Fremont City Council Meeting: 03/15/22 07:00 PM
3300 Capitol Avenue Div/Dept: Planning
Fremont, CA 94538 Category: Plans, Policies and Studies
SCHEDULED
Sponsors:
STAFF REPORT (ID # 4561) DOC ID: 4561
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 1 2021 HOUSING ELEMENT ANNUAL PROGRESS REPORT - Public Hearing (Published Notice) To Consider an Annual Report on the Status of Implementation of the General Plan and the 2015 – 2023 Housing Element, and to Consider an Exemption from the Requirements of the California Environmental Quality Act (CEQA) Pursuant to CEQA Guidelines Section 15378 in that the Annual Report Does Not Meet CEQA's Definition of a "Project." Contact Persons:
Name: Courtney Pal Hang Zhou
Title: Planner II Planner II
Div/Dept: Planning Community Development
Phone: 510-494-4532 510-494-4545
E-Mail: [email protected] [email protected]
Executive Summary: State planning law (Government Code Section 65400) requires local jurisdictions to provide an Annual Progress Report (APR) on the status of the General Plan and progress towards implementing the Housing Element to the Governor’s Office of Planning and Research (OPR) and State Department of Housing and Community Development (HCD). The City of Fremont’s Calendar Year (CY) 2021 APR is included as Exhibit A (General Plan APR) and Exhibit B (Housing Element APR Tables). This staff report provides additional context to the APR and is organized into the following sections: A) progress towards meeting the City’s Regional Housing Needs Allocation (RHNA); B) status of Housing Element actions and programs; C) additional annual reporting requirements; and D) status of General Plan activities.
BACKGROUND: The City Council adopted a comprehensive General Plan update in December 2011. On December 2, 2014, the City Council adopted an updated Housing Element for the 2015-2023 period. HCD certified the City’s 2015-2023 Housing Element on February 4, 2015. The City has submitted an APR to OPR and HCD every year during the current Housing Element planning period, as required under state law.
There is one new reporting requirement for the CY 2021 APR. AB 2345 (2020), codified as Government Code §65400 and 65915, requires local governments to provide more information on density bonus projects that have been submitted for approval or are in development. Under the Density Bonus Law, developers are entitled to a density bonus corresponding to specified percentages of units set aside for very low income, low-income, or moderate-income households. In addition, projects satisfying the requirements of the Density Bonus Law are entitled to one or more development incentives or concessions that will result in identifiable and actual cost reductions to provide for affordable housing costs.
Jurisdictions must provide approval information on density bonus and concessions to HCD as part of the CY 2021 APR.
Planning Commission Hearing
On February 24, 2022, the Planning Commission considered the APR and voted 6-0 to recommend that the City Council direct staff to submit the APR to OPR and HCD. There was one public speaker on the item, who discussed mixed income housing development, live- Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 2 work units in the TC-P zoning district, and ADUs in historic overlay districts. During the meeting, the Planning Commission discussed live-work units in town centers and asked about the City of Berkeley’s affordable housing overlay district.
DISCUSSION/ANALYSIS: The City of Fremont’s CY 2020 APR is included as Exhibit A (General Plan APR) and Exhibit B (Housing Element APR Tables). The Housing Element APR Tables prepared on standard forms provided by HCD and include all data required to be reported under Government Code Section 65400. Following review by the Planning Commission and City Council, staff will forward the City of Fremont’s CY 2020 APR to OPR and HCD. Under state law, the CY 2020 APR must be submitted to OPR and HCD on or before April 1, 2021.
A. Progress in Meeting Regional Housing Need Allocation (RHNA)
The State of California periodically provides population growth and housing need estimates to each regional Council of Governments. The Association of Bay Area Governments (ABAG), which is the regional Council of Governments for the nine-county Bay Area, is then charged with distributing, based on projected local job and household growth, the regional housing need to jurisdictions and counties within the ABAG region. Each city’s need is further categorized by income category. The goal of the RHNA process is to ensure that local General Plans can accommodate projected future household growth for all income levels in each jurisdiction. Housing production across all income levels is needed to address the State’s existing challenges regarding housing supply and affordability.
Table 1 identifies the City’s RHNA for the 2015-2023 period. The City’s 2015-2023 Housing Element is required to demonstrate an ability to accommodate the City’s RHNA at the various income levels through vacant or underutilized land designated to allow residential development and housing production.
Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 3 Table 1 - Fremont’s Current (2015-2023) RHNA by Income Category Income Category % of Area Median Income (AMI) RHNA
Extremely and Very Low Income 0 – 50% of AMI 1,714 (31.42%) Low Income 51 – 80% of AMI 926 (16.98%)
Moderate Income 81 – 120% of AMI 978 (17.93%)
Above Moderate Income 120%+ of AMI 1,837 (33.68%)
TOTAL 5,455
Source: Regional Housing Need Plan-San Francisco Bay Area 2015-2023, ABAG.
Table 2 illustrates the number of building permits the City issued for new housing during the current RHNA cycle.
Table 2 - RHNA Progress- Permitted Units Issued by Affordability Income
Category RHNA 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total
Units
to
Date1
Total
Remaining
RHNA
Very Low2 1,714 64 2 217 34 78 51 140 − − 586 1,128
Low 926 0 0 249 68 52 8 21 − − 398 528
Moderate 978 1 0 0 19 2 1 − − − 22 956
Above
Moderate 1,837 382 452 1,601 1,742 955 251 700 − − 6,084 - Total
RHNA 5,455 447 454 2,067 1,863 1,087 311 861 − − 7,090 1HCD provides Bay Area jurisdictions with the option of counting the units t hey permitted in 2014 towards either the past (2007 - 2014) or the current RHNA cycle. The CY 2018 APR was adjusted to exclude 2014 units from the current RHNA cycle, and the CY 2019 APR continues to exclude 2014 units from the current RHNA cycle.
2Units serving extremely low income households are included in the totals for very low income. Building permits were issued for 32 extremely low income units in 2015, 40 extremely low income units in 2017, 26 extremely low income units in 2019, 34 extremel y low income units in 2020, and 60 extremely low income units in 2021.
Housing at All Income Levels--Permits Issued and Units Produced A total of 861 new housing units received building permits in 2021. Building permits were associated with various housing projects throughout the City but issued building permit activity and housing production were most strongly concentrated in the Warm Springs/South Fremont Innovation (WSI) District. In 2021, approximately 55.6% (479 units) of the new housing units issued were in the WSI District. There has been significant building permit activity in the WSI District over the past several years. Building permit activity in the WSI District slowed in 2020, likely due in part to the COVID-19 pandemic, but rebounded in 2021. Building permit activity in the WSI District will slow in upcoming years, as a majority of the 4,000 residential units entitled in the WSI District have received building permits.
As of 2021, the City has issued more building permits than its total RHNA allocation. By the end of 2021, the City had issued 7,090 building permits for new housing units during the current RHNA period, which represents approximately 130% percent of the City’s total RHNA allocation.
The number of units that were completed jumped from 768 units in 2020 to 1,635 units in 2021. Major developments that received final occupancies in 2021 include Walnut Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 4 Residences with 632 units completed, Lennar Warm Springs Lot 4 (Aya Apartments) with 302 units completed, and Innovia (100% affordable project) with 290 units completed.
Affordable Housing-- Permits Issued and Units Produced
Of the 861 new housing units that received building permits in 2021, 161 units (18.7%) were affordable units. All affordable units were associated with the Granite Ridge Apartments, a four-story apartment building near the intersection of Sequoia Road and Paseo Padre Parkway, and the Doug Ford Community Apartments development, an affordable rental housing project for seniors located at the corner of Fremont Boulevard and Irvington Avenue. Sixty units will be affordable to extremely-low income households and 80 will be affordable to very-low income households.
The City of Fremont continues to have strong affordable housing production relative to the previous RHNA cycle, in which 492 affordable housing units were produced over eight years.
However, the amount of affordable housing produced remains significantly less than the City’s allocated RHNA targets for very low, low, and moderate-income units. By the end of 2021, the City had produced approximately 31% percent (586/1,714) of the City’s RHNA target for very low-income units, 41% percent (398/926) of the City’s RHNA target for low income units, and two percent (22/978) of the City’s RHNA target for moderate income units.
The City continued to facilitate the development of several affordable housing projects during 2021. The following table lists affordable housing projects that were constructed or were still in the process of building permit review or construction in 2021.
Project Name Location Unit
Count* Affordability Status
Islander Motel Downtown 126 Very Low and Low Building Permit Review Granite Ridge Centerville 72 Very Low and Low Issued in 2021 Doug Ford
Community
Apartments
Irvington 89 Very Low and Low Issued in 2021. Under
construction.
Innovia Warm
Springs 287 Low Completed in 2021
Centerville
Pioneer Centerville 1 Moderate Completed in 2021
City Center
Apartments Centerville 59 Very Low and Low Completed in 2021 Fremont Family
Housing
North
Fremont 53 Extremely Low, Very Low,
and Low Building Permit Review
Osgood
Apartments Irvington 111 Very Low, Low, and
Moderate Building Permit Review
Metro Crossing
A1&A2
Warm
Springs 130 Very Low, Low, and
Moderate
Building A2 completed in
2021; Building A1
completed in January 2022
*excluding the managers’ units
Accessory Dwelling Unit Production
After a slight reduction in accessory dwelling unit (ADU) production in 2020 due to the Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 5 COVID-19 pandemic, there was record ADU production in 2021. Due to program improvements and application trends, staff issued building permits for 77 ADUs during the reporting period, which as shown in Chart 1 is the highest number recorded to date.
Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 6 Chart 1 – ADU Production
Slightly fewer ADUs were given certificates of occupancy (“finaled”) in 2021. Permit final data lags issuance data by approximately one year, and so this reduction in completed ADUs was expected given the decrease in permits issued last year. Staff expects that the number of finaled permits will increase in 2022 given the rebound of permits issued in 2021.
Staff also expects that in 2022 HCD will approve a methodology that allows a percentage of ADUs produced to be counted toward the City’s moderate income housing production.
Conformance with SB 35
In 2017, Governor Brown signed SB 35 into law, which established a streamlined approval process for new housing applications that meet certain criteria. Local jurisdictions are subject to SB 35 when the number of units that have been issued building permits is less than the locality’s share of the regional housing needs, by income category, for that RHNA reporting period. Based on housing production during the current RHNA period, HCD has determined that the City of Fremont is subject to SB 35. Since the City is making sufficient progress in the above moderate income category, but not the lower income categories, the minimum affordability requirement for applications submitted under SB 35 in Fremont is 50 percent.
The City did not process any applications pursuant to SB 35 in 2021
B. Progress in Implementing 2015-2023 Housing Element Programs
The 2015-2023 Housing Element identifies eight goals, 22 policies and 69 programs. Table D in Exhibit A lists in detail the various programs implementing the Housing Element goals and policies, with their current status. A summary of notable accomplishments in 2021 toward implementation of Housing Element goals and policies is provided below.
Goal 1: Preserve, Maintain, and Improve the Existing Affordable Housing Supply and Neighborhoods
Policy 1.01 relates to the programs assisting rental property owners and lower income homeowners with the maintenance of their housing units.
Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 7
• Action 1.01-B: Training for Apartment Owners and Property Managers. In collaboration with Fremont Landlord Tenant Services, Fremont Fair Housing and the City's Code Enforcement Division, the City Housing Division hosted a virtual training to property managers and property owners in May 2020. The workshop covered tenant and landlord law, fair housing law, code enforcement regulations, and the rent review ordinance. A total of 130 attendees participated in the meeting, the highest attendance so far during the planning period.
Policy 1.05 relates to the preservation of the existing supply of affordable housing, rental housing and mobile homes.
• Action 1.05-E Continue to Implement Condominium Conversion Ordinance: The City continues to implement the Condominium Conversion Ordinance to maintain the community’s supply of rental units by limiting the number of condominium conversions which may be approved in a calendar year. A memorandum is attached to this staff report as Informational Item 1, which provides a summary of available condominium conversion allocations, and condominium conversion applications approved over the previous five calendar years.
Goal 3: Encourage Affordable and Market Rate Housing to Meet RHNA Policy 3.01 is to establish the City as a leader in identifying and leveraging available funding resources in order to provide the maximum amount of affordable housing
• Action 3.01-B: Update Affordable Housing Ordinance: The City Council adopted an updated Affordable Housing Ordinance in fall of 2021. The ordinance has an inclusionary requirement of 5% Moderate and 10% Low-Income units for for-sale projects and 10% Low-Income for rental projects in all new residential developments. Developers alternatively have the option of paying an in-lieu fee. Fees are being increased in steps, as justified by a nexus study, from $26/square foot to $44/square foot for single family and $27/square foot to $44/ square foot for townhome units in for-sale projects. To encourage the production of rental housing, the fee for stacked flats will remain the same at $27 per square foot, with a discounted fee of $17.50/square foot and $8.75/square foot for units less than 700 square feet in size. The revised ordinance became effective in early November.
• Action 3.01-F: Assist Affordable Developers to Acquire Land for Affordable Housing.
In 2021, the City issued a Notice of Funding Availability (NOFA) for $45 million for the creation of affordable rental housing in Fremont. After reviewing six proposals, City Council authorized funding for three projects:
o A 191-271-unit project located at 41965 and 42021 Osgood Road, Affordable Housing on Osgood Apartments, proposed by MidPen Housing; o A 100-unit project located at 41911 Osgood Road, Osgood South, proposed by the Pacific Companies and Maracor Development;
o A 128-unit project located at 3900 Thornton Avenue, 3900 Thornton Affordable Housing, proposed by Resource for Community Development
City funding will be used for land acquisition and predevelopment costs for all three funded projects.
Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 8 Policy 3.03 facilitates the development of a diverse housing stock that provides a range of housing types and affordability levels throughout the community.
• Action 3.03-F: Continue to Encourage Development of Second [Accessory Dwelling] Units. In 2021, staff issued 77 building permits for new ADUs. Staff continues to pursue new programs to encourage and simplify ADU development. In 2021, the City launched a pre-approval program that allows designers to pre-approve detached ADU plans. Designers may re-use these preapproved plans on multiple lots throughout the City with reduced permitting fees and shortened review timelines.
The City also launched a new ADU webpage that provides a centralized information hub for ADU resources.
Goal 7: Address and Mitigate Constraints to Housing
Housing Policy 7.01 relates to removing constraints to housing development in Fremont.
Action 7.01-E: Review Fee Structure. On June 1, 2021, the City Council authorized adjustments to the City’s Development Impact Parkland Fee, Park Facilities Fee, Traffic Facilities Fee, Capital Facilities Fee, and Fire Facilities Fee based on a 2021 Comprehensive Nexus Study and the Annual Construction Inflation Index. The City Council also established a new affordable housing discount such that any 100% deed restricted affordable housing project pays Traffic, Parkland, and Park Facilities fees at a rate that is 50% of the standard rate. The approved changes became effective on August 2, 2021.
C. Additional Annual Reporting Requirements
APR Tables C and G - Reporting on Housing Element Inventory Sites The City’s 2015-2023 Housing Element is required to demonstrate an ability to accommodate the 2015-2023 RHNA at the various income levels through vacant or underutilized land designated to allow residential development. Under SB 166 (2017), codified as Government Code §65863, a city must demonstrate that there is enough land identified to meet the unmet housing need at each income level prior to approving any project with fewer units by income category than identified in the housing element land inventory. If there is not sufficient land identified, then a city must identify additional sites within 180 days of approving a reduced-density project. Beginning in the CY 2018 APR, jurisdictions were required to report any sites that had been rezoned in order to comply with SB 166 as Table C of their APR.
The City of Fremont continues to have an identified unit capacity in excess of the remaining RHNA allocation. Table 3 indicates the unit capacity on vacant or underutilized sites that were previously identified the City’s 2015-2023 Housing Element. The overall remaining unit capacity did not decrease in 2021 and the sites identified in the City’s 2015-2023 Housing Element remain sufficient to accommodate the City’s remaining RHNA. The City did not identify or rezone any additional land to accommodate unmet housing need in 2021.
Table 3 – Updated Unit Capacity of Vacant and Underutilized Land Unit
Capacity
Identified
Unit
Capacity
Identified
Unit
Capacity
Identified
Remaining
RHNA
Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 9 in 2015
Inventory
(CY 2020
APR)
(CY 2021
APR)
Very Low, Low, and Moderate Income 5,593 4,512 4,512 2,684 Above Moderate Income 1,328 969 969 0
Additionally, AB 1486 (2019), codified as Government Code §65400.1, requires jurisdictions to report in Table G of the APR any housing element inventory sites and were sold, leased, or otherwise disposed of during the reporting year. The City of Fremont did not initiate any new sales, leases, or disposal of City-owned housing element inventory sites in 2021.
APR Table E - Commercial Density Bonus
AB 1934 (2017), codified as Government Code §65915.7, allows for commercial developers to construct additional floor area beyond the permitted FAR or utilize other concessions from the City in exchange for building affordable housing on-site, donating land for affordable housing, or making a payment to an affordable housing developer. The City of Fremont did not receive or approved any applications for a Commercial Density Bonus in 2021.
APR Table F – Units Preserved, Rehabilitated, or Acquired A city may only count units preserved, rehabilitated, or acquired towards its RHNA if it includes in its housing element a program that obligates sufficient available funds to make the preserved, rehabilitated, or acquired units affordable and available for occupancy within two years of its adoption. The City of Fremont does not have such a program and therefore does not report units preserved, rehabilitated, or acquired towards its RHNA.
APR Table H - Surplus Lands Inventory
In 2019, Governor Newsom directed the Department of General Services to conduct a comprehensive survey of all state-owned land and create a digitized inventory of all land in excess of state agencies’ foreseeable needs. AB 1255 (2020), codified as Government Code §54230, extends that mandate to cities and counties by requiring them to create their own inventory of surplus lands. The intention behind this inventory of surplus land is to identify excess government-owned property that could be used for affordable housing, homeless shelters, or other housing needs.
Since 2020 the APR requires that properties designated by a City as surplus lands are reported in the APR along with a description of each parcel and its current use. The City currently owns four properties that have been declared as surplus lands since 2013, which are reported in Table H of the APR.
D. Status of General Plan Activities
Government Code §65400 mandates that general law cities and counties submit an annual report on the status of the General Plan and progress on its implementation to their legislative bodies, the Governor’s Office of Planning and Research (OPR), and the Department of Housing and Community Development (HCD) by April 1 of each year. The intent of this report is to demonstrate the city’s ongoing compliance with Government Codes §65300 - 65303.4 governing the required elements of a general plan and provide a summary of implementation actions that have occurred within the past year.
Staff Report (ID # 4561) Meeting of March 15, 2022
Updated: 3/10/2022 3:58 PM by Alberto Quintanilla Page 10
The City of Fremont is a general law city, and therefore must submit a General Plan Annual Progress Report each year. The CY 2021 General Plan APR is attached as “Exhibit A”.
General Plan Amendments
Under Government Code Section 65358(b), no mandatory element of the General Plan may be amended more than four times per year, although each amendment may include more than one change to the General Plan. Two resolutions were approved in 2021 authorizing General Plan Amendments, which is described as follows:
• Resolution No. 2021-09– Approved by City Council March 9, 2021. A General Plan Amendment to change the land use designation of a 6.08-acre site at 37899 Niles Boulevard from Service Industrial (Special Study Area) to Low-Medium Density Residential (8.8 to 14.5 units per net acre), a Rezoning from Service Industrial with Historical Overlay District (I-S)(HOD) to Medium Density Residential (R-3-14) (HOD), Vesting Tentative Tract Map No. 8205, and a Private Street to facilitate development of 75 attached residential units in the Niles Community Plan Area.
• Resolution No. 2021-13 – Approved by City Council April 6, 2021. A City- initiated a General Plan Amendment to make minor amendments to the General Plan Land Use Diagram to correct the boundaries of various land use designations so that they match existing easements, parcel lines, and previously approved Planned District boundaries.
FISCAL IMPACT: None.
ENVIRONMENTAL REVIEW: This annual report is exempt from the requirements of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15378, in that the annual report does not fall within CEQA's definition of a "project,” as it is an administrative activity that does not involve any commitment to a specific project and does not have the potential directly or indirectly to cause a significant effect on the environment. As a separate and independent basis, the report is exempt, without limitation, pursuant to CEQA Guidelines Section 15061(b)(3) (it can be seen with certainty there is no possibility of significant effect on the environment).
ATTACHMENTS:
• Exhibit A - General Plan Annual Progress Report
• Exhibit B - Housing Element Annual Progress Report Tables • Informational Enclosure 1 - Residential Condo Conversion Tracking Memo
RECOMMENDATIONS:
1. Find the annual report is exempt from, and not subject to the requirements of, the California Environmental Quality Act (CEQA), pursuant to, without limitation, CEQA Guidelines Section 15378(b)(5), in that the annual report does not meet CEQA's definition of a "project,” and as a separate and independent basis, CEQA Guidelines Section 15061(b)(3) (no possibility of significant environmental effect)
2. Accept Exhibit A and Exhibit B, which depict the current status of the General Plan and Housing Element, and direct staff to submit the required materials to OPR and HCD.