Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: SANTERO WAY AND TOC REZONING ORDINANCE
Date: January 13, 2025
Written by: Noah Housh, Director of Community Development Recommendation
It is recommended by the Planning Commission and the Community Development Department that the City Council conduct the second reading of an ordinance to create the Santero Way (SW) and Transit Oriented Communities (TOC) zoning districts, to make additional zoning amendments to implement the Transit Oriented Communities (TOC) policy requirements from ABAG/MTC and to make other clarifying changes to the Cotati Municipal Code (CMC).
Background
.In August 2001, the Santero Way Specific Plan (SWSP) was adopted, and originally envisioned a mixed-use office neighborhood adjacent to the SMART rail station. The primary objective of the original SWSP was to increase the number of residents and employees within walking distance (1/2 mile) of the SMART station. Specifically, the original Plan envisioned the development of 198 new dwelling units, 339,200 square-feet of office and institutional uses, 68,000 square-feet of retail uses, and 57,000 square feet of supporting parkland/open space.
On August 8, 2023, in response to stalled development within the Plan area, the City Council authorized the City Manager to enter into a professional services agreement with 4LEAF Inc. and several subconsultants to provide planning consulting services to complete the Santero Way Specific Plan Update.
In September 2023, the Association of Bay Area Governments (ABAG) and Metropolitan Transportation Commission (MTC) published draft administrative guidance on their TransitOriented Communities (TOC) policies. These policies are intended to intensify land uses within ½ mile of transit hubs with the primary goal of increasing the overall supply of housing while also supporting the creation of jobs and increasing transit ridership, in keeping with the Plan Bay Area 2050. For Cotati, this area primarily covers properties along East Cotati Avenue. These criteria essentially serve to increase residential and commercial densities, support alternative transportation, and reduce the perceived impediments to development. While adoption of the TOC policies is voluntary for Bay Area jurisdictions, TOC compliance will be required to retain eligibility for One Bay Area Grant (OBAG) funds by 2026, which have amounted to approximately $1,000,000 in annual funding for the City of Cotati in recent years.
In April 2024, staff identified a potential opportunity for the environmental analysis being prepared for the SWSP Update to be expanded to additionally analyze the potential impacts of implementing ABAG/MTC TOC policies on the other eligible parcels within the ½ mile radius surrounding the Cotati SMART station (graphic attached). Including this analysis in the environmental impact report (EIR) already underway was approved in order to provide significant cost savings, expedite the analysis, and prepare the City for future adoption of the TOC policies.
In February of 2025 the Santero Way Specific Plan (SWSP) was adopted after 18 months of public engagement, environmental analysis and policy development. One of the core themes of the SWSP is the focus on the neighborhood’s proximity to the SMART station and the benefits of intensified land uses around the train station. These themes are captured through a range of policy ideas often labeled Transit Oriented Development. As was discussed during the review of the Santero Way Specific Plan (SWSP), some of the policies adopted with the SWSP were influenced by the Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC) Transit Oriented Communities (TOC) policy, which comes from their regional planning tool to manage growth in the nine counties of the San Francisco Bay Area, Plan Bay Area 2050+.
Plan Bay Area 2050+ is similar to a General Plan for a city or county but considers and plans for growth on a regional scale. ABAG/MTC identify goals and priorities to guide and manage Bay Area growth and use various methods to achieve compliance with the policies and programs, including allocation of grant funding such as the One Bay Area Grant (OBAG). In Cotati, OBAG provided significant funding for road infrastructure projects in recent years. For local jurisdictions seeking to comply with the Plan Bay Area, TOC has become one of the most impactful planning policies to come out of the 2050+ update process. This policy seeks to intensify land use in close proximity to transit stations and also standardize TOD development criteria throughout the Bay Area.
Because of the unique variety of jurisdictions and transit throughout the region, creation of the TOC policy implementation metrics has been an ongoing and iterative process spanning several years. Since the SWSP project was approved, implementation focus has moved from land use requirements within a ½ mile radius of the SMART station, to more broad policy requirements such as “The Three P’s of Housing”: Production, Preservation, and Protection; automotive and bicycle parking management; and efforts to facilitate circulation and station access. Required implementation of TOC policy is generally limited to the ½ mile radius around the transit stop (see pg. 27 MTC TOC Policy Version 1.1 May 2025), however the nature of some of the policy requirements make limiting enforcement to this geographic area of the City challenging.
In May 2025 the ABAG/MTC TOC policy guidance document was finalized allowing Community Development department staff to pivot their TOC policy efforts to the remaining properties within the broader half-mile radius from the SMART station not within the SWSP boundary. Due to the unique geography of the City, this primarily encompassed properties on E.
Cotati Avenue, from La Salle Avenue east to the SWSP. While demonstrating compliance with TOC policy direction is important to grant infrastructure funding, taking a thoughtful and community-informed approach to the land use changes in this established area is also critical to the successful implementation of these policies.
On June 25, 2025, staff built upon the outreach and engagement efforts of the SWSP, inviting all residents and property owners within a 500-foot radius of the remaining TOC parcels to a neighborhood meeting at Cotati City Hall. Four people attended the meeting and several others called in to ask questions and voice their perspectives. Generally, interested individuals were supportive of the policy efforts to get more homes constructed and to generate more business activity, but were concerned about parking impacts that could result from these intensified business activities (given the inability of the City to require any parking minimums under the proposed policies).
On September 15, 2025, the Planning Commission considered the strategy and code changes proposed by staff to implement the TOC policy at a workshop. After receiving the staff report and presentation, the Commission discussed the proposed policy changes and voted unanimously to support the staff recommendation, making a few additional recommendations. Specifically, the Commission recommended that the City Council incorporate a micro-distillery land use and ensure vintage clothing stores are permissible in the CMC.
On September 23, 2025, the City Council received the Planning Commission recommendation regarding the strategy and code changes proposed by staff to implement TOC policy and make other proposed Cotati Municipal Code (CMC) revisions, also through a workshop format. After receiving the staff report and presentation, the Council discussed the proposed policy changes and voted unanimously to support the staff recommendation, including the Commission recommendation to incorporate micro-distillery and vintage clothing land uses into the CMC, including in the TOC area.
On November 3, 2025, the Planning Commission held a public hearing to consider a draft ordinance to implement comprehensive set of code amendments to comply with the ABAG/MTC TOC policies as well as make some modifications to the CMC to resolve identified challenges and to implement policy direction received from the Planning Commission and City Council.
After considering the ordinance and receiving the public comment, the Commission voted 2-1 to recommend that the City Council introduce the ordinance. Additional details on the Planning Commission consideration are provided below.
On Dec. 9, 2025, the City Council held a public hearing to introduce and conduct the first reading of a draft ordinance to implement comprehensive set of code amendments to comply with the ABAG/MTC TOC policies as well as make some modifications to the CMC to resolve identified challenges and to implement policy direction received from the Planning Commission and City Council. After considering the ordinance and receiving the public comment, the Commission voted 4-0 to introduce the ordinance and requested that staff review potential impacts to the Oliver’s Shopping Center property. Additional details on the City Council consideration are provided below.
Analysis/Discussion
OBAG Funding and Eligibility
Future OBAG funding cycles will consider funding revisions that prioritize investments in transit station areas that are subject to and compliant with the TOC Policy. To ensure eligibility for OBAG 4 funding and any other discretionary funding that may be linked to TOC Policy compliance, jurisdictions are being directed to demonstrate compliance prior to adoption of OBAG 4 (expected in Spring 2026). Compliance with TOC policies is measured on a 100-point scale equally measured across four categories: Density, Housing, Parking, and Station Access (25 points each). These categories are further divided into specific standards and policy areas, each of which is assigned a numeric point value.
The results of ABAG/MTC's TOC applied Scoring Criteria will classify local governments as Fully, Partially, or Not Compliant, impacting each governments competitiveness with future funding (like OBAG 4). Points are proposed to be awarded for partial or substantial progress to incentivize implementation, using tiered compliance levels based on the allocated scores.
TOC Policy Core Components & Scoring
1. Density (25 pts): Measures minimum/maximum residential (units/acre) average & commercial (FAR) densities for new development in TOC areas, with tiers for compliance. In Cotati (Tier 4), compliant TOC density is an average of 25-35 units per acre across all TOC eligible parcels.
2. Housing (25 pts): Covers affordable housing production, preservation, protection, and commercial stabilization policies, with points for adopting specific policies (e.g., inclusionary zoning, overlay zones). Generally, policies for each category are able to be chosen from a menu of available options.
3. Parking (25 pts): Evaluates auto-parking management regulations (including AB 2097 compliance) and includes maximum parking limitations (1.5 spaces/unit or 4/1000 sq ft) for residential/commercial uses.
4. Station Access (25 pts): Focuses on improving transit access, including bike/pedestrian networks and reducing car dependency near stations.
Compliance Levels
Jurisdictions are categorized by their total score:
• Level 1 (85-100 pts): Fully Compliant
• Level 2 (40-84 pts): Partially Compliant
• Level 3 (0-39 pts): Not Compliant
Land Use and Planning Considerations
City Council Direction
During the December 9, 2025, public hearing to consider the proposed TOC implementation options, the City Council indicated general support for the Planning Commission recommendations, both regarding TOC policy implementation and the proposed “clean up” changes. After receiving the presentation on the proposal, asking questions to ensure complete understanding and taking public comments, the Council was supportive of the proposed CMC amendments but identified two concerns, Parking Unbundling and a potential loss of commercial land uses in the TOC zone (specifically the Olivers Shopping Center property). Members of the public had voiced concerns that unbundling of parking could result in rent increases due to parking being identified as an “added amenity” to existing residential units. Additional concerns were voiced that this change would disproportionately impact lower income residents and create parking impacts on surrounding residents and neighbors.
Separately, the Council identified concerns with the potential conversion of existing commercial property to residential land uses, as would be allowed under the proposed changes. In voicing these concerns, the Council directed staff to provide a “case study” of the Oliver’s shopping center TOC zoning to provide additional information and analyzing re-development allowances under current housing regulations, as well as those allowed under the proposed TOC rezoning.
This analysis is provided as an attachment to this staff report.
Staff Response
As originally proposed, staff set a goal of the City being fully compliant with TOC policies through TOC ordinance implementation. Since the City Council introduction of the ordinance, ABAG/MTC has provided some initial scoring feedback. Additionally, staff indicated the maximum possible loss in points if the Oliver’s Shopping Cener were removed from the TOC zone. Finally, comments were received by a developer regarding unit conversions as it relates to the viability of multi-family housing financing. See below for a summary of the potential compliance impacts based on available information and directed changes.
ABAG/MTC Comment-None of the documents referenced include a TOC consistent bus access improvement. While the first- and last-mile components of the Mobility Hub implementation may increase access to bus routes, no specific projects, route improvements, or transit agencies are named, and therefore the potential for gap closure cannot be assessed. Please review and reference operational studies/plans by Sonoma County Transit, for potential bus access projects.
Maximum Identified Compliance Impact: -7 points
Council Direction-Remove Unbundled Parking due to concerns with rent cost increases. • Maximum Identified Compliance Impact of not allowing unbundled parking: -1 point Council Concern-Inclusion of the Olivers Shopping Center in the TOC zoning district could result in redevelopment of the property into residential units and a loss of substantial commercial land uses within the City. Request staff provide a case study of the Olivers property development potential under the current CE zoning district (including current allowances under existing state housing laws) and the potential under the proposed TOC zoning district. • Maximum Identified Compliance Impact of removing the Oliver’s Shopping Center from the TOC zone: -20 points
Developer Concern-Preventing the (future) conversion of multi-family residential rental projects to for-sale condominiums could be problematic for financing of these projects.
Developer input has indicated that lenders often see the potential for future conversion of multifamily housing into condominiums as an opportunity to manage risk. If the bank has to foreclose on the development and sell it to recoup their investment, converting the individual units to condominiums is an opportunity to sell the units to individual residents if the bank cannot sell the larger project. If this change is made, it is unclear how it will impact the TOC preservation policy compliance scoring, but an estimated compliance impact is provided. • Estimated Compliance Impact to allow unit conversions: -4 points Based on this feedback, the staff recommendation is to:
1. Review the ABAG comment regarding transit improvements and look to potentially incorporate changes/projects to further supplement the City compliance and improve the overall circulation function of the TOC area. This would be a separate action from the Ordinance, if pursued.
2. Remove unbundled parking as an option in the proposed ordinance. To implement this change, staff have removed unbundled parking as an option in the proposed ordinance.
3. Keep the Oliver’s Shopping Center in the TOC zone, as described in the attached case study. No changes to the ordinance are proposed.
The above staff recommendations do not require a re-introduction of the ordinance because they do not expand the allowances proposed under the land use changes. Rather, they are a reduction in the scope of these changes and are therefore permitted as part of the City Council review and action on the TOC Rezoning Ordinance.
Lastly, it is recommended that the City Council also discuss allowing conversion of multi-family rental units built after Dec. 31, 2025 to condominiums, provided that they meet certain requirements. To guide this conversation, staff have added draft language to the ordinance that would allow such a conversion. However, this draft language must be stricken before adopting the ordinance, as it was not previously considered. If the City Council directs staff to move forward with this change, it will require a spot amendment of the ordinance at a future publicly noticed hearing.
IV. General Plan Consistency
These ordinance changes have been reviewed for compliance and consistency with the Cotati General Plan, including the Housing Element. Staff analysis has identified the following General Plan policies and actions as supporting the proposed changes to the municipal code and other policy implementation strategies:
Program 1-8: Residential Building Decarbonization: Continue to permit and encourage mixed uses and higher densities on in-fill and vacant sites in Priority Development Areas (PDAs) with public serving facilities, such as medical clinics, schools, and grocery stores, to discourage sprawl and encourage short vehicle trips and/or alternative forms of transportation.
Policy H-2.3 While the City is able to accommodate its share of the regional housing need without rezoning during the current Housing Element period, to the extent necessary, the City will consider land use re-designation and promotion of existing innovations like the Cottage Housing Ordinance in order to accommodate development capacity that affirm all other goals of the City’s General Plan and maintain Cotati’s rural character.
Policy H-2.6 Encourage mixed use development, including residential and live/work uses in commercial and office areas where the viability of the nonresidential activities would not be adversely affected.
Policy H-2.11 Encourage housing development on existing infill sites in order to efficiently utilize existing infrastructure.
In addition, these amendments are consistent with and implement the following General Plan policies and programs:
Policy CON 2.1: Improve air quality through continuing to require a compact development pattern that focuses growth in and around existing urbanized areas, locating new housing near places of employment, encouraging alternative modes of transportation, and requiring projects to mitigate significant air quality impacts.
Policy CON 3.10: Ensure that the layout and design of new development and significant remodels encourages the use of transportation modes other than automobiles and trucks.
Policy LU 1.1: Maintain a supply of developable mixed-use, commercial, industrial, and residential lands sufficient to meet desired growth and economic needs over the planning period.
Policy LU 2.5: Locate medium and higher density housing within easy walking or bicycling distance of public facilities, services, transit, and major employers.
Policy LU 2.10: Encourage mixed-use, pedestrian-, and transit-oriented development, with a focus on the Hub and major corridors.
Staff response: The proposed amendments will help to further the established goals, policies, and implementation programs of the General Plan, including the Housing Element and Santero Way Specific Plan to reduce greenhouse gas production and improve air quality by providing additional opportunities for alternative transportation and walkability; maintaining the supply of developable land and expand housing opportunities through increased density and increased development certainty, including on infill sites along E. Cotati Avenue and Santero Way; directing that the layout and design of new development encourages the use of alternative transportation; conserving resources by encouraging the efficient use of land and allowing more intense development of both residential and commercial land uses; and using land appropriately by increasing the intensity of development in close proximity to the train station and along one of the City’s primary commercial corridors.
Financial Considerations
Other than the staff time required to conduct the analysis and present the information, no direct financial impacts to the general fund were identified resulting from the analysis of TOC policy compliance. However, as has been identified, OBAG funding eligibility is being updated to include TOC compliance as a critical factor in fund allocation and grant approval. Given that a significant portion of the City’s capital improvement plan (CIP) budget has historically been funded by OBAG funds, a lack of compliance with TOC policy could significantly impact the City’s ability to fund future CIP projects. Additionally, a strong TOC compliance score could allow the City to increase its competitiveness for these funds and receive additional funding.
Because ABAG/MTC is still finalizing the TOC compliance criteria, the scope and benefit of this additional competitiveness is undetermined.
Environmental Issues
In keeping with CEQA Guidelines Section 15168(a), a Program Environmental Impact Report (PEIR) was prepared to analyze and evaluate the environmental impacts associated with the Santero Way Specific Plan Update and implementation of the Transit Oriented Communities (TOC) zoning updates. In accordance with CEQA Guidelines Section 15094(d), after the City Council approved adoption of the Specific Plan Update, the city filed a Notice of Determination with the County Clerk. Following adoption of the updated SWSP, proposed development projects that are consistent with the Specific Plan would undergo a streamlined CEQA review process. The proposal to adopt an ordinance implementing the TOC policies is seen as consistent with the EIR analysis and determination, as well as the environmental impact analysis of the Cotati General Plan EIR.
Both of these complete EIR (draft and Final) documents and all appendices are available for public review on the City website. These documents include impact analysis across all categories analyzed under CEQA; all comments received throughout the process and responses to each; summary of impacts all mitigation measures identified to mitigate to less than significant impacts.