and timeline to address infrastructure constraints during the 6th Cycle:.
 The City of Carmel , whenever possible, will collaborate with and support the undergrounding of electrical wires by PG&E in an effort to provide consistent power. The City is working with PG&E to develop an undergrounding plan , with the work estimated to be complete within 10-15 years for a small portion of the City, with . With a desire to underground the remainder of the City’s overhead electrical wires anticipated to be undergrounded in the next 20-30 years, the City will continue to work with PG&E to develop a long term plan.
oQuantified Objective: Underground a small portion of the electrical wires by December 2034, and work with PG&E to underground the remainder over the next 20-30 years.)  The City will implement drainage and street improvements, including ADA ramps and sidewalk slope improvements through the 5-year Capital Improvement ProcessPlan. oQuantified Objective: The City will invest $2.065 2.334 million in drainage improvements and $6.7 4.969 million in street improvements by December 2026.) Timeframe: City’s 5-Year Capital Improvement
Process through June 2031 Responsible Party: Public
Works Department
Funding Source: General Fund
(Formerly Program 3-3.2: Address Infrastructure Constraints) Policy 1.3: Reduce or eliminate governmental constraints on the provision of affordable housing. Direct public funding resources to the conservation of existing housing units in neighborhoods where continued residential use is appropriate.

Program 1.3.A: Condominium Conversions - AFFH
Quantified Objective: N/A
Timeframe: Continued ordinance implementation through December 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
The City will continue to implement the condominium conversion ordinance, which restricts the conversion of apartments to condominiums to preserve the lower-cost rental housing options (i.e., apartments) within the City. Apartments cannot be converted to condominiums unless a new apartment is being created to offset the conversion.

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Chapter 2.0 – Goals, Policies, and Programs 2-25
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Program 1.3.B: Employee Housing - AFFH
Quantified Objective:Preserve rental units N/A
Timeframe: Adoption of Municipal Code amendments by June 2026 Timeframe: Continued ordinance
implementation through June 2031 Responsible Party:

Community Planning and
Building Department Funding Source: General
Fund
(Formerly Program 3-5.3.a: Condominium Conversions)
Program 1.3.B: Overnight Visitor Accommodation (Conversion) Development Transfer Rights - AFFH
Pursuant to Coastal Zone requirements, the City has recognized existing overnight visitor accommodations (hotels/motels, inns, bed and breakfasts and other various lodging options) as an important coastal visitor asset and economic base in the community. There are a number of older, overnight visitor accommodations in the R-1, CC, RC, and SC zoning districts, including some that are non-conforming. Appendix C provides a list of existing eligible overnight visitor accommodation locations. Property owners of these establishments are encouraged to consider rehabilitating these sites as multi-family rental residences. These properties are distributed throughout the City and this policy would diversify the housing stock through more cost-effective means of rehabilitating and refurbishing existing buildings.

The City will incentivize both the transfer of development rights of overnight visitor accommodations to other sites within commercial zoning districts and conversion of existing overnight visitor accommodation properties to multi-family residences that include 15 percent lower-income units. The same number of overnight visitor accommodation rooms to serve coastal visitor access in the City will be retained while increasing the affordable multi-family housing rental stock.

The City will conduct outreach to property owners in addition to meeting annually with non-profit affordable housing developers to identify eligible sites that can be converted from overnight visitor accommodation to multi-family housing, and help to identify funding to enable the conversion of overnight uses to permanent affordable housing.

If at mid-cycle the City has not received any applications to transfer development rights or to convert existing properties to permanent

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Chapter 2.0 – Goals, Policies, and Programs 2-26
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 affordable housing, the City will evaluate the funds in the housing trust fund and partner with a non-profit to identify eligible properties for purchase.

Quantified Objective: 33 units converted from overnight visitor accommodation rooms to housing units
Timeframe: Mid-cycle review in June 2027
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-4.1.b Conversion of R-1 Motels)
Program 1.3.C: Accessory Dwelling Units - AFFH
The City’s ADU ordinance was last updated in 2017 (Ord. 2017-10 § 1 (Exh. A), 2017). Carmel-by- the-Sea 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.

The City recognizes that ADUs provide affordable housing options for family members, seniors, students, in-home health care providers, and other small household types. ADUs can also be useful to generate additional rental income for the homeowner, making homeownership more financially feasible. It’s also important to note that 80 percent of Carmel-by-the-Sea’s vacant units are for seasonal, recreational, or occasional (second home) use. ADU and JADU development on properties used for occasional use adds to the permanent rental housing stock and provides on-site oversight for second home properties. The City includes the Housing and Community Development Department ADU Handbook on the Planning Department website to offer technical assistance to interested property owners.

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

To further promote ADU development the City will implement to the following:

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Chapter 2.0 – Goals, Policies, and Programs 2-27
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

1. The City is on track to adopt an updated ADU Ordinance by the end of 2024. The City will also amend the Municipal Code to reflect current State ADU law in a timely manner as new relevant state laws are adopted during the planning cycle.

Timeframe: Ordinance adopted by December 2024

1. Develop pre-approved, standardized ADU plans available on the City’s website to further incentive the construction of ADUs.

Quantified Objective: 5 Extremely Low, 5 Very Low, 10 Low, 10 Moderate, and 4 Above ModerateIncome units
Timeframe: December 2026
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-5.3.c: Subordinate Units)
Program 1.3.D – Overnight Visitor Accommodation - Employee Housing Program The City has a number of overnight visitor accommodation (motels, hotels, inns) properties that would greatly benefit from incorporating affordable on-site employee housing. Appendix C provides a list of existing overnight visitor accommodation locations. These units would alleviate the current lack of housing that many hospitality employees that work in Carmel face. As an incentive to the owners/operators of motels, hotels, and inns to provide on-site affordable employee housing, the City will offer an additional overnight accommodation room for each onsite housing unit created. This incentive will serve to increase affordable rental housing, offset the loss of revenues for the business owners, and maintain visitor-serving coastal access. The City will amend the Municipal Code to allow at least one on-site affordable employee housing unit in conjunction with one new overnight visitor accommodation room.

The City will conduct outreach with overnight visitor accommodation property owners to better discern the viability of the incentive program by December 2024.

If at mid-cycle, the City has not received any building permits identifying construction of an on-site employee housing unit, the City will amend the Municipal Code to require an on-site deed-restricted

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Chapter 2.0 – Goals, Policies, and Programs 2-28
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 affordable housing unit be developed, in conjunction with one new overnight visitor accommodation room upon receiving a building permit.

Quantified Objective: 4 Extremely Low, 4 Very Low, 12 Low, 11 Moderate-Income employee housing
units by December 2031
Timeframe: Amend Municipal
Code by December 2026 Responsible Party:

Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-5.3.c: Subordinate Units)
Program 1.3.E: Amend the A-2 Zoning District - AFFH
The Community and Cultural Center Zoning District, A-2, allows senior housing (55+) as a permitted use in addition to uses that provide cultural and community activities associated with the arts, education and recreation; however, development standards are not specified for the A-2 district
and design review is required. The lack of development and design standards adds uncertainty and can significantly lengthen the development process. Amending the A-2 zoning district with clear setbacks, height, and objective design standards will add clarity and remove a development constraint. The City will amend the Municipal Code to include clear development and design standards for the A-2 zoning district to encourage affordable senior housing.

Quantified Objective: 25 Extremely Low, 25 Very Low, 35 Low, and 8 Moderate-Income units
Timeframe:Adoption of Municipal Code amendments by December 2025 Responsible Party:

Community Planning and Building Department
Funding Source: General Fund(NEW)
Program 1.3.F: Employee Housing
As stated in Appendix A there are no farmworkers is no farmwork 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.

In compliance with the Employee Housing Act (Health and Safety Code § 17000 §17000 et seq.) Sections 17021.5 and 17021.6, the City of Carmel-by-the-Sea will amend the Carmel Municipal Code to include a definition for employee housing that permits 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.

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Chapter 2.0 – Goals, Policies, and Programs 2-29
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Quantified Objective: N/A
Timeframe: Adoption of Municipal Code
amendments by December 2024 Responsible Party:

Community Planning and Building
Department
Funding
Source: General Fund (NEW)
Program 1.3.GProgram 1.3.C: Manufactured Homes on a Foundation System Quantified Objective: N/A
Timeframe: Adopt Municipal Code amendments by June 2026 Responsible Party: Community Planning and Building Department Funding Source: General Fund
The City currently permits manufactured homes on a foundation system on lots zoned for conventional single-family residential dwellings pursuant to state law California Government Code 65852.3§65852.3.

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

Quantified Objective: 8 Low Income units
Timeframe: Adoption of Municipal Code
amendments by December 2024 Responsible Party:

Community Planning and Building
Department
Funding
Source: General Fund (NEW)
Program 1.3.HProgram 1.3.D: Senate Bill 35 and Senate Bill 423 Processing Procedure Quantified Objective: N/A
Timeframe: Adopt a procedure by December 2026
Responsible Party: Community Planning and Building Department Funding Source: General Fund
According to Senate Bill (SB) 35, Statutes of 2017 (2017), jurisdictions that have insufficient progress toward their lower-income RHNA units must accommodate employ a streamlined ministerial approval process for proposed developments with at least 50 percent affordability. Early implementation of SB 35 did not apply to cities in the coastal citieszone. However, in October 2023, SB 423 was signed into orderlaw, expanding SB 35 measures to include cities located in the coastal zone and extending the operation of the streamlined ministerial approval process to January 1, 2036.

Eligibility requirements for a development in the coastal zone include the following:

2. The development that is located in a coastal zone satisfies the conditions to obtain a coastal development permit; and

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Chapter 2.0 – Goals, Policies, and Programs 2-30
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

3. A public agency with coastal development permitting authority to approve a coastal development permit if it determines that the development is consistent with all objective standards of the local government’s certified local coastal program, as specified; Changes made by SB 423 would apply in a coastal zone on or after January 1, 2025.

In compliance with SB 35 and SB 423, the City will establish a standard procedure for processing eligible development projects.

Program 1.3.E: Emergency Shelters
Quantified Objective: N/A
Timeframe:Adoption of Adopt Municipal Code amendments by December 2024 June 2026 Responsible Party: Community Planning and Building Department Funding Source: General Fund(NEW)
Program 1.3.I: Implement State Law SB 10 Opportunities to Maximize Feasibility of Development in Strategic Locations.

SB 10 encourages strategic density within neighborhoods. Three (3) underutilized sites currently zoned R-1 and located on the periphery of the commercial district are occupied by non-residential uses that could accommodate multi-family housing with the implementation of SB 10.

The City will work with the property owners to zone these sites for development under the provisions of SB 10, including a by-right process, requiring no discretionary review. These sites include Site #5 (First Church of Christ Parking Lot), Site #6 (American Red Cross), and Site #9 (American Legion).

Quantified Objective: 4 Extremely Low, 3 Very low, 6 Low, 3 Moderate, and 3 Above ModerateIncome units
Timeframe: Adoption of Municipal Code
amendments by December 2024 Responsible Party:

Community Planning and Building
Department
Funding
Source: General Fund (NEW)
Program 1.3.J: Emergency Shelters
In compliance with AB 2339 Statutes of 2022(2022), the City will amend Title 17 of the Carmel Municipal Code to define emergency shelters and clearly state they are a permitted use by-right, requiring no discretionary review in the CC, SC, and RC commercial districts.

Quantified Objective: N/A

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Chapter 2.0 – Goals, Policies, and Programs 2-31
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Timeframe: Adoption of Municipal Code
amendments by December 2024 Responsible Party:

Community Planning and Building
Department
Funding
Source: General Fund (NEW)
California Government Code §65583 requires the identification of one or more zoning designations that allow residential uses, including mixed uses, where emergency shelters are allowed as a permitted use without a conditional use or other discretionary permit and that are suitable for residential uses.

The Carmel Municipal Code includes emergency shelters within the definition of Community Social Service Facilities and reads as follows: “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.” Carmel Municipal Code Chapter 17.14, Commercial Zoning Districts, Schedule II-B: Commercial Districts - Use Regulations, includes Community Social Service Facility as a permitted use in the Central Commercial (CC), Service Commercial (SC), and Residential and Limited Commercial (RC) Districts.

Pursuant to Subparagraph (G) of §65583, a local government with an existing ordinance or ordinances that comply with this paragraph shall not be required to take additional action to identify zoning designations for emergency shelters. The housing element must only describe how existing ordinances, policies, and standards are consistent with the requirements of this paragraph.

The City does not currently have objective standards that govern the operation and management of emergency shelters such as the maximum number of beds or persons to be permitted to be served nightly by the facility, sufficient parking to accommodate all staff working at the shelter, size and location of intake areas, provision of onsite management, proximity to other emergency shelters, length of stay, lighting, and security during the hours the shelter is in operation.

The City will amend the Carmel Municipal Code to create objective operational standards for emergency shelters.

Program 1.3.KProgram 1.3.F: Forest and Beach Commission Required Findings To remove potential constraints to the development of multi-family housing, the City will review and modify the Forest and Beach Commission required findings to ensure they do not impede multifamily development on the basis of base floor area.

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Chapter 2.0 – Goals, Policies, and Programs 2-32
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Quantified Objective: N/A
Timeframe:Adoption of Adopt Municipal Code amendments by December 2024 June 2026 Responsible Party: Community Planning and Building Department Funding Source: General Fund(NEW)
Carmel Municipal Code §17.48.070, Findings Required for Significant Trees prohibits the removal of significant trees to facilitate construction or development unless one of the two following findings is met:

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; and 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; and
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.

The findings in 2.a and 2.b have been identified as a potential constraint to the development of multifamily housing. The City will review the findings to ensure they do not impede multifamily development in the commercial and multifamily districts.

Policy 1.4: Improve Development Review and Approval Processes Program 1.4.A: Modify or Eliminate Unnecessary Onerous Use Permits - AFFH Quantified Objective: N/A
Timeframe: Adopt Municipal Code amendments by June 2028 Responsible Party: Community Development Department
Funding Source: General Fund
Multi-family Multifamily and duplex housing units constituted constitute approximately 13 percent of Carmel’s housing stock. The use permit (UP) (or AKA 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 multifamily development. Carmel Municipal Code Chapter 17.64 Findings Required for Permits and Approvals includes a broad list of applicable conditional uses and incentives. There are opportunities to reduce redundancies and facilitate residential construction while still enabling development to meet City regulations.For example, a use permit is required in:

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Chapter 2.0 – Goals, Policies, and Programs 2-33
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

1. Municipal Code Section 17.64.190 Residential Construction at Densities Between 33 and 44 Units per Acre;

2. Municipal Code Section 17.64.230 Affordable Housing – Residential Construction at Densities Between 45 and 88 Units Per Acre for developments the request a bonus density or a density bonus; and

3. Municipal Code Section 17.14.150 Building Height requires a use permit for additional underground floors used for parking vehicles, storage and mechanical equipment. The additional use permit requirement can affect how much parking can be accommodated and limit the number of units.

The City will eliminate UP requirements to remove the To address this potential constraint to the development of multi- family multifamily residential units, and licensed residential care facilities of seven or more persons. Additionally, the City will remove pursue replacing subjective language from in the required findings for UP and adopt Use Permits with objective findings to promote approval certainty, or eliminating these Use Permits altogether.

Quantified Objective: 50 Moderate-Income units
Timeframe: Adoption of Municipal Code
amendments by December 2024 Responsible Party:

Community Development
Department
Funding Source: General Fund
(Formerly Program 3-2.1.D: Multi-Family Residential Development Review) Program 1.4.B: Objective Design and Development Standards - AFFH The City currently relies upon mostly subjective design guidelines for new single-family residences. In the commercial and multi-family districts, less detailed subjective design guidelines are in place. The City’s residential and commercial design guidelines are being updated this year to provide clarity and more objectivity. The lack of objective design guidelines creates a higher level of subjectivity for multi-family affordable projects.

The lack of Objective Design and Development Standards poses a constraint to residential development. Guidelines that are subjective increase uncertainty and risk for housing developers. Objective Design and Development 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

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Chapter 2.0 – Goals, Policies, and Programs 2-34
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 objective standards. The City will create Objective Design and Development Standards for multi-family housing projects that include at least one deed- restricted affordable housing unit.

Quantified Objective: N/A
Timeframe: Adopt Objective Design Guidelines by June 2027 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Carmel Municipal Code Chapter 17.58, Design Review describes a discretionary review process for the construction of new buildings and additions to existing buildings in the commercial districts.

There are three findings for approval: 1) Conformance to the applicable policies of the General Plan and the Local Coastal Program; 2) Compliance with all applicable provisions of the Municipal Code; and 3) Consistency with the applicable adopted design review guidelines.

In November 2023, the City received an $85,000 REAP 2.0 Local Suballocation Grant — , which will be used to pursue the creation and adoption of Objective Design and Development Standards (ODDS) to reduce governmental constraints presently limiting the production of affordable housing. Once adopted, the City's ODDS will be used to review and approve housing projects with at least 20 percent affordable units (units for very-low, low, and moderate-income households) on sites identified within the City's draft 2023-2031 6th Cycle Housing Elementmultifamily housing. The City's expectation, and desired intent, is that having ODDS in place will incentivize and accelerate the construction of multifamily qualifying affordable multifamily housing projects in the City's downtown zonesarea, including the Central Commercial (CC), Service Commercial (SC), Residential & Limited Commercial (RC), and Multifamily Residential (R-4) Districts.

Program 1.4.C: By-Right Approval - AFFH
Multi-family Residential (R-4), which all fall within the Potential Opportunity Area identified by Moving Forward Monterey Bay 2045.

Quantified Objective: N/A
Timeframe: Adoption of Objective Design Guidelines by December 2025 Timeframe: Amend the Municipal Code to comply with state by-right requirements by December 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(NEW)

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Chapter 2.0 – Goals, Policies, and Programs 2-35
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 GOAL H2 PROTECT AFFORDABLE

HOUSING AND IMPROVE THE

HOUSING STOCK
Pursuant to Government Code §65583.2(h)(i) (AB 1397 passed in 2017), the City will amend the Carmel Municipal Code to require by-right approval without discretionary review for a housing development that includes 20 percent of the units as affordable to lower income households, applicable to the following types of sites:
 Vacant sites being used to meet the RHNA adequate sites requirements that represent a “reuse” of sites identified in two or more previous and consecutive Housing Element cycles.  Nonvacant sites being used to meet the RHNA adequate sites requirements that represent a “reuse” of sites identified in the previous cycle of Housing Element.  Sites being redesignated/rezoned after the statutory deadline of the Housing Element to accommodate the RHNA shortfall. By-right approval of these sites would be triggered by the rezoning.

For the 6th Cycle Housing Element, the City does not anticipate the need to rezone sites or utilize any sites that may be considered reuse sites to meet its RHNA. “By-right” means a jurisdiction shall not require:
 A Conditional Use Permit;
 A Planned Unit Development Permit;
 Design review, other than Objective Development Design Standards; or  Other discretionary, local government review or approval that would constitute a “project” as defined in Section 2100 of the Public Resources Code (California Environmental Quality Act “CEQA”)

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Chapter 2.0 – Goals, Policies, and Programs 2-36
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Goal H2 Protect Affordable Housing and Improve the Housing Stock Policy 2.1: Maintain and encourage expansion of permanent residential housing stock in the Residential and Commercial Districts.

Program 2.1.A: Incentives for Mixed-Use Development - AFFH Quantified Objective: Five Moderate Income units (accounted for under Program 1.1.B and Program 1.1.D.)
Timeframe: Adopt Municipal Code amendments by June 2028 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Providing additional development capacity of any type increases project feasibility. In order to better incentivize affordable residential development, the City will amend the Municipal Code to increase the floor area bonuses from 0.15 to up to 25 percent 0.25 for projects in the CC, SC, and RC Districts that include housing for Moderate, Low , or Very-Low-income households. The City will also distribute informational materials promoting the floor area bonus and other applicable incentives.

Quantified Objective: 5 Moderate-Income units
Timeframe: Adoption of Municipal Code
amendments by December 2024 Responsible Party:

Community Planning and Building
Department
Funding
Source: General Fund (Formerly Program 3-2.1.a)
Program 2.1.B: Permanent Housing - AFFH
Quantified Objective: N/A
Timeframe: Continued ordinance implementation through December 2031 Responsible Party: Community Planning & Building Department/City Administrator Funding Source: General Fund
Short-term rentals can provide valuable coastal visitor-serving access; however, units used as shortshort-term rentals preclude the establishment of permanent housing. The City also has a significant percentage of the housing stock that remains vacant for part of the year due to second home ownership. This creates a significant barrier for current and potential residents to enter the local housing market and further limits opportunities to correct the housing crisis, address diversity, and provide inclusive housing options.

The City’s ordinance prohibiting short-term, transient rentals , fractional ownership, and timeshares of residential dwellings in the R-1 District and allowing a limited number of short-term rentals in the commercial areas has successfully limited the proliferation of these uses. The City will continue to implement these ordinances. In an effort to address the high rate of second home ownership, the City will promote Accessory Dwelling Units and Junior Accessory Dwelling Units (see Programs 1.3.C and

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Chapter 2.0 – Goals, Policies, and Programs 2-37
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

1.3.DProgram 1.1.G) to add affordable rental units on properties that may otherwise lie vacant, and will establish an Affordable Housing Trust Fund (see Program 2.1.D).

Quantified Objective: Preservation of permanent
housing and affordable units Timeframe:

Continued ordinance
implementation through June 2031
Responsible Party: Community Planning & Building
Department/City Administrator Funding Source: General
Fund
(Formerly Program 3-4.1.a)
Program 2.1.C: Monitor Affordable Housing Stock - AFFH
Quantified Objective: Monitor 50 lower income units
Timeframe: Develop a program by June 2026
Responsible Party: Community Planning and Building Department Funding Source: General Fund
The City will develop a City-managed Affordable Housing Oversight Program and continue to monitor affordable housing projects and work with the owners to preserve affordability through identification of funding sources and/or opportunities for partnerships with other housing providers. The program will formalize annual monitoring of the affordable housing stock throughout the city to ensure affordable housing is being protected and provided as required by California Government Code Section 65590. This may also include partnering with a qualified entity, like The Carmel Foundation, that already actively manages, monitors, and provides reporting for affordable housing units in the City. The City will update its databases to better track data on new construction, demolition, conversion , and replacement of housing units for lowLower- and moderate-income Moderate-income households including the following indicators:
 The number of new housing units approved for construction;  The number of lowLower- and moderate-income Moderate-income housing units required to be provided in new housing developments;
 The number of existing residential dwelling units occupied by lowLower- and moderateincome Moderate-income households that have been authorized to be demolished or converted; and
 The number of lowLower- and moderate-income Moderate-income housing units required to be replaced (of those units being demolished or converted).

Additionally, in compliance with AB 1397, the City will adopt a policy to require replacement housing units subject to the requirements of Government Code section 65915§65915, subdivision (c)(3) when any new housing development project occurs on a site meeting the any of the following conditions:

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Chapter 2.0 – Goals, Policies, and Programs 2-38
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 1) 1. The site currently has residential uses or within the past five years has had residential uses that have been vacated or demolished, 2) ;

2. The site was subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of Low or Very Low-income; or low or very low-income, 3) 3. The site is subject to any other form of rent or price control through a public entity’s valid exercise of its police power, or is occupied by Low or Very Low-income households.
4) is occupied by low or very lowincome households.

Quantified Objective: Monitor 50 Lower-Income
housing units
Timeframe: Develop program by June 2025
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-5.3.d: Monitor Affordable Housing Stock) Program 2.1.D: Establish Affordable Housing Trust Fund - AFFH Quantified Objective: $1 million
Timeframe: Establish a Fund by December 2026
Responsible Party: City Administrator
Funding Source: General Fund
The City currently relies on outside agencies and organizations to fund affordable housing projects.

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

Quantified Objective: $1,000,000
Timeframe: Establish Fund by June 2031 Responsible Party:

City Administrator
Funding Source: General Fund (NEW)

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Chapter 2.0 – Goals, Policies, and Programs 2-39
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 “I believe a vacancy tax should be proposed to the voters, which can go toward funding affordable housing. The City needs to frame affordable housing in a positive way. I feel like people's aversion to affordable housing in their communities is just a public relations failure." May 24, 2023 Housing Ad Hoc Committee Community Meeting Policy 2.2: Preserve and protect the scale of established neighborhoods while encouraging property improvement.

Program 2.2.A: Historic Preservation Educational Programs Quantified Objective: 25 referrals/materials distributed annually Timeframe: Continued education and ordinance implementation through December 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
Cities have unique characteristics that develop over time. Carmel-by-the-Sea has a distinctive building style design tradition and form that existing residents cherish and which that serves to attract new residents and visitors. In an effort to continue to encourage improvements to the existing housing stock, the City will continue to promote education programs that improve public understanding of the City’s rich cultural and design heritage, and provide zoning flexibility and incentives to facilitate rehabilitation of historic resources. The City will continue to use the Historic Building Code to facilitate residential rehabilitation of historic residences.

Quantified Objective: 50 Low Income rehabilitated historic units Timeframe: Continued education and ordinance
implementation through June 2031
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-4.3.a: Neighborhood Preservation Educational Programs)

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Chapter 2.0 – Goals, Policies, and Programs 2-40
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Policy 2.3: Preserve and expand affordable and rental housing opportunities to enable local employees to live in the community where they work.

Program 2.3.A: Preserve and Increase Upper Floor Residential Uses - AFFH Quantified Objective: These units are accounted for under Program 1.1.B (Development on Small Sites), Program 1.1.C (Live/Work Housing), and Program 1.1.D (Mixed-Income Incentives Program)
Timeframe: Proactive outreach through December 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
The retail and office landscape is shifting and the City continues to experience retail and office vacancies. This shift represents an opportunity to increase the supply of housing as a preferred development form in all Commercial Districts. The City currently prohibits the conversion of existing second-floor residential units to commercial use and requires all newly constructed second- secondfloor space to be used as residential units. Housing over first-floor commercial uses is a particularly suitable solution for underutilized second-floor space. Therefore, the City will proactively work with property owners to encourage the conversion of vacant or underutilized upper floors to residential use.

Quantified Objective: 5 Moderate and 110
Above Moderate-Income units Timeframe:

Proactive outreach
through December 2031 Responsible Party:

Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-2.1.b)
Policy 2.4: Preserve the existing housing stock
Program 2.4.A: Housing Rehabilitation and Maintenance Information - AFFH Quantified Objective: 25 referrals/materials distributed annually Timeframe: Proactive outreach through December 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
In order to To stay habitable and energy efficient, all buildings need maintenance. When buildings fall into an extreme state of disrepair, a more comprehensive housing rehabilitation procedure is needed.

Over the past few years, inflation and building supply chain issues have dramatically increased the cost of building materials. Labor costs have also risen significantly due to a shortage of skilled construction workers and ongoing cost-of-living increases. This results in very costly rehabilitation projects.

In order to assist low-income property owners, the City will distribute information on inspection services, housing rehabilitation programs, and alternative ways to finance home repairs. Based on Code Compliance reports, the City will specifically monitor and conduct outreach to owners of residential

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Chapter 2.0 – Goals, Policies, and Programs 2-41
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 units in need of rehabilitation and maintenance throughout the city with a focus on the southern region of the city.

Quantified Objective: 16 LowIncome rehabilitated units Timeframe: Proactive
outreach through June 3031
Goal H3 Provide Opportunities for New Affordable and Other Special Needs Housing
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Programs 3-1.1.a and 3-1.1.c Housing Rehabilitation and Housing Maintenance)
GOAL H3 PROVIDE OPPORTUNITIES FOR

NEW AFFORDABLE AND OTHER

SPECIAL NEEDS HOUSING
Policy 3.1: Incentivize affordable housing development, with an emphasis on affordable housing built to accommodate Extremely-Low and Low-Income Low-income residents. Encourage the private sector to produce affordable housing.

Program 3.1.A: Mixed-Use Affordable Housing - AFFH
Quantified Objective: 10 Low Income Units
Timeframe: Proactive outreach through December 2031; Revise guidelines and approval processes by June 2028
Responsible Party: Community Planning and Building Department Funding Source: General Fund
The shifting retail and office landscapes are shifting and this change landscape represents an opportunity to encourage mixed-use developments (housing over first-floor commercial uses) as a preferred development form via community outreach. The City will proactively work with property owners, property managers, and realtors to promote and incentivize upper-floor housing opportunities, including the potential of allowing a third-floor mezzanine for affordable housing. Such development would be subject to appropriate objective design standards, including the City’s 30-foot height limit.

The City has identified the following regional affordable housing organizations to include in the discussion of revising design guidelines to promote mixed-use affordable housing in the City.  County of Monterey Housing Authority Development Corporation (HDC);  Woodman Development Company, Inc.;

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Chapter 2.0 – Goals, Policies, and Programs 2-42
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025  Community Housing Improvement Systems and Planning Association, Inc. (CHISPA);  Eden Housing;
 EAH Housing; and
 Mid-Peninsula Housing.

Based on the feedback received by City Staff from the development community, the City will implement the following actions:
 Revise design guidelines based on community and developer feedback;  Revise approval processes if constraints are identified during feedback gathering; and  Annually host outreach and FAQ forums for developers and community members.

Quantified Objective: 10 lower-income units
Timeframe: Proactive outreach through June
2031; Revise guidelines and
approval processes by December
2027
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly 3-2.1.c: Incentives for Mixed Use Affordable Housing) Program 3.1.B: Housing for Extremely-Low Income Households - AFFH Quantified Objective: 2 Extremely Low Income Units
Timeframe: Outreach efforts ongoing through December 2031 Responsible Party: Planning and Building Department
Funding Source: General Fund
Providing housing units for Extremely-Low Income (ELI) Households earning 30 percent or less of the Area Median Income (AMI) for Monterey County has proved challenging for the City. The City will continue to place specific emphasis on the provision of multi-family multifamily housing and non- nontraditional housing types such as single-room-occupancy units and transitional housing. The City will encourage development of housing for ELI households through a variety of activities such as targeted outreach to for-profit and non-profit housing developers on at least an annual basis, providing in-kind technical assistance, fee deferrals, expedited/priority processing, identifying grant and funding opportunities, applying for or supporting applications for “I'm pretty passionate about affordable housing and diversity. I think that's what makes a community, and we do lack it. I have kids that live in the community and go to Carmel High School, and I would like to see more of a social, economic, and age difference in our community, personally."
May 24, 2023 Housing Ad Hoc Committee Community Meeting

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Chapter 2.0 – Goals, Policies, and Programs 2-43
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 funding on an ongoing basis, reviewing and prioritizing local funding for developments that include housing for ELI households , and/or offering additional incentives to supplement the density bonus provisions in state law.

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

Program 3.1.C: Density Bonus - AFFH
Quantified Objective:57 Extremely Low-Income units N/A
Timeframe:Fund Associate Planner through June Adopt Municipal Code amendments by December 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.4.b)
Program 3.1.C: Density Bonus - AFFH
Density bonuses can provide a significant incentive to build affordable housing units. By increasing the number of units permitted to be built on a property, the financial investment required to bring the development to fruition has a higher likelihood of a seeing a positive return. Given the high cost of materials, labor , and borrowing costs, increasing the number of units can make the housing project financially feasible.

The City’s Density Bonus provisions must be updated to reflect recent changes to State law.

Pursuant to Government Code Section 65915§§65915-65918, the City will amend the City’s Density Bonus provisions to be consistent with recent changes to State Density Bonus Law. Additionally, the City will further review and revise local bonus density ordinances to clarify the regulations and increase certainty of applicability.

Quantified Objective: 187 Lower-income units
Timeframe: Adoption of Municipal Code
amendments by December 2024 Responsible Party:

Community Planning and Building
Department
Funding Source: General Fund (Formerly Program 3-5.4.a: Density Bonus)

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Chapter 2.0 – Goals, Policies, and Programs 2-44
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Program 3.1.D: Reduced Entitlement and Development Fees - AFFH Quantified Objective: Reduced fees for developments with affordable units Timeframe: Adopt a Fee Schedule by July 2026
Responsible Party: Community Planning and Building Department Funding Source: General Fund
Entitlement and development fees paid by project applicants assist in the City’s ability to recover administrative and operating costs; however, these fees may have the unintended consequence of increasing the cost of housing. To encourage the development of affordable housing, the City will waive the parking in-lieu reduce the planning and building permit fees for affordable housing units and reduce the planning and building permit fees by up to 25 percent for affordable housing units in commercial areas.

Quantified Objective: Reduced City fees by 25 percent for developments with affordable units
Timeframe: Adopt Fee Schedule by July 2025
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-5.5.a: Reduced Entitlement and Development Fees) Program 3.1.E: Reduced Parking Requirements - AFFH
Quantified Objective: N/A
Timeframe: Adopt Municipal Code amendments by June 2026 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Carmel Municipal Code Chapter 17.38, Off-Street Parking Requirements, Table A: Minimum Parking Requirements provides parking factors for land uses by zoning district. In the Central Commercial (CC), Service Commercial (SC), Residential and Limited Commercial (RC) and Multi-Family Residential (R-4) districts, the parking requirement for affordable housing is one-half space per unit. For senior housing, it is one-third space per unit plus 1 guest space for every 4 units. Other permanent residential uses are required to provide 1 parking space per unit in the SC District, and 1.5 spaces in the RC and R4 Districts. No parking is required in the CC District.

Parking The City recognizes that parking requirements increase costs to the cost of residential development and take up valuable space that can be used for housing, and has maintained a low parking ratio for residential uses. The City will continue to offer reduced parking requirements for affordable housing developments. Additionally, the City will waive the parking in-lieu fees for affordable units, clarify the program requirements in the Central Commercial (CC) zoning district, and reduce parking requirements in the Multi-Family Residential (R-4), Residential & Limited Commercial (RC), and Service Commercial (SC) zoning districtsclarify that affordable units are exempt from parking in-lieu fees.

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Chapter 2.0 – Goals, Policies, and Programs 2-45
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Quantified Objective: Reduced parking for developments
with affordable units Timeframe: Adoption of
Municipal Code amendments by December 2024
Responsible Party: Community Planning and Building
Department
Funding Source: General Fund
(Formerly Program 3-5.5.b: Reduced Parking Requirements) Program 3.1.F: Expedited Processing Procedures - AFFH
Quantified Objective: N/A
Timeframe: Hire a consultant by December 2026; Adopt Municipal Code amendments by June 2027
Responsible Party: Community Planning and Building Department Funding Source: General Fund
Faster permit processing times reduce overall project timelines and allow a project to get to the construction stage in a timely manner. Reducing overall project timelines is critical during this inflationary period where materials and labor costs continue to rise. Additionally, supply chains still have not recovered to pre-pandemic levels and delays in processing can also result in delays in placing orders and receiving materials and securing labor.

To enable a more efficient permit processing system, the City is committed to contracting with a qualified consultant to review the Planning Division’s current permitting procedures to identify inefficiencies and make recommendations on process improvements to streamline the permitting process. Based on the consultant’s recommendations, the City will update existing permitting procedures , including , but not limited to , the following:
 Implement concurrent permit processing for projects that incorporate several land uses or features that would typically require two or more permit applications, to be concurrently reviewed and approved or disapproved by the highest-level review authority or joint meetings. This will expedite the review process for complex development projects.  Allow an option for affordable multi-family multifamily projects to utilize 3-D modeling or other comparable methods, in lieu of story poles, that provide objective information for the City to assess impacts of development on important coastal scenic view resources;.  Prioritize projects with affordable units, assign a dedicated planner to facilitate the development process, and schedule joint public hearings when multiple decision-making bodies are involved.

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Chapter 2.0 – Goals, Policies, and Programs 2-46
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Program 3.1.G: Establish Minimum Densities - AFFH
Quantified Objective:Shorter processing times by 50 percent for developments with affordable units N/A
Timeframe:Hire consultant by December 2024; Adoption of Adopt Municipal Code amendments by June 20262028
Responsible Party: Community Planning and Building Department Funding Source: General Fund
development in the City’s Commercial District have ranged in densities from 22-33 dwelling units per acre.
(Formerly Program 3-5.5.c: Expedited Processing Procedures) Program 3.1.G: Establish Minimum Densities and Ministerial Approval Process - AFFH
Establishing a minimum density can be utilized as a tool to ensure the limited available land in a City is used in an efficient manner and lower densities are avoided. The City’s intention for establishing a minimum density in the Commercial and Multi-Family Residential Districts is rooted in enabling the development of more dense housing in the City. Currently, the Commercial District (CC, SC, RC, and CCRC) permits residential densities of 0-22 dwelling units per acre and the Multi-Family Residential District (R-4) permits a maximum of 33 dwelling units per acre. Effectively, establishing Establishing a minimum density in these districts will result in higher yields of residential units. Recent residential developments in the City’s Commercial District have ranged in density from 22-33 dwelling units per acre. The City will revise the Municipal Code for commercial districts (RC, SC, and CC) and the multifamily residential (R-4) district CC, SC and RC) and the Multifamily Residential (R-4) District to establish a minimum density of 33 22 dwelling units per acre, as part of the base zoning and a maximum allowable density of 40 units per acre, with a total maximum capacity of 88 units per acre, inclusive of all local and State density bonuses. Additionally, the City will restrict prohibit new singlefamily development in the R-4, CC, RCSC, and SC RC Districts. Existing single-family dwellings in these districts will be considered legal nonconforming uses. Recognizing that there is a need for housing to accommodate families, and to try and increase the mix of housing types, the City will pursue options for incentivizing the development of two- and three-bedroom units.

In addition, and in compliance with Government Code 65583.2(h)(i), sites identified in the site inventory to accommodate the lower-income RHNA category, are subject to by-right development, requiring no discretionary review. By-right means a jurisdiction shall not require:

1. Conditional Use Permit;

2. Planned Unit Development Permit;

3. Design review, other than Objective Development Design Standards; or

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Chapter 2.0 – Goals, Policies, and Programs 2-47
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025

4. Other discretionary, local government review or approval that would constitute a “project” as defined in Section 2100 of the Public Resources Code (California Environmental Quality Act “CEQA”)
The City is committed to modifying development standards in the commercial and multi-family districts to ensure the standards support the minimum density and do not function as a constraint to meeting the minimum density, as necessary.

Quantified Objective: 14 Extremely Low, 14 Very Low, 11 Low, 22 Moderate, and 110 Above ModerateIncome units
Timeframe: Adoption of Municipal Code
amendments by December 2024 Responsible Party:

Community Planning and Building
Department
Funding
Source: General Fund (NEW)
Policy 3.2: Recognize the special needs of persons with disabilities and the need to retain flexibility in the design review process to accommodate these needs.

Program 3.2.A: Reasonable Accommodation Procedures - AFFH Quantified Objective: Process 8 applications
Timeframe: Adopt a revised policy and Municipal Code amendment by December 2025
Responsible Party: Community Planning and Building Department Funding Source: General Fund
A reasonable accommodation is any change, exception , or adjustment to a rule, policy, practice or service that allows a person with a disability to have an equal opportunity to participate. Information on reasonable accommodation procedures will continue to be provided at City Hall and on the City’s website. The City will evaluate and revise As of September, 2025 the City is already underway evaluating and revising Policy C11-01, which describes procedures to provide reasonable accommodation , and will explore has explored reduced or waived permit fees for persons with disabilities in compliance with the provisions of SB 520, in an effort to remove any additional barriers and encourage those with disabilities to apply. Initial conversations with the Planning Commission and City Council have been supportive of revising the policy. To eliminate subjectivity from the required findings for requests for reasonable accommodation, 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.” and develop a finding to allow for the reasonable accommodations that adequately addresses the need with the least intrusive impacts.

Further, the City will amend the definition of aggrieved parties and the appeal process in the Municipal Code. An exception for reasonable accommodation appeals will limit the parties eligible to appeal a

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Chapter 2.0 – Goals, Policies, and Programs 2-48
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 request for a , to ensure that appeals of reasonable accommodation permit to the applicant or the personal beneficiarypermits do not create an undue additional barrier.

Quantified Objective: 8 applications
Timeframe: Adoption of revised policy and Municipal
Code amendment by June 2025
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-5.1: Reasonable Accommodation Procedures) Program 3.2.B: Housing Mobility - AFFH
Quantified Objective: 78 live/work units (Program 1.1.C); 18 mixed income units (Program

1.1.D); 65 units on religious properties (Program 1.1.E); and 161 units through Hotel to Residential Conversion (Program 1.1.F); 5 hotel employee housing (Program 1.1.G); and 70 ADUs (Program 1.1.H) Timeframe: December 2027
Responsible Party: Community Planning and Building Department Funding Source: General Plan
The City of Carmel-by-the-Sea is committed to promoting a diverse array of housing options for all income groups throughout the community. To improve housing mobility and promote more housing choices and affordability throughout Carmel-by-the-Sea, the City will employ a suite of actions to be targeted in lower density areas, including outreach, resources, and other strategies with an overall goal of expanding housing opportunities affordable to extremely low, very low, low, and moderate-income households. This initiative strategies to create and/or enhance opportunities in various neighborhoods, including in lower density neighborhoods and in downtown Carmel. This initiative represents an effort to increase housing mobility, and extends beyond programs to meet the City's RHNA in an effort to increase housing mobility. Actions and strategies are detailed in individual programs above and include:

1. Religious institution/faith-based sites: the City will Facilitate housing on religious institution/faith-based sites. Consistent with AB 1851 and AB 2244, the City will amend the Zoning Ordinance to allow religious institution-affiliated housing development projects by- right as an accessory use to a permitted religious institution use, allow these uses at densities up to 33 dwelling units per acre, and update the parking requirements consistent with State law. The City commits to modifying standards and making other modifications as needed to achieve the maximum allowed densities. If no application for housing on a religious institution/faith-based site is received by December 2025, the City will expand outreach efforts to be

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Chapter 2.0 – Goals, Policies, and Programs 2-49
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 conducted annually. This may include direct mailings to faithbased sites highlighting current successful affordable housing units on other faith-based sites, as well as available City grants and loans for such housing and human services endeavors. See Program

1.1.D.
 2.Homesharing: Research and pursue a homesharing program, including coordination with non-profits and other organizations to assist with matching tenants with existing homeowners. The City may provide collaborators with data about single-family homes with long-time residents, Typically, homesharing is a service provided by nonprofit organizations to assist in matching a homeowner with a tenant. This homesharing process can also include helping homeowners rent out their ADUs. The process of identifying and screening potential tenants, developing lease agreements, and understanding the rights and responsibilities of being a landlord can be onerous. The City may facilitate presentations at The Carmel Foundation Senior Center, and other outreach assistance. The City will market and take other actions as necessary , at least annually , with the goal of generating five opportunities per year.

2. Accessory dwelling units (ADUs) and other "missing middle" housing in lower-density zones: Prepare pre-approved ADU building plans, Publicize ADU and JADU incentives such as reduced permit fees (as established in Program 1.3.C). City will provide information about Government Code 65852.21 and
66411.7 (urban lot splits and two-unit developments), including the relevant objective design standards and streamlined review available for such units, with a target of one application for an additional housing unit each year, the City will provide information that homeowners associations and CC&Rs are
preempted by state law and cannot prohibit ADUs or JADUs.  Program 1.1.C: Live/Work Housing
 Program 1.1.D: Mixed-Income Incentive Program
 Program 1.1.E: Affordable Housing on Religious Facility Properties  Program 1.1.F: Hotels to Residential Development
 Program 1.1.G: Hotel Employee Housing
 Program 1.1.H: Accessory dwelling units (ADUs)
 4.Marketing of housing resources and opportunities: Provide housing resources and information available through various City and regional in-person and virtual outlets . The City will provide this information in multiple languages based on U.S. Census Bureau's

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Chapter 2.0 – Goals, Policies, and Programs 2-50
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 American Community Survey indicating the languages spoken by Carmel-by-the-Sea residents., as indicated in the U.S. Census Bureau's American Community Survey.

Program 3.2.C: Family Friendly Housing – AFFH

3. Local Universal Design Ordinance: Adopt a local Universal Design Ordinance applicable to single-family, duplex, and triplex projects. See Program 3.2.C.

4. Additional Housing Opportunities: Adopt an ordinance to zone certain parcels for up to 10 units of residential density if located in either a transit-rich area or an urban infill site consistent with Government Code Section 65913.5 (SB 10). The ordinance will include a map demarcating the parcels subject to this upzoning.

The City will adopt this ordinance no later than December 2025.

The objective is to provide opportunities for at least an additional 20 units through this zoning ordinance. See Program

1.3.I.

Quantified Objective:Provide 75 affordable housing opportunities by January 2031. 5 Very Low, 5 Low, 5 Moderate Income Units
Timeframe: Develop Regulatory Incentive (June 2028); Implement Family Friendly Design Guidelines (June 2028)
Timeframe: Annually review overall progress and
effectiveness in April and include
information in annual report to HCD. If the
City is not on track to achieve development
of 75 affordable housing units beyond the
RHNA goal for the 8-year planning cycle
by 2027 (i.e., 37 units built or in process by
2027), the City will consider alternative land
use strategies and make necessary
amendments to zoning or other land use
documents to facilitate a variety of housing
choices, including but not limited to,
strategies that encourage missing middle
zoning (small-scale multi-unit projects up
to four-plexes) in addition to lot
splits/additional housing units; adaptive
reuse, and allowing additional ADUs
and/or JADUs, within six months, if
sufficient progress toward this quantified
objective is not being met.

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Chapter 2.0 – Goals, Policies, and Programs 2-51
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(New)
Program 3.2.C: Local Universal Design Standards – AFFH
Universal design is the design of products and environments to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design. To ensure accessible housing for all residents, the City will develop Universal Design Standards that incorporate accessibility design features that exceed current California Building Code requirements.

Quantified Objective: N/A
Timeframe:Adoption of Universal Design Standards by June 2026 Responsible Party:

Community Planning and Building Department
Funding Source: General Fund
(Formerly Program 3-5.1: Reasonable Accommodation Procedures) Carmel-by-the-Sea is suffering from a rapid and accelerating decline in the number of families with children living within the village. Between 2012 and 2023, the number of students from Carmel-by-theSea attending Carmel River School (the local public elementary school) declined from 270 to 129.

Similarly, from 2016 to 2024, the number of students from Carmel-by-the-Sea attending Carmel Middle School and Carmel High School declined from 53 to 27 and from 90 to 47, respectively. Overall, between 2015 and 2024 the median age of residents increased from 53 to 65.

Program 3.2.D: Family Friendly Housing – AFFH
Promote multi-family housing designs and unit mix to attract multigenerational To counter this trend, the City will promote multifamily housing designs to attract households with children and larger multigenerational households by encouraging developers to include housing features and more bedrooms unit mixes with higher bedroom counts (including four-bedroom units), as well as other family friendly features and on-site amenities, such as usable outdoor open space for multigenerational use, and multipurpose rooms that can be used for after-school homework clubs, computer, art, or other resident activities. To boost the number of families with children residing in the village and to address potential displacement of households with four or more persons, the City will research options to expand regulatory create incentives to encourage the development of larger units with multiple bedrooms.

Quantified Objective: 15 two-, three-, and four-bedroom units entitled; 15 family friendly designated units
Timeframe: Develop Regulatory Incentive (MidTerm); Implement Family Friendly Design Guidelines (Ongoing)

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Chapter 2.0 – Goals, Policies, and Programs 2-52
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(Formerly Program 3-5.1: Reasonable Accommodation Procedures) Policy 3.3: Facilitate the provision of transitional and supportive housing in appropriate districts in the community.

Program 3.3.A: Zoning for Transitional and Supportive Housing - – AFFH Quantified Objective: N/A
Timeframe: Adopt Municipal Code amendments by June 2026 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Senate Bill (SB) 2 (2007) revised Housing Element law requiring that transitional and supportive housing be permitted as a residential use, subject only to restrictions that apply to other residential dwellings of the same type in the same zone. In compliance with SB 2, the City will continue to allow transitional/supportive housing as a residential use. 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 R4 Districts, regardless of the number of persons in the facility.

Program 3.3.B: Low-Barrier Navigation Centers – AFFH
Quantified Objective: N/A
Timeframe: Adoption of Adopt Municipal Code amendments by December 2024 June 2026
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.8: Zoning for Transitional and Supportive Housing) Program 3.3.B: Low-Barrier Navigation Centers - AFFH
Assembly Bill (AB) 101 (2019) provides a pathway to permanent housing for people experiencing homelessness. A “Low Barrier Navigation Center” is a housing first, low-barrier, service-enriched shelter focused on moving people into permanent housing. The shelter provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter, and housing. In order to comply with state law, the City will amend the Municipal Code to include the definition for of a “Low Barrier Navigation Center” and will develop By Right procedures for processing low barrier navigation centers.

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Chapter 2.0 – Goals, Policies, and Programs 2-53
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Program 3.3.C: Unlicensed Residential Care Facilities – AFFH Quantified Objective: N/A
Timeframe: Adoption of Adopt Municipal Code amendments by December 2024 Amendments by June 2026
Responsible PartyAgency: Community Planning and Building Department Funding Source: General Fund(NEW)
Program 3.3.C: Unlicensed Residential Care Facilities
State law requires local governments to treat licensed residential care facilities (e.g. group homes) with six or fewer residents as a residential use and subject to the same development standards as a singlefamily dwelling. Furthermore, no conditional use permit, variance, or other zoning clearance shall be required of a residential care facility that serves six or fewer persons that is not also required of a singlefamily dwelling of the same type in the same zone. The residents and operators of a residential care facility shall be considered a family for the purposes of any law or zoning ordinance that relates to the residential use of a property. However, “six or fewer persons” does not include the operator, the operator’s family, or persons employed as staff. These facilities are licensed and regulated by the State of California.

The City defines Residential Care Facilities as facilities that require or are licensed by the State of California to provide living accommodations and 24-hour, primarily nonmedical 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.

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 apply to other family residential dwellings in the CC, SC, and RC Districts. In the R-1 District, they are permitted in 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.

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Chapter 2.0 – Goals, Policies, and Programs 2-54
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Recognizing that larger facilities provide necessary supportive environments for a variety of households, the City will amend the Zoning Ordinance to conditionally permit unlicensed facilities of seven or more persons in all zones that allow similar residential uses.

Program 3.3.D: Single Room Occupancy (SRO) Units – AFFH Quantified Objective:Amend the Zoning Ordinance to conditionally permit unlicensed residential care facilities of seven or more persons in all zones that allow similar residential uses N/A
Timeframe: Adopt Municipal Code Amendments by June 2026 Timeframe:Amend the Zoning Ordinance by December 2024 Responsible AgencyParty:

Community Planning and & Building Department
Funding Source: General Fund
(NEW)
Program 3.3.D: Single Room Occupancy (SRO) Units
Government Code §65583 and §65583.2 require that a city plan for a variety of housing types, including single-room occupancy units or SROs. An SRO consists of a single room dwelling unit that is the primary residence of its occupant(s). One example of an SRO could be the proposed Live/Work units in Program 1.1.C. To support the creation of SROs, the City will take the following actions:
 Adopt a definition of “single room occupancy unit” in the Carmel Municipal Code.  The Carmel Municipal Code will be amended to permit single-room occupancy units Amend the Carmel Municipal Code to identify the districts where SROs would be permitted as a residential use subject only to those regulations that apply to other residential dwellings of the same type in the same zone. As such, City staff will complete the following schedule of actions to amend the Municipal Code:The City may adopt specific, objective development standards applicable to SROs such as maximum number of occupants, minimum or maximum unit size, and requirements relating to food preparation facilities, and sanitation facilities.

Goal H4 Exemplify Sustainable Development and Energy Conservation

1. Draft a definition for "single room occupancy unit" to add to the zoning ordinance consistent with the
Government Code (November 2024)

2. Propose the zoning change amendment to the City Council for approval (December 2024) Quantified Objective: N/A
Timeframe: Adopt Ordinance by December 2024
Responsible Party: Community Planning &
Building Department Funding Source:General Fund
(NEW)

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Chapter 2.0 – Goals, Policies, and Programs 2-55
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 GOAL H4 EXEMPLIFY SUSTAINABLE

DEVELOPMENT AND ENERGY

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

Program 4.1.A: Water Conservation - AFFH
Quantified Objective: 25 referrals/materials distributed annually Timeframe: Implement the water management program through December 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Potable Even with a recent allocation of water from the Monterey Peninsula Water Management District (MPWMD), potable water remains scarce a finite, and highly tightly regulated resource in the City and continues to be a major limiting constraint to new developmentCalifornia at large. In order to preserve To responsibly allocate the City’s limited water allocation for to maximize as many new residential units as possible, the City will continue to enforce implement the Water Management Program (Carmel Municipal Code Chapter 17.50) through the building permit process, establish the Water Distribution Policy, and provide information to the community on water conservation retrofits and best practices. In addition, the City will provide information on and promote water conservation education through outreach and community engagement, and retrofit rebates provided by the Monterey Peninsula Water Management DistrictMPWMD.

Program 4.1.B: Energy Conservation and Green Building
Quantified Objective: Promote water conservation in 100 existing units Timeframe:Adoption of policy by June 203125 referrals/materials distributed annually Timeframe: Continued education and compliance through December 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly 3-5.6.b Water Conservation)
Program 4.1.B: Energy Conservation and Green Building
Conserving energy to reduce stress on the electrical grid and reduce the effects of climate change (i.e. wildfire and flooding) is increasingly critical. The City experienced significant power outages during the 2022-23 winter storms, adjacent areas were flooded, and the past few wildfire seasons have significantly impacted air quality and resulted in evacuations of neighboring communities. The City will continue to review applications for new construction and substantial alterations, taking into consideration solar orientation and access to sunlight. The City will also continue to require compliance with current state

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Chapter 2.0 – Goals, Policies, and Programs 2-56
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 building standards for energy efficiency in all new homes. The City will further disseminate information by updating the website annually with related energy conservation and green building information.

The City also participates in the Community Wildfire
Protection Program and is committed to implementing
Program recommendations.Quantified Objective:

Promote energy conservation in 100 existing units
Timeframe: Continued education and
compliance through June 2031 Responsible Party:

Community Planning and
Building Department Funding Source: General Fund
(Formerly Program 3-5.6.a: Energy Conservation and Green Building) GOAL H5 PUBLICIZE HOUSING NEEDS AND RESOURCES
Goal H5 Publicize Housing Needs and Resources
Policy 5.1: Support and enforce fair housing laws. Expand fair housing choice by promoting housing opportunities and removing impediments to fair housing.

Program 5.1.A: Fair Housing Services - – AFFH
Quantified Objective: 25 referrals/materials distributed annually Timeframe: Proactive outreach through December 2031
Responsible Party: Community Planning and Building Department Funding Source: General Fund
The Fair Housing Act protects people from discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance, or engaging in other housing-related activities. The California Department of Fair Employment and Housing and the Conflict Resolution and Mediation Center of Monterey County provide fair housing services and information. These agencies advise persons in need of information on housing and employment, mediate landlord/tenant disputes and research complaints about discriminatory housing practices. The City shall will coordinate with these agencies to provide printed information about fair housing services at City Hall, on the City’s website, and in other public buildings such as the City’s two libraries. The City shall will also refer inquiries related to fair housing to these agencies and provide fair housing resources at outreach events.

Program 5.1.B: Housing Choice Voucher Program – AFFH
Quantified Objective: 25 referrals/materials distributed annually Timeframe: Proactive outreach through June December 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.7: Fair Housing Services)

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Chapter 2.0 – Goals, Policies, and Programs 2-57
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Program 5.1.B: Housing Choice Voucher Program - AFFH
Created by the Housing and Community Development Act of 1978, the Housing Choice Voucher program, formerly known as Section 8, provides assistance to eligible Low- and Moderate-Income families to rent housing in the private market. Eligibility for this program is based on the family’s gross annual income and family size. The Housing Choice Voucher rental assistance program is administered by the Housing Authority of the County of Monterey County. The City will continue to facilitate use of the Housing Choice Voucher program in the community by distributing information for the program at City Hall and the Library and making referrals to the Housing Authority.

Program 5.1.C: Shared Housing Information – AFFH
Quantified Objective:40 25 referrals/materials distributed annually Timeframe: Proactive outreach through June December 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.3.b Section 8 Rental Assistance)
Program 5.1.C: Shared Housing Information - AFFH
Shared housing is another important tool to provide affordable housing unitsoptions. Shared housing is generally more affordable because a portion of a residence is rented as opposed to an entire unit.

Shared housing can provide safe and secure affordable housing in a high-cost market. This model can also financially help low-income individuals who own their homes and alleviate loneliness. Benefits to Low-Income individuals include provision of safe and secure affordable housing in a high-cost market, while alleviating loneliness. The City will continue to distribute informational materials from the Monterey County Housing Authority of the County of Monterey and the The Carmel Foundation, and will display information at City Hall and , other public buildings , and posted on the City’s website. The City will also seek out other Shared Housing shared housing providers and resources to expand this housing option.

Program 5.1.D: Farmworker Housing – AFFH
Quantified Objective:80 referrals/website visits N/A
Timeframe:Proactive outreach through June 2031 Ongoing
Responsible Party: Community Planning and Building Department Funding Source: General Fund
(Formerly Program 3-5.2: Shared Housing Information)
Program 5.1.D: Farmworker Housing – AFFH
Although the City does not have agricultural uses, and therefore, no housing designated specifically for farmworkers —the Although the City does not have agricultural uses, and therefore, no housing designated specifically for farmworkers, the City supports the County of Monterey’s efforts to educate

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Chapter 2.0 – Goals, Policies, and Programs 2-58
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 the public on resources that are available for agricultural workers. The City has identified the following resources that are available throughout the region for agricultural employees:
 Spanish Farmworkers Resource Line – provides information on a variety of issues resources such as legal help and medication services, stress management, resources support for farmworkers with disabilities, etc.
 The Center for Community Advocacy – an organization whose mission is to support and build leadership within the community and in particular for farmworkers and their families. The Center has worked side by side with farmworkers to help improve their living conditions, and advocate to have for more affordable housing and access to health services and resources.
 Farm and Food Worker Relief Program – Catholic Charities Diocese Monterey is providing direct financial relief to eligible farmworkers in the counties of Monterey, Santa Cruz, San Benito, and San Luis Obispo. The purpose of this program is to provide direct financial relief to eligible field workers, meatpacking workers, livestock workers, and grocery store workers.

Quant
ified
Objec
tive:

N/A
Timef
rame: Ongoing
Responsible Party: Community Planning
and Building Department Funding Source:

General Fund
(NEW)
Policy 5.2: Promote public awareness and foster pride in the history of the village.

Program 5.2.A: Support Community Organizations - – AFFH Quantified Objective: N/A
Timeframe: Proactive outreach and partnerships through December 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Community organizations play a pivotal role to provide outreach and services to those facing housing issues. The City will continue to support neighborhood community organizations that promote neighborhood involvement, safety and improvement, including but not limited to the Carmel Residents Association, the The Carmel Foundation , and the Carmel Heritage Society. The City will develop partnerships with these organizations to promote neighborhood enhancement programs, conduct and improve outreach and education, and solicit community input.

Quantified Objective: N/A

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Chapter 2.0 – Goals, Policies, and Programs 2-59
Carmel-by-the-Sea 6th Cycle Housing Element Update Adopted November 2025 Timeframe: Proactive outreach and
partnerships through June 2031 Responsible Party:

Community Planning and
Building Department Funding Source:

General Fund
(Formerly Program 3-4.2.b: Support Neighborhood Organizations)

2.5 Summary of Quantified Objectives
Table 2-1 - Quantified Objectives (2023-2031)
Program
Extremely
Low Very Low Low Moderate
Above
Moderate Total

1.1.A: Adequate Sites 113 74 44 118 349

1.1.B: Development on Small Sites 2 2 2 12 18

1.1.C: Live/Work housing 8 35 35 78

1.1.E: Affordable Housing on Religious
Facility Properties
6 29 30 65

1.1.F: Hotel-to-Residential Conversion 40 40 40 41 161

1.1.G: Hotel Employee Housing 5 5

1.1.H: Accessory Dwelling Units 7 14 21 21 7 70

1.2.A: Water Distribution Prioritization for
Affordable Housing
13 98 113 50 59 333

3.1.A: Mixed Use Affordable Housing 10 10

3.1.B: Housing for Extremely Low Income
Households
2 2

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Goals, Policies, and Programs 2

CHAPTER
ATTACHMENT 3

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Chapter 2.0 – Goals, Policies, and Programs 2-ii
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Table of Contents

2.0 Goals, Policies, and Programs ....................................................................................................................................... 2-1

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

2.2 AFFH in the 6th Cycle ........................................................................................................................................ 2-2

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

2.4 Goals, Policies, and Programs ........................................................................................................................... 2-3

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Chapter 2.0 – Goals, Policies, and Programs 2-1
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025

2.0 Goals, Policies, and Programs

2.1 Introduction
Under state Housing Element Law, the City is responsible for enabling the production of housing by reducing regulatory barriers, providing incentives, and supporting programs that create or preserve housing, especially for vulnerable populations. To enable the construction of quality housing, the City has identified the following goals:
 Goal H-1 Facilitate Housing Construction
 Goal H-2 Protect Affordable Housing and Improve the Housing Stock  Goal H-3 Provide Opportunities for New Affordable and Other Special Needs Housing  Goal H-4 Exemplify Sustainable Development and Energy Conservation  Goal H-5 Publicize Housing Needs and Resources
The City’s demographic and housing needs assessment, which included an analysis of factors contributing to housing disparities, played a major role in informing program development. Highlights include: the predominant age group in 2019 was between 65 to 74 years of age; the population was composed of over 85 percent White individuals; the unemployment rate was 0.1 percent; abovemoderate income households made up the majority of households at 62 percent; and 57 percent of total households were owner occupied and 43 percent renter occupied. Of note, 23 percent of households are cost burdened and a further 23 percent are severely cost burdened. Detailed information is provided in Appendix A.

The majority of the sites identified in the Sites Inventory were not identified in the 5th Cycle Housing Element. The policies and programs below are intended to reduce the regulatory barriers to redevelopment of these sites and to demonstrate that the City is taking measures to ensure construction of more units in the 6th Cycle.
2025 Amendment Process
The 6th Cycle Housing Element (2023-2031) for Carmel-by-the-Sea was adopted on April 8, 2024 and deemed in substantial compliance with State law by the State HCD on April 25, 2024. Beginning in Summer 2024, the City of Carmel-by-the-Sea began exploring strategies to further enhance the City’s ability in delivering affordable housing opportunities throughout the community, and developing alternative strategies that present near-term potential for affordable units. These efforts culminated in the amendment to the adopted Housing Element.

The City is proud of the policies and programs that follow below. They represent an honest desire by both the local government and residents of Carmel to create real affordable housing opportunities in what, by all accounts, is an unaffordable place to live. This shared desire is evidenced by how these policies and programs came together. Of course, creation of the 6th Cycle Housing Element included all ATTACHMENT 3

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Chapter 2.0 – Goals, Policies, and Programs 2-2
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 of the requisite community meetings (over 14) and outreach (e.g., tabling at the City’s farmer’s market), which yielded a wealth of feedback that helped to shape the City’s approach. However, this Housing Element also benefited from something uniquely Carmel – a highly motivated group of residents willing to learn and be deeply involved in crafting policies that will actually work. Concerned about the housing challenges confronting the village, these residents partnered with City staff in an effort to help the City find creative solutions tailored to Carmel’s unique circumstances. Calling themselves the Affordable Housing Alternatives Group, or “AHA”, the AHA Group provided literally thousands of volunteer hours, met with City staff on a weekly basis, leveraged community connections to identify property owner interest, attended meetings with HCD, and genuinely dedicated themselves to finding housing solutions with the best chance of becoming reality. The list of direct positive contributions from the AHA Group is long. One of their most notable contributions was the ‘safari’ effort, which is likely one of the most unique l community-driven Housing Element research projects ever undertaken. The safaris were a highly organized, boots-on-the-ground effort in which 17 volunteers canvassed the commercial district of the City to collect data on every property and leasable space in downtown Carmel. These volunteers, utilizing a mobile app set up by a lead AHA member, catalogued 218 properties and nearly 1,000 leasable spaces, collecting unique data for each site, such as current use, vacancy status, and property condition, to help better understand housing development potential.

2.2 AFFH in the 6th Cycle
This section provides an overview of how the City of Carmel-by-the-Sea is working to affirmatively further fair housing in the community and in the broader Monterey Bay Area.

Affirmatively Furthering Fair Housing
The 6th Cycle Housing Element Update process includes a new state mandate to address historic patterns of economic and racial segregation. In 2018, the California Legislature passed legislation requiring communities in California to take proactive steps to affirmatively further fair housing (AFFH). The 6th Cycle Housing Element is the first time that the City of Carmel-by-the-Sea has addressed AFFH. Affirmatively furthering fair housing is defined specifically as taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity by replacing segregated living patterns with truly integrated and balanced living patterns; transforming racially and ethnically concentrated areas of poverty into areas of opportunity; and fostering and maintaining compliance with civil rights and fair housing laws.

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Chapter 2.0 – Goals, Policies, and Programs 2-3
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Contributing Factors
The following contributing factors that impact fair housing and affirmatively furthering fair housing (AFFH) within the City were identified and prioritized as follows.

High Priority
 Lack of affordable housing;
 Lack of adequate housing stock that meets the needs of residents;  Jobs-worker imbalance;
 Lack of accessible units for individuals with disabilities;  Lack of Transitional and Supportive Housing/Emergency Shelters;  Lack of developable land and additional coastal zone regulations;  Lack of racial and ethnic diversity within the City; and  Cost of land, materials, and labor, which drive up the cost of housing development.

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

The City of Carmel-by-the-Sea is adopting new policies and programs through the update of this 6th Cycle Housing Element to align with the state’s new AFFH mandate. Policies and programs that support this alignment are identified with the letters “AFFH.” More detailed AFFH information can be found in Appendix A. 2.3 Program Overview and Quantified Objectives Quantified Objectives estimate the number of units likely to be constructed, rehabilitated, or preserved, by income level, during the planning period. The Quantified Objectives are not required to match the City’s Regional Housing Needs Allocation (RHNA). They are a goal for the jurisdiction to work towards, based on identified needs constraints, and available resources. These objectives will focus communication between the City and HCD vis-a-vis future Annual Progress Reports (APRs). HCD does not require that all objectives must be met; instead, these objectives create a framework for evaluating program effectiveness, so the City can make informed determinations as to whether it should continue, modify, or eliminate programs in the next Housing Element update cycle.

2.4 Goals, Policies, and Programs
The purpose of this section is to set forth goals, policies, and programs to further the development of housing for households of all income levels in the community. The Implementation Programs listed below provide a work plan for programs to ensure timely implementation and tracking. The following programs will be implemented city-wide, unless otherwise specified below.

Community input has always been an integral part of crafting public policy in the City of Carmel-bythe-Sea. The development of the 6th Cycle Housing Element was no exception. The policies and ATTACHMENT 3

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Chapter 2.0 – Goals, Policies, and Programs 2-4
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 programs below were informed by feedback received through community outreach events, correspondence with individual residents, over a dozen formal public meetings, and direct input from the AHA resident volunteer group. These programs and policies represent the desire of the residents of Carmel to create high quality affordable housing within the City.

Goal H1 Facilitate Housing Construction
Policy 1.1: Ensure adequate sites are available to meet the City’s projected housing growth needs.

Program 1.1.A: Adequate Sites
Quantified Objective: 113 Very Low, 74 Low, 44 Moderate, and 118 Above Moderate income housing units
Timeframe: Maintain adequate sites to meet the RHNA through December 2031 Responsible Party: Community Planning and Building Department Funding Source: General Fund
The City has a Regional Housing Needs Allocation (RHNA) of 349 units, of which 187 units must be affordable to lower income households, 44 units must be affordable to Moderate income households, and 118 units must be made available as Above Moderate income units.

The Sites Inventory identifies adequate sites to meet the City’s RHNA throughout the planning period.

Program 1.1.B: Development on Small Sites - AFFH
Quantified Objective: 2 Very Low, 2 Low, 2 Moderate, and 12 Above Moderate Income Housing Units (these units are also accounted for under Program 1.1.D)
Timeframe: Adopt Municipal Code amendments by June 2028.

Responsible Party: Community Planning and Building Department Funding Source: General Fund
In recognition of the fact that small sites can be difficult to develop, the City will continue to offer incentives and concessions that facilitate development on small sites in the commercial and multifamily districts. Most notable among these incentives is a density bonus for mixed-income projects that include deed-restricted affordable units allowing for development up to a total of 88 du/ac, inclusive of all state and local bonuses.

Another challenge in developing small sites is achieving compliance with parking requirements.

Presently, Carmel Municipal Code Section 17.14.060 - “Central Commercial (CC) District Regulations Applicable”, waives off-street parking entirely for apartments in the CC district. In the Service Commercial (SC) District the required parking for a market rate unit is 1 space per unit, and in the ATTACHMENT 3

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Chapter 2.0 – Goals, Policies, and Programs 2-5
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Residential and Limited Commercial (RC) District and Multi-Family (R4) District it is 1.5 spaces per market rate unit. However, for an affordable housing unit in any of these four Districts, the requirement is already reduced to one-half space per unit and is reduced even further to one-third space per unit for senior housing units (senior housing also has a guest parking requirement of 1 space per 4 housing units). The City will further evaluate the residential parking requirements in the Service Commercial (SC) and Residential & Limited Commercial (RC) zoning districts to help facilitate the development of market rate housing. Alternative parking programs such as bike and/or car share, and free or discounted bus passes, will also be evaluated to offset potential reductions in parking requirements.

Program 1.1.C: Live/Work Housing - AFFH
Quantified Objective: 8 Extremely Low, 35 Very Low, 35 Low Income Units Timeframe: Adopt Municipal Code amendments by June 2026.

Responsible Party: Community Planning and Building Department Funding Source: General Fund
Issues and Opportunities
At first glance, downtown Carmel appears to be thriving, but a closer inspection reveals “a tale of two downtowns.” The prime street-front commercial spaces are, in fact, healthy, with high foot traffic and low vacancy, but Carmel’s numerous alleys and courtyards contain a great many small, impaired commercial spaces that are not a good fit for traditional retail or commercial uses, as evidenced by the high proportion of these spaces that are either vacant or under-utilized. Walking through these offstreet areas, it is common to see empty and for lease storefronts, by-appointment-only signs, storefronts being used for storage, and other evidence of inactivity and a lack of economic viability.

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Chapter 2.0 – Goals, Policies, and Programs 2-6
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 The City will offer the following incentives to spur participation in the program:
 Prioritize water allocations. The City will prioritize water allocations for any commercial spaces that are converted into deed-restricted live/work units through this program.  Expedited processing. Expedited processing (i.e., jumping to the front of the queue for review by City staff) will be made available to applications for conversion of existing commercial space into one or more live/work units. In the event that a project which includes the creation of a live/work unit requires Planning Commission review, that project will also jump to the front of the queue for Planning Commission review.  Waived or reduced fees. The City will waive or reduce permitting fees associated with the conversion of existing commercial spaces to live/work units.  Free Pre-Application Development Meeting. The City will offer an in-person pre-application meeting, at no charge to applicants, which will bring together all departments responsible for review of the project (e.g., Planning, Building, Public Works, Fire). Applicants will receive early feedback on the project concept in order to help expedite the submission and review process.

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Chapter 2.0 – Goals, Policies, and Programs 2-7
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025  The program has the potential to activate the less well-trodden alleys and courtyards that are a unique staple of the physical fabric of downtown Carmel.  By combining a tenant’s commercial rent and residential rent into one lower rent, and by capping that rent, the program has the potential to bring service businesses back to Carmel that cater to local residents rather than tourists (e.g., a single chair salon, a small tutoring space for local children, a therapist’s office, a tailor, or a cobbler).  To the extent that the program reduces the level of vacancy and under-utilization in these off-street commercial spaces, it will boost the City’s sales tax revenue and generate additional resources to support the development of affordable housing.

Program 1.1.D: Mixed-Income Incentive Program - AFFH
Quantified Objective: See Program 1.1.B
Timeframe: Adopt Municipal Code amendments by June 2028 Responsible Party: Community Planning and Building Department Funding Source: General Fund
Issues and Opportunities
In keeping with the community’s expressed desire to distribute new housing throughout the community, the City and the AHA Group explored a variety of potential strategies for incentivizing the creation of new housing units in the downtown area. Since the Live/Work Program and the Hotel-toResidential Conversion Program (described in Program 1.1.F below) tend to have relevance for a narrower subset of properties, one of the goals that emerged was to create a program with broader applicability—i.e., that virtually any downtown property owner could opt into. After extensive discussion and analysis, the City and AHA determined that such a program should be guided by four core principles:

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Chapter 2.0 – Goals, Policies, and Programs 2-8
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 ultimately gets built, it was determined that the program should be designed to make projects financially viable for a property owner without reliance on public funding.

4. It should incentivize the creation of housing that can accommodate families with children. As noted elsewhere in this document, between 2016 and 2024 the population of Carmel-by-the-Sea dropped from 3,905 to 3,122, with the median age increasing during that same timeframe from 53 to 65. Similarly, between 2012 and 2024, the number of students from Carmel-bythe-Sea attending the local public elementary school (Carmel River School) declined from 270 to 129 students. In light of these alarming trends, creating new housing that can accommodate families with children was determined to be an important priority.

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Chapter 2.0 – Goals, Policies, and Programs 2-9
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Program Benefits
 The program will help to incentivize the creation of mixed-income housing in downtown Carmel, and is in keeping with the City’s desire to distribute housing for various income groups throughout the village.
 The income mix and the incentives in the program will be carefully calibrated to ensure that potential projects will be economically viable without any public funding required. Making these projects profitable for property owners will help to ensure that new housing ultimately gets built.
 This program will give the City the opportunity to incentivize the construction of muchneeded larger bedroom count units, which will help to reverse the decline in the number of families with children in the village.

Program 1.1.E: Affordable Housing on Religious Facility Properties - AFFH Quantified Objective: 6 Extremely Low, 29 Very Low, 30 Low Income Units Timeframe: Continue working with individual churches to submit formal applications by June 2028. If by June 2028 the City is not trending to meet its established objectives for this program, the City will modify the program and/or utilize alternative strategies within 6 months to ensure that the City could fully accommodate its RHNA. Annual Outreach to assess progress (December 2031)
Responsible Party: Community Planning & Building Department Funding Source: General Fund
Issues and Opportunities
The State of California and the City of Carmel-by-the-Sea have both adopted new rules, regulations, and policies in recent years to facilitate the development of housing on properties owned by religious institutions. For example, eligible housing proposals on property owned by religious institutions qualify for:
 Exemptions from environmental (CEQA) review [2023 Senate Bill SB-4]  Reduction or elimination of parking requirements [2022 Assembly Bill AB-1851]  Increased density [2023 Assembly Bill AB-1287 & Government Code §§65915-65918]  “By-right” design approvals without planning commission review [2023 SB-4 & Government Code §§65589.5]
 Priority water allocations [Housing Element Program 1.2.A.]  Expedited application processing [Housing Element Program 3.1.F.]  Reduction in entitlement and development fees [Housing Element Program 3.1.D.]  Direct financial support through Carmel’s affordable housing trust fund [Housing Element Program 2.1.D.]
 Partnership facilitation for tenant selection and program management [City of Carmel] ATTACHMENT 3

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Chapter 2.0 – Goals, Policies, and Programs 2-10
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 If the above accommodations prove insufficient, Government Code §§65915-65918 allows a church to receive bonuses and concessions for projects that are 100 percent affordable. These include:
 Additional density bonuses to establish more residential units;  Reductions in setback and building height requirements;  Reductions in parking requirements;
 Approval of mixed-use zoning compatible with the location; and  Other regulatory incentives or concessions proposed by the developer.

Program Description
In 2023, the California legislature passed Senate Bill (SB) 4, the Affordable Housing on Faith and Higher Education Lands Act of 2023. The Act requires a housing development project be allowed byright when located on land owned by a religious institution. The housing units, exclusive of manager’s units, must be 100 percent affordable to lower income households, except that 20 percent may be for Moderate-income households and 5 percent may be for staff of the religious institution that owns the land. Projects submitted pursuant to SB4 are also eligible for a density bonus, incentives, concessions, and waivers or reductions of development and parking standards.

Program Benefits
 The program encourages the natural synergy between supportive faith communities and those most in need of this support.
 The program leverages properties that are some of the largest in the village.  The program provides a vehicle for translating the expressed interest and enthusiasm of the local religious community into concrete action.

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Chapter 2.0 – Goals, Policies, and Programs 2-11
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 Program 1.1.F: Hotel- to-Residential Conversion (Hotel ‘Key’ Transfer) - AFFH Quantified Objective: 40 Very Low, 40 Low, 40 Moderate, 41 Above Moderate Income Units Timeframe: Outreach for developer interest by December 2025 Create/amend Municipal codes to support the program by May 2026.

Responsible Party: Community Planning and Building Department Funding Source: General Fund
Issues and Opportunities
Carmel has a significant number of older, underperforming overnight visitor accommodations (hotels/motels, inns, bed and breakfasts, and other various lodging options) distributed throughout the City in the CC, RC, and SC, and R-1 zoning districts. These properties are ideal candidates for conversion to multifamily housing, both because they tend to have physical layouts that lend themselves to such a conversion (indeed, several hotels and motels in Carmel were originally built as apartment buildings), and because their relatively low net operating income means that they can be acquired at a more modest price point.

Program Description
The City will create a program providing opportunities for property owners and developers to convert underperforming hotels into mixed-income multifamily rentals with a deed restricted affordable component. Such conversions would be accomplished through adaptive re-use or redevelopment. To incentivize participation in the program, the City will allow the owners of converted hotel properties to sell and transfer the hotel keys from the converted hotel to facilitate the construction of the same number of new hotel rooms on other sites within Carmel-by-the-Sea’s commercial zoning districts (CC, SC, or RC)–either as new hotels or as additions to existing hotels. While such conversions could be partially financed through public funding programs such as the Low-Income Housing Tax Credit (LIHTC) program, the City’s intent in allowing the sale of the hotel keys is to maximize housing production by making these conversions economically viable without any reliance on public funding.

The ultimate goal is to make conversion to multifamily residential the highest and best use of the property, and one that would allow purchasers with this business plan to outbid other purchasers.

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Chapter 2.0 – Goals, Policies, and Programs 2-12
Carmel-by-the-Sea 6th Cycle Housing Element Amendment Update Adopted November 2025 In the absence of any public subsidy, a property owner would be unlikely to convert a hotel into deedrestricted affordable housing because the result would be lower net operating income and a reduction in the value of the property. However, as the analysis in Appendix C illustrates, by combining the value of the hotel keys with the residual value of the converted hotel, participating property owners and developers will be able to achieve an above market return. Put another way, the program is designed to allow participating owners and developers to “sell the property twice.” The program is designed to be flexible and to allow for a variety of potential scenarios. For example, the existing owner could convert the hotel to mixed-income residential themself and sell the hotel keys to a hotel developer to be used to construct a new hotel or to add hotel rooms to another property within the City’s commercial districts (CC, SC, or RC). Or the existing owner could convert the hotel to mixed-income residential themself and retain the keys to add hotel rooms to another property within the City’s commercial districts (CC, SC, or RC). Alternatively, and perhaps most likely, the existing owner—who may lack expertise in development – could sell the underperforming hotel to an affordable or multifamily developer, who could in turn convert the hotel to mixed-income residential and then either sell the hotel keys or retain them for use on another site within the City’s commercial districts (CC, SC, or RC). These various permutations are outlined visually in the following graphic.  Transferable development rights. Hotel owners that convert their hotel into mixed-income multifamily housing through the program will be allowed to sell the hotel keys and transfer the hotel rights to other parcels in the City’s commercial districts (CC, SC, or RC) (particularly valuable due to Carmel's General Plan cap of 948 hotel rooms).  Water rights. In recognition of the fact that the sale of the hotel keys drives the production of affordable housing, the City will create opportunities for purchasers of hotel keys to receive the water allocation required to create new hotel rooms on other sites within the ATTACHMENT 3

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Carmel-by-the-Sea City CouncilNovember 4, 2025

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