Agenda Item C.2
CPMS DISCUSSION/ACTION ITEM
Meeting Date: September 15, 2026
TO: Mayor and Councilmembers
SUBMITTED BY: Peter Imhof, Planning and Environmental Review Director PREPARED BY: Lucy Graham, Housing Manager
SUBJECT: Resolution to Revise Local Preference for Below Market Rate Housing
RECOMMENDATION:
A. Adopt Resolution No. 2 6-__, entitled “A Resolution of the City Council of the City of Goleta, California, A mending the City of Goleta Affordable Housing Policies and Procedures Manual and Finding the Resolution is Exempt under the California Environmental Quality Act;”
B. Direct staff to file a notice of exemption.
BACKGROUND:
In September 2023, the City Council adopted the Affordable Housing Policies and Procedures Manual (Manual) by Resolution No. 23 -46. The Manual sets forth policies and procedures governing the sale and rental of deed-restricted below market rate (BMR) units in the City of Goleta. It includes a Local Preference Requirement, which provides a benefit of priority ranking, when public housing lotteries are held by the City for BMR units, to applicant households that currently reside on the South Coast of Santa Barbara County or have at least one member who works within city limits. The preference policy has not yet been applied, as no project has reached the stage of a public housing lottery since the policy was adopted. Staff received Council direction, via the adopted Fiscal Year 2026/27 Annual Work Program for the Affordable Housing Program, to research refining the lottery-ranking criteria to add a more specific weighting system for local residency and employment factors. These refinements are intended to serve the City’s goals of facilitating affordable housing for the local workforce and ensuring equity, inclusion, and access in City programs and services.
DISCUSSION:
Existing Policy
1 Meeting Date: September 15, 2026
Below Market Rate Units
New housing projects in Goleta are required to provide a portion of the housing units as deed-restricted to be affordable to households of certain income categories. The City’s Inclusionary Housing program, in Chapter 17.28 of the Goleta Municipal Code (GMC), applies a uniform requirement to development projects, both rental and ownership, that contain more than one housing unit. Projects with two to four housing units pay a fee per square foot of the total living area proposed in lieu of providing affordable units onsite , while projects with five or more units must generally provide 20% of the units onsite as affordable across five income categories. 1 Developers have several methods of complying with the requirements, including but not limited to onsite construction of below market rate (BMR) units, offsite construction, and payment of Affordable Housing In-Lieu Fees. Similarly, under State Density Bonus Law (Gov. Code Section 65915) and GMC Chapter 17.27, projects deed-restrict a portion of the housing units as affordable for very low, low, or moderate income households, in exchan ge for reductions or waivers of City development standards.
For households applying to live in the BMR units created, applicants must meet certain requirements, which are set by the City or applicable law and vary by income category and by housing tenure type ( i.e., for sale or for rent). The City’s Affordable Housing Policies and Procedures Manual lays out the eligibility requirements for applicants, as well as the public housing lottery process, including the Local Preference Requirement.
Current Local Preference Requirement
The existing Local Preference Requirement, in Section III.E of the Affordable Housing Policies and Procedures Manual, provides a priority benefit to households entering public housing lotteries to purchase or rent new BMR units in the City. To receive priority ranking, at least one household member must either currently work (or have been hired to work or have a bona fide offer to work) in the City of Goleta or the household must currently reside on the South Coast of Santa Barbara County.
Administrative Workload
The Affordable Housing Program and consultant2 staff are responsible for administering public housing lotteries, certifying household income and eligibility, and applying preference categories for BMR units (as well as long-term monitoring of BMR units). For each applicant household, staff must confirm the basic eligibility requirements, as well as affirmatively verify any preference category claimed by the applicant.
For public housing lotteries, staff first draws applicant households from the pool of those claiming eligibility under the highest level of priority ranking, followed by households claiming eligibility under the second highest level, and so on, until all applicant households have been ranked. The highest ranked households on the list are contacted and offered the chance to select an available BMR unit, and the household’s income and eligibility is confirmed. If the household d oes not meet the minimum qualifications or, upon
1 5% above moderate income, 5% moderate income, 5% low income, 2.5% very low income, and 2.5% extremely low income.
2 The Affordable Housing Program has a contract with the Housing Authority of the County of Sa nta Barbara for one staff person to assist with income certification and housing lotteries. 2 Meeting Date: September 15, 2026
verification, does not qualify for the preference category, staff proceed s to offer a unit to the next household on the list.
In past lotteries that the City has held, there was no priority ranking of applicants. Should the application of additional preference categories and levels require increased staff time and/or technological resources, that would mean decreased staff capacity in other areas or increased contract or subscription costs for the City.
Proposed Policy
Possible Factors for Priority Ranking
Staff received Council direction to review possible factors for incorporation into a priority ranking system for applicant households in housing lotteries. The following criteria have been reviewed by staff.
1. Works in the City – Households with at least one member who currently works, has been hired to work, or has a bona fide offer to work in the City of Goleta.
Working in the City is defined as:
…owning or operating a business located within the City of Goleta, employment for wages or salary for an employer located wi thin the City of Goleta, contract employment where the actual work is conducted within the City of Goleta, or commission work where the applicant's principal location from which they work is located within the City of Goleta, for an average of at least 20 hours per week.
Status: part of the current Local Preference Requirement Administrative workload: Housing staff must verify past, current, and future employment status by checking paystubs, speaking with employers, etc. Practical concerns: None.
Staff recommendation: Yes.
2. Lives on the South Coast – Households currently residing on the South Coast of Santa Barbara County, defined as the area from the county line near Carpinteria to the tunnel at Gaviota.
Status: part of the current Local Preference Requirement Administrative workload: Housing staff must verify current residency via rental agreements, utility bills, etc.
Practical concerns: None.
Staff recommendation: Yes.
3. Imminent risk of homelessness – Households with a court-ordered eviction notice or those fleeing domestic violence, or households meeting the federal definition of “at risk of homelessness.”3
3 24 CFR 576.2, Definitions, includes an expansive definition of “at risk of homelessness” including:
(1) An individual or family who (i) has annual income below 30% median family income, (ii) does not have sufficient resources or support networks, e.g., family, friends, faith-based or other social networks, immediately available to prevent them from moving to an emergency shelter or another pl ace described in paragraph (1) of the “homeless” definition in this section; and (iii) meets one of the following conditions:
3 Meeting Date: September 15, 2026
Status: not part of the current Local Preference Requirement Administrative workload: Housing staff would have to obtain and verify a variety of docum ents to determine eligibility (e.g., eviction trial decisions, police reports).
Practical concerns: Court -ordered eviction notices are issued only a few days before a tenant and their belongings can be forcibly removed by law enforcement, so it would be ch allenging to identify and connect affected households with housing before they are evicted. For domestic violence cases, the fleeing party may not wish to have their new residence posted publicly. It would also likely be outside of the scope of staff’s ability to review or obtain the relevant evidentiary documentation.
Alternatively, using the federal definition of “at risk of homelessness” would apply only to the Extremely Low-income units produced in City projects (because the federal definition limits h ousehold income to 30% of area median income) and would likely pose challenges for staff in fairly determining applicant eligibility in a reasonable amount of time. There are significant privacy concerns with applying certain provisions of the definition, such as exiting a “publicly funding institution or system of care.” A referral system from the County or another agency could be utilized, but the federal definition may include populations in need of supportive services beyond what is required of most hou sing project developers. Finally, an individual or household’s eligibility under the definition could change between the time of eligibility determination and the time of a City -held lottery.
(A) Has moved because of economic reasons two or more times during the 60 days immediately preceding the application for homelessness prevention assistance; (B) Is living in the home of another because of economic hardship; (C) Has been notified in writing that their right to occupy their current housing or living situation will be terminated within 21 days after the date of application for assistance; (D) Lives in a hotel or motel and the cost of the hotel or motel stay is not paid by charitable organizations or by Federal, State, or local government programs for low-income individuals; (E) Lives in a single-room occupancy or efficiency apartment unit in which there reside more than two persons or lives in a larger housing unit in which there reside more than 1.5 persons reside per room, as defined by the U.S. Census Bureau;
(F) Is exiting a publicly funded institution, or system of care (such as a health-care facility, a mental health facility, foster care or other youth facility, or correction program or institution); or (G) Otherwise lives in housing that has characteristics associated with instability and an increased risk of homelessness, as identified in the recipient's approved consolidated plan;
(2) A child or youth who does not qualify as “homeless” under this section, but qualifies as “homeless” under section 387(3) of the Runaway and Homeless Youth Act (42 U.S.C. 5732a(3)), section 637(11) of the Head Start Act (42 U.S.C. 9832(11)), section 41403(6) of the Violence Against Women Act of 1994 (42 U.S.C. 14043e-2(6)), section 330(h)(5)(A) of the Public Health Service Act (42 U.S.C. 254b(h)(5)(A)), section 3(m) of the Food and Nutrition Act of 2008 (7 U.S.C. 2012(m)), or section 17(b)(15) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(b)(15)); or
(3) A child or youth who does not qualify as “homeless” under this section, but qualifies as “homeless” under section 725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2)), and the parent(s) or guardian(s) of that child or youth if living with her or him. 4 Meeting Date: September 15, 2026
Staff recommendation: No.
4. High risk of displacement – Households living in “naturally occurring affordable housing” currently under renovation or sale, or mixed immigration status households living in Section 8 housing.
Status: not part of the current Local Preference Requirement Administrative workload: Hous ing staff would have to verify the circumstances under which the household is at risk of displacement. Practical concerns: “Naturally occurring affordable housing” is not a defined term in the City Municipal Code or General Plan and therefore would be difficult to apply fairly and transparently in a lottery. For mixed immigration status households, they may not wish to have their new residence posted publicly.
Staff recommendation: No.
5. Severe housing cost burden – Households paying more than 50% of the ir gross income toward rent.
Status: not part of the current Local Preference Requirement Administrative workload: Housing staff would have to obtain source documentation to determine household income as well as housing costs. Practical concerns: Calculati on and verification of income and housing costs would likely need to be done in advance of the lottery in order to verify eligibility of all households claiming priority ranking. Staff recommendation: No.
Application of Priority Categories in Lotteries
For public housing lotteries, there are two possible methods for applying preference categories. The first method would allow households to assert eligibility under a Local Preference category at the time of application. Staff would first draw all households from the pool of applicants claiming eligibility under the highest level of ranking, followed by households claiming eligibility under the second highest level, and so on, until all applicant households are ranked. The highest ranked households on the lis t would be contacted and offered the chance to select an available BMR unit, at which point the household’s Local Preference household income and eligibility status would be determined. If the household did not meet the minimum qualifications or, upon veri fication, did not qualify for the preference category, the household would not get a unit, and staff would proceed by offering a unit to the next household on the list. The list of households at a higher priority level would be exhausted before a BMR unit would be offered to someone at the next priority level.
A second possible method would involve Housing Program staff verify ing the Local Preference eligibility (e.g., residency, employment) of each applicant household before ranking applicants in each priority pool. Those selected for the highest priority level would be screened first and selected either through a lottery selection, if necessary, or without a lottery, if the number of candidates in the priority level is less than or equal to the number of BMR units available. The list of households at a higher priority level would be exhausted before a BMR unit would be offered to someone at the next priority level. 5 Meeting Date: September 15, 2026
In the interest of efficient use of limited staff resources, staff recommends that the firs t method be used, such that verification of eligibility for priority ranking would be conducted after the lottery drawing, as each applicant household’s income and other documentation is collected.
Considerations with Local Preference Policies
As a local jurisdiction in California, the City is subject to regulations under the federal Fair Housing Act and the state Fair Employment and Housing Act, both of which protect people from discrimination in housing. Any policies adopted by the City must not create housing programs or policies that, either directly or indirectly, have discriminatory effect. While adopted policies may not have been adopted with discriminatory impact, policies could still be found to have a “disparate impact” on protected classes, such as the elderly or individuals with disabilities.
In addition, as mentioned above, increasing the complexity of the selection process will increase the staff time and resources needed to conduct housing lotteries and verify applicant eligibility. There is also the possibility that some households will apply under a preference category for which they do not qualify, either mistakenly or intentionally, which would result in them losing their opportunity to obtain a BMR unit, regardless of their place in the l ottery ranking. Finally, the potential for misrepresentation, fraud, or appeal may further increase the staff time required to administer lotteries.
Combination of Priority Ranking Factors
The current Local Preference Requirement policy has a binary priority ranking system, providing a higher rank for households residing on the South Coast or that have one member who works in the City. Following Council direction and staff research, the staff recommendation is to adopt a tiered priority ranking system with three levels:
Priority Ranking Criteria
Allocation of priority in projects
with…
Households that… 1 BMR unit
2 BMR
units
3 or more
BMR units
Level 1 Reside on the South
Coast and have a
member who works
in the City
1st BMR
unit
1st BMR
unit 1st BMR unit
Level 2 Reside on the South
Coast or have a
member who works
in the City -
2nd BMR
unit
All BMR units
except 1st and
last
Level 3 Meet general
eligibility
requirements - - Last unit
This recommendation creates priority ranking tiers and provides a benefit to those who both live and work in the City and a secondary ranking for households that either reside 6 Meeting Date: September 15, 2026
on the South Coast or have a member who works in the City, without effectively excluding all other household types from the opportunity to obtain a new BMR unit through the City’s affordable housing program. During the lottery process for new BMR units, there will be multiple pools of applicants, by preference category. For Level 1, applicant households claiming Level 1 eligibility will b e ranked, and the top -ranked household will proceed to obtain the first BMR Unit, subject to eligibility determination. The remaining Level 1 households will be added to the Level 2 pool of applicants for ranking with households claiming Level 2 eligibility, and the number of top-ranked households equal to the number of Level 2-designated BMR units in the project will proceed to eligibility determination for occupancy. If the project has 3 or more BMR units, the remaining households in the Level 2 pool will be added to the Level 3 pool of applicants for ranking with all other households for the final BMR unit . The proposed revisions are summarized in the attached Council Resolution (Attachment 1) and shown in strike-through/underline revisions in Attachment
3. Additional Considerations
Housing projects entitled through the City’s permit process can be either rental or for sale.
The City’s Inclusionary Housing Ordinance, as well as State Density Bonus Law and other state statutes, can create ownership opportunities for Extremely Low, Very Low, and Low income households, providing them with an opportunity to enter the housing market at a more affordable cost. However, for home ownership in particular, some households may not be familiar with the process of purchasing a home and the responsibilities of homeownership. Staff recommends that purchasers of for -sale BMR units in the City be required to complete a HUD-certified or Fannie Mae h omebuyer education course and provide a certificate of completion with their application materials. This requirement will be included in the project’s lottery application, and t he household’s application package will be considered incomplete until the course is completed.
Environmental Review
Pursuant to the California Environmental Quality Act (Public Resources Code Sections 21000 et seq., “CEQA”) and the regulations promulgated thereunder (14 California Code of Regulations Sections 15000 et seq., the “CEQA Guidelines”), the amended policies and procedures document does not constitute a “project” for the purposes of CEQA because it is continuing administrative or maintenance activities such as “general policy and procedure making,” and it will not result in direct or indirect physical changes in the environment and there is no possibility it will have a significant effect on the environment (CEQA Guidelines Section 15378(b)(2) and Section 15061(b)(3)).
GOLETA STRATEGIC PLAN:
Implementation of a Local Preference Requirement for BMR units is consistent with Goleta’s 2025-2027 Strategic Plan.
City-Wide Initiative: 4. Support Economic Vitality
7 Meeting Date: September 15, 2026
Strategic Goal : 4.7: Support organizations, programs, and policies that facilitate affordable housing for the Goleta workforce
City-Wide Initiative: 9. Ensure Equity, Inclusion, and Access in City Programs, Services, and Activities
Strategic Goal: 9.5: Continually examine operational policies and practices to eliminate bias and ensure equity, inclusion, and access.
FISCAL IMPACTS:
Implementation of the current Local Preference Requirement in public lotteries for BMR units is already a responsibility of the Affordable Housing Program. As part of the FY 2026/27 Mid-Cycle Budget, Council approved an additional Management Analyst position and the reclassification of the Senior Housing Analys t to Housing Manager to address expanding program responsibilities, including workload associated with the new BMR housing development, tenant -protection assistance, and Housing Element implementation. However, the proposed local preference revisions were not anticipated as part of that workload and the lottery selection process is typically handled by the County Housing Authority under contract with the City. As a result, an unknown increase in costs could result if administration of a more complex applica tion process and household selection required increased staff or consultant time and resources. Additional contract costs could result if a new or amended consultant contract or software were deemed necessary.
ALTERNATIVES:
Staff is re commending Council adopt revisions to the current Local Preference Requirement for BMR units. Alternatively, Council could direct staff not to make changes to the current policy or could direct staff to eliminate the current Local Preference Requirement.
LEGAL REVIEW BY: Isaac Rosen, City Attorney
APPROVED BY: Robert Nisbet, City Manager
8 Meeting Date: September 15, 2026
ATTACHMENTS:
1. A Resolution of the City Council of the City of Goleta, California, Amending the City of Goleta Affordable Housing Policies and Procedures Manual and Finding the Resolution is Exempt under the California Environmental Quality Act
2. CEQA Notice of Exemption
3. Excerpts from Affordable Housing Policies & Procedures Manual Showing Revisions in Strike-through/Underline
4. Staff Presentation
9 ATTACHMENT 1
A Resolution of the City Council of the City of Goleta, California, Amending the City of Goleta Affordable Housing
Policies and Procedures Manual and Finding the Resolution is Exempt under the California Environmental Quality Act
10 Resolution No. 26-__ Amending the City of Goleta Affordable Housing Policies and Procedures Manual RESOLUTION NO. 26-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GOLETA, CALIFORNIA, A MENDING THE CITY OF GOLETA
AFFORDABLE HOUSING POLICIES AND PROCEDURES
MANUAL AND FINDING THAT THE RESOLUTION IS EXEMPT
UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
WHEREAS the City’s General Plan and Coastal Land Use Plan contain policies that seek to promote and maintain a balanced , equitable, and economically diverse community with a mix of workplaces and residential uses that offer a variety of housing types; and
WHEREAS the City strives to ensure that an adequate supply of affordable housing is accessibl e to persons and households at all economic levels of the community; and
WHEREAS the City implements California Density Bonus law under Government Code Section 65915, which offers certain waivers and incentives for housing projects which deed restrict a portion of the housing units for occupancy by lower- or moderate-income households; and
WHEREAS the City’s Zoning Ordinance , codified in Title 17 of the Goleta Municipal Code, provides for certain requirement s for the inclusion of affordable housing in conjunction with for-sale and rental residential development; and
WHEREAS, in 2023, the City adopt ed administrative standards and procedures to implement such policies, regulations, and deed restrictions; and
WHEREAS the administrative standards and procedures should be adopted, published, and updated regularly to ensure fairness, predictability, and transparency in implementation of affordable housing programs and projects; and
WHEREAS the City wishes to amend the Affordable Housing Policies and Procedures Manual to revise the method by which below market rate uni ts are allocated to applicant households to provide a priority to households living and working in the area;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GOLETA, AS FOLLOWS:
SECTION 1.
The City Council hereby amends the City of Golet a A ffordable Housing Policies and Procedures Manual as follows.
Section III.E Local Preference Requirement is replaced in its entirety to 11 Resolution No. 26-__ Amending the City of Goleta Affordable Housing Policies and Procedures Manual read:
E. Local Preference Requirement
Except where prohibited by state or federal law or a project’s funding program regulations, for new BMR Units, the City’s Local Preference Requirement provides a benefit to applicant households with at least one member who currently works, has been hired to work, or has a bona fide offer to work in the City of Goleta (defined here a s owning or operating a business located within the City of Goleta, employment for wages or salary for an employer located within the City of Goleta, contract employment where the actual work is conducted within the City of Goleta, or commission work where the applicant's principal location from which they work is located within the City of Goleta, for an average of at least 20 hours per week) or who currently resides on the South Coast of Santa Barbara County (from the county line near Carpinteria to the tunnel at Gaviota).
There are three priority ranking levels under the Local Preference Requirement: 1) households that reside on the South Coast and have a member that works in the City, 2) households that either reside on the South Coast or have a member who works in the City, and 3) all other households.
Priority
Ranking Criteria
Allocation of priority in projects
with…
Households that… 1 BMR unit
2 BMR
units
3 or more
BMR
units
Level 1 Reside on the South
Coast and have a
member who works
in the City
1st BMR
unit
1st BMR
unit
1st BMR
unit
Level 2
Reside on the South
Coast or have a
member who works
in the City -
2nd BMR
unit
All BMR
units
except
1st and
last
Level 3 Meet general
eligibility
requirements - - Last unit
The preference category for Level 1 is applied to the first BMR unit in a project.
For projects with two BMR units, the preference category for Level 2 is applied to the second BMR unit in the project. For projects with 3 or 12 Resolution No. 26-__ Amending the City of Goleta Affordable Housing Policies and Procedures Manual more BMR units, Level 2 is applied to all the BMR units ex cept the first and the last.
In projects with more than two BMR units, the preference category for Level 3 is applied to the last BMR unit.
During the lottery process for new BMR units , there will be multiple pools of applicants, by preference category. For Level 1, applicant households claiming Level 1 eligibility will be ranked, and the top - ranked household will proceed to obtain the first BMR Unit, subject to eligibility determination. The remaining Level 1 households will be added to the Level 2 pool of applicants for ranking with households claiming Level 2 eligibility, and the number of top -ranked households equal to the number of Level -2-designated BMR units in the project will proceed to eligibility determination for occupancy. If the project has 3 or more BMR units, the remaining households in the Level 2 pool will be added to the Level 3 pool of applicants for ranking with all other households for the final BMR unit.
Refer to Section IV – Affordable Housing Lottery, for more information on the public lottery process.
For subsequent leasing of BMR Rental Units to fill a vacancy, a public lottery is not held and a first-come/first-served method can be utilized, per the approved Marketing Plan and Tenant Selection Plan. To satisfy the Local Preference Requirement, an initial application period of ten (10) business days must be reserved only for applicant households claiming to meet the applicable income requirements and either residing on the South Coast or having a member who works in the City . If a ll applications received during that ten -day period are reviewed for eligibility, none of the applicant households meet the minimum qualifications, and the unit remains available, then applications can be accepted and considered from applicant households who do not meet the Local Preference requirement.
Purchasers of for-sale BMR units in the City be required to complete a HUD -certified or Fannie Mae homebuyer education course and provide a certificate of completion with their application materials. This requirement will be included in the project’s lottery application.
SECTION 2.
The remaining provisions of the City of Goleta Affordable Housing Policies and Procedures Manual are not amended and remain in force and effect.
SECTION 3.
The City Council finds that this resolution is exempt from or not a project 13 Resolution No. 26-__ Amending the City of Goleta Affordable Housing Policies and Procedures Manual under the California Environmental Qu ality Act under CEQA Guidelines Section 15378 (b)(2), continuing administrative or maintenance activities such as the making of policies and procedures is not a project , and under CEQA Guidelines Section 15061(b)(3) General Rule , the activity is not subject to CEQA as there is no possibility that the activity in question may have a significant impact on the environment and directs staff to file a notice of exemption.
SECTION 4.
The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.
PASSED, APPROVED AND ADOPTED this ____ day of ______ 2026.
_______________________
PAULA PEROTTE, MAYOR
ATTEST: APPROVED AS TO FORM:
_______________________ _______________________
DEBORAH S. LOPEZ ISAAC ROSEN
CITY CLERK CITY ATTORNEY
14 Resolution No. 26-__ Amending the City of Goleta Affordable Housing Policies and Procedures Manual
STATE OF CALIFORNIA )
COUNTY OF SANTA BARBARA ) ss.
CITY OF GOLETA )
I, DEBORAH S. LOPEZ, City Clerk of the City of Goleta, California, DO HEREBY CERTIFY that the foregoing Resolution No. _____ was duly adopted by the City Council of the City of Goleta at a regular meeting held on the ____ day of ________ 2026 by the following roll call vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
(SEAL)
_______________________
DEBORAH S. LOPEZ
CITY CLERK
15 ATTACHMENT 2
CEQA Notice of Exemption
16 NOTICE OF EXEMPTION (NOE)
1 To: Office of Planning and Research From: City of Goleta P.O. Box 3044, 1400 Tenth St. Rm. 212 130 Cremona Drive, Suite B Sacramento, CA 95812-3044 Goleta, CA 93117
Clerk of the Board of Supervisors
County of Santa Barbara
105 E. Anapamu Street, Room 407
Santa Barbara, CA 93101
Subject: Filing of Notice of Exemption
Project Title:
Amendment of Affordable Housing Policies & Procedures Manual
Project Applicant:
City of Goleta Planning and Environmental Review Department
Project Location (Address and APN):
Citywide
Description of Nature, Purpose, and Beneficiaries of Project:
Amendment of an Affordable Housing Policies & Procedures Manual to revise the method for allocation of below market rate units of affordable housing in the City.
Name of Public Agency Approving the Project:
City Council of the City of Goleta
Name of Person or Agency Carrying Out the Project:
City of Goleta
Exempt Status: (check one)
Ministerial (Sec. 15268)
Declared Emergency (Sec. 15269 (a))
Emergency Project (Sec. 15269 (b) (c))
Categorical Exemption: (Insert Type(s) and Section Number(s)) Other Statutory Exemption: Sec. 15378(b)(2) (not a project), 15061(b)(3) (general rule)
Reason(s) why the project is exempt:
Pursuant to California Environmental Quality Act (Public Resources Code Sections 21000 et seq., “CEQA”) and the regulations promulgated thereunder (14 California Code of Regulations Sections 15000 et seq., the “CEQA Guidelines”), an amendment to a policies and procedures document does not constitute a “project” for the purposes of CEQA because it is continuing administrative or maintenance activities, and it will not result in direct or indirect physical changes in the environment and there is no possibility it will have a significant effect on the environment (CEQA Guidelines Section 15378(b)(2) and Section 15061(b)(3)).
City of Goleta Contact Person, Telephone Number, and Email:
17 NOTICE OF EXEMPTION (NOE)
2 Lucy Graham, Housing Manager
805-961-7546
[email protected]
Peter Imhof, Director, Planning and Environmental Review Dept. Date
If filed by the applicant:
1. Attach certified document of exemption finding.
2. Has a Notice of Exemption been filed by the public agency approving the project?
Yes No
Date received for filing at OPR: ____________________________________________
Note: Authority cited: Section 21083 and 211110, Public Resources Code Reference: Sections 21108, 21152.1, Public Resources Code 18 ATTACHMENT 3
Excerpts from Affordable Housing Policies & Procedures Manual Showing Revisions in Strike-through/Underline
19 City of Goleta Affordable Housing Policies and Procedures Manual 13 is possible only if a written request is submitted and approved for good cause. Refer to Section IX.B – Requests for Waiver for more information.
A Marketing Plan must be submitted to Housing staff for review a minimum of six (6) months prior to the anticipated sale or initial occupancy of the BMR Units. Housing staff will review the plan for compliance with City requirements as well as fair housing and other regulations, etc., and provide an approval, an approval with suggested modifications, or a disapproval in the case of significant issues which must be revised. After approval of the Marketing Plan or corrected Marketing Plan, staff will schedule the public lottery for selection and ranking of applicants for the BMR Units, subject to any applicable preferences.
See Subsection III.F – Marketing New BMR Units below for Marketing Plan requirements.
Document Retention Policy
Developers (and property owners) must retain all records related to administration of the sale BMR Ownership Units for a minimum of five years after the sale. Records related to the leasing of BMR Rental Units must be retained for at least five years past the end of an occupant household’s tenancy or the project’s term of affordability. Such documents must be made available for review by City staff upon written request and at least 5 calendar days’ notice.
Housing Preference Categories
A housing preference grants priority to applicant households that have one or more household members with a given characteristic, such as a local resident or local employee or a senior resident over the age of
55. An applicant household which qualifies for a housing preference category applicable to a project will be ranked higher on the housing lottery list than an applicant household which does not qualify for a housing preference category, and owners of new BMR Units must sell or lease to an applicant household which qualifies for the housing preference category applicable to its unit. Therefore, a housing preference increases an applicant household’s odds of obtaining a BMR Unit. Except where prohibited by fair housing laws, the City has a Local Preference Requirement, as outlined below in Section III.E – Local Preference Requirement, which provides a preference during the application process for local employees or local residents for the initial sale or lease, as well as re-rentals, of BMR Units. A developer may propose additional housing-preference categories, but they must be included in the submitted Marketing Plan and, if applicable, Tenant Selection Plan for the project and approved in writing by City staff before marketing begins.
E. Local Preference Requirement
Except where prohibited by state or federal law or a project’s funding program regulations, for new BMR Units, the City’s Local Preference Requirement provides a benefit to applicant households with at least one member who currently works, has been hired to work, or has a bona fide offer to work in the City of Goleta (defined here as owning or operating a business located within the City of Goleta, employment for wages or salary for an employer located within the City of Goleta, contract employment where the actual work is conducted within the City of Goleta, or commission work where the applicant's principal location from which they work is located within the City of Goleta, for an average of at least 20 hours per week) or who currently resides on the South Coast of Santa Barbara County (from the county line near Carpinteria to the tunnel at Gaviota).
20 City of Goleta Affordable Housing Policies and Procedures Manual 14 There are three priority ranking levels under the Local Preference Requirement: 1) households that reside on the South Coast and have a member that works in the City, 2) households that either reside on the South Coast or have a member who works in the City, and 3) all other households.
Priority
Ranking Criteria Allocation of priority in projects with… Households that… 1 BMR unit 2 BMR units 3 or more BMR units Level 1 Reside on the South Coast and
have a member who works in the
City
1st BMR unit 1st BMR unit 1st BMR unit
Level 2 Reside on the South Coast or have
a member who works in the City
- 2nd BMR unit All BMR units except
1st and last
Level 3 Meet general eligibility
requirements
- - Last unit
The preference category for Level 1 is applied to the first BMR unit in a project.
For projects with two BMR units, the preference category for Level 2 is applied to the second BMR unit in the project. For projects with 3 or more BMR units, Level 2 is applied to all the BMR units except the first and the last.
In projects with more than two BMR units, the preference category for Level 3 is applied to the last BMR unit.
Refer to Section IV – Affordable Housing Lottery, for more information on application of housing preferences in the public lottery process.
For subsequent leasing of BMR Rental Units to fill a vacancy, a public lottery is not held and a first- come/first-served method can be utilized, per the approved Marketing Plan and Tenant Selection Plan. To satisfy the Local Preference Requirement, an initial application period of ten (10) business days must be reserved only for applicant households claiming to meet the applicable income requirements and either residing on the South Coast or having a member who works in the CityLocal Preference requirement. If all applications received during that ten-day period are reviewed for eligibility, none of the applicant households meet the minimum qualifications, and the unit remains available, then applications can be accepted and considered from applicant households who do not meet the Local Preference requirement.
F. Marketing New BMR Units
To ensure that BMR Units are marketed properly, fairly, and equitably, the City requires that developers submit a Marketing Plan that outlines how the City’s minimum marketing requirements will be met as well as any particular methods proposed for the individual project. The required contents of the Marketing Plan are outlined below.
(In addition, a Tenant Selection Plan is required for BMR Rental Units; see Section VIII – Rental Program for more information.)
21 ATTACHMENT 4
Presentation
22 Revisions to Local
Preference for Below
Market Rate Units
Planning & Environmental Review Dept.
Peter Imhof, Director
Lucy Graham, Housing Manager
September 15, 2026
23 Current Policy
September 15, 2026 City Council Meeting 2
24 Below Market Rate (BMR) Units
Income- and price-restricted units
Usually a % of total units
Satisfy requirements:
City Inclusionary (GMC § 17.28)
State Density Bonus Law (G.C. § 65915)
Other state programs
Affordable Housing Policies and Procedures Manual
September 15, 2026 City Council Meeting 3
25 Local Housing Requirement
Section III.E of Aff. Housing Policies & Procedures Manual New BMR Units – for rent or for sale
Priority ranking for households (HHs) who:
Live on South Coast or
Work in city limits
Then all other applicants
September 15, 2026 City Council Meeting 4
26 Current Process for BMR Units
Public lottery for each new project
2 pools of applicants (live or work locally / all other) Usually on a tight timeline
Developer eager to finalize project/costs
Applicants eager to get approved/occupy units
Local Housing Req.
Preference for HHs living/working locally
(No waiting lists, no carryover from project to project, no referrals) September 15, 2026 City Council Meeting 5
27 Factors for Consideration
September 15, 2026 City Council Meeting 6
28 Current Prioritization Factors
Works in the City limits
Lives on the South Coast
September 15, 2026 City Council Meeting 7
29 Potential Prioritization Factors
Works in City limits
Lives on South Coast
Eviction notice
Fleeing domestic violence
At risk of homelessness
High risk of displacement
Mixed immigration status (Section 8 housing)
Severe housing cost burden
September 15, 2026 City Council Meeting 8
30 Works in City limits
Households with 1+ member currently works, has been hired to work, or has a bona fide off
er to work in the City
…owning/operating a business in the City, employment for wages or salary f
or an employer in the City, contract employment where
the work is conducted in the City, or commission work where the principal location they work from is in the City, for an average of 20+ hours per week
Staff analysis: Clear definition, feasible to apply
September 15, 2026 City Council Meeting 9
31 Lives on South Coast
Households currently residing on the South Coast of Santa Barbara
County, defined as the area from the county line
near Carpinteria to the tunnel at Gaviota
Staff analysis: Clear definition, simple to apply
September 15, 2026 City Council Meeting 10
32 Imminent risk of homelessness
Court-ordered eviction notice
Fleeing domestic violence
At risk of homelessness (24 CFR 576.2)
Staff analysis: Varying definitions, difficult to apply fairly, privacy c
oncerns, DV victims may avoid public lottery
September 15, 2026 City Council Meeting 11
33 High risk of displacement
Households in naturally occurring affordable housing (NOAH) Under renovation or pending sale
Mixed-immigration status (in Section 8 housing)
Staff analysis: No definition for NOAH, privacy concerns, difficult to obt
ain documentation/apply fairly,
mixed-immigration status HHs may avoid public lottery
September 15, 2026 City Council Meeting 12
34 Severe cost burden
HHs paying 50%+ of gross income toward rent
Staff analysis: Clear definition but difficult to obtain documenta
tion, time-consuming to verify eligibility
September 15, 2026 City Council Meeting 13
35 Proposed Policy
September 15, 2026 City Council Meeting 14
36 Ranked Preference Categories
Two qualifying prioritization factors
Three pools – preference categories
Applicability – depends on no. of BMR Units
September 15, 2026 City Council Meeting 15
37 3. All other
households
Preference Categories
September 15, 2026 City Council Meeting 16
2. Live on South
Coast OR
work in City
1. Live on South
Coast AND
work in City
38 Preference Categories - Applied
* Unless project only has 1 BMR Unit
** Unless project only has 2 BMR Units
September 15, 2026 City Council Meeting 17
Category Criteria Applied to BMR Units in project
1 Live on South Coast and work in City First BMR Unit
2 Live on South Coast or work in City All other BMR Units except Last* 3 All others Last BMR Unit**
39 Preference Categories - by no. BMR Units
Note: Preference Category 3 would be the default if there were no qualifying HHs in Categories 1 or 2
September 15, 2026 City Council Meeting 18
Category
Projects with…
1 BMR unit 2 BMR Units 3+ BMR Units
1 1 st BMR Unit 1 st BMR Unit 1st BMR Unit
2 - 2nd BMR Unit All BMR Units except 1 st & last
3 - - Last BMR Unit
40 Lottery Administration
1. HHs submit applications, claiming preference
2. Ranked lottery drawing – by preference category
3. Staff offers BMR Unit to highest ranked HH
a. Verification of HH income/eligibility
b. If eligible, HH proceeds to occupancy
c. If not, staff denies eligibility and moves to next HH
4. Staff offers BMR Unit to next-highest ranked HH, and so on a. Until all BMR Units filled or until no HHs remain on ranked list September 15, 2026 City Council Meeting 19
41 Lottery Administration (cont’d)
Multiple pools - by preference category
Level 1 HHs ranked
Top-ranked HH proceeds to 1st BMR Unit
Remaining Level 1 HHs added to Level 2 pool
No. of top-ranked HHs for no. of Level 2 BMR units proceed (If 3+ BMR units) Remaining Level 2 HHs added to Level 3 pool All HHs ranked for final BMR unit
September 15, 2026 City Council Meeting 20
42 Homebuyer Course for Buyers
City programs offer ownership across five (5) income categories:
Above Moderate, Moderate, Low, Very Low, Extremely Low Ownership – opportunities & responsibilities
Staff recommending requirement for purchasers of BMR units:
Complete HUD-certified or Fannie Mae homebuyer education course Provide a certificate of completion with their application materials HH’s application considered incomplete until cert. submitted Requirement would be listed in eligibility checklist & lottery pack
et
September 15, 2026 City Council Meeting 21
43 Staff Recommendation
September 15, 2026 City Council Meeting 22
A. Adopt Resolution No. 26-__, entitled “A Resolution of the City Council of the City of Goleta, California, Amending the City of Goleta Affordable Housing Policies and Procedures Manual and Finding the Resolution is Exempt under the California Environmental Quality Act;” B. Direct staff to file a notice of exemption.
44 23
Conclusion
45