IMPLEMENTATION OF THE HOUSING
ELEMENT AND CHARTER SECTION 423
City Council Study Session
July 9, 2024
Community Development Department
Very Low Income
Low Income
Moderate Income
0 50% AMI
51 — 80% AMI
81 120% AM I
1,456 units
930 units
1,050 units
Above Moderate >120%AMI 1,409 units
Income
Total
4,845 units
Council directed to "firmly challenge and plan to comply" • Facilitate compliance with mandated deadlines and requirements • Appeal to reduce the City's RHNA
o City's appeal denied by SCAG
• Focus the General Plan update on housing
• City Council formed the Housing Element Update Advisory Committee (HEUAC) to assist with outreach and guiding the Housing Element • Members had expertise in housing, financing, and design • Collaborate regionally
o Worked with other jurisdictions to oppose harmful legislation and support helpful legislation
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CITY OF
NEWPORT BEACH
-a Substantial Evidence
• Must meet specific criteria and demonstrate a realistic capacity to develop • Property owner interest letters, recent development examples, etc.
Affirmatively Furthering Fair Housing (AFFH)
* Avoid concentrations of affordable units in low resource areas -D No Net Loss
* Maintain sites to always accommodate lower -income categories * Can't deny a project for not including affordable units * 15-30% buffer recommended for each income category
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NEWPORT BEACH
If No Net Loss is triggered, must identify and rezone additional new sites within 180 days
Rezoning could require separate CEQA analysis and may have Charter Section 423 implications, which may not be feasible to complete within the 180-day limit
Including a buffer helps to prevent No Net Loss and reduces exposure of planning for housing development outside identified Focus Areas
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CITY O�
NEWPORT BEACH
Housing Plan - Expected
Developer X Project -
Actual
Difference
275 165
165
-110
55 -110
17000
17220
+220
• Must now take the difference from the buffer
• If no buffer, must identify and rezone to recapture the loss in 6 months • If not timely, then risk decertification and loss of local control I,
CITY OF
NEWPORT BEACH
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From 2019 to 2022 leading up to Housing Element adoption, we had Steering Committee Meetings
Housing Element Update Advisory Committee Meetings
Community Workshops
Planning Commission Meetings
City Council Meetings (including Direction on Buffer)
Drafts Posted
Adopted by Council in September 2022,
and certified by State in October 2022
r
Implementation lFrAction
e Amend Land Use Element Goals/Policies to
Implement the Plan and Comply with State Law
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CITY OF
NEWPORT BEACH
Since Housing Element certification, we have had...
Steering Committee Meetings Related to Implementation
Advisory Committee Meetings Related to Implementation
Land Use Subcommittee Meetings
Planning Commission Meetings
City Council Meetings
Drafts Posted
• July 23, 2024, City Council Public Hearing
v' All final implementing documents and ballot resolutions • August 9, 2024, Last Day to Call Election
• August 27, 2024, Second Reading of Ordinance
• November 5, 2024, Ballot Vote I
All actions would become effective immediately upon
certification of a successful vote (50%+1).
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CITY OF
NEWPORT BEACH
Me
Vote of the electorate is generally required for any "major amendment" to the General Plan that results in any one of the following in a single statistical area:
VAn additional 40,000 sq. ft. of development intensity
,/An additional 100 dwelling units of residential density v/An additional 100 peak hour trips (AM or PM)
However,...
"This section shall not apply if state or federal law precludes a vote of the voters on the amendment."
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CITY O�
NEWPORT BEACH
State Housing Element Law requires City to identify adequate sites to meet the RHNA
• State controls implementation of plan: HCD determines consistency
• HCD has the authority to revoke certification for noncompliance • State Attorney General can force implementation if the vote fails • Could place additional attention on Charter Section 423 and its legitimacy
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CITY OF
NEWPORT BEACH
Li
• Adopted Housing Element includes Charter Section 423 Election as an Implementing Action
• If determined to be precluded from Charter Section
423, amendment needed to remove from HE program
• HCD staff consulted and committed to a narrowly focused and expedited amendment
• This removal raises no concerns from HCD
7-day public review and 60-day HCD review period
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CITY OF
NEWPORT BEACH
• Work with HCD to revise housing plan and address community concerns while meeting all State objectives and remaining statutorily compliant
• Conduct additional public review periods and hearings Hold a special election with revised ballot or wait until November 4, 2025
Housing Element decertification is inevitable, as there is no way to meet February 2025 rezoning deadline
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CITY OF
NEWPORT BEACH
HCD Housing Accountability Unit (HAU) is highly active with education and enforcement of State Housing Element Law
Some examples of penalties:
• Housing Element certification revoked (Portola Valley) • Building permit moratoria (Beverly Hills and Encinitas) • Public litigation with the State Attorney General's Office (Fullerton and Huntington Beach)
• Loss of State grant funding (e.g., SB1 and SB2 funds) • Monthly fines up to $600k at the discretion of the AG Huntington Beach lawsuit status: Superior Court ruled must plan for more housing and pass compliant HE within 120 days
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CITY OF
NEWPORT BEACH
• Non -compliant Housing Element triggers applicability • Limited oversight over housing projects and emergency shelters • Bypasses local zoning and our General Plan
• Exceed allowed densities in residential zones
• Allows housing in nonresidential zones
• Opens development opportunities throughout the City
• City can't deny or apply conditions that makes project infeasible • Only requires 20% of units to be affordable
• Has been used in dozens of cities, including Beverly Hills, Santa Monica, Redondo Beach, La Habra, Orange, Mission Viejo
In Santa Monica, 16 applications filed immediately totaling over 4,500 new housing units
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NEWPORT BEACH
• Eliminates legal ambiguities in law
• Affordability Requirements:
Reduced from 20% to 13% to 7% (based on income level)
Eliminates requirements for 10 units or less
• Density:
3x max density allowed by General Plan
150DU/acre possible
• Density Bonus: Additional density and incentives authorized • Allows existing projects to convert to Builder's Remedy • Penalties for stalling projects
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CITY OF
NEWPORT BEACH
City has been diligently pursuing compliance with State Housing Element Law
If Council decides Charter Section 423 vote not required... o Staff will work with HCD on a targeted amendment to the Housing Element and will return later this year for re -adoption and adoption of all amendments If Council decides vote is required...
o Staff will return on July 23, 2024, for a public hearing to deliver resolutions to County by August 9, 2024
If November 5, 2024, vote fails, decertification is inevitable, and the City will be exposed to penalties and loss of local control including Builder's Remedy
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CITY O�
NEWPORT BEACH
18 THANK YOU!
Jaime Murillo, AICP, Deputy Community Development Director Ben Zdeba, AICP, Principal Planner