CITY OF GROVER BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 4
Placement: Business
Meeting Date: June 8, 2026
TO: Honorable Mayor and City Council
FROM: Matthew Bronson, City Manager
PREPARED BY: Jennifer Thompson, City Attorney
Megan Martin, Community Development Director
Kyle Bell, Senior Planner
SUBJECT: Report on Citizen Initiative to Limit Certain Building Heights in Certain Zones and Establish a Minimum Commercial Component in Mixed-Use Development Projects and Consideration of Related Ordinance
RECOMMENDATION
Accept the Ballot Measure Report on a proposed citizen initiative to limit building heights in certain zones and establish a minimum commercial component in mixed-use projects; and consider adoption of the Ordinance in the initiative, or submission to voters in the November 3, 2026, election.
BACKGROUND
Submitted Initiative
On February 10, 2026, the City of Grover Beach (City) received a Notice of Intention to Circulate Petition (Notice) for a proposed citizen initiative to limit building heights in commercial and industrial zones within the City and establish a minimum commercial component of thirty-three percent (33%) in mixed-use developments in the city as shown in Attachment 1. On February 10th, the City Clerk transmitted the Notice to the City Attorney. The City Attorney prepared a ballot title and impartial summary (Title and Summary) of the Measure, attached hereto as Attachment 2, which was provided to the City Clerk on February 24, 2026. The Measure proponents published the Notice and Title and Summary in New Times on March 5, 2026. The City Clerk certified publication on March 5, 2026, and the Measure proponents began collecting signatures.
On April 20, 2026, the Measure proponents filed the petition and 1,249 signatures with the City Clerk. On April 30, 2026, the City Clerk determined that the Measure proponents received 1,102 valid signatures, exceeding the required 783 signatures to place the initiative on the ballot. On May 11, 2026, the City Council accepted the petition and certification of signatures for the initiative and scheduled an agenda item for the June 8, 2026 meeting to receive the Ballot Measure Report previously authorized by the Council on March 31, 2026. Upon presentation of the report, the Council must either adopt the ordinance within 10 days or submit the proposed ordinance to the voters at the general municipal election on November 3, 2026.
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 2 June 8, 2026
Impacts of the Proposed Initiative
The purpose of this report is to present staff’s analysis of the proposed citizen initiative, including its potential impacts on development in Grover Beach and any legal implications under State Housing law as directed by the Council. Specifically, the Council requested an analysis of whether the reductions in allowable building heights in certain zones and required commercial-toresidential ratio for mixed-use projects could constrain the City’s ability to achieve the maximum allowable residential densities identified in the City’s Land Use and Housing Element.
Currently, the Development Code, Article IX of the City’s Municipal Code, allows for building heights up to fifty-five feet (55') in certain commercial zones1, and building heights up to forty feet (40') in industrial zones2
. The initiative would limit building heights in certain Commercial Zoning Districts to three (3) stories and no more than forty feet (40') in height, and limit buildings within the Industrial Zoning Districts to thirty-three feet (33') in height. The initiative would additionally change how building height is measured. Building height is currently measured from the average natural grade to the highest point of the building, excluding any appurtenances3 . The initiative will
require that building heights are measured from the average natural grade to the highest point of the building, including any appurtenances.
For mixed-use developments, the existing Development Code does not currently prescribe a minimum percentage for the commercial component of mixed-use developments4 though the Council had previously provided direction to staff to develop a proposed minimum percentage for review by the Planning Commission and subsequent action by the Council. The initiative would additionally require a minimum of thirty-three percent (33%) of a mixed-use building to be dedicated to commercial uses and require such commercial uses on the ground floor frontage on the primary street.
Staff has completed a comprehensive review of how the proposed citizen initiative would impact development capacity, site feasibility, and the City’s ability to achieve residential capacity consistent with adopted plans. The analysis first outlines potential legal implications under State housing law, followed by a more detailed quantitative assessment of the measure’s impacts.
State Housing Law and Legal Implications
As presented to the Council at the March 31st special meeting on housing and development issues, State housing law substantially limits local discretion over qualifying housing development projects. The Housing Crisis Act (HCA or Senate Bill 330) of 2019 limits the City’s ability to reduce residential density or impose new constraints on housing development below the levels allowed as of January 1, 20185
. The Housing Accountability Act (HAA) further restricts the City’s ability to deny or reduce the density of a housing development project that complies with applicable objective standards, including standards as modified by Density Bonus projects. Density Bonus Law requires the City to grant additional density, incentives, and waivers of development standards when a project includes specified levels of affordable housing6. Housing Element Law 1 Central Business (CB), Central Business Open (CBO), Visitor Serving (VS), and Coastal Visitor Serving (CVS) 2 Coastal Industrial (CI), Coastal Industrial Commercial (CIC), Industrial (I) 3 Development Code Section 3.10.030.C - The maximum allowable height shall be measured as the vertical distance from the average level of the highest and lowest point, measured from natural grade, of that portion of the lot covered by the building to the topmost point of the roof as shown in Figure 3-9. Natural grade shall be determined by the Director using the best available information. 4 “Mixed-Use Project” defined as “A project that combines both residential and commercial uses on the same site.” 5 Government Code §66300(b)(1)(A) 6 Government Code §65915
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 3 June 8, 2026
requires jurisdictions to plan for and accommodate housing. Together, these statutes significantly constrain local discretion and require approval of qualifying housing projects unless specific, evidence-based findings can be made under State law.
Collectively, these statutes create a legal framework in which approval of qualifying housing development projects7 is required unless the City can make specific, adverse findings supported by a preponderance of the evidence in the record. Importantly, the burden of proof rests entirely with the City. This is a high evidentiary standard requiring substantial, objective, and quantifiable evidence demonstrating that the project would result in a specific, adverse impact to public health or safety that cannot be mitigated. Absent such findings, denial or reduction in density of a project would be inconsistent with State law.
As such, regardless of the outcome of the citizen initiative, certain housing development projects will not be subject to these amended standards and expectations:
• State Density Bonus Law (DBL) projects
• SB 330 applications
• Vesting Subdivision Maps
• Entitlements deemed complete prior to effective date
• Building Permits submitted prior to the effective date Housing Crisis Act
In reviewing the proposed ordinance in the initiative, staff believes the City could be in violation of the HCA if the ordinance is adopted. This is due to the reduction of building heights and requirement of a minimum 33% commercial to residential ratio in the ordinance because these actions arguably reduce the intensity of the land use and resulting development capacity8 .
Pursuant to Government Code Section 66300, subdivision (b), “an affected city shall not enact a development policy, standard, or condition that would … [c]hang[e] the general plan land use designation, specific plan land use designation, or zoning of a parcel or parcels of property to a less intensive use or reduce[e] the intensity of land use within an existing general plan land use designation, specific plan land use designation, or zoning district in effect at the time of the proposed change … .” “’[R]educing the intensity of land use’ includes, but is not limited to, reductions in height, … or any other action that would individually or cumulatively reduce the site’s residential development capacity. (emphasis added)”
Reducing height is explicitly identified as a reduction of the intensity of a land use. In addition, requiring a certain ratio of commercial to residential in mixed-use buildings also likely can constitute a reduction of the intensity of a land use because this could potentially, both individually and cumulatively, reduce the site’s residential development capacity compared to without a ratio requirement.
Housing Element Law
In this review, staff also found that the ordinance could be in violation of State Housing Element Law. Housing Element Law expects a city to identify enough realistic housing capacity and to avoid development standards that function as constraints. Reducing building height could be considered such a constraint if this reduces the City’s capacity to meet its regional housing needs.
Additionally, requiring a specific minimum commercial to residential ratio in mixed-use projects 7 Government Code §65589.5(h)(2)
8 Government Code §66300(b)(1)(A)
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 4 June 8, 2026
could also be considered a constraint depending on the level established as this could effectively reduce the residential share or add constraints that discourage housing production. This is particularly true on sites the housing element has identified in their inventory as sites for potential capacity.
Further Analysis on Consistency with State Law
To further evaluate the ordinance in the initiative and its consistency with State law, staff completed a detailed quantitative analysis to better inform potential conclusions about the legality of the ordinance and its impacts. Staff would acknowledge that this analysis was carried out inhouse to meet the abbreviated timing of presenting this report to the Council for a potential November 2026 initiative. If additional analysis was needed in the future, staff would recommend contracting an outside consultant for this work.
For this analysis, staff created two prototype mixed-use development scenarios for parcels located in Commercial Business (CB) zones. The scenarios focus on the CB zones rather than industrial zones as there are substantially more parcels and acreage affected by the ordinance in the commercial zones. Each scenario evaluates whether a mixed-use development project, subject to the reduced building heights and 33% commercial percentage in the ordinance, can achieve maximum residential density while meeting the City’s other applicable development standards, including:
• Lot Coverage
• Floor Area Ratio (FAR)
• Residential density
• Parking requirements
• Landscaping requirements
For analysis purposes, staff evaluated a hypothetical 10,000 square-foot (sf) corner parcel along West Grand Avenue. The hypothetical parcel was adjusted to account for required parking (1 space per 450 sf of commercial) and landscaping (minimum 5% of total site area). Under the City’s current development standards, the maximum density permitted in the zone for a corner lot would be 9 residential units with an average unit size of 1,200 square feet, resulting in approximately 10,800 square feet of residential floor area (this area accounts for residential amenities, open space areas, and internal circulation).
Assuming the ordinance was adopted by the Council or voters, a mixed-use development project would be limited to 40 feet in height (capped at three stories), 33% commercial floor area requirement of the total building area, and subject to a residential density of 20 dwelling units per acre (du/ac). Below is a summary of findings from this evaluation with additional information shown in Attachment 3:
• Prototype 1 – Average Residential Unit Size
On this hypothetical 10,000 sf corner parcel, and accounting for the development standards imposed by the ordinance in the initiative, a mixed-use project accommodating the maximum residential density would require approximately 10,800 sf of residential floor area capable of supporting nine (9) residential units at 1,200 sf each. To satisfy the 33% commercial floor area requirement, an additional 5,400 sf of commercial floor area would be required, resulting in a total building area of approximately 16,200 sf. After accounting for approximately 500 sf of landscaping and 9,200 sf of parking (28 parking spaces), the total land area required exceeds the available 10,000 sf parcel.
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 5 June 8, 2026
As a result, the City’s development standards cannot be fully accommodated in developing this parcel under these changes in the ordinance without reducing residential or commercial floor area. Staff estimates that approximately four (4) of the nine (9) residential units would be displaced.
• Prototype 2 – Reduced Residential Unit Size with Fractional Density On the same parcel, and accounting for all the same variables, staff looked at utilizing the City’s Fractional Density ordinance and reducing the size of the residential units to achieve density. Fourteen (14) residential units at 800 sf each, would require approximately 11,200 sf of residential floor area and 5,600 sf of commercial, resulting in a total building area of approximately 16,800 sf. Similar to the larger residential unit size scenario, the development standards cannot be fully accommodated without reducing residential or commercial floor area. Utilizing the larger residential unit scenario, staff estimates that approximately six (6) residential units would be displaced.
Staff used the results of these prototypes in estimating citywide implications from the changes in building heights and commercial spaces under this ordinance. Staff would note there are approximately 62 acres of CB and CBO land within the Central Business – Mixed Use land use designation. At 20 du/ac, these areas could accommodate approximately 1,240 residential units (62 acres x 20 du/ac) at full buildout. Applying the 44% reduction of housing units in the prototypes (9 units to 5 units), staff estimates a potential reduction of approximately 544 residential units across the CB and CBO zones.
These 544 lost units would need to be accounted for somewhere else in the city as State Housing law prohibits approval of development standards that reduce residential capacity without identifying replacement capacity elsewhere in the jurisdiction. There could be various ways to account for these lost units through rezoning areas of the city such as single-family zoned areas (R1). As an example, staff estimates that approximately 136 acres of Low Density Residential (R1; 2-5 du/ac) zoned area could be rezoned to Medium Density Residential (R2; 5-9 du/ac) to account for the loss. This would affect roughly 1,000 parcels which is approximately 40% of the City’s total R1 zoning. The process and criteria for determining areas to rezone to account for these lost units would be subject to policy direction from the Council. As further discussed in the Fiscal Impact section of this report, a rezoning of this scale would also involve preparation of an Environmental Impact Report at an estimated cost of approximately $500,000-$1,000,000 based on similar processes in other cities.
Staff would also note that this formula above only accounts for the CB and CBO zones whereas the ordinance in the ballot initiative applies to all commercial zones where mixed-use projects are allowed including Coastal Visitor Serving (CVS), Visitor Serving (VS), Neighborhood Commercial (NC), Retail Commercial (RC), and Coastal Commercial (CC), and Coastal Industrial Commercial (CIC). Additionally, notwithstanding the scenario described above, not every parcel in CB and CBO zones is 10,000 sf, therefore this estimate should be looked at as the upper-bound scenario and does not account for alternative capacity offsets in other zones or mixed-use areas.
In summary, the legislative intent of the HCA and Housing Element Law is to prevent development standards that function as constraints on housing production. The analysis carried out by staff finds that the combined effect of reduced heights and the commercial floor area ratio would reduce feasible residential development in mixed-use zones. Unless equivalent residential capacity is identified and rezoned elsewhere in the city under the process prescribed by HCD, the ordinance in the ballot initiative would likely be in violation with State Housing law due to a net loss of residential capacity.
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 6 June 8, 2026
7th Cycle Regional Housing Needs Allocation
The proposed ordinance in the citizen initiative also has implications beyond the immediate need to address residential capacity loss through future rezoning efforts. As part of the upcoming 7th Cycle Regional Housing Needs Allocation (RHNA), the City must demonstrate adequate residential site capacity to accommodate its future housing obligations. Preliminary information from the San Luis Obispo Council of Governments (SLOCOG) indicates that the region’s allocation from HCD may increase to nearly 14,000 units during the 7th Cycle, with the City’s RHNA allocation potentially doubling from the previous cycle of 369 units to approximately 748 units. While the SLOCOG Board will discuss a potential appeal to HCD’s allocation on June 3, 2026, HCD retains the authority to establish the region’s housing needs.
If SLOCOG is unsuccessful in reducing the number of units regionally and the ordinance is adopted, the City will not only need to account for lost residential units across the affected zones as a result of the initiative but also accommodate future housing needs as part of the 7th Cycle Housing Element Update. This ordinance in the initiative would substantially limit the City’s ability to accommodate future housing needs and increases the reliance on additional upzoning and land use changes elsewhere in the community. Maintaining adequate residential capacity is critical, not only for compliance with current State housing laws, but also for preserving flexibility as the City responds to future state-mandated housing obligations.
Projects Exempt from the Initiative
As mentioned earlier in this report, certain types of qualifying housing development projects would be exempt from the ordinance in the initiative, including State Density Bonus projects, SB 330 applications, Vesting Subdivision Maps, Entitlements deemed complete prior to the effective date of the ordinance, and building permits submitted prior to the effective date. This means that if a project that implements State DBL and offers a minimum percentage of affordable units, it may waive the standards the ballot initiative seeks to enforce. Building heights established by this initiative or within the Development Code may be exceeded and any ground floor commercial requirements can be eliminated.
Additionally, a project approved by the Planning Commission prior to the effective date of the ordinance, and building permits are issued after the effective date, are subject to the code requirements in effect at the time the project was approved. Similarly, if a property owner submits an SB 330 project application, once the application is deemed complete it is vested in the code requirements in effect at the time it was deemed complete. In other words, if the SB 330 application is approved prior to the effective date of the ordinance, the ordinance would have no influence or effect over that application regardless of when the formal submittal was received.
Ordinance Implementation Process and HCD Enforcement
Should the ordinance in the initiative be adopted by either the Council or voters, staff would work to implement the ordinance following the effective date of 30 days after adoption. Prior to this report, staff consulted with HCD’s Housing Accountability Unit (HAU) to understand the process and timing requirements following adoption as well as the legal issues related to the ordinance in the ballot initiative. HAU representatives informed staff that the measure raised potential violations of both the HCA and Housing Element Law and outlined the steps the City would need to take to remain in compliance with its Housing Element, including the previously-mentioned upzoning requirements under the HCA and identifying alternative sites to meet the City’s RHNA obligations should inventory sites identified in the Housing Element be impacted by the initiative.
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 7 June 8, 2026
Following the effective date of the proposed ordinance, staff would have 90 days to implement the changes to the appropriate planning documents, including the Development Code and Objective Design Standards. However, because staff’s analysis demonstrates a reduction in residential capacity, staff would also need to implement changes to the City’s General Plan Land Use Element, Housing Element, and update the Official Land Use and Zoning Maps. Staff would bring an item to the Council shortly after the effective date to begin policy deliberation into the potential rezoning needed to carry this out. These actions will require public outreach, Planning Commission hearing(s), and final local action and approval by the Council. Staff would also coordinate closely with the Coastal Commission to agendize any Local Coastal Program amendments associated with these actions. From a scheduling standpoint, staff would begin this process in July if the ordinance was adopted by the Council on June 8 and in January/February 2027 if the ordinance was adopted by voters in November.
If the City is unable to identify and upzone sufficient alternative sites to offset the reduction in residential density, it is anticipated that HCD would issue a formal determination of nonconformance with a deadline for resolution. At that point, the City would need to either reject HCD’s determination and face enforcement (minimum of $10,000 per month depending on the nature of the violation; SB 1037), or rescind the voter-approved measure. The most consequential outcome of noncompliance, however, would be the decertification of the City’s Housing Element.
HCD has explicit authority under Housing Element Law to review a jurisdiction’s Housing Element for compliance and to issue a finding of noncompliance if adopted policies, standards, or zoning actions are inconsistent with State law. Once HCD issues a finding of noncompliance, the jurisdiction is given a defined period to cure the violation. If the City fails to act within that window, the matter will likely be referred to the Attorney General for enforcement and to formally decertify the City’s Housing Element.
A decertified Housing Element allows what is referred to as “Builder’s Remedy” (Government Code Section 65589.5). Builder’s Remedy is a provision under State law that allows developers to bypass local zoning regulations, including height limits, design standards, and density caps, on any project where at least 20% of the units are deed-restricted as affordable. Under Builder’s Remedy, the City would lose all meaningful local land use authority; where and how housing is built, until such time as the Housing Element is recertified. Over the last two years, at least 35 letters have been sent to jurisdictions across the State with findings of “noncompliance” or “decertification”9 and there are examples statewide of Builder’s Remedy projects including an 18- story, 130-unit multifamily project recently proposed in Carpinteria. Jurisdictions that have faced decertification have experienced significant and unwanted development and applications for development that they have no legal authority to deny.
In addition to the ramifications listed above and the impacts on development, if the City’s Housing Element is decertified, the City would no longer be eligible for Community Development Block Grant (CDBG) funding administered by HCD and potentially competitive and formula Permanent Local Housing Allocation (PLHA) funds. Combined, the City has received millions of dollars in funding from both grant programs. This ineligibility would impact the City’s ability to apply for future funding and partner with organizations such as 5Cities Homeless Coalition to support on-going and critical public services to both emergency shelters, affect the City’s ability to obtain grant funding for future sewer infrastructure or park projects, and related to PLHA, would affect our ability to partner with other organizations to support affordable housing projects. 9 https://www.hcd.ca.gov/hau/enforcement-letters
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 8 June 8, 2026
Staff would note that in November 2025, Assembly Member James Gallagher submitted a request to the Attorney General for an opinion regarding how private actions such as citizen-led ballot initiatives relate to State housing law and the ability to enforce Government Code Section 6630010.
Due to the lack of case law on the matter, the opinion from the Attorney General’s office would provide important legal guidance to State and local agencies. To date, an opinion has not been made, but such an opinion could affect consideration of the ordinance in the ballot initiative.
Assembly Member Gallagher has also authored an amendment to HCA (2019) through Assembly Bill 2676 (AB 2676) which would expand prohibitions on local actions that constrain housing development in affected cities and counties, including limiting the use of voter initiatives to impose moratoria or similar restrictions and extending those protections to areas within an affected city’s sphere of influence. As of this report, AB 2676 was passed by the Assembly and is now awaiting a vote in the Senate11.
FISCAL IMPACT
There are no direct funding impacts associated with this staff report. However, if the proposed ordinance is adopted by the Council or by voters, the Community Development Department would immediately need to substantially revise its current work program and initiate amendments to the City’s Land Use Element, Housing Element, Development Code, and Objective Design Standards.
This would lead to a delay in other work program tasks such as finalizing the Circulation Element Update and beginning the Housing Element Update and affect the timeliness and response on day-to-day development review work involving properties across the city.
Also as mentioned earlier in this report, the scale of a rezoning that would be needed to restore lost residential capacity would likely require the City to prepare an Environmental Impact Report (EIR) pursuant to the California Environmental Quality Act (CEQA). For an infill community, the cost to hire a consultant to prepare the updates and an EIR associated with a citywide land use and rezoning effort could reasonably be expected to cost a minimum of $500,000 and potentially up to $1,000,000 based on similar processes in other cities. The funding for this work would need to come from the City’s General Fund and require a review of General Fund reserves and/or operating budgets to account for this cost.
Additionally, because portions of the City are located within the Coastal Zone, implementation of any necessary land use or zoning amendments may also require a Local Coastal Program (LCP) Amendment, subject to review and certification by the California Coastal Commission. The LCP process would add additional consultant costs, staff resources, hearing requirements, and an extended implementation timeline associated with Coastal Commission review and approval. This effort would need to be coordinated closely with HCD in the event the City is subject to enforcement fines.
Staff notes that HCD recently released guidance regarding a new statutory CEQA exemption established through SB 131 that may apply to rezoning actions undertaken by the City. Based on a preliminary review of the legislation and HCD guidance, it appears possible that the City’s rezoning efforts could qualify for this exemption, which would eliminate the need to prepare an EIR. However, the applicability of the exemption has not been fully evaluated, and staff has reached out to the HAU for additional technical support and guidance on the matter. Regardless of whether an EIR is ultimately required, the City would still need to retain a qualified planning 10 Government Code section 66300, subdivision (b)(1), prohibits, among other things, the enactment of any “development policy, standard, or condition” that has the effect of “[i]mposing a moratorium or similar restriction or limitation on housing development.” (Gov. Code, § 66300, subd. (b)(1).) 11 Bill Text - AB-2676 Housing Crisis Act of 2019.
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 9 June 8, 2026
consultant to prepare the necessary updates to all planning-related documents, as well as any supporting technical analysis and coordination with HCD and other regulatory agencies. There would be an unknown cost for this consulting work.
Lastly, if the Council submits this ordinance to voters in November, there would be a cost of up to $5,000 in adding the initiative to the printing of the November ballot and voter information guide.
This cost is minimal since the election will be conducted by the County Elections Office and the ballot and guide will already be produced.
CITY ATTORNEY’S IMPARTIAL ANALYSIS
The City Attorney has prepared a title and summary of the effect of the proposed initiative measure as shown in Attachment 2. This impartial analysis will be included after any applicable arguments and rebuttals submitted and pertaining to the ballot measure. Upon consideration of this report and the City Attorney’s analysis, the Council must either:
1) Adopt the ordinance proposed by the initiative, without alteration, thus limiting building heights in certain zones and establish a minimum commercial component in mixed-use projects; or
2) Adopt a resolution calling an election to submit the initiative measure to the voters at the next general municipal election on November 3, 2026.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Receive and file the Ballot Measure Report prepared by staff; and either
2. Adopt a resolution adopting the proposed ordinance, without alteration, to limit building heights in certain zones and establish a minimum commercial component in mixed-use projects (Attachment 4); or
3. Adopt a resolution calling an election to submit the initiative measure to the voters at the next general municipal election on November 3, 2026 (Attachment 5).
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
ATTACHMENTS
1. Notice of Intention to Circulate Petition
2. Ballot Title and Impartial Summary
3. Prototype Development Scenario Detailed Analysis
4. Resolution Adopting the Proposed Ordinance
5. Resolution Calling for an Election to Submit the Initiative Measure to the Voters at the next General Election on November 3, 2026
Staff Report: Report on Citizen Initiative on Building Heights and Commercial Space Component Page 10 June 8, 2026
Multi-Year Goals
☐ Public Safety and Community Services ☒ Economic Development and Housing ☐ Community Infrastructure ☐ Financial and Organization Sustainability Council Priorities
☐ Water & Wastewater Infrastructure ☐ Community Engagement ☐ Street Improvements and Maintenance
Attachment 1
733 Marsh Street, Suite 200, San Luis Obispo, California 93401 Telephone: (805) 471-7080 Fax: (805) 930-1031
M E M O R A N D U M
By E-Mail: [email protected]
DATE: February 24, 2026 CLIENT/MATTER:
03586/04
TO: Wendi Sims, City Clerk
CC: Matt Bronson, City Manager
Kristin Eriksson, Assistant City Manager
FROM: City Attorney's Office
RE: Proposed Initiative Measure to Limit Building Height and Establish a Minimum Commercial Component in Mixed-Use Developments
On February 10, 2026, the City of Grover Beach (“City”) received a Notice of Intention to Circulate Petition for a proposed local ballot measure to limit building heights and establish a minimum commercial component of thirty-three percent (33%) in mixed-use development (“Measure”). Accompanying the Measure was a request to prepare a Ballot Title and Summary.
The City Clerk’s office immediately transmitted that request to the City Attorney’s office in accordance with Elections Code section 9203, subdivision (a).
In accordance with Elections Code section 9203, subdivision (a), the following is the City Attorney’s Ballot Title and Summary of the Measure.
Pursuant to California Elections Code section 9203, subdivision (a), the City Attorney has prepared the following ballot title and summary of the proposed initiative Measure. The ballot title and summary must be printed across the top of each page of the petition whereon signatures are to appear as required by Elections Code section 9203, subdivision (b).
A Citizen’s Initiative Measure to Limit Building Heights and to Establish a Minimum Commercial Component of Thirty-Three Percent (33%) in Mixed-Use Developments Attachment 2
- 2 -
The purpose of this measure is to ask registered voters in the City of Grover Beach if they wish to adopt an ordinance to limit building height within the commercial and industrial zones, and to establish a minimum percentage for designated commercial use within mixed-use developments.
Currently, the Development Code, Article IX of the City’s Municipal Code, allows for building heights up to fifty-five feet (55') in certain commercial zones, and building heights up to forty feet (40') in industrial zones. The measure would limit building heights in Commercial Zoning Districts to three (3) stories and no more than forty feet (40') in height, and limit buildings within the Industrial Zoning Districts to thirty-three feet (33') in height. The measure would additionally change how building height is measured. The existing building height is measured from the average natural grade to the highest point of the building, excluding any appurtenances.
The measure will measure building height from the average natural grade to the highest point of the building, including any appurtenances.
For mixed-use developments, the existing Development Code does not currently prescribe a minimum percentage for the commercial component of mixed-use developments. The measure would additionally require a minimum of thirty-three percent (33%) of a mixed-use building to be dedicated to commercial uses and require such commercial uses on the ground floor frontage on the primary street.
If passed, this measure would be added to the City’s Objective Design Standards and amend applicable sections of the City of Grover Beach Municipal Code. The ordinance would become effective at the earliest time permitted by law and require the Community Development Department to update the Development Code within ninety (90) days of it becoming effective.
Only proposed development applications received after the ordinance effective date would be required to comply with the Measure.
Successful passage of this measure would effectively void existing Grover Beach Municipal Code sections in conflict and necessitate revaluation of the City’s Housing Element. Under California State law (Gov. Code, § 65583.2), local agencies are required to include an inventory of land suitable for residential development within the agency’s Housing Element to address the agency’s Regional Housing Needs Allocation (“RHNA”). The City’s 2020-2028 Housing Element considered existing allowable building height limits in determining and demonstrating how the City will accommodate its allocated number of housing units pursuant to the San Luis Obispo Council of Governments 2019 RHNA Plan. By limiting building heights, the City may be required to accommodate housing units in alternate locations.
CITY OF GROVER BEACH
COMMUNITY DEVELOPMENT DEPARTMENT
154 South Eighth Street Grover Beach, California 93433 www.groverbeach.org Building & Planning: Phone: (805) 473-4520 Email: [email protected] Code Compliance: Phone: (805) 473-4523 Email: [email protected] Prototype Mixed-Use Development Scenarios
This memorandum was prepared to provide the City Council with a detailed analysis of the citizens initiative’s impact on development in the city and the City’s ability to achieve its residential capacity assumed in the General Plan Land Use Element. Staff would acknowledge that this analysis was carried out in an abbreviated period to meet the timing of presenting this report to the City Council for a potential November 2026 initiative. If additional analysis was needed in the future, staff would recommend contracting an outside consultant for this work.
The purpose of this analysis is to demonstrate whether adoption of this initiative would violate State Housing law. Consistent with the requirements of the Housing Crisis Act (HCA), Housing Accountability Act (HAA), and Housing Element Law, cities cannot introduce development standards that would reduce the allowable residential capacity of a housing project without identifying additional sites or zoning capacity. In other words, should any scenario result in a theoretical loss of residential capacity, the City will be required by the State to replace this loss elsewhere in the community.
To accomplish this, staff prepared two prototype development scenarios under the standards in this initiative compared with existing development standards for parcels located in the Commercial Business (CB) zones. The scenarios focus on the CB zones rather than industrial zones as there are substantially more parcels and acreage affected by the ordinance in the commercial zones.
Both scenarios evaluate whether a mixed-use development, subject to the ballot initiative, can accommodate the allotted residential area based on maximum achievable density, while satisfying the City’s other applicable development standards.
In accordance with the ballot initiative, the scenarios assume a mixed-use building configuration with ground-floor commercial space and residential units on the upper floors. Building height is limited to 40 feet and capped at three stories. Any mixed-use project is subject to the 33% commercial to residential ratio. All other development standards associated with the applicable zone are assumed, including:
• Lot Coverage – 100% commercial
• Floor Area Ratio (FAR) – 3.0 commercial
• Residential density – 20 units per acre – gross lot area • Parking requirements – 1.5 space/unit + 1 guest space/4 units • Landscaping area – 5% total site area
Accompanying diagrams for each scenario illustrate the conceptual massing consistent with the assumptions.
Attachment 3
Detailed Analysis – Prototype Scenarios of Citizen Initiative Page 2 The conceptual development scenario for the CB zone evaluates whether a mixed-use project on a typical 10,000 square-foot corner lot could accommodate the base residential capacity allowed under the Development Code while complying with applicable development standards.
Residential density in the CB zone is calculated based on gross lot area measured to the centerline of the adjacent street. Based on the maximum density permitted in the zone (for a corner lot), the prototype project assumes a residential program of 9 units with an average unit size of 1,200 square feet, resulting in approximately 10,800 square feet of residential floor area (this area accounts for residential amenities, open space areas, and internal circulation).
Under the City’s Development Code, 1.5 parking spaces are required for each residential unit in the CB zone, and 1 guest space for every 4 units (Section 3.50.040; Table 3-4). For commercial uses along West Grand Avenue, the parking requirement is one space per 450 square feet (Section 3.50.040.C).
To determine the amount of commercial space that could reasonably be accommodated on the site, staff evaluated the remaining lot area after accounting for required landscaping (5% of the lot area) and parking area. However, the amount of commercial floor area has a coupling effect on site design because increases in commercial space generates additional parking demand.
Based on an assumed site layout, the site plan could reasonably accommodate 18 parking spaces, which could also accommodate up to 3,500 square feet of commercial floor area.
Because residential uses are not permitted on the ground floor in the CB zone fronting West Grand Ave, the 10,800 square feet of residential floor area required to accommodate the 9 units would be located on the upper floors, while remaining within the zone’s maximum building height and floor area ratio (FAR) standards.
CB Zone Development Standards – Corner Lot
Standards Standards
Maximum FAR 3.0
Maximum Height 55 feet
Minimum Residential Area 10,800 sq ft
Number of Residential Units 9 Units, 1,200 sq ft each
Commercial Area 3,500 sq ft
Landscaping Requirement 5% of lot area
Parking Requirement 18 spaces
Detailed Analysis – Prototype Scenarios of Citizen Initiative Page 3 Existing Development Standards
Building Envelope
• FAR 30,000 sq ft,
• Max Height 55-Feet
• Minimum 10,800 sf of Residential Area
Compliance Checklist
Up to 5 stories
15-ft Ground Floor Plate Height
10-ft Upper Floor Plate Height
24,000 sf of Residential Area
9 Residential Units
3,500 sf of Commercial Area
500 sf of Landscaping Area
18 On-Site Parking spaces
Key Observations
• The conceptual project accommodates the minimum residential program of 9 units (10,800 square feet) while complying with the CB zone height and FAR limits. • The excess residential floor area provides flexibility to incorporate residential amenities, common areas, or circulation space while maintaining the minimum residential area. • The 55-foot height limit allows for four residential floors above ground-floor commercial, assuming typical 10-foot residential plate heights, which are generally consistent with market preferences.
• Because the building height reaches the maximum limit under this configuration, a rooftop deck above the fifth floor would not be permitted. However, reducing residential plate heights by approximately one foot per floor could provide sufficient clearance for a rooftop deck and parapet while remaining within the maximum height limit. • The 3,500 square feet of commercial space reflects available parking capacity and could be adjusted based on tenant demand or parking requirements.
Detailed Analysis – Prototype Scenarios of Citizen Initiative Page 4 Prototype 1 – Average Residential Unit Size
This scenario evaluates the combined effect of the initiative requiring commercial space equal to one-third of the total building area and reduced maximum building heights (40 feet in the CB zone). The analysis indicates that the combined commercial ratio requirement and reduced maximum building heights significantly limit the amount of upper-floor area available for residential use. As a result, the total residential floor area achievable on a typical 10,000-square-foot parcel falls below the minimum needed to reach the base allowable density. Additionally, the coupling effect between commercial space and parking demand further constrains building layout and limits the amount of commercial space that can be provided, particularly on smaller parcels, while also limiting the residential area. The limitation of residential area to achieve base density allowances raises compliance concerns under State housing and Fair Housing laws.
Building Envelope
• FAR 30,000 sq ft,
• Max. Height 40-Feet
• Capped at 3 stories
• Min. 10,800 sq ft of Residential Area
• Nine (9), 1,200 sq ft units
• 33% Commercial Area Ratio
Compliance Checklist
Up to 3 stories
15-ft Ground Floor Plate Height
10-ft Upper Floor Plate Height
X 7,000 sf of Residential Area
X 5 Residential Units
3,500 sq ft of Commercial Area
500 sq ft of Landscaping Area
17 On-Site Parking spaces
Prototype 2 – Reduced Residential Unit Size with Fractional Density The City offers fractional density as an incentive to developers to provide more units on a site than would otherwise be permitted under the base zoning district. For this scenario, staff compared the development scenario utilizing conventional unit sizes (Prototype 1) with a scenario utilizing smaller units and fractional density incentives. The analysis demonstrates that, under the ballot initiative, even when a developer takes advantage of fractional density provisions and reduces unit sizes from 1,200 sq. ft. to 800 sq. ft., the project is unable to achieve the densities allotted by the zoning code.
Detailed Analysis – Prototype Scenarios of Citizen Initiative Page 5 Building Envelope
• FAR 30,000 sq ft,
• Max. Height 40-Feet
• Capped at 3 stories
• Min. 11,200 sq ft of Residential Area
• Fourteen (14), 800 sq ft units
• 33% Commercial Area Ratio
Compliance Checklist
Up to 3 stories
15-ft Ground Floor Plate Height
10-ft Upper Floor Plate Height
X 7,000 sf of Residential Area
X 8 Residential Units
3,500 sf of Commercial Area
500 sf of Landscaping Area
22 On-Site Parking spaces
Key Findings
• Residential Density: In Prototypes 1 and 2, the commercial requirement and reduced height result in residential floor area falling below the minimum needed to achieve the permitted density, reducing unit capacity by 44% (corner lots). These reductions raise compliance concerns under the Housing Accountability Act, the Housing Crisis Act, and Fair Housing laws.
• Design Flexibility: Commercial floor area requirements directly influence parking demand and available building footprint, which can limit flexibility in building layout, unit sizes, and placement of commercial spaces. Lowering maximum height may constrain design options, resulting in flat roof designs.
• Development Feasibility: Site strategies to maximize residential floor area, such as cantilevering upper floors over parking, can require podium-style construction and may increase per-unit construction costs. Plate height adjustments or height reductions can also affect rooftop amenities, and design quality.
• Parcel Size Sensitivity: Smaller parcels typical of the City’s commercial corridors are particularly sensitive to the combined effects of commercial requirements, parking standards, and height limits.
• Flexibility for Amenities: Excess residential floor area above the minimum program provides an opportunity to incorporate common areas, residential amenities, or circulation space without reducing the number of units.
• Commercial Adjustability: The size of commercial space can be adjusted based on tenant demand and associated parking requirements, but the mandatory one‑third commercial requirement eliminates this flexibility and compounds other site constraints.
RESOLUTION NO. 26-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH,
CALIFORNIA, ADOPTING THE PROVISIONS OF AN INITIATIVE MEASURE TO
ADOPT AN ORDINANCE TO LIMIT BUILDING HEIGHTS AND ESTABLISH A MINIMUM THIRTY THREE PERCENT (33%) COMMERCIAL COMPONENT IN
MIXED-USE DEVELOPMENT
WHEREAS, on February 10, 2026, the proponents of an initiative measure submitted a Notice of Intention to Circulate Petition for a proposed ballot measure to limit building heights and establish a minimum thirty three percent (33%) commercial component in mixed-use development (“Measure”); and
WHEREAS, on February 10, 2026, the City Clerk transmitted the Measure to the City Attorney; and
WHEREAS, on February 24, 2026, the City Attorney prepared a ballot title and impartial summary of the Measure; and
WHEREAS, the Measure proponents published the Measure in New Times on March 5, 2026 and the City Clerk certified publication on March 5, 2026; and WHEREAS, on April 20, 2026, the Measure proponents submitted 1,249 petition signatures to the City Clerk, which signatures the City Clerk accepted on March 14, 2024; and WHEREAS, on April 30, 2026, the City Clerk certified that the initiative petition qualified with the requisite number of sufficient valid signatures; and WHEREAS, on March 30, 2026, the City Council directed City staff to provide a report on the potential effects of the Measure; and
WHEREAS, on May 11, 2026, the City Council accepted the Certificate of Sufficiency of the Initiative Petition issued by the City Clerk; and
WHEREAS, on June 8, 2026, the City Council accepted the report; and WHEREAS, California Constitution Article II, Section 10 and California Elections Code section 9217 authorize the City Council to adopt without alteration the proposed Measure to adopt an ordinance to limit building heights and establish a minimum thirty-three percent (33%) commercial component in mixed-use development.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA, DOES DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
SECTION 1. The Measure ordinance, included and incorporated herein as Exhibit A, shall be adopted without alteration in accordance with Section 3 OF Article XIII C of the Constitution of the State of California.
SECTION 2. This Measure may not be amended, except upon voter approval.
Attachment 4
On motion by ____________, second by ____________, and on the following roll-call vote, to wit:
AYES: Council Members -
NOES: Council Members -
ABSENT: Council Members -
ABSTAIN: Council Members -
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a Regular Meeting of the City Council of the City of Grover Beach, California this 8th day of June 2026. _____________________________
KASSI DEE, MAYOR
Attest:
______________________________
WENDI SIMS, CITY CLERK
RESOLUTION NO. 26-___
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER
BEACH, CALIFORNIA, SUBMITTING TO THE VOTERS AT THE NEXT GENERAL MUNICIPAL ELECTION ON NOVEMBER 3, 2026, AN
INITIATIVE MEASURE TO ADOPT AN ORDINANCE TO LIMIT BUILDING
HEIGHTS AND ESTABLISH A MINIMUM THIRTY-THREE PERCENT
(33%) COMMERCIAL COMPONENT IN MIXED-USE DEVELOPMENT
WHEREAS, on February 10, 2026, the proponents of an initiative measure submitted a Notice of Intention to Circulate Petition for a proposed ballot measure to limit building heights and establish a minimum thirty-three percent (33%) commercial component in mixed-use development (“Measure”); and
WHEREAS, on February 10, 2026, the City Clerk transmitted the Measure to the City Attorney; and
WHEREAS, on February 24, 2026, the City Attorney prepared a ballot title and impartial summary of the Measure; and
WHEREAS, the Measure proponents published the Measure in New Times on March 5, 2026, and the City Clerk certified publication on March 5, 2026; and WHEREAS, on April 20, 2026, the Measure proponents submitted one thousand two hundred forty-nine (1,249) petition signatures to the City Clerk, which signatures the City Clerk accepted on March 14, 2024; and
WHEREAS, on April 30, 2026, the City Clerk certified that the initiative petition qualified with the requisite number of sufficient valid signatures; and WHEREAS, on March 30, 2026, the City Council directed City staff to provide a report on the potential effects of the Measure; and
WHEREAS, on May 11, 2026, the City Council accepted the Certificate of Sufficiency of the Initiative Petition issued by the City Clerk; and WHEREAS, on June 8, 2026, the City Council accepted the report.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA, DOES DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
SECTION 1. Initiative Measure Submitted to Voters at General Municipal Election.
A regularly scheduled general municipal election has been called for the City of Grover Beach to be held on Tuesday, November 3, 2026. The following question is submitted to the voters at the election:
Attachment 5
2 CITY OF GROVER BEACH
INITIATIVE MEASURE _____
Grover Beach Citizen Initiative Ballot Measure. Shall
the City of Grover Beach implement a building height limit and establish a minimum thirty-three percent (33%)
commercial component in mixed-use development?
YES
NO
SECTION 2. Adoption of Measure. The full text of the measure to be submitted to the voters is as follows:
INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS
ADOPTING AN ORDINANCE TO LIMIT BUILDING HEIGHTS AND
ESTABLISH A MINIMUM THIRTY-THREE PERCENT (33%)
COMMERCIAL COMPONENT IN MIXED-USE DEVELOPMENT
THE PEOPLE OF THE CITY OF GROVER BEACH DO ORDAIN AS
FOLLOWS:
SECTION 1. Building and Structure Maximum Height – Commercial Zoning Districts – Building and structure heights in all commercial zoning districts shall not exceed three (3) stories and forty (40) feet in height. Industrial Zoning Districts – buildings and structures in all industrial zoning districts shall not exceed thirty-three (33) feet in height. Building and Structure Heights in all zoning districts shall be measured from the average natural grade to the highest point of the building or structure including any appurtenances. Appurtenances include, but are not limited to, architectural features, roof mounted equipment, elevators, stairwell towers, chimneys, parapets, or any other rooftop additions, structures, or furnishings.
SECTION 2. Mixed Use – A minimum of thirty-three percent (33%) of a mixeduse building shall be dedicated to commercial or retail use. The front of buildings and structures shall be oriented to the primary street of the project and contain only commercial uses on the ground floor fronting the primary street, except that accessory ground floor access to upper floors shall be allowed in addition to the minimum thirtythree percent (33%) ground floor commercial use. Minimum ground floor ceiling heights shall be reduced to ten (10) feet.
/ /
3 SECTION 3. These regulations shall be added to the City’s Objective Design Standards. The City shall update and amend all applicable sections of the City of Grover Beach Municipal Code Article IX – Planning & Zoning Regulations and any related regulations to reflect these height limits, definition of appurtenances, and percentages.
SECTION 4. This Initiative shall be binding and effective as of the earliest date allowed by law (the “Effective Date”). The Community Development Department shall update all City of Grover Beach zoning information and zoning maps to reflect the above zoning requirements within ninety (90) days of the Effective Date. All new decisions or changes, regardless of the original date of approval, shall comply with this measure.
SECTION 5. If any provision of this Initiative Ordinance conflicts with other provisions contained in the Grover Beach Municipal Code, the provisions of this ordinance shall supersede any conflicting provision.
SECTION 6. Nothing in this ordinance shall be amended or repealed except by a majority vote of the people of Grover Beach. The purpose of this measure is to ask registered voters in the City of Grover Beach if they wish to adopt an ordinance to limit building height within the commercial and industrial zones, and to establish a minimum percentage for designated commercial use within mixed-use developments.
SECTION 7. If a majority of qualified electors voting on such measure shall vote in favor of City of Grover Beach Initiative Measure “____”, it shall be deemed ratified and shall read as provided above.
SECTION 8. Notice of Election. Notice of the time and place of holding the election is hereby given, and the City Clerk is authorized, instructed, and directed to give further or additional notice of the election in time, form, and manner as required by law.
SECTION 9. Impartial Analysis. The City Council hereby directs the City Clerk to transmit a copy of the City Attorney’s prepared impartial analysis of the measure, showing the effect of the measure on the existing law and the operation of the measure, and to provide such as required to the San Luis Obispo County Registrar of Voters.
SECTION 10. Ballot Arguments. Arguments in favor of or against the measure shall be submitted to the City Clerk on or before June 22, 2026, at 5:00 p.m. under Elections Code section 9286 et seq. If the City Clerk receives more than one argument for and/or against, the priorities established by Elections Code section 9287 shall control.
SECTION 11. Rebuttal Arguments. Rebuttal arguments shall be controlled by the provisions of Elections Code section 9285. The deadline for filing rebuttal arguments shall be July 2, 2026, at 5:00 p.m.
4 SECTION 12. Duties of City Clerk. The Grover Beach City Clerk shall do all things required by law to effectuate the November 3, 2026, general municipal election, including, but not limited to, causing the posting, publication, and printing of all notices or other election materials under the requirements of the California Elections and Government Codes.
SECTION 13. Non-substantive Changes. The City Attorney is authorized to make any non-substantive changes and/or to correct minor administrative, procedural and clerical errors necessary to ensure the initiative measure is placed on the ballot for the November 3, 2026, general municipal election.
SECTION 14. Transmittal of Resolution. The City Clerk is hereby directed to submit a certified copy of this resolution to the Board of Supervisors and Registrar of Voters of the County of San Luis Obispo.
On motion by ____________, seconded by ____________, and on the following roll-call vote, to wit:
AYES: Council Members -
NOES: Council Members -
ABSENT: Council Members -
ABSTAIN: Council Members -
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a Regular Meeting of the City Council of the City of Grover Beach, California this 8th day of June 2026.
__________________________
KASSI DEE, MAYOR
Attest:
___________________________
WENDI SIMS, CITY CLERK