Agenda Report
Fullerton City Council
MEETING DATE: DECEMBER 3, 2024
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: SUNAYANA THOMAS, DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT PREPARED BY: CHRIS SCHAEFER, AICP, PLANNING MANAGER
Sunayana Thomas, Director of Community and economic development SUBJECT: 6TH CYCLE (2021-2029) HOUSING ELEMENT, HOUSING INCENTIVE OVERLAY PROGRAM ENVIRONMENTAL IMPACT REPORT, FULLERTON GENERAL PLAN LAND USE ELEMENT PORTION AMENDMENT TO IMPLEMENT HOUSING INCENTIVE OVERLAY PROGRAM AND HOUSING INCENTIVE OVERLAY ZONE (Continued from November 19, 2024 meeting)
SUMMARY
City Council continued review of the Draft Housing Element for the 6th Cycle (2021-2029) and proposed Housing Incentive Overlay Zone (HIOZ) from November 19, 2024. Staff made revisions as directed at the November 19, 2024 meeting.
PROPOSED MOTION
Adopt the following resolutions:
RESOLUTION NO. 2024 – XXX - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FULLERTON, CALIFORNIA AMENDING THE FULLERTON PLAN BY ADOPTING THE 6TH CYCLE HOUSING ELEMENT TO REPLACE APPENDIX H (HOUSING ELEMENT) AND CHAPTER 2 (HOUSING) RESOLUTION NO. 2024 – XXX - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FULLERTON, CALIFORNIA CERTIFYING AN ENVIRONMENTAL IMPACT REPORT, MAKING FINDINGS OF FACT, ADOPTING A STATEMENT OF OVERRIDING CONSIDERATIONS AND ADOPTING A MITIGATION MONITORING AND REPORTING PROGRAM RELATING TO A HOUSING INCENTIVE OVERLAY PROGRAM RESOLUTION NO. 2024 – XXX - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FULLERTON, CALIFORNIA, AMENDING THE FULLERTON GENERAL PLAN BY AMENDING THE FULLERTON PLAN FULLERTON BUILT ENVIRONMENT TABLES AND EXHIBITS AND ADOPTING A REVISED APPENDIX C TO INCORPORATE THE HOUSING INCENTIVE OVERLAY DESIGNATION INTO THE FULLERTON PLAN Introduce Ordinance No. XXXX for first reading by title only and waive further reading of the ordinance.
ORDINANCE NO. XXXX - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FULLERTON, CALIFORNIA, AMENDING FULLERTON MUNICIPAL CODE SECTIONS 15.08.020 AND 15.17.070 AND ADDING CHAPTERS 15.18 AND 15.23 RELATING TO THE HOUSING INCENTIVE OVERLAY ZONE PROGRAM ESTABLISHMENT AND RELATED DEVELOPMENT STANDARDS AND AMENDING THE OFFICIAL FULLERTON ZONING MAP BY APPLYING THE “-HI” ZONING OVERLAY DESIGNATION TO CERTAIN COMMERCIAL AND INDUSTRIAL ZONED PROPERTIES
ALTERNATIVE OPTIONS
Approve the Proposed Motion.
.Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
Based on the City Council direction, staff has brought back several proposed changes to the Housing Element. Staff had meetings with HCD and with our consultants and attorneys.
Based on those discussions—
A change in the height requirement has been made that is still in compliance with the State law on the Housing Element.
A change in affordable requirement has been made to increase it to 15% to be a by right project.
We have provided two alternatives on the sites. The first option is to approve the Site Inventory which was the reduced option previously and include the above two changes in the approval.
The second option would be to remove 3 designated parcels from the site inventory and not add any parcels to replace which would still (staff believes) be in compliance with our RHNA requirement. Although this option does carry more risk of not receiving HCD approval.
Also, for clarity, this is a plan but does not have specific developments tied to the sites and is subject to approval from HCD.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Infrastructure and City Assets.
FISCAL IMPACT
A variety of sources fund the research and preparation of the Draft Housing Element and the Housing Incentive Overlay Zone including:
Local Early Action Planning (LEAP) Grant - $500,000 (100 percent allocated) SB-2 Planning Grant Program (PGP) - $310,000 (100 percent allocated) City General Funds - $146,500 (pending authorization at a subsequent Council meeting), Per the stipulated agreement with California Department of Housing and Community Development (HCD), the remaining work on the Housing Element is scheduled to be completed by the end of January 2025. The stipulation requires not only adoption of the Housing Element, but also adoption of the amendments to the Fullerton Plan’s equivalent of the Land Use Element and adoption of the Housing Incentive Overlay zone. This all requires a public hearing before City Council. The outcome of the HCD review of the draft document as well as any recommended changes may impact the final cost of preparing the document. Delays in certifying the Housing Element could result in penalties, withholding of over $1,000,000 in Permanent Local Housing Allocation Program funding and potential legal action and fees from the State, affecting homelessness services (NorthSPA), infrastructure improvements and General Fund.
BACKGROUND AND DISCUSSION
Staff was directed at the last City Council Meeting to refine the HIOZ by limiting parcels to those necessary for the Sites Inventory, considering the removal of parcels along Chapman Avenue, Commonwealth Avenue, Raymond Avenue and State College Boulevard, establishing a maximum building height limit and increasing the affordable housing requirement. Each of these items is further described below.
Limitation of HIOZ parcels to satisfy the Housing Sites Inventory Elimination of the HIOZ parcels outside the Housing Inventory Sites, per Council direction. This results in the reduction from 723 parcels to 235 parcels being rezoned.
Removal of parcels from HIOZ list within selected corridors Staff conducted analysis of the remaining HIOZ parcels looking at the various options discussed during the previous City Council meeting to see whether the Regional Housing Needs Allocation (RHNA) could still be met. The following scenarios were investigated as follows:
Limitation to HIOZ parcels within Sites Inventory
Very Low Income
Low Income
Moderate Income
Above Moderate Income
Total
RHNA Allocation
3,198
1,989
2,271
5,751
13,209
Planned and Approved Units
67 133
131
2,227
2,558
ADUs
90 155
108
10 363
Remaining RHNA After Credits
3,041
1,701
2,032
3,514
10,288
HIOZ*
3,258
1,850
2,349
3,760
11,217
Surplus Land/Owner Interest*
7 5
0 117
129
Total Units After Credits
3,265
1,855
2,349
3,877
11,346
Total Unit Surplus
224
154
317
363
1,058
Total % Buffer above RHNA Allocation
7%
9%
This option meets the RHNA with a buffer of 1,058 units.
Removal of HIOZ parcels within Commonwealth Avenue corridor Very Low Income
Low Income
Moderate Income
Above Moderate Income
Total
RHNA Allocation
3,198
1,989
2,271
5,751
13,209
Planned and Approved Units
67 133
131
2,227
2,558
ADUs
90 155
108
10 363
Remaining RHNA After Credits
3,041
1,701
2,032
3,514
10,288
HIOZ*
2,974
1,694
2,097
3,347
10,112
Surplus Land/Owner Interest*
7 5
0 117
129
Total Units After Credits
2,981
1,699
2,097
3,464
10,241
Total Unit Surplus
-60
-2
65 -50
-47
Total % Buffer above RHNA Allocation
-2%
0%
This option does not meet the RHNA and is deficient 47 units. No buffer is provided as required by HCD.
Removal of HIOZ parcels within Chapman Avenue corridor Focus Area Very Low Income
Low Income
Moderate Income
Above Moderate Income
Total
RHNA Allocation
3,198
1,989
2,271
5,751
13,209
Planned and Approved Units
67 133
131
2,227
2,558
ADUs
90 155
108
10 363
Remaining RHNA After Credits
3,041
1,701
2,032
3,514
10,288
HIOZ*
3,133
1,783
2,244
3,583
10,743
Surplus Land/Owner Interest*
7 5
0 117
129
Total Units After Credits
3,140
1,788
2,244
3,700
10,872
Total Unit Surplus
99 87
212
186
584
Total % Buffer above RHNA Allocation
3%
5%
This option meets the RHNA with a buffer of 584 units.
Removal of HIOZ parcels within Raymond Avenue corridor
Very Low Income
Low Income
Moderate Income
Above Moderate Income
Total
RHNA Allocation
3,198
1,989
2,271
5,751
13,209
Planned and Approved Units
67 133
131
2,227
2,558
ADUs
90 155
108
10 363
Remaining RHNA After Credits
3,041
1,701
2,032
3,514
10,288
HIOZ*
3,144
1,783
2,267
3,631
10,825
Surplus Land/Owner Interest*
7 5
0 117
129
Total Units After Credits
3,151
1,788
2,267
3,748
10,954
Total Unit Surplus
110
87 235
234
666
Total % Buffer above RHNA Allocation
4%
5%
This option meets the RHNA and provides a buffer of 666 units.
Removal of HIOZ parcels within State College Boulevard corridor Very Low Income
Low Income
Moderate Income
Above Moderate Income
Total
RHNA Allocation
3,198
1,989
2,271
5,751
13,209
Planned and Approved Units
67 133
131
2,227
2,558
ADUs
90 155
108
10 363
Remaining RHNA After Credits
3,041
1,701
2,032
3,514
10,288
HIOZ*
3,145
1,785
2,276
3,642
10,848
Surplus Land/Owner Interest*
7 5
0 117
129
Total Units After Credits
3,152
1,790
2,276
3,759
10,977
Total Unit Surplus
111
89 244
245
689
Total % Buffer above RHNA Allocation
4%
5%
This option meets the RHNA and provides a buffer of 689 units.
Removal of HIOZ parcels within all stated corridors
Very Low Income
Low Income
Moderate Income
Above Moderate Income
Total
RHNA Allocation
3,198
1,989
2,271
5,751
13,209
Planned and Approved Units
67 133
131
2,227
2,558
ADUs
90 155
108
10 363
Remaining RHNA After Credits
3,041
1,701
2,032
3,514
10,288
HIOZ*
2,413
1,370
1,699
2,715
8,197
Surplus Land/Owner Interest*
7 5
0 117
129
Total Units After Credits
2,420
1,375
1,699
2,832
8,326
Total Unit Surplus
-621
-326
-333
-682
-1,962
Total % Buffer above RHNA Allocation
-20%
-19%
This option does not meet the RHNA and is deficient by 1,962 units. No buffer is provided.
Removal of selected HIOZ parcels within all corridors
Very Low Income
Low Income
Moderate Income
Above Moderate Income
Total
RHNA Allocation
3,198
1,989
2,271
5,751
13,209
Planned and Approved Units
67 133
131
2,227
2,558
ADUs
90 155
108
10 363
Remaining RHNA After Credits
3,041
1,701
2,032
3,514
10,288
HIOZ*
3,179
1,806
2,286
3,658
10,929
Surplus Land/Owner Interest*
7 5
0 117
129
Total Units After Credits
3,186
1,811
2,286
3,775
11,058
Total Unit Surplus
145
110
254
261
770
Total % Buffer above RHNA Allocation
5%
6%
This option meets the RHNA and provides a buffer of 770 units.
In summary, the first option provides the best means for meeting the RHNA and provides a buffer near ten percent (HCD recommends a 15% to 30% buffer). However, should City Council wish to further reduce the number of sites, staff recommends the last option (above) as it keeps the affected parcels spread throughout the City and within varying economic areas, as well as providing the largest buffer next to the first option. It is unclear if HCD will accept any of the lower buffer amounts other than those in the first option.
HIOZ maximum building height standards
Per the original standards, projects within the HIOZ weren’t subject to a maximum building height standard, similar to those standards within the Fullerton Municipal Code for the C-3 zone. A review of the unit calculation methodology in the Housing Element determined that setting a maximum building height of 65 feet would be consistent with the document and acceptable to HCD. The draft code language has been updated to reflect this building height. There would still be a 30-foot height limitation for any portion of a building within 100 feet of an R-1 zone.
HIOZ affordability requirement
As originally drafted, projects within the HIOZ must include at least ten percent affordable units (moderate income level or lower) to support housing diversity. City Council directed staff to look at ways to increase the affordable units within a project to at least 15 percent or even 20 percent.
Staff conducted outreach to HCD to determine the feasibility of increasing the minimum affordability requirement and the ordinance has been revised to require 15 percent affordability for moderate income level and lower. Within that 15 percent, ten percent must be at the level for lower income (low, very low, extremely low, acutely low) and the developer will have the option to use any affordable income level for the remaining five percent. Projects that meet the affordability level by providing units will only need to go through a ministerial, Minor Site Plan Review process. Projects that provide 20 percent affordability for lower income units will not even need to go through this process.
Additional Review
If a project wishes to exceed the height requirements or use an alternative means other than construction of the units on site to meet the affordability requirement, it will have to go through a Major Site Plan Review before the Planning Commission.
Attachments:
Attachment 1 – Draft Resolution No. XXX – Housing Element Attachment 2 – Draft Resolution No. XXX – EIR Certification Attachment 3 – Draft Resolution No. XXX – Land Use Element Attachment 4 – Draft Ordinance No. XXXX – Zoning Ordinance Attachment 5 – Letter of Support
cc: City Manager Eric J. Levitt
6th Cycle Housing Element
December 3, 2024 - Page 2