Agenda Item
Planning Commission
Item #: 7.1. 1/3/2022 File #: 21-0583
TO: Chair and Members of the Planning Commission
FROM: Anna Pehoushek, Assistant Community Development Director
1. SUBJECT
Public Hearing: General Plan Amendment No. 2022-0001; City of Orange 2021-2029 Housing Element Update
2. SUMMARY
A request to adopt an updated General Plan Housing Element in accordance with state law. The updated Housing Element replaces the 2014-2021 Housing Element in its entirety. The updated Housing Element identifies and analyzes existing and projected housing needs, plans for the long- term provision of housing for a variety of household income levels and articulates the City’sofficial policies for the preservation, conservation, improvement, and production of housing within the City for the 2021 through 2029 planning period.
3. RECOMMENDED ACTION
Adopt Planning Commission Resolution No. 01-22 entitled:
A Resolution of the Planning Commission of the City of Orange recommending that the City Council approve General Plan Amendment No. 2022-0001 adopting the City of Orange 2021-2029 General Plan Housing Element.
4. AUTHORIZING GUIDELINES
Orange Municipal Code (OMC) Sections 17.08.020 and 17.10.010 authorize the Planning Commission to provide a recommendation to the City Council for amendments to the City’sGeneral Plan.
5. PROJECT BACKGROUND
The Housing Element is one of the chapters or “elements”of the City’sGeneral Plan required by State law. The Housing Element establishes the City’sofficial policies related to housing. Pursuant to state law, it is also required to plan to accommodate new housing development consistent with the City’s Regional Housing Needs Assessment allocation.
The Housing Element was last updated in January 2014 and covered the 2014 through 2021 planning period. State law requires the Housing Element be updated to cover the 2021 through 2029 planning period within 120 days of the October 15, 2021 deadline (February 12, 2022). If the City adopts the Housing Element Update by this deadline and it is certified by the State Department of Housing and Community Development (HCD) (i.e., deemed in compliance with state requirements) the Housing Element will not need to be updated for another eight years. If the City does not adopt the Housing Element by the deadline, or if the adopted Housing Element is not certified by the HCD, the City will continue to work with HCD to gain compliance. If additional edits are required, an City of Orange Printed on 12/23/2021Page 1 of 8
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the City will continue to work with HCD to gain compliance. If additional edits are required, an adopted Housing Element may need to be amended once compliance is gained.
If not adopted or certified, the City could be subject to legal challenges, become ineligible for certain state funding programs, be mandated to utilize a ministerial review process for entitling housing projects, or have its authority to issue building permits suspended.
Given the complex housing issues confronting California, the State has set forth high expectations for municipalities to put policies and programs in place that result in housing production at a range of affordability levels, with particular interest in housing for Very Low and Low Income households.
6. PROJECT DESCRIPTION
The City of Orange 2021-2029 General Plan Housing Element identifies and analyzes the existing and projected housing needs of the Orange community and articulates the City’spolicy actions for the preservation, conservation, improvement, and production of housing units in the City. The City has been tasked by HCD through a process called the Regional Housing Needs Assessment (RHNA) to show our viability to construct 3,936 dwelling units at varying affordability income levels. Details on the RHNA process are outlined in Issue 1 of the Analysis and Statement of Issues section of this staff report. The Quantified Objectives for the 2021-2029 planning period are to accommodate the City’s 3,936 RHNA unit allocation at varying affordability levels through new construction, development of Accessory Dwelling Units, and conservation of units at risk of converting from affordable to market rate units.
The Housing Element addresses the following content, in accordance with State requirements:
· Population and employment trends.
· Existing and projected housing needs for all income groups, including extremely low income households.
· City housing and household characteristics, including cost for housing compared to ability to pay, overcrowding, and housing conditions.
· An inventory of land reasonably viable for residential development. · Analysis of existing and potential constraints, governmental and non-governmental, upon maintenance, improvement, or development of housing for all income levels. · Housing needs of people experiencing homelessness, including identification of zoning where emergency shelters are allowed as a permitted use.
· Special housing needs: handicapped, elderly, large families, farm workers, and female-headed households.
· Opportunities for energy conservation with respect to residential development. · Identification of publicly assisted housing developments. · Units at risk of conversion to market rate housing.
· Maintenance, improvement, and development of housing. · Identification of adequate sites with required public services and facilities for a variety of housing types for all income levels.
· Strategies to assist in the development of adequate housing to meet the needs of Very Low, Low, and Moderate Income households.
· Public participation program in the formulation of Housing Element Goals, Policies, and Programs.
· Regional Housing Needs Assessment prepared by the Southern California Association of City of Orange Printed on 12/23/2021Page 2 of 8
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Governments.
· Analysis of Fair Housing, including Affirmatively Furthering Fair Housing. · Review of the effectiveness of the past Element, including the City’saccomplishments during the previous planning period.
The Housing Plan (Section 4) of the Housing Element update establishes four central goals supported by 31 policy actions to address the City’s housing needs. These goals include:
· Providing high quality housing stock and neighborhoods · Accommodating all income levels of the City’s RHNA allocation · Ensuring maintenance, preservation, and development of housing · Providing equal housing opportunities for all
Policy actions focus on:
· Acquisition/rehabilitation of housing units
· Monitoring and preserving affordable units at risk of converting to market rate units · Evaluating the housing development entitlement process · Addressing deferred property maintenance and code violations · Preserving of historic residential structures
· Promoting affordable housing
· Encouraging development of housing for large families and seniors · Facilitating infill development
· Exploring alternative funding and financing
· Providing funding support for non-profit community housing development organizations · Monitoring adequate sites for housing
· Coordinating with Chapman University to address student housing needs · Accommodating development of Accessory Dwelling Units/Junior Accessory Dwelling Units · Furthering fair housing
The complete collection of goals and policy actions is presented in Section 4 of the Housing Element update. Through implementation of the policy actions and the identification of candidate housing sites within the adequate sites analysis, the Housing Element demonstrates that the City is providing substantive opportunities and making a good-faith effort to address the housing needs of the community and fair access to housing. The policy framework and identified opportunity sites both encourage and accommodate new housing development in a manner that meets the City’sRHNA allocation and is consistent with state law.
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Public Outreach
As part of the Housing Element Update process, the City conducted extensive public outreach activities beginning in 2019. These efforts included:
· Establishing a Housing Element Update webpage with all housing element materials and information.
· Two stakeholder meetings (English and Spanish) on December 1, 2020 engaging service providers, housing advocacy groups, developers, church representatives, and similar entities that provide support services to individuals with housing needs. · Virtual Community Workshops on October 12, 2020 and May 26, 2021 with recordings available on the webpage.
· An online Community Survey available from October 12, 2020 to December 1, 2020.
A public review draft of the Housing Element was made available from May 21 through June 21, 2021 on the City’swebsite prior to sending the document to HCD for its review and comment. The content of the draft Housing Element considers the input provided during this process. More detailed information about the public outreach process and community feedback is provided in Appendix C of the draft Housing Element Update (Attachment 1).
7. ANALYSIS AND STATEMENT OF THE ISSUES
Issue 1: Regional Housing Needs Allocation
RHNA allocation is derived from a regional housing goal that HCD supplies to the Southern California Association of Governments (SCAG), the metropolitan planning agency that coordinates regional planning activity for the six counties comprising Southern California. Once HCD establishes the regional housing goal, SCAG is then required to allocate a portion of the overall housing units for the region to each city and county jurisdiction in the region based on a complex methodology that incorporates factors such as housing market demand, employment opportunities, community patterns, concentrations of low-income households, and more.
For the 2021-2029 Housing Element cycle, 183,861 RHNA units are allocated throughout all jurisdictions in Orange County. Of those units, the City of Orange is responsible for demonstrating the ability to construct 3,936 RHNA units, or 2% of the County allocation. The units do not have to be constructed if the market does not choose to do so, but our 2021-2029 Housing Element must demonstrate that we have viable zoning capacity to build our RHNA allocated units. The 3,936 units of this 2021-2029 RHNA cycle assigned to Orange represents a significant increase over the 2014- 2021 RHNA which required Orange to demonstrate the ability to accommodate only 363 units. In addition to identifying a total number of housing units needed during the planning period, the RHNA also assigns the housing unit need by household income level. The affordability breakdown for the City’s RHNA is provided below:
City of Orange Housing Needs 2021-2029
Income Category (% of County Area Median
Income)
Number of Units Percent
Very Low (21 to 50%) 1,067 27.1%
Low (51 to 80%) 604 15.3%
Moderate (81 to 120%) 677 17.2%
Above Moderate (over 120%) 1,588 40.4%
Total 3,936 100%
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City of Orange Housing Needs 2021-2029
Income Category (% of County Area Median
Income)
Number of Units Percent
Very Low (21 to 50%) 1,067 27.1%
Low (51 to 80%) 604 15.3%
Moderate (81 to 120%) 677 17.2%
Above Moderate (over 120%) 1,588 40.4%
Total 3,936 100%
Note: The 2021 area median income in Orange County is $106,700.
Housing Opportunity Sites
The City’sGeneral Plan land use and zoning designations provide adequate development capacity to accommodate the City’sRHNA in various locations of the City. All of the identified sites represent under-utilized property that either has the potential for infill development, or the possibility of entire site redevelopment. Many of the sites are located in portions of Orange with Urban Mixed Use or Neighborhood Mixed Use zoning, while others are sites in transition with pending or active development applications that include housing. The City also anticipates that a number of housing units will be produced in the form of Accessory Dwelling Units or Junior Accessory Dwelling Units.
Housing Opportunity Sites and likely development scenarios are presented in Appendix B of the Housing Element Update.
Summary of RHNA Status and Sites Inventory
Extremely Low/ Very Low
Income
Low Income Moderate
Income
Above
Moderate
Income
Total
2021-2029 RHNA1,067 604 677 1,588 3,936
RHNA Credit (Units Built)-- -- -- -- --
Total RHNA Obligations1,067 604 677 1,588 3,936
Sites Available
Residential Zones0 0 0 81 81
Neighborhood Mixed Use (NMU-24)16 4 114 0 134
Urban Mixed-Use (UMU)1,025 478 618 1,696 3,817
Total Potential Capacity Based on
Existing GP and Zoning
1,041 482 732 1,777 4,032
Accessory Dwelling Unit Production80 137 96 7 320
Total Sites Available1,121 619 828 1,784 4,352
Potential Unit Surplus+54 +15 +151 +196 +416
Housing Affordability
The sites identified as candidate housing sites are anticipated to develop at a range of affordability levels. Where sites have General Plan and Zoning designations that allow over 30 units per acre, HCD acknowledges that greater affordability can be achieved in projects developed at this “default density”or higher. Sites meeting the “defaultdensity”are located in Uptown Orange in the vicinity of City of Orange Printed on 12/23/2021Page 5 of 8
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the Outlets at Orange, and on West Katella Avenue.
In addition to the “defaultdensity”sites, the City of Orange benefits from long-standing relationships with local affordable housing developers who have a proven track record in Orange of bringing forward affordable housing units for families and senior citizens. Four such projects are currently in process, which the City anticipates will qualify with HCD towards fulfilling our 2021-2029 affordable RHNA categories. The proposed Housing Element Update anticipates continued work with these entities to continue to bring forward affordable/workforce housing projects meeting varied housing needs.
State and regional funding programs available for housing are presently expanding. Therefore, staff is speculating that tax incentives and a variety of creative funding sources will continue to evolve to encourage and facilitate affordable housing development. While the City receives relatively limited federal housing funds (HOME program), it will continue to accumulate its annual allocation in order to ultimately offer these funds to assist affordable housing projects in the community. Recent projects that have received HOME funds or involved creative financing include the entitled Corp Yard housing project on Struck Avenue and the Orange Senior Housing project on Katella Avenue.
During the 2014-2021 Housing Element cycle, 1,950 units were built in relation to the City’s393 unit RHNA. The constructed units satisfied the identified housing unit need at nearly all of the income levels except for Very Low Income, for which 74 of the 83 unit need remain unmet.
Because the City has limited funding available to offer to affordable housing developers, and cannot look to redevelopment funds to incentivize development of affordable housing, it is dependent on the non-profit or private development community to bring forward affordable housing projects. Similarly, because the City does not have significant surplus property, it is not typically able to incentivize affordable housing projects by providing land. Therefore, housing development, whether market rate or affordable, is largely dependent on the development community and the economy.
Staff anticipates that affordable and workforce housing projects will continue to materialize in coming years, and are likely to occur on both sites contemplated in the Housing Element Update as candidate housing sites, as well as on parcels that had not been anticipated for infill residential development.
Issue 2: Policy Document Review and Updates
Changes in state law require the City to review and update, as necessary, its policy documents to bring various development disciplines into alignment with each other. There are four areas where follow up work on various policy documents will be necessary. Specifically:
· SB 1035 requires the City to identify flood hazards and address fire risk on residential property. Staff is presently undertaking a review of the General Plan Safety Element and anticipates bringing the item forward for Council consideration in the first quarter of 2022. · SB 1000 requires that the City include an environmental justice component to its General Plan. Staff intends to perform a review of the existing General Plan to determine where environmental justice content is currently addressed and where amendments may be needed to integrate additional language that addresses state law. · In conjunction with furthering fair housing opportunities through outreach and education, the City will update its Density Bonus ordinance to be consistent with state law. · To facilitate housing production and create more opportunities for housing development, the City of Orange Printed on 12/23/2021Page 6 of 8
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· To facilitate housing production and create more opportunities for housing development, the City recently adopted a Small Lot Subdivision Ordinance, and is presently preparing a Transfer of Development Rights Ordinance that would allow development rights to be transferred from historic district properties to Urban Mixed Use districts for purposes of increasing density on the receiver site, and a specific plan for the North Tustin Street corridor that will provide strategic opportunities for the integration of housing in that district. · In response to any changes in state law related to emergency, transitional and supportive housing, the City will review and amend the Orange Municipal Code to ensure consistency with state law.
Issue 3: HCD Review
Staff submitted the Draft Housing Element for HCD review in July 2021. HCD provided comments to the City in September 2021 (Attachment 2). Staff with support from the City’s consultant has addressed these comments in the public hearing draft of the document. A matrix of HCD comments and City responses is provided in Attachment 3 to this report. The revised document will be re- submitted to HCD in anticipation of a determination that the Housing Element Update is in compliance with State law.
8. PUBLIC NOTICE
A Public Hearing notice was published in the Anaheim Bulletin newspaper on December 23, 2021 and posted at City kiosks. Project stakeholders were also notified.
9. ENVIRONMENTAL REVIEW
The project is exempt from the California Environmental Quality Act (CEQA) as follows: (i) pursuant to Section 15061(b)(3) of the state CEQA Guidelines (Common Sense Exemption) because it can be seen with certainty that there is no possibility that the proposed 2021-2029 Housing Element Update would have a significant effect on the environment; (ii) no property re-zoning is needed to accommodate the City’sRegional Housing Needs Allocation, and potential residential development densities have already been analyzed and mitigated in an earlier Environmental Impact Report (the Program Environmental Impact Report prepared for the 2010 Comprehensive General Plan Update, State Clearinghouse No. 2006031117); (iii) pursuant to Guideline 15283, CEQA does not apply to Regional Housing Needs determinations made by a city. For these reasons, no further CEQA documentation is required.
10. ADVISORY BOARD ACTION
Not applicable. The Planning Commission is advisory to the City Council for General Plan amendments.
11. ATTACHMENTS
· Attachment 1 Planning Commission Resolution No. PC 01-22 · Attachment 2 HCD Comment Letter
· Attachment 3 HCD Response Matrix
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· Attachment 4 Draft Housing Element Update
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24 Planning Commission Minutes - Final January 3, 2022
5. COMMISSION BUSINESS
None
6. CONTINUED HEARINGS
None
7. NEW HEARINGS
7.1. Public Hearing: General Plan Amendment No. 2022-0001; City of Orange 2021-2029 Housing Element Update
Consultant Nick Chen of Kimley-Horn gave a presentation about the project process.
Chair Simpson opened the public hearing.
Bonnie Robinson, Je'net Kreitner and Adrienne Gladson expressed concerns about the Housing Element meeting affordable housing needs.
Chair Simpson closed the public hearing.
The Commissioners had questions about the following:
· Accessory Dwelling Unit development
· Affordable housing
· Certain Housing Policy Actions
· Transitional housing
· Student housing
· Quality of neighborhoods
· UCI Regents sites
· California Department of Housing and Community Development comments A motion was made by Commissioner Glasgow, seconded by Commissioner Trapesonian to adopt Planning Commission Resolution No. 01-22 entitled:
A Resolution of the Planning Commission of the City of Orange recommending that the City Council approve General Plan Amendment No. 2022-0001 adopting the City of Orange 2021-2029 General Plan Housing Element.
The motion carried by the following vote:
Simpson, Vazquez, Glasgow, Martinez, and TrapesonianAyes:
NoneNoes:
NoneAbsent:
Planning Commission Minutes - Final January 3, 2022
8. ADJOURNMENT
There being no further business, the meeting adjourned at 8:25 p.m.
The next Regular Planning Commission Meeting will be held on Monday, January 17, 2022 at 7:00 p.m., in the Council Chamber.
______________________________
s/Anna Pehoushek
Assistant Community Development Director