Fremont City Council Meeting: 03/21/23 07:00 PM
3300 Capitol Avenue Div/Dept: Community Development
Fremont, CA 94538 Category: Plans, Policies and Studies
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 4831) DOC ID: 4831
Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 1 2022 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, without limitation, CEQA Guidelines Section 15378 and/or 15061(b)(3).
Contact Persons:
Name: Wayland Li Dan Schoenholz
Title: Principal Planner Community Development Director Div/Dept: Community Development Community Development
Phone: 510-494-4453 510-494-4438
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) 2022 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 planning 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.
Planning Commission Hearing
On February 23, 2023, the Planning Commission considered the APR and voted 6 to 0, with one commissioner absent, to recommend that the City Council direct staff to submit the APR to OPR and HCD. The subject item had one public speaker who provided general comments on recent communications provided by the Governor, minimum parking requirements, and the progress Fremont has made on its Housing Element in relation to other jurisdictions.
Following public comment, the Commission asked a few clarifying questions including, but not limited to, repercussions of not meeting affordable housing requirements, number of affordable units required for the 6th Cycle Housing Element, and number of outreach events held for accessory dwelling units.
Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 2 DISCUSSION/ANALYSIS: The City of Fremont’s CY 2022 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 City Council, staff will forward the City of Fremont’s CY 2022 APR to OPR and HCD. Under state law, the CY 2022 APR must be submitted to OPR and HCD on or before April 1, 2023.
The CY 2022 APR is the final APR of the 2015-2023 planning period.
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 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.
Table 1. Fremont’s Current 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
Total
Units
to
Date1
Total
Remaining
RHNA
Very Low1 1,714 64 2 217 34 78 51 140 111 697 1,017
Low 926 0 0 249 68 52 8 21 119 517 409
Moderate 978 1 0 0 19 2 1 − 68 91 887
Above
Moderate 1,837 382 452 1,601 1,742 955 251 700 835 6,918 - Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 3 Income
Category RHNA 2015 2016 2017 2018 2019 2020 2021 2022
Total
Units
to
Date1
Total
Remaining
RHNA
Total
RHNA 5,455 447 454 2,067 1,863 1,087 311 861 1,133 8,223 - 1Units serving extremely low income households are included in the totals for very low income.
Total Housing Production
A total of 1,133 new housing units received building permits in 2022, which makes 2022 the third strongest year of production in the 2015-2023 planning period, behind 2017 (2,067 units) and 2018 (1,863 units). Like the previous several years, building permit activity was most strongly concentrated in the Warm Springs Innovation (WSI) District, where building permits were issued for 542 new units (approximately 48% of all units in 2022). Other notable residential projects receiving building permits in 2022 include the Osgood Apartments project (112 units) in the Irvington Community Plan Area, the Allied Housing Fremont Family Housing project (54 units) in the North Fremont Community Plan Area, and the Fremont Bank Residences project (240 units) in the Central Fremont Community Plan Area.
By the end of 2022, the City had issued 8,223 building permits for new housing units during the 2015-2023 planning period, which exceeds the City’s total RHNA target by approximately 50% percent.
Affordable Housing Production
Two major affordable housing developments received building permits in 2022: the Osgood Apartments project with 111 affordable units (24 very-low income, 64 low income, 23 moderate income), and the Allied Housing Fremont Family Apartments project with 53 affordable units (43 very-low income, 10 low income).
By the end of 2022, the City had issued building permits for 697 very-low income units, 517 low income units, and 91 moderate income units. In total, 1,305 affordable units were permitted in the 2015-2023 planning period. Although the City fell short of lower income and moderate income RHNA targets, affordable housing production was significantly stronger than previous planning periods. For context, only 492 affordable units were produced in the previous Housing Element cycle.
Notable affordable housing developments that received building permits during the 2015 - 2023 planning period are shown in Table 3 below.
Table 3. Notable Affordable Housing Projects, Permitted in the 2015-2023 Planning Period
Project Name Community Plan Area Affordable Unit
Count
Allied Housing Fremont Family Apartments North Fremont 53 Bell Street Gardens Central 128
Central Commons Centerville 30
City Center Apartments Centerville 59
Doug Ford Senior Apartments Irvington 89
Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 4 Project Name Community Plan Area Affordable Unit
Count
Fairfield Residential Geo Apartments South Fremont 102
Granite Ridge Apartments Centerville 72
Innovia South Fremont 290
Laguna Commons Irvington 64
Metro Crossing Reilly Station and Canyon Flats South Fremont 132 Osgood Apartments Irvington 111
Pauline Weaver Senior Apartments Warm Springs 90
Stevenson Terrace Central 80
Accessory Dwelling Unit Production
Accessory dwelling unit (ADU) production in Fremont surged to a record high in 2022 . Staff issued building permits for 149 ADUs during 2022, which is nearly twice as many as the next highest mark (77 ADUs in 2021).
Chart 1. ADU Permit Issuance Data, 2018-2022
The increase in production can be attributed to various factors, including increased public awareness and the removal of various regulatory requirements.
Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 5 In 2022, ABAG collected rental data on ADUs in the region and prepared analysis to support assumptions on the affordability levels of ADUs in the San Francisco Bay Area. The affordability assumptions are that 30% of ADUs are affordable to very-low income households, 30% are affordable to low-income households, 30% are affordable to moderate income households, and 10% are affordable to above-moderate income households. The 149 ADUs permitted in 2022 were assigned to different income categories in the APR based on ABAG’s affordability assumptions, as shown in Table 4 below.
Table 4. ADU Affordability Assignments
Household Income Level % of Total 2022 Permitted
ADUs
Very-Low Income (0-50% AMI) 30% 44
Low Income (50-80% AMI) 30% 45
Moderate Income (80-120% AMI) 30% 45
Above-Moderate Income (120+% AMI) 10% 15
Total 100% 149
Source: ABAG Technical Assistance Memorandum – Using ADUs to Satisfy RHNA 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 issued one entitlement pursuant to SB 35 in 2022, which was for the 3900 Thornton affordable housing project.
Conformance with SB 9
In 2021, Governor Newsom signed SB 9 into law, which allowed by-right lot splits (known as “Urban Lot Splits” and two-unit developments in single-family zoned neighborhoods when certain criteria are met. The City of Fremont will be preparing a local SB 9 ordinance to implement the requirements of state law. In the interim period before the adoption of a local ordinance, the requirements of SB 9 still apply.
Although SB 9 went into effect at the beginning of 2022, applications did not start coming in until later in the year, after homeowners and the development community had time to study and better understand the law. The City received six applications for an Urban Lot Split under SB 9 in 2022. As of December 31, 2022, one of those applications had been approved and the remaining five applications are still in process. No building permits have yet been issued for an application submitted pursuant to SB 9.
Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 6 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. Many of the successful programs in the 2015-2023 Housing Element were carried over to the upcoming 2023-2031 Housing Element, and some programs were modified or refocused to better address housing goals. A summary of notable accomplishments in 2022 toward implementation of 2015-2023 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 operating programs assisting rental property owners and lower income homeowners with the repair of their housing units.
• Action 1.01-B: Training for Apartment Owners and Property Managers. The City’s Housing Division, in collaboration with Fremont Landlord Tenant Services, Fremont Fair Housing and the City's Code Enforcement Division, hosted a virtual training to property managers and property owners regarding new landlord and tenant laws, fair housing law, code enforcement regulations, and the Rent Review Ordinance update.
A total of 115 attendees participated in the training.
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 amendment to the Affordable Housing Ordinance in 2022. The ordinance codified the City’s longstanding practice to require that affordable housing units required as part of an Affordable Housing Agreement with the City (including, but not limit ed to, the City’s Affordable Housing Ordinance, a Development Agreement, or Density Bonus Agreement) provide a local priority preference. Under this policy, people who live or work in Fremont are given preference when applying for new affordable housing rental units in Fremont. Including this preference policy in the Affordable Housing Ordinance strengthened the requirement and ensured that this longstanding practice is transparent to all stakeholders. The purpose of the local live/work preference policy for affordable housing units is to remedy or mitigate the displacement and gentrification impacts that may result from development activities and increasing job Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 7 opportunities in the City.
• Action 3.01-D: Maximize Existing Funding Resources. The City has utilized its full allocation for Community Development Block Grant (CDBG) and HOME grants each year during the planning period. The City has also applied for new one-time and repetitive sources of funding during the planning period. In 2015, the City received a Local Housing Trust Fund (LHTF) Grant from the State to support the Stevenson Terrace affordable housing project. In 2020, the City again applied for and received a LHTF Grant from the State. The City will use the funding to support the 3900 Thornton affordable housing project. In 2020, the City applied for and received the Permanent Local Housing Allocation (PLHA) which provides an ongoing source of funding for affordable housing and shelter services. The City has used PLHA dollars to fund the Housing Navigation Center.
In 2022, the City received a third LHTF Grant. The City will use this funding to support the development of the Affordable Housing on Osgood project. The City also utilized Federal HOME funds to support the development of the Bell Street Gardens affordable housing project.
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-B: Continue to Encourage Development of Second [Accessory Dwelling] Units. In 2022, staff issued 149 building permits for new ADUs, by far the most on record. In May 2022, the City participated in an ADU Homeowners Fair to promote ADU development and share useful information about developing ADUs. The City also participated in an effort led by Alameda County to promote ADU development countywide.
Goal 4: Ensure That All Persons Have Equal Access to Housing.
Policy 4.01 relates to enforcing regulatory measures to protect individual rights.
• Action 4.01-C: Administration of Landlord/Tenant Counseling Services and Eviction Prevention Services. During 2022, the City operated the Keep Fremont Housed Program, which provided direct rental and utility assistance to landlords and tenants facing economic challenges and layoffs stemming from the COVID-19 pandemic. The City also continued to contract with Project Sentinel's Fremont Fair Housing and Landlord/Tenant Services (FFHS) to provide information/education to tenants and landlords regarding fair housing. FFHS also investigates housing discrimination complaints.
Goal 5: Promote Regional Collaboration to Maintain and Expand the Range of Housing Alternatives in Fremont.
Policy 5.01 relates to promoting community dialogue and education on housing issues.
• Action 5.01-B: Conduct Affordable Housing Presentations. Staff provided presentations about affordable housing to interested groups, including affordable housing developers and the Rental Homeowners’ Association, throughout the Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 8 planning period. In May 2022, the City provided an Affordable Housing 101 Webinar to those who were seeking affordable rental housing. More than 400 people participated in the webinar.
Policy 5.02 relates to collaborating with other organizations in Fremont and the Bay Area to address housing issues.
• Action 5.02-C: Consultation with Housing Stakeholders. The City maintains a developers’ interest list, through which it notifies developers of any proposed policy changes and opportunities for feedback. Throughout the planning period, the City has consulted with affordable housing developers, market-rate developers, housing advocates, real estate professionals, the business community, and other stakeholders on proposed housing policy changes. The City also utilizes the Development Digest newsletter as an effective communication tool for informing stakeholders about upcoming policy decisions related to housing.
Extensive consultation with stakeholders took place in 2022 regarding the preparation of the City's 2023-2031 Housing Element Update.
C. Additional 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 to comply with SB 166 as Table C of their APR.
The City has already surpassed its RHNA target for the above-moderate income category, and therefore the City does not need to demonstrate additional capacity at that income level. At the very-low, low, and moderate-income categories, the 2015-2023 Housing Element continues to have an identified unit capacity far in excess of the remaining RHNA allocation. The overall remaining unit capacity on vacant or underutilized sites listed in the 2015-2023 Housing Element exceeds 4,000 units, while the City’s remaining RHNA in those income categories was 2,313 units at the end of 2022. The City did not identify or rezone any additional land to accommodate unmet housing needs in 2022.
Additionally, AB 1486 (2019), codified as Government Code §65400.1, requires jurisdictions to report in Table G of the APR any city-owned housing element inventory sites that 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 2022.
Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 9 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 approve any applications for a Commercial Density Bonus in 2022.
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.
The City of Fremont is a general law city, and therefore must submit a General Plan Annual Progress Report each year. The CY 2022 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. One resolution was approved in 2022 authorizing a General Plan Amendment:
• Resolution No. 2022-16 – Adopted by City Council May 3, 2022. A General Plan Amendment to change the land use designation of a 22.4-acre site at 40517 Albrae Council Staff Report (ID # 4831) Meeting of March 21, 2023 Updated: 3/17/2023 11:00 AM by Alberto Quintanilla Page 10 Street from Regional Commercial to Tech Industrial to facilitate the construction of an approximately 397,000 square foot industrial development in the Bayside Industrial Community Plan Area.
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(b)(2) and/or (5), in that the annual report does not meet 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), in that it can be seen with certainty there is no possibility of significant effect on the environment.
LINKS: None.
ATTACHMENTS:
• Exhibit A - General Plan APR
• Exhibit B - Housing Element Annual Progress Report Tables • Informational Item 1 - Condo Conversion Tracking Memo • Informational Item 2 – Draft Planning Commission Minutes • Informational Item 3 - FY 21-22 Low and Moderate Income Housing Asset Fund Annual Report
RECOMMENDATIONS:
1. Find that 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)(2), (5), and/or 15061(b)(3) in that the annual report is an administrative action that has no potential to cause a direct or indirect significant effect on the environment and does not meet CEQA's definition of a "project." Each of the foregoing provides a separate and independent basis for CEQA exemption.
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.