Agenda Report
Fullerton City Council
MEETING DATE: SEPTEMBER 20, 2022
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: SUNAYANA THOMAS, Interim COMmunity development DIRECTOR PREPARED BY: CHRIS SCHAEFER, AICP, PLANNING MANAGER
SUBJECT: HOUSING INCENTIVE OVERLAY ZONE DEVELOPMENT UPDATE
SUMMARY
City Council consideration of the on-going development of the Housing Incentive Overlay Zone (HIOZ), as a related tool of the City’s Housing Element Update.
RECOMMENDATION
Receive and file this report and provide guidance on future steps.
CITY MANAGER REMARKS
This report updates City Council on one element of the work of the Housing Element Update. As you are aware, the City submitted a first draft to HCD and received comments back in January 2022. The new Community Development staff is working with the consultants to put together a plan for HCD approval.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Not applicable.
FISCAL IMPACT
The City has hired two consultant firms for the Housing Element Update (HEU): Dudek will work on the HIOZ (Housing Incentive Overlay Zone Development) in support of the HEU and Rincon Consultants will work on the Housing Element document. Grant funding from Senate Bill 2 (SB2) via the California Department of Housing and Community Development (HCD) Planning Grant Program (PGP) will support consultant services related to the HIOZ on a reimbursable basis. The anticipated cost of scope of services totals $120,800, supported by available SB2 PGP grant funding (Fund 32). This item has no impact to the General Fund.
City Council approved an amendment to the previous agreement with Dudek on August 2, 2022, extending services through July 31, 2024 and allowing the City to utilize available funding through the end of the project expiration.
DISCUSSION
Background
The City of Fullerton issued a Request for Proposals (RFP) to seek a qualified consultant to help develop and adopt a HIOZ program in May 2020. The City selected Dudek, a California-based planning and design firm, for this effort which began in August 2021. A combination of State SB2 and LEAP (Local Early Action Planning) grant funds entirely funds the contract. Implementing a HIOZ will accelerate housing production in the City by allowing a property owner to develop housing on a property with a non-residential underlying zoning classification. HIOZ regulations would require the property owner to include a specified percentage of affordable housing units in the proposed development.
HIOZ does not change the existing zoning classification of a parcel, nor does it require the housing development. Instead, it layers a housing zoning classification on existing zoning. The property can continue operating as it does today, the owner can redevelop and/or improve within current zoning regulations or the owner can redevelop with HIOZ as housing.
The City’s sixth cycle (2021-2029) Draft Housing Element Update identifies HIOZ as one of its implementation programs. The City will develop HIOZ regulations in collaboration with HEU efforts and within the umbrella framework of the City’s “Housing Game Plan (https://housing-game-plan-fullertoncagis.hub.arcgis.com/).” An advisory committee of housing-related stakeholders, further referred to as the “Housing Champions” has provided additional guidance and feedback. These “Housing Champions” included the following:
Barry Ross, Providence St. Joseph’s Health
Jose Trinidad Castaneda, former Planning Commissioner
Elizabeth Hansburg, former Planning Commissioner
Leonel Talavera, Habitat for Humanity
Mohammad Raghib, Islamic Center of Fullerton
Jay Williams, OC United
Frank Haselton, OC United
Kevin Mo-Wong, Executive Director Solidarity
Amy Santos, CSUF Center for Healthy Neighborhoods Assistant Director.
Status
Staff identified 19 pre-selected preliminary locations (each consisting of multiple parcels) to study for potential inclusion in HIOZ. Staff and the Housing Champions conducted initial analysis and discussion and decided to expand the screening of potential HIOZ parcels to all non-residential parcels Citywide and broaden the evaluation and scoring of potential HIOZ parcels using data-based, objective criteria to identify non-residential parcels for future residential use while offering the greatest benefit to current residents, future neighbors and the City as a whole.
The committee scored all parcels Citywide, using a weighted and tiered scoring system, according to their ability to meet criteria across four topics, each weighted to reflect City and community priorities as follows:
Tier 4: Economic Viability
Target parcels most likely to redevelop given their current underutilization of land.
Tier 3: Within “Opportunity Areas”
End exclusionary housing practices and promote Affirmatively Furthering Fair Housing (AFFH) policies set by the State.
Promote smart, sustainable growth by clustering homes within transit-served areas.
Prevent land use incompatibility between residential and non-residential uses.
Tier 2: Outside of Local Hazard Zones
Discourage development within known local hazard zones.
Tier 1: Adjacent to Local Amenities
Encourage residential development within easy access of community amenities.
This screening methodology scored all 29,862 parcels Citywide. The Committee excluded parcels that displayed the following attributes from HIOZ:
Already with residential use and mixed-use
Public uses (e.g., schools, open space, City property)
Infrastructure uses (e.g., rail, water wells, substations) Historic uses
Parcels that scored below screening average
Other (e.g., currently entitled, national chains, data inconsistency, etc.).
The remaining 843 parcels constitute the current boundaries of the proposed HIOZ overlay. These parcels (if City Council adopts HIOZ) may develop housing if they satisfy all of the following:
Voluntarily opt into HIOZ
Develop a minimum ten housing units
Commit to including a specified percentage of affordable housing units Develop buildings consistent with context-appropriate development standards.
Staff estimates tentatively setting the affordable housing requirement at ten percent of total units. An economist will determine affordable housing requirements based on analysis of Fullerton’s real estate market. Staff has received requests from additional property owners to have properties included in the HIOZ since the public circulation of the HIOZ boundaries.
Next Steps
Staff requests City Council input and guidance on the following:
Identify any locations and/or parcels that the City should exclude from or include into the draft HIOZ boundaries.
Suggested approach to responding to parcel inclusion requests on a one-off basis (pre- and post- adoption of HIOZ).
Anything related to building types and design that staff should keep in mind as they draft appropriate development standards.
Staff and our consultants will develop draft design standards along with the draft HIOZ ordinance for public input and review. California Environmental Quality Act (CEQA) evaluation will commence with a scoping meeting in the coming months. Staff plans to hold HIOZ adoption hearings in late 2023.
Attachments:
Attachment 1 – PowerPoint Presentation
cc: City Manager Eric J. Levitt
HIOZ Study Session
September 20, 2022 - Page 4