Cotati City Council
Agenda Staff Report
Item type: STUDY SESSION
To: City Council
Subject: Draft 6th Cycle Housing Element Update Public Workshop Date: February 22, 2022
Written by: Noah Housh, Director of Community Development Recommendation
It is recommended that the City Council and Planning Commission review the provided information, provide direction on outstanding issues and receive and file the report for future consideration.
Background
This Workshop is a public presentation and information gathering event for the community, Planning Commission and City Council and is intended to:
1. To provide an overview of state, regional, and local housing issues and laws to provide context for the 6th Cycle Housing Element Update process;
2. To demonstrate where demographic data and community input can inform the 2023 Housing Element Update;
3. To obtain feedback from the Planning Commission and City Council on potential policy options; and
4. To seek public input on housing needs and potential solutions that will be used to inform the 6th Cycle Housing Element Update.
Analysis/Discussion
Introduction And Overview
The preparation of the Housing Element is required by California State Law, Chapter 10.6 and
10.7 of the Government Code. The City has contracted with 4LEAF, Inc. to prepare the required update to its 2014 Housing Element to cover the period between 2023 – 2031. The update of the Housing Element provides the opportunity for the City to review and supplement their existing housing policies and implementation measures to facilitate housing production and demonstrate how the City will accommodate its assigned housing need, spread across the different income levels for the next eight years.
The Housing Element is one of the seven mandated elements of the City’s General Plan. It is the only element of the General Plan required by the State to be updated on a set schedule. A Housing Element is required by California law to establish policies and programs that will support the provision of an adequate housing supply for citizens of all income levels. The intent of state law is to ensure that all jurisdictions in the state are zoned to provide adequate housing for all members of the community. While the State reviews the Housing Element to ensure compliance with housing law, each jurisdiction must identify its own specific housing needs to successfully address those needs.
Regional Housing Needs Allocation
The Regional Housing Needs Allocation (RHNA) is mandated by State housing laws as part of the process of updating General Plan Housing Elements. The RHNA process is meant to identify and address housing needs for the projected State population and household growth; to improve the jobs - housing balance in communities; and to ensure the availability of housing affordable to all income groups. The County of Sonoma has a combined RHNA of 14,562 units. Cotati’s assigned share of that RHNA is 234 units, including 94 units affordable to lower-income households and 39 units affordable to moderate-income households:
Draft Regional Housing Need Allocation, 2023 - 2031
Very
Low
Low Moderate Above
Moderate
Total
Cotati 60 34 39 101 234
Government Code (GC) Section 65583(a)(1) further divides the very-low-income category into extremely low and very low categories with 50% in each. Cotati’s extremely low-income unit allocation is therefore 30 units.
Zoning, Density, and Affordability Assumptions
The City is not required to construct housing units mandated by RHNA. It is instead required to demonstrate that it has adequate sites zoned at appropriate densities to accommodate the number of RHNA units in each income category. When a city lacks adequate available, vacant land for the development of its RHNA, it must either rezone adequate land at high enough densities to support affordable housing development or use other methods to identify where the units can go. These methods may include increasing allowable densities in certain land use categories; providing zoning overlays to allow housing on certain commercial parcels; allowing additional units within single-family neighborhoods; implementing programs to encourage more, smaller units that are typically more affordable than larger units; or developing other creative solutions that address the City’s identified housing needs. For a unit to qualify as low income in a housing site inventory, the City must demonstrate that the rent or sales price is affordable to the specified income levels. The typical method to demonstrate affordability at these income levels is to record a deed restriction on the units for all future renters or owners for 55 years.
Credit for Accessory Dwelling Units (ADUs)
The City may also take credit for non-restricted units such as Accessory Dwelling Units (ADUs) or Junior Accessory Dwelling Units (JADUs) that are rented within the affordable income categories if it can demonstrate affordable rental rates. Alternatively, the City may use HCD’s “safe harbor” affordability assumptions, which are proposed by ABAG to be distributed across income categories as follows: 15% Extremely Low; 15% Very Low; 30% low, 30% moderate; and 10% above moderate. The safe harbor for the number of ADUs assumed for the upcoming planning period is the average of ADUs permitted over the years 2018-2021; higher numbers would need to be supported by evidence of significant increases in permitted ADUs along with strong programs to promote and support their construction.
Housing Element Update Requirements:
In addition to the requirement that the Housing Element address the City’s ability to meet the RHNA through zoning, the Housing Element serves as the tool to identify and provide for the local housing needs of the community.
State law requires that the Housing Element:
• Provide achievable goals, policies, quantified objectives, and scheduled programs to preserve, improve, and develop housing opportunities; • Identify and analyze household characteristics, including housing costs compared to residents’ ability to pay; and housing characteristics, including the extent of overcrowding and an estimate of housing stock conditions; • Identify and analyze governmental constraints on the maintenance, improvement, and development of housing for all income levels. These constraints include land use and density controls, building codes and their enforcement, site improvements, fees required of developers, and local processing and permit procedures; • Identify and analyze nongovernmental constraints on the maintenance, improvement, and development of housing for all income levels, including the availability of financing, the price of land, the cost of construction, and community opposition;
• Identify the special housing needs of the community including the homeless, seniors, female-headed households, farmworkers, and persons with disabilities; • Identify sites that are suitable for all types of residential development, including multi- family and manufactured homes, during the eight-year housing cycle to meet the City’s fair share of regional housing needs (the RHNA) at all income levels; • Identify opportunities for energy conservation with respect to residential development; and
• Be certified (approved) by the State Department of Housing & Community Development (HCD) as complying with State law.
Highlights of New Housing Laws since the last Housing Element:
The California State Legislature has identified the attainment of a decent home and suitable living environment for every Californian as the State’s major housing goal. In the last few years, the legislature has passed multiple housing bills that prescribe new requirements for Housing Elements and new by-right requirements for housing projects. The State is serious about their efforts to facilitate the construction of new housing units in California, and new housing bills will continue to reshape the housing landscape for years to come. A brief overview of the state Housing Law updates is provided below for information and context about the Housing Element update process.
AB 72 (2017) strengthened California’s 50-year-old “Housing Element law,” which requires local governments to adequately plan for future housing needs at all income levels. The bill grants the state Housing and Community Development Department (HCD) authority to review any action or failure to act by a local government that it determines is inconsistent with an adopted Housing Element or Housing Element law. This includes failure to implement program actions included in the Housing Element. HCD may revoke Housing Element compliance if the local government’s actions do not comply with state law. In addition, the HCD can refer violations to the state Attorney General’s Office for enforcement any time it determines that a local jurisdiction is in violation of state law for non-compliance with Housing Element law, the Housing Accountability Act, the “No Net Loss” law, the density bonus law or anti- discrimination laws.
Since 2018, HCD has sent more than 250 enforcement letters to jurisdictions throughout the state. The most notorious case involving the Attorney General’s office was that of Huntington Beach, which held that, for multiple reasons, the RHNA did not apply to them. The case was settled in 2020 when the City agreed to amend one of its Specific Plans to provide adequate sites to meet its RHNA obligation. In late 2021, the California HCD added a Housing Accountability Unit to further hold local jurisdictions accountable for their Housing Element commitments and other state laws.
SB 35 (2017) requires that jurisdictions that are not meeting their RHNA obligations have a “streamlined ministerial approval process” for housing developments of two or more units when 10% or 50% of project units are provided as affordable and deed restricted. “Streamlined ministerial approval process” means that officials cannot exercise discretion over a qualifying project, but can only compare it against adopted, objective design and development standards.
Cotati has not yet received applications under SB 35, but projects developing at 50% affordable housing are eligible for streamlined review, and staff is endeavoring to have such standards adopted within the next year.
AB 1397 (2017) requires that cities zone appropriately for their share of the regional housing need, and zoning for all types of housing – including multi-family housing - is required. The new law requires strong justification when non-vacant sites are zoned to meet the housing need, especially for lower-income housing. In Cotati, this means that most of the housing sites listed in the current 5th Cycle Housing Element may not be used in the 2023 Housing Element Update without a market analysis demonstrating that the site(s) remains a suitable candidate for a housing project.
SB 166 (2017), the new “No Net Loss” law, requires that a City replace any site that was zoned and listed in inventory for low-income housing if it develops with anything else, unless the City can make findings that enough additional sites that are adequately zoned remain to allow the City to continue to accommodate its remaining housing need (RHNA), by income category (See Policy Issue #3). The intent is to ensure that jurisdictions have adequate sites with appropriate zoning to accommodate their share of the regional housing need throughout the Housing Element period. As noted above, AB 72 provides that HCD and the state Attorney General can intercede if a jurisdiction fails to uphold the “No Net Loss” provisions.
AB 686 (2018), also known as the anti-discrimination or “Affirmatively Furthering Fair Housing” (AFFH) law, requires specific analysis around patterns of socio-economic concentration within the City and the larger region. This new law requires Cotati to examine past and current zoning, land use, funding, and other practices. New programs may be needed to ensure compliance.
SB 330 (2019) amends the Housing Accountability Act to prohibit local jurisdictions from enacting new laws that would have the effect of reducing the legal limit on new housing within their borders or delay new housing via administrative or other regulatory barriers.
SB 9 and SB 10 (2021) do not directly affect Housing Element law or RHNA allocations, but they may be considered when making development capacity assumptions or when exploring policy approaches to encourage housing development to meet the City’s needs. SB 9 builds on existing accessory dwelling unit (ADU) law by allowing duplexes and lot splits on most singlefamily parcels in California, and SB 10 is an opt-in provision to allow low-density multiplexes with streamlined rezoning and flexible parameters tailored to local needs.
In additional to the above, Government Code Section 65583(c) requires that the Housing Element include a five-year schedule of actions the local government is undertaking or intends to undertake to implement the policies and achieve the goals and objectives of the Housing Element. Significantly, if the City’s housing inventory “does not identify adequate sites to accommodate the [RHNA] need for groups of all household income levels ..., the program shall identify sites that can be developed for housing within the planning period.” Those sites must typically be identified and rezoned to allow housing by-right at default densities within 3 years from the beginning of the Housing Element period. However, AB 215 (2021) now shortens that rezoning period from three years to one year for any jurisdiction that does not have a certified Housing Element by the statutory deadline.
State’s Expectations and Requirements:
The California HCD publishes materials and provides technical assistance aimed at assisting California jurisdictions in updating their Housing Elements to comply with complex state laws and to obtain HCD certification. Thoughtful solutions will be needed to address the following HCD expectations and requirements:
• Regardless of RHNA allocations, all local governments must include zoning for a variety of housing types, including multifamily, transitional, supportive, workforce, and farmworker housing; SROs (Single Room Occupancy); homeless shelters, including Low Barrier Navigation Centers; and mobile homes. Even if the City was able to demonstrate meeting their full RHNA by depending on ADUs and housing projects already in the pipeline, the above housing types must still be allowed under state law. • The City will need to demonstrate appropriate zoning to accommodate their allocation of regional housing need for lower income households. Statute provides a default minimum density of 20 units per acre. If the City plans to accommodate their RHNA for lowincome households on sites that allow less than 20 units per acre, an analysis is required based on statutory factors that include consideration of market conditions and the City’s experience in developing affordable housing at lower densities. • Regardless of how the City accommodated its RHNA, HCD will require programs to remove zoning barriers and increase housing choices so that housing units are not out of reach to less affluent community members. Even though the City does not include areas designated as high opportunity, AB 686 requires HCD to look at how the sites zoned at high enough densities for low-income housing are integrated throughout the community. • The City may be able to demonstrate adequate sites through a combination of methods without the need to rezone specific sites within the limited period noted above (see Policy Issue #1).
Housing Constraints Analysis:
State statute requires specific constraints to be addressed within a Housing Element.
Governmental constraints include land use and density limitations, General Plan policies and growth control programs, development fees, and local approval requirements such as for use permits and design review. Non-governmental constraints include land prices, construction costs, community opposition and the availability of vacant developable parcels. The constraints identification and analysis for Cotati is ongoing with the input of developers and community members.
Potential Governmental Constraints:
•Land use controls, including density limits and zoning •Building codes and their enforcement
•Site improvement requirements
•Fees and other exactions
•Local processing and permit procedures
•Housing for persons with disabilities
•Transitional housing & supportive housing as a residential use of property Potential Non-governmental Constraints:
•Availability of financing
•Availability and price of land
•Cost of construction
•Community opposition
Local Housing Issues and Housing Needs
One of the many requirements for the Housing Element Update is the collection of data to help determine housing needs. This includes such things as how many residents are overpaying for their housing; overcrowded units; the costs of developing housing; and demographic information and trends. The bulk of the required housing and demographic data has been provided by ABAG and is contained in Attachment 1. The Housing Element must be more than just a set of policies and a list of sites for review and approval by the HCD. The Housing Element needs to contain policies and programs that will benefit and meet the needs of current and future Cotati residents. Those needs are being identified by the 4LEAF team and the community, and programs will be tailored to address them. The most important method of determining housing issues and needs is to ask residents. A survey has been issued in English and Spanish asking residents about Cotati’s housing issues and housing needs; preliminary survey results are provided as Attachment 2 and are summarized below.
Public Outreach to Date:
Housing issues affect the entire community and can be confusing and contentious. California requirements about what Housing Elements must do and allow, can seem at odds with longstanding community values and identity. The public participation requirement of Housing Element law presents an opportunity to engage constituents in defining housing issues and creating solutions that both meet the needs of the community and the requirements of state law.
Restrictions on indoor gatherings due to the pandemic have necessitated virtual community outreach and engagement. While in some cases this has made it possible for more people to be engaged in the process, a digital divide may exist in cases where households lack internet connections or may be unable to attend virtual meetings due to work obligations. To ensure that community outreach during the pandemic has been as equitable as possible, the outreach program included participation opportunities via cell phone, at public events and at the convenience of the residents. Cotati’s Housing Element Update has included the following public outreach efforts to date:
Housing Element Update Webpage provides status updates, introductory information to the Housing Element Update process, access to meeting agendas and materials, a dedicated email to provide comments about the Housing Element Update, a housing interest list sign up, and community opinion surveys in Spanish and English:
Figure 1: Screenshot of Cotati’s Housing Element Update Webpage (http://www.cotaticity.org/City_Hall/Departments/Community_Development/Housing/2023_H ousing_Element_Update)
Napa-Sonoma Collaborative Housing Element Update Webpage “Let’s Talk Housing” provides more generalized information regarding the Housing Element Update process itself, and is funded by a grant from ABAG/MTC supporting collaboration efforts between all of the communities in Napa and Sonoma Counties. Links to each individual communities housing element update pages are available frm this site.
Figure 2: Screenshot of the Napa Sonoma Collaborative Let’s Talk Housing Webpage ( https://nsc-housing.org/)
Community Events:
• October 24, 2019, Cotati City staff held a Housing Workshop to present an overview of State legislation affecting the upcoming 6th Cycle Housing Element Cycle. Among other things, this presentation included the changes to the RHNA process affected by AB 1771 and SB 828; the likely changes to the RHNA Distribution Methodology; and the upcoming Housing Methodology Committee (HMC) process managed by ABAG/MTC.
Following up on this workshop, city staff initiated the first community engagement effort to support the 6th Cycle Housing Element Update, the Community Housing Survey and over 100 responses were received.
• In December 2020 thru February 2021, City staff gathered community input regarding the design of housing within Cotati through the Multi-Family Visual Preference Survey.
Over 75 individual responses to this survey were received with the input informing the Multi-Family Objective Design Standards, which were adopted by the City Council in September 2021.
• November 10, 2020, City staff presented the outcome of the HMC process, providing a summary of the findings and direction of the HMC including the significant increase in the projected 6th Cycle RHNA, the likely use of the Plan Bay Area (2050) as the baseline data source and the significant changes to the Housing Element Update process. • Kick-off presentation at a joint Planning Commission/City Council meeting was held via Zoom on October 12, 2021, covering the Housing Element update process, new laws, opportunities for engagement, and local housing demographics. This meeting also included an opportunity for members of the public to speak. • October 31, 2021, City staff tabled at the Cotati Candy Land Trick or Treat Halloween Carnival, providing residents and visitors with an overview of the Housing Element process, the community survey and had a zoning map on display for booth visitors to identify sites suitable for housing development.
• December 4, 2021, Civic Edge Consultants tabled to provide information and solicit survey responses at the Cotati Chamber of Commerce annual “Shop and Stroll” holiday event in downtown Cotati.
• Community stakeholder group interview on February 2, 2022 and continuing stakeholder interviews with community-based organizations and housing developers. • Presentation to the Planning Commission on February 22, 2022 via Zoom to discuss preliminary sites and policy strategies. This meeting also includes an opportunity for members of the public to identify priority areas for the upcoming Draft Housing Strategy. • Future Public Town Hall event in Spring 2022 to further engage residents in the Housing Element Update process, with an interest in discussing equity, residents’ individual housing needs & concerns, and diligent, targeted outreach to equitably reach renters and students.
Community Opinion Survey and Preliminary Results:
Surveys were made available in English and Spanish and could be completed on paper or on cell phones, computers, or other internet-accessing devices. Surveys were promoted on the City webpage, email distribution lists, through social media, and on flyers posted throughout the community, including in coffee shops, laundromats, and community centers. The first community opinion survey on housing issues and opportunities generated 126 responses; aggregated results can be viewed in Attachment 2 of this report. The surveys were designed to elicit residents’ opinions about housing needs and opportunities, both now and in the future, as well as their ideas about new housing types that might help to meet identified needs.
The preliminary survey results demonstrate that residents have given housing issues much thought and have innovative ideas for meeting housing needs. Generally, survey respondents identified housing costs, both for renting and purchasing, as a top concern, along with housing affordable to people that work in the City and accessible homes for the aging population. When asked what types of new housing would be most successful in Cotati, “missing middle” housing such as smaller single-family homes, townhomes, and duplexes received the most support from respondents, followed by downtown apartments and accessory dwelling units (ADUs). When asked to provide their thoughts on housing opportunities in the community, respondents had a variety of opinions on different strategies. Responses included sentiments of support for the community’s walkability, bikeability, uniqueness, and compact urban design.
Respondents expressed support for increased density, student housing, senior housing, and affordable housing options. Responses also included concerns about dense development and sprawl. Preliminary survey results are provided as Attachment 2.
Discussion of Policy Options:
The primary task to be addressed by this Housing Element will be the need to meet the statutory requirements of the CA Government Code. In addition to fulfilling mandates, Cotati has unique community needs and interests that can be addressed by its Housing Element.
Some preliminary options for the Council and Commission to consider are outlined below; input is sought on the most favorable options to be pursued within the 2023 6th Cycle Housing Element. Additional policy ideas, solutions, and input from members of the public and from the Council and Commission are welcomed and encouraged.
ISSUE #1: ADEQUATE SITES APPROACHES & REZONING OPTIONS
As noted above, if the City does not have sufficient sites zoned at adequate densities to accommodate its RHNA, it must include a program within its Housing Element rezone sites to meet that need within three years of the Housing Element due date (by January 31, 2026), or within one year (by January 31, 2024) if the City does not adopt and certify on time. Strong penalties would be incurred if the City failed to accomplish the required rezones in a timely manner, up to and including the loss of land use authority.
Conversely, if the City can demonstrate that it already has adequate sites that meet AB 1397 criteria and are appropriately zoned to meet the City's RHNA, it does not need to include a required rezoning program in its Housing Element. It could, if desired, include an optional program or programs to consider rezoning to provide additional opportunities for housing; this type of supplemental program would not trigger the three-year rule. Rezoning may also be pursued throughout the 6th Cycle planning period without necessitating additional review of the Housing Element.
A preliminary analysis has been conducted of the sites available for housing (Table 1, below).
Once the housing projects in the City’s approval pipeline and the “safe harbor” ADU assumptions have been factored in, the City may have adequate sites to meet its regional housing need for most income categories. This analysis is preliminary, however, and proof of adequate sites under AB 1397 will be required prior to the inventory being approved by HCD.
As well, the City must ensure that it has adequate sites available for its RHNA throughout the Housing Element period, either by having significantly more sites in inventory than are needed, or by including a program to add appropriately zoned sites to the inventory as they are needed during the Housing Element period (see Issue #3).
Table 1: Preliminary Summary of RHNA Surplus
ELI VLI LI MI AMI Total
RHNA Allocation 30 30 34 39 101 234
Pipeline 0 30 8 15 337 390
ADUs/JADUs 3 4 7 7 3 24
RHNA
Credits
Preservation of Affordability 7 7 8 6 0 28
Remaining RHNA After Credits 20 -11 11 11 -239 -208
Sites from 5th Cycle Housing
Element 0 10 25 67 205 307
Additional Potential Housing
Sites
0 0 21 35 110 166
RHNA
Sites
Santero Way Specific Plan 0 5 5 5 83 98
TOTAL UNITS 10 56 74 135 738 1013
RHNA SURPLUS/SHORTFALL -20 26 40 96 637 779
% OF RHNA MET 149% 346% 731% 433%
ELI = Extremely Low Income; VLI = Very Low Income; LI= Low Income; MI = Moderate Income; AMI = Above Moderate Income
Policy Option A: Avoid rezoning sites. This option would make full use of other Housing Element programs to avoid any required rezoning of housing sites and the potential penalties that would apply if not accomplished on time.
Policy Option B: Rezone only after adequate inventory. This option would not completely avoid rezoning and might consider it in the future under some circumstances but only after an adequate inventory can be demonstrated without the need for a required rezoning program to meet RHNA.
Recommendation: Policy Option A. This option would allow for programs to consider targeted rezoning to be included in the Housing Element but would not count on the rezoning of any sites to demonstrate an adequate inventory and achieve a certified Housing Element.
The risks associated with a failure to rezone sites by the statutory deadline are too great to consider rezoning sites unless necessary to achieve an adequate inventory.
ISSUE #2: ACCESSORY DWELLING UNIT APPROACHES
As noted in the Introduction section above, the City can take credit for non-restricted units such as Accessory Dwelling Units (ADUs) or Junior Accessory Dwelling Units (JADUs) consistent with HCD’s income categories under “safe harbor” affordability assumptions, which are reflected in Table 1 above. The safe harbor for the number of ADUs assumed for the upcoming planning period is the average of ADUs permitted over the years 2018-2021; in Cotati’s case that average is 3 ADUs per year. If the City uses this safe harbor assumption, this portion of their inventory will be accepted by HCD. No Net Loss reporting rules will apply (See Issue #3, below).
If the City determines that a larger number of ADUs will assist it in reaching its housing goals, including the provision of units for special needs and smaller households, it may wish to adopt additional programs to incentivize, and support ADUs. If this is the case, then higher numbers of ADUs than the "safe harbor” assumptions may be justified. This may be an appropriate approach for Cotati with programs to incentivize production. The Community survey results indicate that the community believes that ADUs are a housing type that will work well for Cotati, and census data indicate that ADUs would provide a good match for aging households, smaller households, and special needs households where family or caretakers can remain close by. As well, the provision of ADUs throughout the City can help to meet AFFH (Affirmatively Furthering Fair Housing) objectives because it integrates affordable rental housing units into higher-resource single family neighborhoods.
Another option to provide for a portion of the very-low income RHNA within single-family neighborhoods would be JADU’s. This can help meet the specific housing needs of Cotati’s smaller households, students, and low-income seniors while creating opportunities for renters or caretakers to live on-site.
A new CalHFA grant program for ADUs is available to lower-income borrowers and this information could be provided as a potential program option. Furthermore, local programs facilitated by the Napa Sonoma ADU Center and financing options for prefabricated homes with Homes for Sonoma are available for programmatic considerations.
Option A: Increase ADU Assumptions. This policy option would make maximum use of the allowances for ADUs and JADUs by adopting new programs to facilitate and encourage the construction of ADUs and JADUs, and project a larger number of units to be constructed over the planning period than the safe harbor assumptions.
Option B: Use HCD “safe harbor” ADU assumptions. This policy option would not commit to adopting additional programs to facilitate and encourage additional ADUs, but instead would use the HCD safe harbor assumptions of 3 ADUs/JADUs per year (24 total units over the planning period).
Recommendation: Option A. Increase ADU assumptions beyond the safe harbor allowances, but only to the extent that new policies and programs are included to facilitate their construction.
ADUs meet many identified community needs and are easily integrated within Cotati’s housing stock due to enabling state legislation. Care will need to be taken to not project construction numbers and affordability levels too high such that replacement sites are needed under the No Net Loss provisions; see Issue #3 below. ADU’s under state law are currently approved ministerially, but such a program can promote permit ready ADU’s that are most compatible with Cotati’s neighborhoods.
ISSUE #3: NO NET LOSS APPROACHES
As noted in the new laws section above, the new “No Net Loss” laws will impact the sites used in Housing Element sites inventories, including assumed affordability levels and development assumptions. The intent of the legislation is to ensure all jurisdictions maintain an adequate supply of appropriately zoned land to accommodate their remaining RHNA for the entire 8-year Housing Element period. There are several components to this new law: First, a jurisdiction may not approve a project at a density or level of affordability lower than that listed in the Housing Element inventory unless it can make findings that adequate sites remain available to accommodate the remaining RHNA. Second, if a jurisdiction approves a project at a density or affordability level less than the level the site was listed for and it does not have enough other sites with appropriate zoning to accommodate the remaining RHNA, it must identify and rezone adequate sites within 6 months – a timeframe that is infeasible. Third, the inventory is expected to be dynamic and to reflect all changes and adjustments made throughout the Housing Element period. These adjustments would be made during the state mandated Annual Planning Report (APR). AB 72 allows referrals to the Attorney General for violations of the No Net Loss laws.
Jurisdictions must not run afoul of this law and plan for inventory changes throughout the Housing Element period.
Policy Option A: Zone an excess of sites to accommodate future development. This is an approach taken by many jurisdictions, with a sites “buffer” of at least 30 percent recommended.
Under this option, the City would need to ensure that there are adequate sites for at least 130% of RHNA for each income category. Preliminary projections for the 6th Cycle indicate that the City will meet and exceed this threshold.
Policy Option B: Decrease development capacity assumptions and assumed affordability levels for all sites listed in inventory. While the City is “allowed” to count any residentially zoned site that allows at least 20 units per acre as being able to accommodate 100% affordable housing, that may not be the best approach because it is difficult to predict the exact affordability levels that future projects will achieve. Likewise, the City must apply reasonable development capacity assumptions to the site, and not simply assume that 100% of the site will be developed.
Most jurisdictions use a conservative figure between 70 and 75 percent of capacity will be achieved; analysis of past development patterns in Cotati indicates that an 80% development capacity assumption is appropriate.
Policy Option C: Administrative “B” List of sites to be added as needed. This policy option has recently been used in Southern California Housing Elements prepared by 4LEAF, Inc. and accepted by HCD. This option treats the sites inventory as truly dynamic, and revisits it each year during the APR when, if necessary, additional sites that are appropriately zoned for housing can be added to the inventory list so that adequate sites are always assured. For this option, the City would maintain an administrative “B” list of sites that are appropriately zoned for housing but that were not the City’s first choice of sites to be listed in inventory. It is like Policy Option A in that the City still needs to have enough sites zoned to accommodate more than its RHNA, but it is not required to list those sites in inventory unless and until they are needed because a listed site developed at a lower capacity or affordability level. Under this option, a program would be included in the Housing Element to maintain an administrative list of qualified sites that could be added as needed during the APR at the beginning of each year. If the program is included in a certified Housing Element, then the revised inventory would not trigger a new HCD review of the Housing Element.
Recommendation: Options B and C. Development capacity assumptions should reflect the actual densities achieved for similar projects in the City. Likewise, assumed affordability levels should reflect the actual distribution of income groups across recent development projects. If development capacity and affordability assumptions are realistic and the City has additional sites beyond those needed to show an adequate inventory, then the ability to add sites to the inventory on an as-needed basis reduces the risk of falling into a net loss.
ISSUE #4: CONSIDERATION OF POTENTIAL NEW PROGRAMS
The 2023 Housing Element is an update of the existing Housing Element, and will retain most existing goals, policies, and programs. Programs that have been completed will be removed, and those that were not successfully implemented in the existing Housing Element will also be reviewed and either eliminated or revised and continued. New policies and programs will be added where needed to address new legislative requirements, to address housing needs and trends, and to affirmatively further fair housing.
Several new program concepts are offered below for discussion. Each concept would address an identified need or community preference, and most would incentivize diverse types of housing development within the City. The Council & Commission should consider new programs to facilitate housing development and increase the potential to demonstrate adequate sites. This workshop is an opportunity for the City to identify which policies are favorable to pursue in the upcoming Draft Housing Strategy; this is not an exhaustive list, but the beginning of a dialogue where the Council & Commission can provide feedback on these potential programs, as well as any other potential programs.
Housing on Church and School Sites. Churches and schools have traditionally been located within residential zones and are a part of the neighborhood fabric. Additional opportunities for housing types that would meet Cotati’s specific housing needs may exist on underutilized church and school sites. Existing uses on these sites could remain, with residential units added within underutilized areas. Any such development would be at the discretion and desire of the property owner. The allowance for the addition of housing on these sites could be made through a zoning text amendment, or through placement of the Workforce Housing Overlay discussed below. A zoning text amendment could open most or all church and school sites to residential uses; use of the overlay (below) would allow specific sites to be designated by the City Council.
Workforce Housing Overlay. This is a market-driven approach that gives the City control over where workforce housing can be allowed through a legislative process (City Council review).
The Workforce Housing Overlay Zone, once applied to a commercial or light industrial parcel, would allow any of the uses allowed by the underlying zoning, or multi- family housing (rental or ownership) at a density of 20 units per acre, or both. To qualify under HCD rules, the housing can only be subject to the same review process as the commercial and light industrial uses allowed by the underlying zoning. To use this option, the City would adopt a new Workforce Housing (W-H) Overlay Zone into the Zoning Code concurrent with the Housing Element adoption. The Housing Element would then include a program to add the W-H Overlay Zone to selected sites, either by an interested property owner or through the City’s rezoning action. The benefits of this approach are that it does not take away any allowed uses in the underlying zones; it provides greater flexibility in achieving mixed-use development by potentially expanding the locations where such development may be constructed; it is market-based so that property owners can choose the development type; it allows housing to be added to underutilized commercial sites, either vertically or horizontally; it allows business owners to live on-site or to provide housing for their employees on-site; and it allows the City to determine the specific sites that are suitable. The negatives are the cost of implementation, and the higher possibility that the “No Net Loss” law would come into play because of the different options for development.
City Density Bonus Program. California requires that a density bonus be granted to projects that provide a certain amount of their units as affordable. AB 2345 (2020) allows up to a 50% density bonus for eligible projects, and the exact percentage of affordable units required varies depending on the income level and whether the affordable units are rented or sold. A City density bonus program would meet this state requirement but go beyond it for projects that meet some of the City’s specified needs and to encourage development in existing Priority Development Areas. For example, a greater density bonus might be provided in exchange for more affordable units, a deeper level of affordability, the provision of some units as fully accessible or universally designed, the provision of childcare or eldercare on-site, or other identified city-specific needs. This type of program can incentivize development by providing a greater density bonus when certain criteria beyond the state’s requirements are met.
Incentivizing Smaller Units that are Affordable “By Design.” The Cotati City Council & Planning Commission approved the Cottage Housing Ordinance in 2021 to facilitate production of smaller housing units. The final adopted ordinance requires City Council approval of the projects’ “Housing Development Plan” for such projects and is primarily focused on detached housing types. Two potential programs are detailed below to further incentivize the production of smaller units through 1) calculating impact fees with Density Unit Equivalents, and 2) allowing missing middle housing with a locally tailored SB 10 ordinance. If there is Council interest, further programs could be incorporated to incentivize the development of co-housing, dormitory style homes, or communal housing units utilizing this “affordable by design” approach, specifically in existing Priority Development Areas where development can meet several community goals simultaneously and is more compatible with the surrounding land uses.
Density designations are calculated by the number of dwelling units allowed per acre. The traditional acreage-based density is the same regardless of the size of the unit—i.e., a project is allowed the same number of units per acre whether made up of studio apartments or fourbedroom apartments. This traditional framework incentivizes larger units because they count toward density allowances in the same manner as smaller units but are more profitable.
The concept of “density unit equivalents” would allow small units (studios, one- and twobedroom units under a certain size) to count as a fraction of a unit, and larger units (four+ bedroom units over a certain size) to count as more than one unit. This would encourage the development of more, smaller units, and discourage large units. For example, the provision of three micro-apartments could be considered equal to the provision of one three-bedroom unit in terms of the assigned unit density (see Table 2: Proposed Density Unit Equivalent, below).
Similarly, three 400 SF cottages or micro-units would be considered “equivalent” to a traditional 3-bedroom single family home.
Table 2: Example Density Unit Equivalents
Density Units
Micro-apartment or studio (<500
sf)
0.33 density unit
One bedroom (<750 sf) 0.50 density unit
Two bedrooms (<1,000 sf) 0.75 density unit
Three bedroom 1.00 density unit
Four or more bedrooms (>2,000
sf)
1.50 density units
A density bonus, if requested, would be applied to the mapped General Plan density.
Using the density unit equivalent concept, property owners or developers would be able to provide the number of density units in any combination. For example, consider a one-acre parcel with a mapped density of 10 units per acre. To meet the 10-unit count, a multifamily project could consist of 10 three-bedroom units, 15 one-bedroom units, or 30 micro-apartments. For a one-acre parcel with a mapped density of 5 units per acre, a single family development project could provide 5 three-bedroom units, or 10 one-bedroom cottages, or 15 efficiency units or tiny homes of less than 500 square feet. A combination of unit sizes can also be accommodated under this concept. The Council & Commission should note that unless development impact fees are also reduced to reflect the smaller unit sizes, the per-unit costs may remain too large to incentivize the construction of smaller, more affordable units.
State legislation facilitating greater production of smaller units in smaller developments is now available. SB 10 (2021) was passed to facilitate residential-scale density of missing middle housing such as townhomes and low-rise multiplexes in existing residential zones. The bill allows a jurisdiction to streamline for developments of up to 10 units. Where such a decision could have previously jeopardized Housing Element certification timelines with costly and lengthy rezoning, the enabling legislation exempts such local ordinances from the California Environmental Quality Act (CEQA). Though the legislation allows rezoning of up to 10 units, lower unit counts can be adopted. The ordinance can be tailored to a variety of local needs, including eligible parcels or zones and development/design standards such as height, setbacks, and parking requirements. This program is an opportunity for the City to expand upon the Cottage Housing Ordinance by opting into an existing state program while retaining local control with a tailored ordinance that addresses Cotati’s unique housing needs and opportunities.
Summary:
The preliminary sites analysis indicates that Cotati’s can likely demonstrate adequate sites under existing zoning (density allowances) to meet the RHNA allocation. However, in order to meet statutory requirements of the State and HCD and the results of the housing needs assessment currently being conducted, it is anticipated that the City will likely need to adopt several programs to target these individual requirements. A program to rezone sites for inclusion in the sites inventory is not recommended because of the state requirements and potential penalties if the rezoning is not accomplished by the deadline. Rather, the Council & Commission should consider and provide direction on pursuing the following programs that would assist the City in meeting its identified housing needs without triggering the more restrictive rezoning obligations:
• Make full use of the allowance for ADUs at the affordability levels predetermined by the Association of Bay Area Governments and pre-certified by HCD, and facilitate more ADU/JADUs than the 3 per year safe harbor along with the adoption of programs to encourage and facilitate them; • Consider amending the Zoning Code to allow residential uses in conjunction with church (and possibly school) uses;
• Consider adopting a Workforce Housing Overlay Zone that allows attached housing developments with the same review process as development in the base zone;
• Consider creating a City density bonus program that goes beyond the state program where it can also further other specified City goals, particularly in Priority Development Areas;
• Consider a program for workforce housing to purchase existing multi-family, or new development in Priority Development Areas using joint powers authority financing tools (or other financing tools to facilitate such development available in state law);
• Consider creating a program to waive, set to zero, or pay down certain impact fees for very low-income affordable housing units;
• Consider incentivizing smaller units of all types that are “affordable by design” using dwelling unit equivalents, particularly in Priority Development Areas where this can simultaneously meet several City goals;
• Consider incentivizing affordable and/or missing middle housing with enhanced streamlining provisions and prioritizing the review of such projects over typical market rate development;
City Council & Planning Commission discussion and public input on the City’s different options is requested. This input will then be used to formalize the City’s draft Housing Element strategy, programs and policies.
Next Steps:
Following this public workshop with consideration of comments received thus far, 4LEAF will work with City staff to prepare a Draft Housing Strategy to be presented at the City Council public workshop in Spring 2022. The Draft Housing Strategy will consist of the housing goals, policies, and programs to be included in the 6th Cycle Housing Element. It will be informed by state law, the public input received to date, and direction provided by the City Council & Planning Commission. Public input on the preferred options will be important in understanding the community’s desires and goals.
• Draft Housing Strategy will be prepared for input at City Council workshop. (Target: April 2022)
• An HCD Draft Housing Element, including a Draft Housing Sites Inventory, will be prepared for a 30-day public review and then for a 90-day review by HCD, during which time public comment will also be considered. CEQA review will be completed at this time. (Target: Spring - Fall 2022)
• Following HCD review, a Draft Housing Element incorporating HCD’s requested changes and the CEQA document will be prepared for Planning Commission recommendation and City Council action. (Target: Late 2022) Public input will continue to be accepted at each of these review points. Although certification after only one final review is not guaranteed, Cotati’s HCD-reviewed 6th Cycle Housing Element must be adopted by the City Council no later than January 31, 2023 and certified within 120 days in order to achieve timely certification and for the City to remain in compliance with state housing law.
Public Comment:
Separate from the surveys and input received through the engagement efforts detailed above, no specific public comments have been received pertaining to the information presented, as of the writing of this staff report.
Financial Considerations
The total anticipated cost of the Housing Element Update is $149,289, which is the anticipated total cost for the public engagement, CEQA analysis and the updated housing element itself. As the Council is aware, City staff have been successful in securing multiple grants specifically to cover the cost of State mandated housing efforts. These grants are anticipated to cover approximately $85,000 of the housing element update costs leaving a potential General Fund cost obligation of approximately $64,289. This falls within the $65,000 of General Fund monies allocated in FY21/22 for the Housing Element Update, therefore no additional budget requests are anticipated.
Environmental Issues
This action is an informational presentation only and as such, is not a project under the California Environmental Quality Act. The completed draft housing element will be analyzed under the requirements of the CEQA and a formal determination will be made prior to any decision actions on the proposed project.
Attachments:
ATTACHMENT 1 - ABAG_MTC_Housing_Needs_Data_Report_Cotati_w_toc (PDF) ATTACHMENT 2 - Preliminary Results from Cotati Community Survey (PDF)