EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: March 21, 2023
TO: Honorable Mayor and Members of the City Council
VIA: Melvin E. Gaines, City Manager
BY: Michelle Huang, Associate Planner
Karen Camacho, Housing & Economic Development Manager
SUBJECT: 2022 Housing Element and General Plan Annual Progress Report Recommendation
Adopt a Resolution:
1. Accepting the 2022 Housing Element Annual Progress Report and 2022 General Plan Annual Progress Report;
2. Directing staff to submit the 2022 Housing Element Annual Progress Report, 2022 General Plan Annual Progress Report, and Housing Successor to the Redevelopment Agency Annual Report to the appropriate State authorities; and
3. Finding that the acceptance and submittal of the 2022 Housing Element Annual Progress Report and 2022 General Plan Annual Progress Report are exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guideline Sections 15061(b)(3) and 15306.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
➢ Priority #6: Create a Healthy and Safe Community
Background
This staff report combines the following three annual progress reports, all of which must be submitted to the relevant State agencies by April 1 of each year:
• Housing Element Annual Progress Report (Housing Element APR) • General Plan Annual Progress Report (General Plan APR) • Housing Successor Annual Report
The Housing Element Annual Progress Report and the General Plan Annual Progress Report must be submitted to the California Department of Housing and Community Development (“HCD”) and the Governor’s Office of Planning and Research (“OPR”).
The Housing Successor Annual Report (Report) regarding the Low- and ModerateIncome Housing Asset Fund (“LMIHAF”) may be submitted as an accompanying document to the Housing Element APR.
These reports must be presented to the local legislative body for its review and acceptance prior to submission to the relevant government entity. The Housing Element APR and General Plan APR were presented to the Planning Commission on March 13, 2023.
Housing Element Annual Progress Report
Government Code Section 65400 requires all jurisdictions to prepare a Housing Element Annual Progress Report (Attachment 2) to detail the implementation of their Housing Element.
The report must be submitted to HCD and OPR by April 1 of each year for the immediate past calendar year. The Housing Element APR addresses the following topics:
• Progress on achieving the City’s Very-Low Income (VLI), including Extremely-Low Income (ELI), and Low-Income (LI) housing goals.
• Progress on achieving the City’s Moderate Income (MOD) and Above Moderate-Income (Above-MOD) housing goals.
• Progress on accomplishing the Housing Element workplan to increase, preserve, and improve the supply of affordable housing; invest in activities to end homelessness; promote equitable development; and create healthy, sustainable, communities and neighborhoods.
The Housing Element outlines the City’s plan to meet its affordable and market rate housing production goals, referred to as the Regional Housing Needs Allocation (RHNA). This allocation is determined by HCD, Department of Finance (DOF), and the regional Councils of Governments. The Association of Bay Area Governments (ABAG) is the Council of Governments (COG) for the nine-county Bay Area. The State agencies calculate statewide housing needs based on population projections and regional population forecasts used to prepare regional transportation plans.
ABAG is then responsible for distributing the RHNA to the Bay Area local governments using an allocation methodology that is consistent with development and growth patterns. East Palo Alto’s RHNA for the current 2015-2023 eight-year Housing Element cycle is 467 housing units.
The RHNA is divided into four income categories that encompass all levels of housing needs.
HCD publishes the income data for all counties each year. Please note that RHNA does not include Extremely Low Income (ELI) as a separate category; income levels up to 50% of the Area Median Income (AMI) are included in the Very Low Income (VLI) category. The State Income Limits for San Mateo County for 2021 are shown in Table 1 below:
Table 1: State Income Limits for San Mateo County, 2022 Income Level Number of Persons in Household
1 2 3 4 5 6
Extremely Low
(0% - 30% AMI) $39,150 $44,750 $50,350 $55,900 $60,400 $64,850 Very Low (31% -
50% AMI) $65,250 $74,600 $83,900 $93,200 $100,700 $108,150 Low (51% - 80%
AMI) $104,400 $119,300 $134,200 $149,100 $161,050 $173,000 Moderate (81% -
120% AMI) $139,450 $159,350 $179,300 $199,200 $215,150 $231,050 Above Moderate
(greater than
120% AMI)
NA NA NA NA NA NA
See San Mateo County Department of Housing:
https://www.smcgov.org/media/126576/download?inline=
The East Palo Alto RHNA allocation for each income range is shown in Table 2 below:
Table 2: East Palo Alto 2015-2023 RHNA Allocation
Regional Housing Needs Allocation (RHNA) for East Palo Alto Income Level # of Units % of Total
Extremely Low (0% - 30% AMI) n/a n/a
Very Low (31% - 50% AMI) 64 13.7%
Low (51% - 80% AMI) 54 11.6%
Moderate (81% - 120% AMI) 83 17.8%
Above Moderate (greater than
120% AMI) 266 57.0%
Total 467 100.0%
The City Council adopted the 2015-2023 Housing Element on January 17, 2017 and HCD certified the Housing Element on March 13, 2017.1
General Plan Annual Progress Report
The General Plan is the City’s “constitution” for future growth and development, providing a comprehensive guide for decision making on land use and other development and planning issues through established goals, policies, and programs. The City adopted its General Plan, VISTA 2035, on October 4, 2016. VISTA 2035 can be found on the City’s website at the following link: https://www.cityofepa.org/econdev/page/general-plan-update.
Government Code Sections 65400 and 65700 mandate that all cities and counties submit an annual report to the Governor’s Office of Planning and Research (OPR) on the status of their General Plan (see Attachment 3). This report is submitted separately from the Housing Element APR and addresses all other components of the General Plan. It is intended to provide the OPR with an overview of statewide trends in land-use decision making, planning 1 The Housing Element can be found on the City’s website at the following link:
https://www.cityofepa.org/housing.
and development.
The General Plan APR should demonstrate progress on the City’s overall implementation program, or specific measures associated with the implementation of each section of the General Plan. It should also contain an overview of any major planning activities undertaken in 2022, such as specific or master plans, master environmental assessments, General Plan amendments, and major development applications.
Housing Successor Agency Annual Report
The Housing Successor to the Redevelopment Agency Annual Report for Fiscal Year 2021- 2022 (“Housing Successor Report”) is included as an accompanying document to the Housing Element Annual Progress Report, thus satisfying the requirements of Senate Bill 341, which took effect on January 1, 2014. This report describes how the City (as the Successor to the former Redevelopment Agency of the City of East Palo Alto) has utilized its former Redevelopment Agency funds for housing activities in conformance with the California State Health and Safety Code.
Analysis
Housing Element Progress in 2022
In 2022, the City issued building permits for 29 new residential units, including non-deed restricted Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs).
One single-family dwelling building permit was “finaled” (all required inspections were satisfactorily completed) in 2022.
The City’s overall progress in achieving its RHNA goals from January 1, 2015 to December 31, 2022 is shown in Table 3 below. Units are counted in Table 3 when they are issued a building permit. Note that extremely low-income units are not counted separately in the RHNA or on the Housing Element APR; they are included in the very low-income total.
Table 3: East Palo Alto Building Permits Issued by Income Level, 2015-2023 RHNA Progress, 2015-Present
Income
Level 2015 2016 2017 2018 2019 20202 2021 2022 Total Deficit ELI (0% -
30% AMI) 16 26 8 4 54 n/a
VLI (31% -
50% AMI) 4 68 7 5 84 -74
LI (51% -
80% AMI) 24 2 3 6 7 42 12
MOD (81%
- 120% 1 5 1 2 2 6 7 24 59
2 Please note that additional units were permitted from the Light Tree development in 2021. Since Light Tree is a phased project with construction spanning multiple years, the 91 net new units were all counted in 2020 when the first Building permit was issued.
AMI)
AboveMOD
(>120%
AMI)
50 2 5 3 1 4 5 4 74 192
Total 91 7 5 4 9 103 32 27 278 189
Looking at the building permits issued, the City has met 60% of its cumulative 2015-2023 housing goal. By income category, the City has met 28% of its market rate housing goal and 101% of its affordable housing (extremely low income to moderate income) goal to date.
Projects in the Pipeline – Entitled Units or Units with SB 35 or SB 9 Zoning Clearance
While only projects that received a building permit in 2022 will be counted towards the City’s RHNA progress, the Housing Element APR also accounts for projects at other stages of development, including entitled projects. These are shown in Table A2 of Attachment 2. Please note that the SB 35 and SB 9 projects, as described below, are listed as “entitled” projects for the purposes of the APR.
In 2022, the City accepted applications for several market-rate housing projects, including inclusionary housing projects that will create a more diverse housing stock. All residential developments in East Palo Alto that create additional housing units are subject to the City’s Inclusionary Housing Ordinance, which requires 20% of units in any project of five or more units to be provided as deed-restricted affordable housing.
Three residential projects received SB 9 Zoning Clearance throughout the year of 2022 for a total of six units. One of the three SB 9 projects, Lincoln St (APN 063-186- 270), included an inclusionary housing component, for a total of 1 deed-restricted inclusionary unit at 35% AMI.
Single-Family Residential Projects
The entitled 990 Garden Street residential project includes six market rate singlefamily residential units and one deed restricted below market rate duplex, as required by the Council-approved inclusionary agreement. The project site has a Low-Density General Plan land use and a Residential-Low Density (R-LD) zoning designation. The proposed six residential units would consist of a two-story single-family dwelling, each unit with an attached carport and two uncovered parking spaces on the driveway. The applicant has affirmed that they will submit ministerial permits for the duplex (consistent with SB 9) and ADUs for the six single family units. The project was approved in February 2023.
Multi-Family Residential Projects
The Woodland Park Euclid Improvements Project was entitled on November 15, 2022 to demolish and replace 161 units with 605 units, resulting in 444 net new units. This project was a key milestone, as it included a high number of units, zoning code and General Plan amendments, a Development Agreement, with a robust relocation and anti-displacement plan and inclusionary housing requirements amongst several other conditions of approval. Based on the developer’s projected rents, this project will add 271 moderate income and 173 Abovemoderate income units.
SB 35 Projects
California Senate Bill 35 (SB 35), known as the Streamlined Ministerial Approval Process bill, was passed in September 2017 and in effect January 1, 2018. As a law intended to streamline housing construction to address the state housing crisis it requires that cities approve housing projects that meet objective zoning standards through a ministerial process.
This requirement applies to jurisdictions that do not issue enough building permits to make progress on their RHNA, as determined by HCD. If the jurisdiction also has not made sufficient progress toward its Above-Moderate income RHNA, then it is required to streamline developments with at least 10% affordable units. East Palo Alto is subject to this requirement.
Since SB 35 projects receive ministerial, rather than discretionary, review, they are not “entitled.” Instead, projects are reviewed by the Planning Division for conformance with the City’s existing objective development standards and issued a Zoning Clearance to enable a project to proceed to the building permit stage.
Between 2018-2021, two applications were subject to the streamlined, ministerial review process through SB 35 because they complied with the City’s Zoning Code, General Plan and Inclusionary Housing Ordinance and met the affordability threshold of 10%:
• 1804 Bay Road - a 75-unit mixed-use project with 10 inclusionary units: 3 at 35% AMI; 5 units at 50% AMI; and 2 at 60% AMI.
• 760 Weeks Street - a 10-unit condominium project with 2 inclusionary units, restricted to 80% and 120% AMI.
The City received no requests for SB 35 projects in 2022.
SB 9 Projects
California Senate Bill 9 (“SB 9”), passed in September 2021 and effective January 1, 2022, requires ministerial approval of housing development with no more than two primary units on a single-family zoned parcel, the subdivision of a single-family parcel into two parcels, or both. It also facilitates the creation of up to four housing units in a single-family home lot because each primary unit would be allowed one Accessory Dwelling Unit (ADU) and/or Junior Dwelling Unit (JADU).
Similar to SB 35 projects, SB 9 projects are subject to ministerial, rather than discretionary, review. These projects are initially reviewed by the Planning Division for conformance with the City’s existing objective development standards and issued a Zoning Clearance (or “approved”) to enable a project to proceed to the building permit stage for a ministerial building permit.
In 2022, three SB 9 projects were granted zoning clearances to proceed to the building permit process, for a total of six units: 805 Runnymede, 1215 Cypress, and Lincoln St (APN 063-186-270).
• 805 Runnymede is a proposal to build one above-moderate income 3,607 square foot second unit on a lot with an existing dwelling. The developer will pay the in-lieu fee for the inclusionary requirement before the issuance of a building permit.
• 1215 Cypress is a proposal to build one above-moderate income 1,200 square foot unit on a vacant lot. The developer will pay the in-lieu fee for the inclusionary requirement before the issuance of a building permit. • Lincoln St (APN 063-186-270) is a proposal to build two rental units with two ADUs on a vacant lot. The inclusionary unit is an attached ADU, deedrestricted as an extremely low-income unit.
Projects in the Pipeline – Under Review
Projects are considered “pipeline” if there is an active Planning application under review, but the project has not been deemed complete and/or the project has not received any Planning approvals. These units are not yet reflected in the Housing Element APR but are important to contextualize the unit counts shown in this staff report and capture housing development trends.
Further progress on very low-income, low-income, and moderate-income units is anticipated from these developments due to the City’s Inclusionary Housing program.
All residential developments in East Palo Alto that create additional housing units are subject to the City’s Inclusionary Housing Ordinance, which requires 20% of units in any project of five or more units to be provided as deed-restricted affordable housing.
Table 4 below shows the additional housing units in the City’s development “pipeline” against the remaining RHNA. The chart captures the development projects that are in the preapplication stage and that the Planning Division is most likely to be engaged within 2023.
Please note that Table 4 includes projects in the pre-application phase, or for which the Inclusionary Housing obligation has yet to be finalized. For these projects, unit estimates are calculated by applying the 20% standard on-site Inclusionary Housing requirement and are only intended for reference. As these are preliminary estimates, they should be interpreted more as an illustration of potential RHNA progress. If they receive entitlements and/or building permits in 2023, these units will be added to the 2023 APR; if they receive building permits in 2023, they will count toward the 2023 RHNA in the next 2023-2031 RHNA cycle.
Table 4: Unit Pipeline Estimates by Proposed Development Project Development Type of
Project Status AboveMOD ELI VLI LI MOD Units Total
Four Corners Rental Under
Review 144 9 27 180
717 Donohoe Condo Under
Review 12 1 1 14
2340 Cooley Condo Under
Review 7 1 8
842 Green Single
Family
Under
Review 3 3
1201
Runnymede Townhomes Under Review 16 4 20
755 Schembri
Duplex,
Single
Family &
ADUs
Under
Review 6 6
851 Weeks Rental Under
Review 22 44 23 89
120 – 126 Maple
Lane
SingleFamily
Townhomes
Under
Review 4
EPA Waterfront Mixed use Under
Review 208 13 26 13 260
Harvest: The
Landing Commercial Under Review TBD 95
n/a ADUs Under
Review 4 0 0 0 0 4
n/a Other Single
Family
Under
Review 0 0 0 0 0 0
Estimated Pipeline Unit Total 683
Large Development Projects in Concept Phase
The applicants of the four large mixed-use or commercial projects listed in Table 4 have expressed interest in providing housing: Mid-Pen: 851 Weeks or Colibri Commons, Sandhill: Four Corners, Emerson: EPA Waterfront, and Harvest: The Landing.3 As reported in prior Housing Element APR staff reports, the City has seen unprecedented development activity in its Ravenswood/4 Corners Specific Plan area, prompting the City to analyze revisions to the specific plan.
These developments will be subject to the broader RBD Specific Plan update.3 Some parcels included in these proposals are not currently zoned for housing, and the combined unit count of these proposals would exceed the original housing maximum of 835 units originally studied for the RBD specific plan.
This high level of development interest and activity indicates that the City may be able to meet its RHNA goals if the City is able to address its significant infrastructure challenges.
Key Impediments to Housing Production
State law requires that jurisdictions identify any significant impediments to the production 3 The Landing project does not contain housing units on-site but proposes an off-site development consisting of 95 affordable units located at 1106 Weeks St. in fulfillment of Chapter 18.40 (Affordable Housing Impact Fee for Nonresidential Development) of the East Palo Alto Municipal Code. of housing units. Prior to 2018, the key impediment in East Palo Alto was the Temporary Water Moratorium (Ordinance No. 399), which was adopted in July 2016 and ended in July 2018. This resulted in the suspension of progress on several housing related projects.
With several developments in the pipeline, the chief impediment to further housing development in East Palo Alto remains infrastructure related. Pipeline projects are experiencing significant delays as the City and developers of affected projects work with the East Palo Alto Sanitary District (EPASD) to find a feasible solution to the system’s capacity. The City has initiated a process with the San Mateo Local Area Formation Commission (LAFCo) to address this impediment, for example, by having EPASD potentially be operated by another entity that could implement a feasible effort to increase the sanitary system’s capacity.
In addition, while the City has largely met its water supply needs, water distribution and storage remain a challenge. However, the City has taken major steps to address these shortfalls. On October 4, 2022, the City approved the 2022 Water System Master Plan (“WSMP”) and appropriated nearly $8.4 million to design and build several key City water infrastructure projects over the next two years and provide an overall plan for potable water infrastructure improvements for the next twenty years. The City has also secured several funding sources for major capital improvements to improve water distribution for the entire city, including an $8 million State allocation, $1.5 million of which will go toward water infrastructure improvements along University Avenue and Weeks Street, and the rest of which will go toward construction and permanent costs for the 136- unit affordable housing development, Colibri Commons (formerly known as 965 Weeks).
The Missing Middle: Moderate-Income Units
Although progress is being made in developing more affordable housing (for ELI, VLI, and LI households) and market-rate (aka Above MOD) housing, many jurisdictions are challenged to develop more housing units for Moderate-Income households, defined as those earning at or below 120% of the County’s Median Income. The City is required to develop 83 moderate-income units before the end of the 2015-2023 Housing Element cycle. However, the funding sources to develop Moderate-Income units are limited.
Given the number of market-rate, for-sale residential developments currently in the pipeline, the City’s Inclusionary Housing program is likely to continue to add significantly to the production of Moderate-Income units. There have been several projects since adoption of the Inclusionary Housing Ordinance in 2019 that include for-sale units in the 80-120% AMI range.4
From 2020 through 2022, the City implemented multiple initiatives to increase the production of ADUs, which can serve as a source of “naturally” affordable housing for Moderate-Income households. For example, the City and its partners completed their “ADU Streamlining” initiative, funded by an SB 2 Planning Grant, and continue to meet to discuss additional streamlining options. In November 2020, the City adopted its updated ADU ordinance, and will update its ADU ordinance again in 2023 to align with new state laws. New states laws include SB 9 (effective January 1, 2022) and SB 897 (effective 4 In for-sale market-rate residential developments of five or more units, 20% of the units must be affordable to LI and Moderate-Income homebuyers.
January 1, 2023), which have greatly incentivized ADU production. Further ADU progress is discussed below.
Other Key Accomplishments & Initiatives that Will Increase Housing Production Accessory Dwelling Units (ADUs)
As noted above, the City has invested significant resources into encouraging the production of ADUs as a strategy for adding to the affordable housing stock in East Palo Alto. City staff participates in monthly ADU Technical Working Group meetings with community partners and collaborate with these organizations on multiple ongoing ADU initiatives. Through the SB 2-funded “ADU Streamlining” initiative, the City’s partners led a comprehensive analysis of the full ADU application process and will be conducting interviews with City staff and ADU applicants. They will be further assisting Planning staff by creating an interactive East Palo Alto ADU website and updated handouts that reflect the City’s updated ADU ordinance.
As part of the City’s efforts to streamline ADU applications and reflect changes to state ADU law, Planning staff have updated the Zoning Clearance Form to provide early feedback on a proposal’s compliance with the Zoning Code, which expedites the ADU plan review for the building permit process. City staff anticipate updating the City’s ADU ordinance in the Summer of 2023.
City staff also participates in weekly CalHome meetings with the CalHome ADU/JADU Loan Program administrator, East Palo Alto Community Alliance and Neighborhood Development Organization (EPACANDO), to identify potential applicants for the $2,000,000 grant received from HCD in 2020.5
The number of ADU applications continues to be consistent with 2021. As noted above, in 2022, the City issued 29 ADU building permits and 26 zoning clearances to ADU applicants. In 2021, the City issued 30 building permits and 26 zoning clearances for ADUs, and issued 13 ADU building permits and 12 zoning clearances in 2020.
Progress on the City’s Five-Year Affordable Housing Strategy In October 2018, the City approved its Affordable Housing Strategy (“the Strategy”). The Strategy directs limited affordable housing funds into the development of new, deed-restricted affordable housing, with the goal of doubling the number of deed-restricted units and preserving 200 existing affordable units by 2023. The Strategy also outlines potential regulatory changes and other creative approaches that the City and community partners could utilize to increase the production of affordable housing.
The City has made significant progress towards the goals of the Strategy, completing the majority of the items on the workplan. In 2022, this included:
• 965 Weeks – awarded the Affordable Housing and Sustainable Communities (“AHSC”) grant and loan in January 2022; awarded a $8 million state earmark for construction and permanent costs in July 2022, $1.5 million of which is for major water infrastructure 5 The program officially launched January 2022.
improvements (funds expected to be dispersed in Spring of 2023) • LightTree – supported the developer in disseminating information regarding open applications;
• School District Sites – continued to support the school district in its interest in developing affordable housing on district-controlled land; • RV Safe Parking Program – renewed nighttime operations through April 2023; established Master Temporary Use Permit (TUP) program for temporary shelter; • Coordination on Homelessness – monthly meetings with County partners and service providers on homeless encampments in East Palo Alto;
• Inclusionary Housing – processed three SB 9 projects with in-lieu fee payment and one with an alternative compliance inclusionary requirement; updated the City’s Inclusionary Housing Guidelines and In-Lieu Fees;
• Preservation – supported preservation of 32 Nugent Square units for an additional 55 years with the 2022 resyndication and City renewal of 1,000,000 loan; and • Multi-Family Development – negotiated and approved the Development Agreement and Conditions of Approval for the Woodland Park Euclid Improvements Project.
General Plan Progress in 2022
In addition to the Housing Element, the General Plan consists of several distinct sections: Land Use and Urban Design; Economic Development; Transportation, Health and Equity; Parks, Open Space, and Conservation; Infrastructure Services and Facilities; Safety and Noise; and the Westside Area Plan. Each element includes specific programs to implement the identified goals and policies. The table in Attachment 3 shows the status of the implementation of each individual program in the VISTA 2035 General Plan. This table will be provided to OPR as the annual report.
Key Progress Efforts in 2022
In spite of the challenges of the continued COVID-19 pandemic and staffing, the Planning Division made progress on a number of different projects in 2022 to address certain General Plan Programs, as identified in Chapter 12 of the General Plan, Implementation Programs.
Currently, 23% of the programs are complete, 56% of the programs are in progress, and 41% of the programs have not started or are in the pipeline. One General Plan Amendment was approved in November 2022 for the Woodland Park Euclid Improvement Apartment project, to apply the Neighborhood Center Overlay to allow for a density of up to 175 dwelling units per acre. This new designation was found to support multiple General Plan policies for the production of housing. State law allows General Plan Amendments up to four times a year.
Table 5: Vista 2035 General Plan Program Progress
Several key projects are highlighted below (See Attachment 3 for the program details):
Land Use and Urban Design Programs
Ravenswood Business District/Four Corners Specific Plan Update The City of East Palo Alto has been working on an update to the Ravenswood/Four Corners Transit Oriented District Specific Plan. The purpose of the update is to analyze the impacts of allowing an increasing amount of office development and housing within the Ravenswood Business District (RBD) and to develop a framework for obtaining community benefits from the new developments and ensure that the new development integrates into the community of East Palo Alto while creating a ‘complete neighborhood’ in the city. The update consists of a two-year effort that includes planning and environmental analysis, community outreach, and further emphasis on design and development standards for the Specific Plan area.
The City and Raimi + Associates held multiple community outreach events to capture and understand the community’s perspective and comments on the RBD developments in the summer of 2022. A range of engagement activities was created to identify and prioritize community benefits from RBD developments, including subsidized space for local entrepreneurs and community use, affordable housing units, job training, homeownership programs, and more. City staff have drafted and released the Notification of Preparation for the environmental review process in April 2022. The community benefits framework has been identified, which includes eight components:
1. Base Requirements: requiring new office/RBD development projects to meet all adopted City requirements and ordinances, such as Measure HH, inclusionary housing requirements, commercial linkage impact fees, and various public infrastructure impact fees.
2. Financial Transparency: requiring financial transparency for RBD developments on the confirmed total dollar value of proposed community benefits and if the value is adequate to the granted development rights.
3. Jobs and Housing Linkage: creating policies to produce new affordable housing based on development square footage.
4. Office/R&D SF Allocation Methodology: ensuring that maximum community benefits are achieved in exchange for the allocation of office/R&D square footage by setting a threshold to evaluate the potential projects’ community benefits proposal.
5. Community Benefits Scorecard: ensuring and evaluating the highest priority and community benefits are provided to the community by the RBD development projects.
6. Ongoing Revenue Stream for Community Benefits: creating a Community Benefits Fund that further assists the community by providing funding. The fund would be overseen by the City.
7. Community Entity to Guide Decision-Making on Benefits: creating a ‘Local Benefits Commission’ with advisory oversight of the Community Benefits Fund. The advisory body would ensure community involvement in deciding how benefits dollars or spaces are utilized or allocated.
8. Benefits Phasing: requiring a phasing plan to explain how the proposed project intends to deliver benefits over time which ties into specific benchmarks such as development approvals or permit entitlements.
A series of study sessions and public hearings are scheduled this year in order to conclude the Specific Plan in 2023.
Economic Development Programs
Local Hire
The residents of East Palo Alto have a lower rate of high school and college diploma and have a significantly lower per capita income and median family income than residents of the surrounding Bay Area. East Palo Alto per capita income from 2017 – 2021 was approximately $36,505 while nearby cities like Menlo Park and Redwood City were approximately $98,481 and $69,317. To further provide and ensure full and equitable opportunities for East Palo Alto residents, the City of East Palo Alto adopted a First Source Hiring Ordinance in April 2022, which will be Chapter 5.11 of the City of East Palo Alto Municipal Code. The First Source Hiring Ordinance allows residents to participate in employment opportunities that arise from Public Works contracts and City subsidized projects. The policy aims to increase the number of employed persons in the City and reduce the unemployment rate within the City. The First Source Hiring program will establish workforce development and referral programs for the residents to be more competitive in the workforce and marketplace. The main components and details of the First Source Hiring Ordinance are summarized in the table:
Table 6: East Palo Alto First Source Hiring Program Summary Ordinance Component Description
Applicable Projects and Value Threshold • Public Works projects: $100,000 or greater
• Subsidized Projects: with a subsidy
from the City of $100,000 or more
• A project that is sited on property
leased from the City
Public Works Project FSH Minimum • 20% of all work hours for duration of project
• 20% of new hires for duration of
project,
o of which 5% must be
“disadvantaged” workers
Subsidized Retail, Office, Administrative
Other Project * FSH Minimum
• 20% of total workforce
• 20% of new hires (for limited
time)
Basic Requirements • First Source Agreement with
established hiring process
• Engagement with City employment
referral system
• Regular reporting to City
“Good Faith” definition Ability to demonstrate:
• Compliance with City guidelines
and local employment plans
• Interactivity with the City job
coordinator on new job
information/postings
• Establishments with local unions to
hire East Palo Alto residents
Waivers • Approval of any contract that does
not demonstrate ability to
meet FSH requirements would
require waiver, with City Council
approval only
Exempt Projects Small businesses (fewer than 10
employees)
Enforcement • City has authority to determine
compliance
• Public Works Contracts may be
paused or revoked as necessary if
provisions are not followed
• Civil penalties for noncompliance
Transportation Programs
Public Works Capital Improvement Program
The City of East Palo Alto aims to improve safety for road access and routes for the residences, while providing adequate sidewalks and amenities. Public Works Division has identified the Addison Avenue Safe Routes to School and Green Street Improvements to enhance pedestrian safety and access. The project construction contract was awarded in April 2022, and the construction started in September 2022. The project is to improve pedestrian safety by constructing a sidewalk along one side of Addison Avenue, with curb ramps to meet ADA standards. The street improvement will install signage and pavement marking to designate the road as a Class III bike route. Curb extensions will be incorporated at the intersection corners which will improve pedestrian safety on the identified streets by enhancing pedestrian visibility on approaching vehicles.
Safety and Noise Programs
Hazard Mitigation and Public Disaster Planning/Training The Local Hazard Mitigation Plan (LHMP) effort has been led by the Police Department, the Public Works Department and the Planning Division and is part of a countywide effort known as the San Mateo County Multi-Jurisdictional Hazard Mitigation Plan. All participating local jurisdictions have been responsible for assisting in the development of hazard and vulnerability assessments and mitigation action strategies for their respective jurisdictions and organizations. The LHMP presents the accumulated information in a unified framework to ensure a comprehensive and coordinated plan covering the entire San Mateo County planning area. Each jurisdiction has been responsible for the review and approval of its individual sections of the LHMP. A ten-member Steering Committee (SC) composed of representative stakeholders was formed to guide the development of the LHMP. In addition, residents were asked to contribute by sharing local knowledge of their individual area’s vulnerability to natural hazards based on past occurrences. Public involvement has been solicited via a comprehensive public outreach campaign that included two rounds of public meetings, webbased information, a questionnaire, and multiple social media updates. The hazard identification and profiling in the LHMP addresses the following hazards of concern within the planning area:
1. Dam failure
2. Earthquake
3. Flood
4. Landslide
5. Severe weather
6. Tsunami
7. Wildfire
Community Rating System
The Community Rating System (CRS) program is a voluntary program established by the Federal Emergency Management Agency (FEMA) and managed by the Insurance Services Office (ISO) to reduce flood losses, facilitate accurate flood insurance rating and promote the awareness of flood insurance. Certification is required annually, with the most recent in 2022.
Communities participating in the CRS program, including the City of East Palo Alto, earn credit points by implementing floodplain management activities that exceed the minimum requirements established under the National Flood Insurance Program (NFIP). Every 500 credit points that a community earns under the program translates to a higher-class rating and an additional 5% discount on flood insurance premiums for properties in the Special Flood Hazard Area (SFHA), as illustrated in the table below. Currently, the residents of East Palo Alto receive a 15% reduction in flood insurance premiums. The City’s eventual aim is to reach and stay at Class 6, which would mean a 20% reduction in residents’ flood insurance premiums and represent the highest level ever achieved by the City of East Palo Alto.
Infrastructure, Services, Facilities Physical Improvements Programs Parks Master Plan
The City is developing its first Parks Master Plan to guide future improvements of the existing parks and the development of new parks and open spaces. The Master Plan identifies goals and policies, which would be consistent with the General Plan, to guide the development of parks and open space. One of the primary goals is to ensure that East Palo Alto residents can safely access parks and open spaces. Seven community priorities and principles were identified through the community engagement process that took place in 2021 - 2022:
1. Connect People to Parks: ensure East Palo Alto residents have safe access to parks and open spaces;
2. Create Diverse and Inclusive Parks: provide reliable, free, and serviceable parks to city residents;
3. Promote Public Health and Sustainability: promote and establish community health through parks and open spaces while encouraging sustainable practices;
4. Celebrate The Bay: enhance and improve access to nature preserves and resources;
5. Activate East Palo Alto Parks: provide programs that reflect the community needs while providing safe parks and open spaces;
6. Improve Park Operations: maintain and improve park operations by expanding and diversifying staff resources;
7. Grow Programming and Partnerships: develop programs and opportunities and strengthen relationships with local nonprofits and organizations.
In Spring 2022, the City hosted its second Parks Master Plan community workshop to further gather public feedback on park improvements and operations and notify the public of previous feedback that the City received during the 2021 community workshops. Two pop-up events were hosted to notify the public regarding the Parks Master Plan and to retrieve the public comment on the master plans. The draft Parks Master Plan is currently out for public review and scheduled for a third community workshop. The draft plan is scheduled for a City Council discussion and adoption at its April 4, 2023 meeting.
Housing Successor to Redevelopment Agency Annual Report Staff has also attached the Housing Successor to Redevelopment Agency Annual Report (Attachment 4) for Fiscal Year 2021-2022 (“Housing Successor Report”). As mentioned previously, the Housing Successor Report is required to be submitted with the Annual Housing Element Progress Report. The Housing Successor Report provides information on the Successor Housing Low and Moderate Income Housing Asset Fund (“LMIHAF”). The Housing Successor Report is included as an attachment to the Housing Element Annual Progress Report.
The Successor Agency Report shows that the City had $11,517,417 LMIHAF assets at the end of the fiscal year. Besides information on aggregate expenditures, the document includes several expenditure “tests” that the Successor Agency must meet.
The “Excess Surplus Test” requires that the Agency cannot have unencumbered funds that exceed the aggregate amount deposited into the fund during the preceding four fiscal years or a minimum of $1,000,000. The Report indicates that the aggregate deposit amount during the four prior years is $1,733,082. The unencumbered amount is $1,617,621, which is less than the maximum amount allowed and is in compliance with the requirement.
Redevelopment law also places a limit on the amount of funding that can be spent on affordable units for senior citizens. If this percentage exceeds 50% of units funded over the last ten years, the Housing Successor cannot expend future LMIHAF funds on new senior housing until the Housing Successor or City has reduced this percentage to 50% or below. The report indicates that 0% of expenditures over this period went to fund senior housing.
Therefore, the Successor Agency meets the “Senior Housing Test”.
Next Steps
If approved, staff will submit these annual reports to the applicable State agencies by April 1, 2023
Fiscal Impact
There is no fiscal impact associated with this staff report.
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available on the City’s website.
Environmental
The proposed action does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15061(b)(3), because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. Additionally, it is categorically exempt from environmental review pursuant to Section 15306, (Class 6 – Information Collection). Any amendments to either the General Plan or Housing Element would be subject to CEQA and as such require its own environmental clearance.
Attachments
1. Resolution
2. General Plan APR Program Status Table
3. HSA Report (FY2021-22)
4. Housing Element APR (excerpts)