Business Agenda Item 4a
STAFF REPORT
City Council Business Item
DATE: December 15, 2025
TO: Honorable Mayor and Council Members
FROM: Michelle Nielsen, Contract City Planner
THROUGH: Amy Nilsen, City Manager
SUBJECT: Public Hearing and Second Reading and Adoption of Ordinances to Amend the Zoning Regulations, Title 17 of the Fortuna Municipal Code, and the Zoning Map.
STAFF RECOMMENDATION
1. Second Reading and Adoption of Ordinance 2025-779 – Amending chapters 17.03, 17.06, and
17.08 of the Municipal Code to Implement Programs H-12 and H-8 of the 6th cycle Housing Element.
2. Second Reading and Adoption of Ordinance 2025-780 – Amending Section 17.02.030 of the Municipal Code (Zoning Map) and Section 17.04.090 (Qualified combining zone) to implement the Mill District Specific Plan and Program H-10 of the 6th cycle Housing Element.
Ordinance 2025-780 will specify the principal and conditional uses in Area A, Area B, and Area C.
PROJECT INFORMATION:
Project: Adoption of amendments to the Zoning Regulations, Title 17 of the Fortuna Municipal Code, and the Zoning Map to implement the Housing Element and Mill District Specific Plan, and address changes in state housing law.
Applicant: City of Fortuna
Project Site: Citywide including areas zoned with Q-2 and Q-16 combining zones Zoning Districts: Residential Multifamily (R-M) and Commercial Thoroughfare (CT) General Plan
Land Use:
Residential High (RH), Residential Medium (RM) and Mill District (MD)
EXECUTIVE SUMMARY
In 2019, the Fortuna City Council adopted the City’s 2019-2027 Housing Element which provides a multi-year roadmap for meeting the City’s current and future housing needs. The Element establishes goals, policies, and implementation measures (also called programs) for new housing considering local needs, and statewide mandates and priorities. The Housing Element has three programs that require changes to the Municipal Code, but these programs have not been completed. The three programs encourage new housing development for lower income households and special needs populations.
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Additionally, the adoption of the Mill District Specific Plan (MDSP) in March 2025 amended the Fortuna General. The MDSP includes rezoning of the existing residential area that is within the MDSP planning area.
After holding a duly noticed public hearing on October 28, 2025, the Planning Commission (PC) unanimously approved Resolution P-2025-3137, recommending that the City Council adopt amendments to the Zoning Regulations and the Zoning Map.
As recommended by the PC, Ordinance 2025-779 proposes to amend the text of the Zoning Regulations (Title 17 of the Fortuna Municipal Code) to implement Program H-12 and Program H-18 of the 2019 Housing Element to achieve consistency with the Housing Element and current state housing element law.
Also as recommended by the PC, Ordinance 2025-780 proposes to amend the Zoning Map to rezone the residential neighborhood in the northeast corner of the MDSP planning area. In addition to rezoning the residential area in accordance with the MDSP, Ordinance 2025-780 proposes to rezone two residential areas to implement Program H-10 of the Housing Element. More specifically, the recommended amendments to the Zoning Map will modify two existing Qualified combining zones (in Attachment 4) in specific areas covered by two Qualified combining zones (or Q- zones):
1. Ordinance 88-532 Z. This Qualified Combining Zone is referred to as “Q-2”.
2. Ordinance 2002-633 Z. This Qualified Combining Zone is referred to as “Q-16”.
The importance of completing the amendments that implement the Housing Element is further highlighted by a letter of inquiry from the State Department of Housing and Community Development (HCD) received by the City on May 23, 2025, requesting a status update on the City’s Housing Element Program Implementation. City staff responded to HCD and committed to completing the changes to the zoning regulations directed by the Housing Element Programs H10, H-12, and H-18 before the end of 2025.
ZONING TEXT AMENDMENTS
The proposed text amendments to the Zoning Regulations (Attachment 2) will implement Housing Element Programs H-12 and H-18 by updating those portions of the Zoning Regulations that are currently inconsistent with state housing element law to be consistent with current requirements.
Housing Element Program H-12
Program H-12 focuses on allowances for Transitional and Supportive Housing. This Program states that:
…transitional and supportive housing types will be allowed as permitted uses subject to only the same restrictions on residential uses contained in the same type of structure. Additionally, supportive housing will be allowed as a permitted use in zones where multifamily and mixed uses are permitted, including nonresidential zones permitting multifamily uses.
To implement Program H-12, the Zoning Regulations are proposed to be changed to allow supportive and transitional housing to be permitted in the same manner as other residential dwellings of the same type in the same zone. Additionally, the definitions in chapter 17.08 Fortuna Business Agenda Item 4a
Municipal Code (FMC) related to supportive and transitional housing are proposed to be updated to be consistent with state law.
Program H-12 also includes a commitment to add a new type of housing to the Zoning Regulations:
Supportive Housing Developments. Amending the Zoning Regulations to include this new housing type will achieve consistency with state law by implementing SB 744 (2019), a statewide mandate that applies to all California cities and counties. state law1requires this type of housing to be permitted as “…a by right use in zones where multifamily and mixed uses are permitted, including nonresidential zones permitting multifamily uses”.
2 For Fortuna, this means the following zoning
districts: Residential Multifamily (R-M), Neighborhood Commercial (N-C), Retail Commercial (R-C), Commercial Thoroughfare (C-T), Light Industrial (M-1), and Heavy Industrial (M-2). State law requires cities and counties to allow supportive housing developments that meet the standards specified in state law, while not giving cities and counties latitude to modify the standards.
Therefore, to complete the implementation of Program H-12, it is necessary to add standards for Supportive Housing Developments to chapter 17.06 that align with state law.
Housing Element Program H-18
Program H-18 focuses on the City’s Reasonable Accommodation Procedure. The adoption of Ordinance 2024-769 in January 2025 accomplished most of the commitments of this program by adding reasonable accommodation procedures to the Zoning Regulations. Program H-18 includes a commitment to update the definition of family to state “one or more persons living together in a dwelling unit” which has not yet been implemented. Accordingly, the changes to the Zoning Regulations propose updating the definition of family in FMC 17.08.240, which will complete the commitments of Program H-18.
ZONING MAP AMENDMENTS
Figure 1 below identifies the three areas that are proposed to be zoned Multifamily Residential with a Qualified combining zone. These three areas are labeled as Area A, Area B, and Area C, and are mapped in Figure 1 below. Table 1 identifies which General Plan document is implemented by the proposed Zoning Map, and provides an overview of the existing and proposed zoning by area.
Table 1
Area A Area B Area C
General Plan
document
implemented
Mill District
Specific Plan
(MDSP)
6 th cycle Housing
Element, Program H-10
6 th cycle Housing
Element, Program H-10
Existing
Zoning
R-M-Q-2 and C-T R-M-Q-2 R-M-Q-16
Proposed
Zoning
R-M-Q: the Q-zone
as established by
Ord. 2025-780
R-M-Q: the Q-zone as
established by Ord.
2025-780
R-M-Q: the Q-zone as
established by Ord.
2025-780
The rationale for rezoning Area A, Area B, and Area C to be Residential Multiple Family with a new Qualified combining zone (R-M-Q) is due to 1) the intent of Housing Element Program H1 See California Gov’t Code Sections 65650–65656. 2 See California Gov’t Code Section 65651, subdivision (a).
Business Agenda Item 4a
10; and 2) the existing development in Area A. The basis for applying a new Qualified combining zone to these areas is explained further below. Two key points of the proposed Qualified combining zone are:
• Single family dwellings will continue to be permitted by right. • Multifamily developments in which at least 20 percent of the units are affordable to lower income households will be permitted by right, and conditionally permitted uses include multifamily housing developments in which less than 20 percent of the units, excluding a designated manager’s unit, are not affordable to lower income households.
Figure 1. Areas to be rezoned
The Purpose of Housing Element Program H-10
The proposed amendments to the Zoning Map implement Program H-10. One key priority of the Housing Element is removing governmental constraints to new housing development that is affordable to lower income households. To reduce identified constraints, the City Council adopted Housing Element Program H-10, which commits the City to change the Zoning Regulations and Zoning Map to allow multifamily residential use by‑right on all sites zoned Multifamily Residential (R-M) with a General Plan designation of Residential High (RH). This by right (without discretionary review) allowance is targeted to housing developments in which at least 20 percent of the units are affordable to lower income households, and is intended to incentivize development of affordable housing, and to comply with the requirements of California Gov’t Code § 65583.2(c).
New multifamily housing development is constrained in the Q-2 and Q-16 Qualified combining zone areas because it requires a conditional use permit, or it is outright prohibited. To implement Program H-10, for Area A, Area B, and Area C, the amendments to the Zoning Map propose to replace two existing Qualified combining zones with a new Qualified combining zone that will allow single family residences, two-family residences, and by right multifamily for housing developments in which at least 20 percent of the units are affordable to lower‐income households.
Multifamily housing developments in which less than 20 percent of the units are affordable will Source: Planwest Partners,
2025
Business Agenda Item 4a
be permitted with a conditional use permit. It will remove regulatory constraints to multifamily housing development.
Area A – The Mill District Specific Plan Residential Area The Zoning Map amendments for Area A implement the MDSP. The scope of the MDSP and the certified Supplemental Environmental Impact Report (SEIR) includes amending the Zoning Map for the residential neighborhood at the northeast corner of the MDSP planning area. This residential neighborhood is comprised of 79 parcels, and is identified as Area A. Seventy-five parcels in this area are zoned Residential Multifamily with a Qualified Combining Zone (R-M-Q2), and the remaining four parcels are zoned Commercial Thoroughfare (C-T). This Qualified Combining Zone was adopted in 1988 by Ordinance 88-532 Z, and is referred to as “Q-2”.
Ordinance 88-532 Z restricts multifamily development, and only single family residential development is permitted by right.
The MDSP directs Area A to be rezoned to R-M. During review of the proposed Zoning Regulations amendments for Area A, the City’s Contract Planner identified a housing constraint in the R-M Zone that needs to be addressed in the proposed Zoning Map amendments: the R-M Zone does not allow single-family residences by right. This means the properties with existing single-family homes would become “non-conforming” under the Zoning Regulations. The City’s non-conforming regulations place limitations on repairs, additions, and replacement of nonconforming uses and structures. Of the 79 parcels in Area A, 57 are developed with single family residences, according to the Assessor’s office data. If the properties in Area A are rezoned to the R-M zone (and no Qualified combining zone is adopted), about 72% of those properties would become non-conforming due to the existing single family development. 3 This means there would
be restrictions on repairing and replacing those homes under the City’s non-conforming zoning rules. Also, it would be more difficult and expensive for owners to obtain financing for repairs .
The proposed Q-Zone addresses this constraint by including single family residential use as a principally permitted use.
3 It is noted that in Area A, the average parcel size is 0.20 acres (or 8,712 sq. ft), and the median parcel size is 0.15 acres (or 6,534 sq. ft.).
Business Agenda Item 4a
Area B and Area C
The Zoning Map amendments for Area B and Area C implement Housing Element Program H-10.
Area B and Area C contain parcels identified as meeting the City’s 6th Regional Housing Needs Allocation (RHNA).
Like most of Area A discussed above, Area B is zoned Residential Multifamily with a Qualified Combining Zone (R-M-Q-2). Area C is zoned Residential Multifamily with a Qualified Combining Zone (R-M-Q-16). This Qualified Combining Zone was adopted in 2002 and prohibits new multifamily uses, although single family residential uses are principally permitted. Area B and Area C do not have properties with existing single-family residences; nonetheless, it is proposed to apply the same Qualified combining zone discussed above. This means single family (as currently allowed by the existing Q-2 and Q-16 combining zones) will continue to be allowed by right, along with qualifying affordable multifamily development as described above.
The proposed Qualified combining zone implements Housing Element Program H-10 that commits the City to maintaining an inventory of affordable housing sites and ensuring feasibility.
The proposed Qualified combining zone also implements the MDSP.
GENERAL PLAN CONSISTENCY ANALYSIS
The following table analyzes the consistency of the proposed Zoning text and map changes with the City’s General Plan.
Proposed Amendments to the Zoning
Regulations General Plan Consistency Analysis
Proposed Zoning Regulations Changes:
The Zoning Regulations are proposed to be
changed to allow supportive and transitional
housing to be permitted in the same manner
as other residential dwellings of the same type
in the same zone.
Also, a new use – Supportive Housing
Developments is proposed to be added to the
Zoning Code.
The affected Zoning Districts are all the
Residential Zoning Districts and the
Commercial and Industrial zones that allow
residential. Finally, standards for Supportive
Housing Developments are proposed to be
added and definitions are specified related to
the above changes.)
The proposed amendments are consistent with
Housing Element Programs H-12 and H-18
because the amendments implement both
programs of the City’s Housing Element.
Program H-12 concerns Transitional and
Supportive Housing, and has an objective to
“Amend the Zoning Ordinance to state that
transitional and supportive housing types
consistent with state law.” Program H-18
directs the City to establish a reasonable
accommodation procedure. This program
includes a commitment to update the
definition of family to state “one or more
persons living together in a dwelling unit.”
Existing Q-2 Qualified Combining Zone
Ordinance No. 88-532 Z, Section 2
subparagraph C; Passed and Adopted on
November 7, 1988: “… The qualification is
that a use permit is required for any
development that increases the density of
dwellings or intensity of use other than a
The proposed Zoning Map Amendments are
consistent with General Plan Housing
Element Program H-10, Maintain an
Inventory of Affordable Housing Sites and
Ensure Site Feasibility, commits the City to
“rezone all sites zoned R‐M with a General
Plan designation of Residential High, to allow
residential use by right. This by right (without
Business Agenda Item 4a
Proposed Amendments to the Zoning
Regulations General Plan Consistency Analysis
single-family residence.” (See Attachment 4
for full Ordinance)
Proposed Changes:
- Amend the Q-2 Qualified Zone to allow by
right multi-family housing developments in
which at least 20 percent of the units are
affordable to lower-income households,
subject to meeting the City’s Objective
Planning Standards.
- Remove language that relates to storm
drainage which is now addressed in the
MDSP.
Existing Q-16 Qualified Combining Zone
Ordinance NO. 2002-633 Z, Section 1 Line 1;
Passed and Adopted on March 4, 2002
“The Q Combining Zone modifies the uses of
the RM zone by completely eliminating
multifamily dwelling units as either a
principal use or a conditional use.” (See
Attachment 5 for full Ordinance)
Proposed Changes:
- Amend the Q-16 Qualified Combining Zone
to allow by right multi-family housing
developments in which at least 20 percent of
the units are affordable to lower-income
households subject to meeting the City’s
Objective Planning Standards.
discretionary review) requirement is only for
housing developments in which at least 20
percent of the units are affordable to lower‐
income households.”
Also, the proposed Zoning Map Amendments
are consistent with Administrative and
Implementation Program AI‐4: “The City
shall review and amend, as necessary,
applicable ordinances and regulations
referenced herein to ensure consistency with
the General Plan. These shall include the
following: Zoning Ordinance, Subdivision
Ordinance, Building Code, and Development
Standards.
Existing Zoning on APN’s 201-081-018,
201-081-019, 201-081-029, 201-081-031:
Commercial Thoroughfare – C-T
Proposed Zoning on APN’s 201-081-018,
201-081-019, 201-081-029, 201-081-031:
Multifamily Residential – R-M
The proposed Zoning Map Amendments are
consistent with General Plan Housing
Element Program and consistent with the Mill
District Specific Plan which designated these
parcels as Residential Multifamily”, and the
City’s General Plan Administrative and
Implementation Program AI‐4: “The City
shall review and amend, as necessary,
applicable ordinances and regulations
referenced herein to ensure consistency with
the General Plan. These shall include the
following: Zoning Ordinance, Subdivision
Ordinance, Building Code, and Development
Standards.
Business Agenda Item 4a
PUBLIC INTEREST
The proposed amendments to the Zoning Regulations and Zoning Map are in the public interest because the amendments promote the orderly and efficient development of land within the City and encourages a wide range of housing types and densities. The proposed amendments to the Zoning Map for Area A ensure the long-term retention of an established single family residential neighborhood, does not create conditions that could result in displacement of residents, while removing regulatory barriers to the creation of a variety of housing types and ownerships, at range of densities. These goals and policies are intended to provide a wider range of housing types and affordability throughout the City to support residents through all stages of life while also increasing the health and welfare of residents and visitors. The proposed amendments to the Zoning Regulations and Zoning Map advance the goals, policies, and implementation programs of the Mill District Specific Plan and the Housing Element of the Fortuna General Plan, and therefore is in the public interest.
CONSISTENCY WITH THE ZONING REGULATIONS AND THE FORTUNA
MUNICIPAL CODE
The amendments to the Zoning Regulations and Zoning Map are consistent with all other chapters, and other titles of the Fortuna Municipal Code. The proposed Amendments carry through to all sections of the Zoning Regulations, and have been reviewed to ensure they are consistent with all other chapters of the Zoning Regulations and other titles of the Fortuna Municipal Code.
ENVIRONMENTAL REVIEW
The Supplemental Environmental Impact Report (SEIR) prepared and certified for the Mill District Specific Plan also analyzed the Zoning Map Amendments for the Residential Area that is part of the Mill District Specific Plan. This means the City has already complied with the requirements of the California Environmental Quality Act (CEQA) for the Area A Zoning Map amendments.
The proposed Zoning Map amendments for Area B and Area C implement a schedule of actions contained in the City’s approved 2019-2027 Housing Element. 4 Specifically, the Zoning Map
amendments proposed for Area B and Area C are intended to satisfy the requirements of Gov’t Code § 65583.2(c). The text amendments to the Zoning Regulations are intended to satisfy the requirements of paragraphs (3) and (5) of Gov’t Code § 65582(c). The facts in the record show that the proposed amendments do not involve zoning actions allowing the construction of oil and gas infrastructure or a distribution center, as defined by Public Resources Code sections 21064.8 and 21060.4. Likewise, the areas to be rezoned, specifically Area B and Area C, are not located within natural and protected lands, as defined by Public Resources Code § 21067.5. Therefore, it is recommended that the amendments to the Zoning Regulations and Zoning Map be found statutorily exempt pursuant to Public Resources Code § 21080.085 Additionally, it is recommended the amendments to the Zoning Regulations and Zoning Map found to be exempt from the CEQA pursuant to CEQA Guidelines § 15061(b)3, the “common sense” exemption which states that a project is exempt from CEQA where it can be seen with 4 Public Resources Code § 21080.085 describes a schedule of actions to be subdivision (c) of Gov’t Code 65583 by way of direct reference.
Business Agenda Item 4a
certainty that there is no possibility that the project would have a significant effect on the environment. These amendments are exempt under the CEQA Guidelines § 15061 (b)(3) common sense exemption because it can be seen with certainty that the proposed Zoning Text and Zoning Map amendments will not result in any changes to the environment since the allowed General Plan residential density is not changing.
In accordance with the CEQA Guidelines, staff will file a Notice of Exemption with the County Clerk and the State Clearinghouse upon adoption of the ordinance.
RECOMMENDED COUNCIL ACTION
1. Receive staff report and review Council questions with staff.
2. Open the public hearing and receive public comment.
3. Close the public hearing.
4. Motion to hold second reading and adopt Ordinance 2025-779, and read by title only. Roll call vote.
5. Motion to hold second reading and adopt Ordinance 2025-780, and read by title only. Roll call vote.
ATTACHMENTS:
Attachment 1: Ordinance 2025-779 and Exhibit A – Proposed Amendments to the Zoning Regulations
Attachment 2: Ordinance 2025-780 and Exhibit A – Proposed Amendments to the Zoning Map Attachment 3: Maps of Area A, Area B, and Area C: Existing Zoning and Proposed Zoning Attachment 4: Existing Qualified combining zones established by Ordinance No. 88-532 Z (Q2), and Ordinance No. 2002-633 Z (Q-16) Attachment 5: Planning Commission Resolution P-2025-3137