CITY COUNCIL STAFF REPORT
April 9, 2024 {{section.number}}a
CONSIDER ADOPTION OF THE DRAFT REVISED HOUSING ELEMENT UPDATE FOR THE 2021-2029 HOUSING ELEMENT PLANNING PERIOD, INCLUDING GENERAL PLAN
AMENDMENTS TO THE HOUSING ELEMENT AND LAND USE ELEMENT, ENVIRONMENTAL ASSESSMENT PURSUANT TO GOVERNMENT CODE SECTION 65759,
ZONING ORDINANCE AMENDMENT, LOCAL COASTAL PROGRAM AMENDMENT, AND
ORANGE AVENUE CORRIDOR SPECIFIC PLAN AMENDMENT AND AUTHORIZE
SUBMITTAL TO THE STATE DEPARTMENT OF HOUSING AND COMMUNITY
DEVELOPMENT AND THE CALIFORNIA COASTAL COMMISSION
PLANNING COMMISSION RECOMMENDATION:
That the City Council not adopt the draft Housing Element Update (HEU), or any associated amendments to the City’s General Plan, Municipal Code, Orange Avenue Corridor Specific Plan, or Local Coastal Program (Attachment 12).
STAFF RECOMMENDATION:
That the City Council adopt the draft Housing Element Update (HEU), including opportunity sites and housing programs, as well as associated amendments to the City’s Land Use Element of the General Plan; introduce ordinances (Attachment 2) to codify the associated amendments in Chapters 70.130, 80.00, 86.04, 86.08, 86.09, 86.10, 86.14, 86.18, 86.34, 86.42, 86.55, 86.56, and 86.58 of the Coronado Municipal Code; the Orange Avenue Corridor Specific Plan (OACSP); and the Coronado Local Coastal Program. Further determine that the project has been prepared consistent with the terms of a judgment entered by the Superior Court of San Diego County and therefore is exempt from the California Environmental Quality Act and adopt the Environmental Assessment prepared pursuant to Government Code Section 65759 and incorporate the same by reference into the General Plan, and authorize the City Manager to take any and all necessary actions to effectuate the adoption of the housing element for certification including submittal of the Draft Revised Housing Element Update to the California Department of Housing and Community Development and the California Coastal Commission (Attachment 1).
BACKGROUND:
The Housing Element is one of seven state-mandated elements included in the City’s General Plan and is the only one required to be updated periodically. Its purpose is to identify and plan for existing and projected housing needs in the region within the eight-year planning cycle. The City is required to update the Housing Element to address the 2021-2029 planning period.
California Department of Housing and Community Development (HCD) is responsible for allocating a Regional Housing Needs Assessment (RHNA) to SANDAG, which is the total number of new dwelling units that must be planned for the region across different income affordability levels. SANDAG then allocated a RHNA of 912 units to Coronado broken down into the following affordability categories:
Lower
Income
Moderate
Income
Above
Moderate
Income
Total
2021-2029 RHNA 481 159 272 912
In July 2021, the City Council adopted a Housing Element Update (HEU) for the 2021-2029 planning period (6th Cycle). However, HCD did not certify that document as they determined it did not substantially comply with Housing Element Law. The City has since prepared a significantly revised Draft HEU.
In October 2023, acting through the Attorney General’s Office, the State of California and HCD filed a petition for writ of mandate and declaratory relief against the City for its failure to adopt a Housing Element that HCD found to be substantially compliant with state law. The State and the City agreed to the terms of a stipulated judgment, which was accepted by the Superior Court of San Diego County on November 8, 2023. The judgment requires the City to adopt an updated HEU and associated implementing actions by April 16, 2024 and submit the same to HCD by April 17, 2024.
On October 12, 2023, the City held a public workshop to present the Draft Housing Element Update to the community, including proposed opportunity sites. City staff receive comments and feedback from the community prior to the City Council meeting to request authorization to submit the HEU to HCD.
At their October 17, 2023 regular meeting, the City Council authorized the City Manager to take any and all actions necessary to effectuate timely adoption of the housing element for certification and to submit the draft HEU to HCD. There were multiple actions taken over the following months which are outlined below:
November 13, 2023: HCD provided preliminary comments
November 21, 2023: City staff met with HCD staff to go over comments November 28, 2023: HCD provided revised preliminary comments to the City December 1, 2023: City released a revised Draft HEU addressing HCDs preliminary comments December 15, 2023: HCD provided an official findings letter with required revisions December 21, 2023: City staff met with HCD staff to go over their official findings letter January 2, 2024: City released a revised Draft HEU for public review January 12, 2024: Revised Draft HEU addressing public comments released January 17, 2024: Revised Draft HEU submitted to HCD
March 5, 2024: HCD provided an official findings letter with required revisions March 7, 2024: City staff met with HCD staff to go over their official findings letter March 12, 2024: City staff met with HCD staff to refine specific language in the Draft HEU On March 26, 2024, the City’s Planning Commission held a public hearing to make a recommendation to the City Council on the Housing Element Update and associated amendments. After considering public testimony the Commission voted 3-0 to recommend that the City Council deny the Housing Element Update and all associated amendments (Attachment 12). Public comments submitted to the Planning Commission can be found in attachment 13.
ANALYSIS:
To have a compliant HEU, Coronado must plan for and show that it can accommodate 912 units spread across the different income categories. In addition to the RHNA of 912, the City must also comply with the State’s ‘No Net Loss’ requirement. ‘No Net Loss’ requires cities to continually maintain their housing sites inventory as properties are developed to show that the RHNA can be achieved during the planning period. Should a site identified in the HEU to provide affordable housing be developed with market rate units, or fewer units than anticipated, the City would have to show there are still adequate sites to provide the number of required affordable units. As a result of this requirement, HCD expects to see a 15% buffer beyond the assigned RHNA.
Lower
Income
Moderate
Income
Above
Moderate
Income
Total
2021-2029 RHNA 481 159 272 912
15% Buffer 72 24 41 137
TOTAL 553 183 313 1,049
The Draft HEU meets the assigned RHNA plus the “No Net Loss” buffer through a four-pronged approach as shown below that includes: (1) Entitled or Proposed Projects (Pipeline); (2) Accessory Dwelling Units and Carriage House Conversions; (3) Navy Housing; and (4) Opportunity Sites.
(1) Entitled or Proposed Projects (Pipeline) 146 pending or entitled housing units are proposed Lower Mod. Above Mod. Total
RHNA 481 159 272 912 15% Buffer1 72 24 41 137 553 183 313 1,049 Entitled or Proposed Projects (Pipeline) 0 0 146 146
Accessory Dwelling Unit Potential 117 25 53 195
Carriage House Conversion Program 72 0 31 103
Navy Housing
2 305 69 0 374
Subtotal 494 94 230 818 Net RHNA with 15% Buffer (after credits are applied) 59 89 83 231 Opportunity Sites
3 184 89 180 453
Total (125) (0) (97) (222)
Units by Income Level
Alternative Methods to Meet the RHNA (Credits)
1HCD recommends a 15% buffer for lower-income (very low and low) sites to protect the City from the No Net Loss provision. The City Included a buffer for the moderate- and above moderate-income levels for the same reason. The City calculated its buffer as a percentage of the gross RHNA. 2As determined by HCD Enforcement Division in coordination with the US Navy and the City of Coronado. 3Not including the Navy Housing Units to be used towards the RHNA. This is a mix of market-rate projects that are currently either completed, under construction, approved for construction, or proposed for construction. It is anticipated that all 146 units will be built during the planning period and can therefore be credited towards the City’s RHNA.
(2) Accessory Dwelling Units and Carriage House Conversions The City expects to be able to credit a total of 195 ADUs towards its RHNA. This number was determined using previous ADU development data as well as proposed policies to encourage more ADU development. Proposed policies found in the Accessory Dwelling Unit Program (H-1.A.) include various concessions and/or waivers to encourage ADUs to be deed-restricted to lower income levels, which allows the City to credit 117 ADUs at the lower income level and 25 at the moderate income level with the remaining 53 as market rate units.
Additionally, the City has allowed for single family zoned parcels with alley access to build a carriage house above a detached garage. When originally constructed it was anticipated these would not be separate dwelling units and property owners were required to sign a covenant prohibiting installation of a kitchen and rental of the carriage house. There are approximately 129 carriage houses in Coronado. The HEU assumes adding kitchen facilities to 80% of the existing carriage houses, allowing the City to credit 103 carriage house units towards the RHNA. Through various incentives found in the Carriage House Program (H-4. A.) the HEU assumes 72 unit would be available to lower income levels.
(3) Navy Housing The Navy has secured funding to construct a housing development for 600 enlisted personnel that equates to a total of 374 housing units on Naval Amphibious Base Coronado. 305 units are to be considered lower income, with 69 attributable to the moderateincome level. This development is anticipated to occur within the planning period. (4) Opportunity Sites After accounting for the pipeline projects, ADU/Carriage house conversions, and Navy housing there is still a need for additional units to achieve the required RHNA plus No Net Loss buffer. In order to achieve that nine additional sites that could accommodate future housing were identified. Note that HCD requirements call for privately owned sites to be a minimum 0.5 acres in size, and most properties in Coronado do not meet that threshold. Site details can be found in Section 7 of the Revised Draft HEU (Attachment 3). A general description follows:
Site 1 – 919 C Avenue: The property owner has expressed an interest in developing affordable housing on this property. It is currently zoned R-3 allowing 28 dwelling units per acre and is proposed to be rezoned to R-4 which would allow up to 40 dwelling units per acre. The City is assuming 19 lower income units on the site, as well as retention of the church-related thrift store and school programming.
Site 2 – 517 Orange Avenue: This is a City-owned property improved with a duplex. It is currently zoned R-4 allowing 40 dwelling units per acre, or a total of three for this site. The goal is to provide a total of two-three units affordable to lower income tenants.
Site 3 – 1224 Tenth Street: This property is currently zoned Commercial and is improved with a two-story office building with tuck-under and surface parking. Currently no dwelling units are allowed on this property but proposed amendments, specifically the addition of the Housing Element Opportunity Site Overlay Zone, would allow both commercial and residential uses, with up to 40 dwelling units per acre. The City is assuming eight above-moderate income units and three lower-income units.
Site 4 – 1001 C Avenue: This property is currently zoned Commercial and is improved with a onestory retail building with a mix of uses and surface parking. Currently no dwelling units are allowed on this property but proposed amendments, specifically the addition of the Housing Element Opportunity Site Overlay Zone, would allow both commercial and residential uses, with up to 40 dwelling units per acre. The City is assuming eight above-moderate income units and three lowerincome units.
Site 5 – 150 B Avenue: This property is currently zoned Commercial and is improved with a Smart and Final grocery store, a two-story commercial building, and a large surface parking lot. Currently no dwelling units are allowed on this property but proposed amendments, specifically the addition of the Housing Element Opportunity Site Overlay Zone, would allow both commercial and residential uses, with up to 40 dwelling units per acre. The City is assuming 43 above-moderate income units, 15 lower income units, and will still allow for commercial uses with the goal of including a grocery store component in any future development.
Site 6 – 149 A Avenue: This property is currently zoned R-PCD (Residential – Planned Community Development) and is improved with a surface parking lot serving the adjacent Bayside Apartments. Chapter 86.42 is proposed to be updated to allow up to 60 dwelling units per acre. the City is assuming 23 above-moderate income units and 15 lower income units.
Site 7 – 1515 Second Street: This property is currently zoned R-PCD (Residential – Planned Community Development) and is improved with the Bayside Apartments, a development of multiple three-story buildings with 549 apartments. Chapter 86.42 is proposed to be updated to allow up to 60 dwelling units per acre. The City is assuming 100 above-moderate income units, 55 moderate income units, and 12 lower income units.
Site 8 – 700 Orange: This property is currently zoned Civic Use, with a small portion zoned R-4, and is the site of the City’s Police Department and an underutilized AT&T switching facility building. The zoning is proposed to allow up to 40 dwelling units per acre and the City is assuming a total of 47 lower income units that could be incorporated into a new Police Department facility on the site.
Site 9 – 201 Sixth Street: This site is owned by the school district, is currently zoned Civic Use, and is improved with a childcare and Pre-K center. The Zoning is proposed to allow up to 40 dwelling units per acre and the City is assuming 34 moderate income units and 67 lower income units.
Housing Element Update Programs: The draft Housing Element Update includes five Housing Goals with a series of programs and policies to further those various goals that can be found in section 8 of the plan. The five goals and a sampling of their programs follow:
Housing Goal #1: Provide a broad range of housing opportunities to increase the housing options available to individuals.
The City would achieve this through outreach on ADU development, potential fee waivers for ADU development with a low or moderate affordability restriction, and waiving parking requirements for ADUs restricted to extremely low, very low-, or low-income levels. A program calling for updates to the General Plan and Zoning documents to match what is proposed in the HEU is also included under this goal.
Housing Goal #2: Provide a broad range of affordable housing opportunities that serve the needs of people who work and live in Coronado.
Programs to further this goal include increasing the affordable housing in-lieu fee, supporting grant applications for the County and affordable housing developers, and reducing the parking requirement of affordable units to one space.
Housing Goal #3: Affirmatively further fair housing and provide equal housing opportunities that are accessible to all segments of the Coronado community.
Programs to further this goal include pursuing grant opportunities for affordable housing development, and to develop financial and regulatory incentives for affordable and/or senior housing that may include reduced parking and waiving City development impact fees. Programs also call for partnering with other government and non-government organizations to review housing discrimination complaints, including the County of San Diego and the Legal Aid Society of San Diego.
Housing Goal #4: Conservation and maintenance of Coronado’s housing stock, neighborhoods, and history.
Programs to further this goal include promoting carriage house conversions and advertising programs such as the Home Repair program administered by the County.
Housing Goal #5: Minimize governmental constraints to the development, improvement, and maintenance of housing, particularly affordable housing, or housing accessible to persons with disabilities.
Programs to further this goal include streamlining affordable housing developments and updating City codes to align with State requirements for Low Barrier navigation centers and group homes.
These programs were developed through consultation with HCD, and are considered requirements to achieving Housing Element certification from HCD and are in response to their official findings letter (Attachment 10). The City’s response to HCDs letters is summarized in a matrix found in Attachment 11. Staff has prepared proposed amendments to each of these documents which are provided in track changes. The significant amendments are summarized below, a table of the changes can be found in Attachment 4, and all amendments can be read in their entirety in redline format in Attachments 5 through 8. Staff wanted to highlight the major changes required by HCD that you will find in the draft HEU and associated General Plan and Code amendments.
Parking: In order to incentivize development of affordable units and ADUs, parking standards would be reduced to require one uncovered space per each affordable unit, as well as all studio and one-bedroom units. Staff originally proposed that parking reductions be limited to affordable units, but HCD required it be applied to all future multi-family developments. ADUs that are deed restricted to be affordable to low, very low, and extremely low-income households would also not be required to provide parking.
ADUs: Changes are proposed that would bring the City’s ADU standards into compliance with current state law, which include changes to the height and setback requirements. Additionally, carriage houses that comply with the current carriage house standards would be allowed to convert to an ADU by installing a kitchen and sanitation facilities while still complying with all other carriage house standards. Carriage house conversions will be required to provide one parking space unless they are deed restricted to low, very low, or extremely low-income households. The City will also commit to prepare pre-approved ADU plans that can be used by property owners in accordance with Assembly Bill 1332.
Zoning: A new Housing Element Opportunity Site Overlay Zone has been drafted to be added as Chapter 86.34 of the Zoning Ordinance. It aims to encourage new housing that is affordable to lower-income households with alternative development standards for projects that meet affordability criteria. Two subzones are included (HE-1 and HE-2), each with unique development standard allowing development up to four stories in height and reduced setbacks. Additionally, this chapter includes a ‘By-Right Approval Process” for projects that are on properties that were either upzoned through the HEU or are non-vacant properties that were included in the previous HEU, as required by Gov’t Code Section 65583.2.
Height and Story Limits: HCD staff has identified the City’s height limits in the R-3 and R-4 zone are a constraint on housing development. In their letter dated March 5, 2024 (Attachment 10) they state the existing height limits are “a constraint to development, affordability, supply, and achieving maximum densities.” In follow up conversations with HCD, City presented analysis demonstrating that developing a property to maximum density it is more a product of design and unit size and staff provided examples of recent multi-family development in Coronado that has been able to achieve maximum density within existing height and story limits. However, HCD staff was unwavering. As a result, the Housing Element includes a program to address the development standards limiting building heights. Specifically, the program proposes code changes to increase the allowable stories and height limit for the R-3 zone from 2 stories and 33- feet to 3 stories and 36 feet. Opportunity sites in the R-4 zone would see an increase to the existing story limitation from 3 to 4 stories and allowing height up to 42 feet where 35 is required today. The opportunity sites in the R-PCD zone will also see increased height limits up to 50 feet and five stories where it is limited to 40-feet today. As required by HCD, the HEU also includes a program that requires the City to present a ballot measure to City voters that, if approved would amend the height limitation in 1972’s Proposition R to allow four stories elsewhere in the R-4 zone (with a height limit of 40-42 feet outside of the opportunity sites).
Design Review: HCD felt that some of the City’s existing Design Review findings were subjective and don’t promote objectivity or certainty in the design review process. As a result, a program is proposed to establish objective design standards for multi-family and mixed-use residential development with the main goal of removing subjectivity from the design review process for housing projects. The implication of this program is that multi-family residential and mixed-use projects would no longer be subject to review by the Design Review Commission, because the City would have uniformly applicable design standards to regulate future development.
Maps: The City currently has a Zoning Map but does not have a General Plan Designation Map.
A new General Plan Designation Map has been created and the Zoning Map was updated to identify the new Housing Element Opportunity Sites Overlay zone. The Zoning Map was also updated to change the zoning for Opportunity Site 1 (919 C Avenue) from R-3 to R-4 to allow residential development at up to 40 dwelling units per acre.
Continuing Administration: The programs found in Section 8 of the HEU have been drafted in consultation with HCD staff and, after many edits and negotiations, have reached a point where staff believes HCD can certify the HEU. However, it should be noted that many programs will require staff time and resources throughout the remainder of the 2021-2029 planning period. This includes education and outreach to multiple groups on an annual basis through community meetings, print or online materials, or smaller stakeholder groups. Various monitoring programs will be established to track progress and effectiveness of the HEU measures. And the preparation of pre-approved ADU plans and objective design standards through a community outreach process will also be required. While some education and outreach efforts can be combined, it will still occupy a decent amount of staff time.
NEXT STEPS:
Should City Council adopt the HEU and proposed amendments and give authorization to submit the revised draft HEU to HCD the next steps would be as follows:
1. Conduct a second reading to adopt the ordinances to update the City’s Municipal Code at the next Council Meeting.
2. Submit Local Coastal Program Amendments to the California Coastal Commission for review and certification.
FISCAL IMPACT:
On February 21, 2023, the City Council authorized an Agreement for Professional Services with Harris and Associates for the revised Coronado Housing Element Update and associated environmental review. The contract amount was for $925,000. A subsequent amendment to include the required General Plan/Zoning Code amendments was processed for Harris and Associated to use a subconsultant, Ben Noble Planning, to prepare these amendments for an additional $63,618 for a total contract cost of $988,618. Housing Elements are required by the State and are intended to effectuate State policy. Some State and SANDAG funding is contingent upon a State-certified Housing Element. Without a certified Housing Element, Coronado is not eligible to receive these funds. Additionally, if found out of compliance the State can suspend the City’s authority to issue building permits, grant zone changes or variances, or grant subdivision map approvals, and can fine the City up to $100,000 per month. AB 72, passed in 2017, further strengthened State housing law by allowing for HCD to refer any non-compliance to the State Attorney General for enforcement. This happened when the State sued Huntington Beach in 2019 for removing capacity to build affordable housing units and forced them to rezone sites to provide adequate affordable housing.
ALTERNATIVE:
The City Council could direct staff to make changes to the HEU document, including sites and program language, or to the proposed code amendments before submitting to HCD. Note that any amendments would most likely make it impossible to submit an adopted HEU to HCD by the deadline of April 17, 2024 that is included in the Court’s judgment.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
The project is exempt from the requirements of the California Environmental Quality Act pursuant to Government Code Section 65759, because the project consists of actions necessary to bring the City’s General Plan into conformance with state law under the terms of a judgment entered by the Superior Court of San Deigo on November 8, 2023. As provided in Government Code Section 65759, the City has prepared and Environmental Assessment (EA), the content of which substantially conforms to the required content for a draft environmental impact report set forth in Article 9 (commencing with Section 15140) of Title 14 of the California Code of Regulations, to analyze potential environmental impacts from the project. The EA identifies mitigation measures that are required to reduce potential impacts to a less than significant level related to Biology (preconstruction nesting bird survey), Cultural Resources (archaeological and Native American monitor), Geology and Soils (fault study and geotechnical reports required prior to construction, and paleontological monitoring), Greenhouse Gas Emissions (Require project attributes to comply with the 2022 Scoping Plan design requirements, and Noise (vibration impact analysis).
If adopted by the City Council, the EA will be incorporated by reference into the City’s General Plan, and future development projects on Housing Element Opportunity Sites would be required to comply with these Mitigation Measures. All other impact areas are considered less than significant without mitigation. The EA can be found in Attachment 9.
PUBLIC NOTICE:
Multiple public notices have been prepared for this project. The General Plan Amendment notice was published in the Coronado Eagle & Journal on February 7, 2024, and was also mailed to all required agencies. A Local Coastal Program Amendment notice was published in the Coronado Eagle & Journal on February 28, 2024 and was also mailed to all required agencies. A public notice for the March 26, 2024 Planning Commission hearing was published in the Coronado Eagle & Journal on March 13, 2024, and mailed to all opportunity site owners as well as property owners within 300 feet of each opportunity site. A public hearing notice for the April 9, 2024 City Council meeting was published in the Coronado Eagle & Journal on March 27, 2024 and April 3, 2024, and mailed to all opportunity site owners as well as property owners within 300 feet of each opportunity site.
ATTACHMENTS:
1. Draft City Council Resolutions 2024-18 through 2024-23
2. Draft City Council Ordinances 2024-02 and 2024-03
3. Revised Draft Housing Element Update
4. Summary Table of Amendments
5. Coronado Municipal Code Amendments in Redline
6. Orange Avenue Corridor Specific Plan Amendments in Redline
7. Local Coastal Program Amendments in Redline
8. Land Use Element Amendments in Redline
9. Environmental Assessment
10. HCD findings Letter
11. HCD Response Matrix
12. Planning Commission Resolution 2024-01
13. Planning Commission Written Public Comments
Submitted By: Community Development Department / Richard Grunow