Pismo Beach City Council
July 18, 2023

PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #12.A
SUBJECT/TITLE:

REGIONAL HOUSING & INFRASTRUCTURE PLAN
RECOMMENDATION:

1. Discuss and consider support for the Regional Housing and Infrastructure Plan, as a recommitment to the 2020 San Luis Obispo Countywide Regional Compact; and

2. Direct staff to continue discussing ways to utilize and implement the Regional Housing and Infrastructure Plan.

BACKGROUND:

Meeting the housing needs of the San Luis Obispo region is a challenge shared by all eight local land use jurisdictions (the seven cities and County of San Luis Obispo (County)), San Luis Obispo Council of Governments (SLOCOG), organizations that develop and build housing, as well as local community members. This challenge is larger than any one entity can solve alone and will require the collective actions of all local partners. With this challenge comes an opportunity for regional collaboration, including the need to work collaboratively to solve the critical shortage of infrastructure resources and housing attainability in the region. In 2019, the County allocated resources to launch a new regional collaborative initiative that has a phased approach intended to address three major goals:

1. Foster regional collaboration (action taken in 2020);

2. Align land use planning documents (action taken in 2020); and

3. Create the Housing and Infrastructure Plan (HIP).

The City Council completed the first two actions through the adoption of the Regional Compact (Attachment 1.D) on March 3, 2020, and through the adoption of the 2020- 2028 (6th Cycle) Housing Element Update on November 17, 2020, which contained regional policies consistent with the other land use jurisdictions.

The HIP is the next necessary collaborative action along the region’s path to addressing the growing housing and infrastructure needs. The HIP is intended to help accelerate housing development where it makes the most sense given regional conditions and community readiness. The HIP inventories infrastructure barriers to housing, identifies funding opportunities to implement infrastructure priorities, studies housing affordability in the region, and develops foundational information for the future 2027 Regional Housing Needs Assessment (RHNA) and other future regional programs.

The Draft HIP (Attachment 1) includes seven major components that intertwine and build upon one another. The Draft HIP components include:

HIP Component 1 - Housing Highlights – A communication tool designed to unify the region’s focus on the challenges and successes that local agencies, the

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building and development community, and other stakeholders face related to the housing supply needs (Attachment 1.A).

HIP Component 2 - Data and Project Inventory – A compilation of infrastructure and housing data from across individual agencies, including housing, transportation, water/wastewater, and additional contextual data (Attachment

1.A).

HIP Component 3 - HIP Mapping Tool – The HIP Mapping Tool is an interactive tool, compiling the complex data and inventoried projects from across the region to make it easier to visualize connections between infrastructure and housing, see project priorities, and quickly access more information about each community’s priority projects and housing efficient areas, within a regional context.

HIP Component 4 - Housing Efficiency Analysis – The Housing Efficiency Analysis looks at three efficiency factors: (1) transportation access, (2) water capacity and (3) wastewater capacity. By analyzing these efficiency factors, housing efficient areas were identified as efficient, potential, or limited. Any infrastructure projects located in an area deemed “efficient” or “potential” moved on to the Infrastructure Prioritization element. All projects located in areas deemed “limited” housing efficiency were removed from further analysis.

HIP Component 5 - Infrastructure Prioritization – A ranking of 80 infrastructure projects ranked as high, medium, or low priority based on three factors: (1) if the project is needed for new housing, (2) benefit/cost (i.e., investment cost per additional potential housing units served), and (3) whether there are significant barriers to development.

HIP Component 6 - Funding Strategies Assessment – The Funding Strategies Assessment component is currently underway and seeks to identify funding sources that can reasonably implement water, wastewater, and transportation infrastructure priorities included in the HIP. Although not yet completed, the final assessment will include a project-by-project detailed breakdown covering funding requirements, potential funding sources, projected grant funding, and residual funding gap.

HIP Component 7 - Affordable-by-Design (ABD) Study – The ABD Study is currently underway and will evaluate housing affordability characteristics for the seven cities as well as unincorporated areas. The intent is to identify whether housing units in this region can be built to meet low to moderate income RHNA categories (as rentals or for-purchase) without being income- or rent-restricted.

Initial findings include:
Design helps, but does not guarantee affordability.
Market rate rental housing is close to affordability targets in some areas, but regulatory changes are necessary for most areas of the county.

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Only manufactured housing met target price points for new for-sale housing. Factors that make for-sale housing more affordable in other areas may not translate to this region’s current market.

The ABD Study notes that there are generally four factors that come together in the housing market to produce lower-cost housing, including: (1) simple design with lower-cost materials, (2) lower cost locations, (3) efficient production, and (4) smaller units with higher density. Due to the limited findings of housing affordability, the ABD Study includes development of a simple menu of policy options that could help to incentivize ABD units in the region. The draft study is expected in July 2023; however, preliminary information is included as Attachment 1.C.

It is worth emphasizing that the recommendation to support the HIP recognizes that there is no “one size fits all” when it comes to the region’s planning and that while local agencies plan for housing, they do not build or develop housing. Therefore, nothing in the HIP mandates action by any of the cities or the County. Rather, the HIP offers voluntary opportunities for action that could accelerate the development of needed housing in the region. Implementation relies on each agency’s voluntary actions moving forward, such as:
Agency(ies) may consider pursuing funding opportunities identified for a priority infrastructure project to cover funding gaps.
Agency(ies) may consider implementation of affordable-by-design policies appropriate to each unique community and its needs.
Agency may consider programmatic changes to improve approval process timelines such as directing staff to identify ways to improve response time for housing project approval or coordinating with other agencies to align and streamline processes.
Agency may consider updating its analysis approach to prioritizing the community’s needed infrastructure projects in order to most impactfully increase housing supply.
Agency may consider using the HIP to help justify the benefit of a community’s priority infrastructure project towards increasing the region’s future housing supply, making it more competitive in a number of state and federal funding programs. SLOCOG and agencies may consider using the HIP as a foundation for negotiating where the region’s housing needs are best met (e.g future Regional Housing Needs Allocation (RHNA) cycle allocations).

As stated above, the housing, infrastructure and economic challenges that the region faces are larger than any one entity can solve alone and will require the collective actions of all local partners. The HIP is the first of its kind, and it is intended to be a living document. The HIP’s future implementation and use are wholly dependent on the voluntary actions of many – the seven cities, County, SLOCOG, organizations that develop and build housing, as well as local community members.

Pending adoption of the HIP, SLOCOG is committed to updating the data in the HIP Mapping Tool in sync with the Regional Transportation Plan/Sustainable Community

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Strategies development’s public processes, using the HIP as a factor in future grant programming cycles, and leveraging the HIP as a foundational tool during the next RHNA cycle. City staff remains committed to engaging with partners including county departments, the seven cities, SLOCOG, and key stakeholders to finalize the HIP and carry out the goals set forth in the Regional Compact.

Conclusion and Recommendation
Staff recommends the City Council support the Regional Housing and Infrastructure Plan as a recommitment to the 2020 San Luis Obispo Countywide Regional Compact and direct staff to continue discussing ways to utilize and implement the Regional Housing and Infrastructure Plan.

FISCAL IMPACT:

There is no fiscal impact from the recommended action. The HIP does not require the City to take any additional action or expend any funds. However, the HIP is anticipated to have a substantial effect on future regional infrastructure funding decisions.

ALTERNATIVES:

1. Do not support the Regional Housing and Infrastructure Plan.

2. Provide alternative direction to staff.

ATTACHMENTS:

1. Draft Regional Housing & Infrastructure Plan

1.A. Housing Needs and Highlights

1.B. Appendix A: Draft List of HIP Infrastructure Priorities

1.C. Appendix B: Affordable-by-Design Study Preliminary Information

1.D. Appendix D: Regional Compact & Housing Element Regional Chapter Submitted by: Meeting Date: July 18, 2023
Matthew Downing, Community Development Director
Interim City Manager Approval:

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Attachment 1

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1| HIP

ACKNOWLEDGEMENTS PAGE
Attachment 1

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CONTENTS
HIP Summary.................................................................................................................................................... 4 Data and Project Inventory ........................................................................................................................... 6 Housing ..................................................................................................................................................... 7 Water & Wastewater .............................................................................................................................. 7 Transportation......................................................................................................................................... 7 Bonus Layers............................................................................................................................................ 8 Housing Efficiency Analysis............................................................................................................................ 8 Infrastructure Prioritization........................................................................................................................... 8 Findings........................................................................................................................................................10 Future Data Considerations................................................................................................................12 HIP Mapping Tool..........................................................................................................................................14 Affordable-By-Design Study........................................................................................................................15 Rental Preliminary Findings ................................................................................................................16 For-Sale Preliminary Findings.............................................................................................................18 Market Conditions.................................................................................................................................19 Funding Strategies Assessment.................................................................................................................20 Housing Highlights........................................................................................................................................21 Stakeholder Engagement Strategy........................................................................................................21 Regional Housing Success Stories.........................................................................................................23 Next Steps.......................................................................................................................................................23 Appendix..........................................................................................................................................................23 Appendix A: Draft List of HIP Infrastructure Priorities........................................................................23 Appendix B: Affordable-by-Design Study Preliminary Information................................................23 Appendix C: Funding Strategies Assessment Preliminary Information ........................................23 Appendix D: Regional Compact & Housing Element Regional Chapter .......................................23 Appendix E: Additional Housing Data July 2023 .................................................................................23 Attachment 1

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FIGURES
Figure 1: HIP Elements................................................................................................................................... 5 Figure 2: Draft HIP Priority Projects Summary.......................................................................................... 5 Figure 3: Data Inventory Sources................................................................................................................. 6 Figure 4: HIP Mapping Process .................................................................................................................... 8 Figure 5: HIP Analysis Process...................................................................................................................... 9 Figure 6: Draft HIP List Summary...............................................................................................................10 Figure 7: Priority Projects by Community.................................................................................................11 Figure 8: Multijurisdictional Projects by Priority.....................................................................................11 Figure 9: Priority Projects by Subregion...................................................................................................12 Figure 10: Future Data Considerations by Community........................................................................13 Figure 11: Future Data Considerations by Subregion...........................................................................13 Figure 12: San Luis Obispo County’s Rent and Sale Price Limits (May 2022)..................................15 Figure 13: Feasibility of Rental Prototypes by Subregion.....................................................................17 Figure 14: Key Takeaways from Financial Feasibility Analysis (Rental) ..............................................17 Figure 15: Market Conditions for Lower-Cost Housing........................................................................19 Figure 16: Public Sector and ABD Market Conditions............................................................................20 Figure 17: HIP Stakeholder Process...........................................................................................................22 Attachment 1

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HIP SUMMARY
The Regional Housing & Infrastructure Plan (HIP) is a collaborative action plan between nine local jurisdictions in response to the San Luis Obispo region’s growing housing and infrastructure shortage. The HIP is intended to help accelerate housing development where it makes the most sense given regional conditions and readiness. The HIP inventories infrastructure barriers to housing, identifies funding to implement infrastructure needs, and develops foundational information for the future 2027 Regional Housing Needs Assessment (RHNA).

In 2018, the County of San Luis Obispo recognized the need to work regionally in solving the critical shortage of infrastructure resources and housing attainability in San Luis Obispo County. This challenge is larger than any one jurisdiction can solve alone. In January 2019 the County Board of Supervisors approved the kick off of this effort. Since inception, the HIP has always been a phased approach with the goals of regional collaboration, strategic action planning, and aligning land use planning documents.

The Regional Compact (April 2020)
The County, seven Cities, and San Luis Obispo Council of Governments (SLOCOG) approved the first major milestone of the HIP - the San Luis Obispo Countywide Regional Compact. The Regional Compact is an aspirational document that sets the tone and goals for future recommended plans and actions among the local agencies. It establishes a united regional framework to unlock the potential to develop an adequate supply of housing and resilient infrastructure that support our economic prosperity. It recognizes that people, water, transportation, connectivity, and housing form the foundation of the San Luis Obispo region’s healthy, livable communities and thriving economic opportunity.

Housing Element Alignment (June 2020)
The County and the seven Cities were each required to update their jurisdiction's Housing Elements to reflect how local communities are planning for the State’s 6th Cycle Regional Housing Needs Allocations through 2028. The Housing Elements were submitted to the Housing and Community Development (HCD) in December 2020. As part of the Housing Element update process, the regional approach section was developed to showcase the ongoing commitment of each agency to the HIP collaboration. This section presents a regional vision and policies focused specifically on fostering regional collaboration to plan and develop housing and supportive infrastructure. It was the first time all seven jurisdictions included a regional approach chapter in their required housing elements.

Regional Housing and Infrastructure Plan (2022-2023)
Put on hold during the Pandemic, the HIP was revived in June 2022 with the establishment of a Memorandum of Understanding between the County of San Luis Obispo and SLOCOG.

SLOCOG became the project manager of the effort. With Senate Bill 2 funding sunsetting in September 2023, the HIP began moving at an accelerated pace. There are seven elements of Attachment 1

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5| HIP
the HIP and they are listed in Figure 1: HIP Elements. These elements intertwine and build upon one another.

Figure 1: HIP Elements
HIP Element Informs
Data and Project Inventory Infrastructure barriers to housing Housing Efficiency Analysis Housing Efficient Areas in HIP Infrastructure Prioritization Region’s highest priority projects to unlock housing HIP Mapping Tool Living strategic analysis tool used to show the interrelation between housing and infrastructure
Affordable-by-Design Study Menu of possible policies to increase housing attainability Funding Strategies Assessment Funding the region could pursue for priority infrastructure Housing Highlights Communication tool: Understanding the need for housing, affordability, and opportunities
There were 430 infrastructure projects collected as part of the data inventory. Of those, 18% (78 projects) were located within Housing Efficient Areas. The 78 projects were ranked using a three-tiered prioritization process based on potential new housing units served. The estimated cost for all 78 HIP projects is a little under one billion dollars. About one third of the projects are water related with the remaining being transportation improvements. The estimates for each prioritized category are relatively similar around $300 million.

Figure 2: Draft HIP Priority Projects Summary
Estimate
($ Millions)Projects
Estimate for all HIP Projects $ 919 78
High $ 323 53
Medium $ 315 9
Low $ 281 16
HIP 2023+
The HIP is the first of its kind, and it is intended to be a living document. For the last five years, collaboration has continued to build, and these incremental steps have allowed the region to make progress in addressing the monumental challenges of the housing and infrastructure shortage.Next steps to follow stakeholder guidance during Summer 2023 Outreach.

Attachment 1

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DATA AND PROJECT INVENTORY
The HIP analyzes the transportation, water, and wastewater infrastructure barriers to housing development. Figure 3: Data Inventory Sources, provides the source details on the data used in the HIP analysis.

Figure 3: Data Inventory Sources
DDataa IInputss
TTransportation
HHousing
WWaterr &
WWastewater
FFloodd Risk
SSensitivee Habitatt
OOpenn Space
PPrimee Farmland
FFiree Risk
7 Cities & County Planning Staff (Land Use
Model, 2022 Transportation Efficiency Analysis
(TEA), 2020 Housing Elements, Developer
Updates
DDataa SSources
44 water & wastewater entities surveyed,
Community Improvement Plans reviewed
7 Cities & County Public Works Staff, 2023 RTP
Projects List, 2022 TEA
Federal Emergency Management Agency’s
“Flood Insurance Rate” map
California Department of Fish and Wildlife
“Biogeographic Information Observation
System (BIOS)”
California Protected Areas Database and the
California Conservation Easement Database,
2023
Farmland Mapping and Monitoring Program
(FMMP) 2018
CALFIRE High Fire Hazard Severity Zones
(2023), Local Jurisdictions GIS teams
Attachment 1

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HHousingg
Proposed residential developments within the seven cities and unincorporated county were collected from planning staff in 2021. This data includes specific plans, proposed residential and mixed-use projects projected for to be built between now and 2045. Residential development that has been completed or near completion was removed from the HIP analysis.

Waterr && Wastewaterr
In early January 2023, SLOCOG staff contacted the 44 water and wastewater agencies found in the 2021 Regional Water Infrastructure Resiliency Plan. Five initial questions were asked to the agencies:

1. Is your agency fulfilling its water/wastewater service demand?

2.Do you have capacity to serve additional housing units?

3. Is your agency experiencing any infrastructure limitations or does it have any infrastructure needs?

4.Have they been planned for?

5. Is there a cost estimate for these improvements?
The data collected includes the findings of the 2021 Regional Water Infrastructure Resiliency Plan, agency responses, local capital improvement project lists, and information from the County of San Luis Obispo’s Water Team. Water and wastewater service districts were used as water boundaries. Detailed GIS based data from these agencies is limited and water capacity data will be informed by the County’s Master Water Report Update. However, infrastructure projects, estimated costs, and timing were all collected. In 2023, forty-five water and wastewater projects were collected from the agencies.

Transportationn
Transportation infrastructure was studied in the Transportation Efficiency Analysis (TEA) which the SLOCOG Board approved in April 2022. The TEA identified transportation barriers to housing production which resulted in a list of transportation projects that were prioritized as either land use necessitated or land use beneficial. Land use necessitated projects were transportation projects required for new housing development. These projects are considered TEA priority projects because they are needed to accelerate housing development. Land use beneficial projects are transportation projects that are not required for housing development but improve the transportation efficiency of an area. Of the 350+ transportation investments contained within in the 2023 Regional Transportation Plan (RTP), 64 transportation investments were identified as TEA projects. The San Luis Obispo Regional Transit Authority (RTA) provided details on transit projects and additional improvements needed to best serve additional housing development. The transportation infrastructure list was further refined in the HIP analysis and prioritized differently.

Attachment 1

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BBonuss Layerss
The HIP analysis provides the data that connects infrastructure and housing on a regional scale for the first-time. The 2023 effort is also the first phase of the analysis. When planning for housing, land conditions carefully considered. To provide a fuller picture, flood risk, sensitive habitat, open space, prime farmland, and fire risk were all included as additional reference information. These were not used to remove infrastructure projects from the HIP list but are there to provide additional context.

HOUSING EFFICIENCY ANALYSIS
The HIP Infrastructure Analysis looks at three efficiency factors: transportation access, water capacity, and wastewater capacity. By combining the three efficiency factors, housing efficient areas were identified. This is graphically represented in Figure 4: HIP Mapping Process. Any infrastructure projects located in the “efficient” or “potential” mapped areas moved on to the prioritization phase. All areas and projects that were considered “limited” were removed from further analysis. The Communities of Shandon, Avila Beach, and Cambria were removed from HIP analysis since they did not meet the efficiency criteria.

Figure 4: HIP Mapping Process
There were 430 infrastructure projects collected as part of the data inventory. Of those, 18% (78 projects) were located within a Housing Efficient Area. The 78 projects moved on to the prioritization phase. The flow of the analysis can be seen in Figure 5: HIP Analysis Process

INFRASTRUCTURE PRIORITIZATION
After stakeholder outreach in February and March 2023, a three-tiered approach was selected to prioritize projects. Projects were labeled as high, medium, or low depending on three factors: if the project supports new housing, the benefit/cost (project cost per total potential Attachment 1

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9| HIP
housing units within community), and barriers to development. Barriers to development include instances such as a building moratorium. These barriers are outside the controls of the HIP and slow housing development. The entire analysis and prioritization process can be seen in Figure 5.

Figure 5: HIP Analysis Process

LLIMITED
Missing 2 of the 3
efficiency factors –
limited capacity for
housing acceleration
Located in Job Cluster
Include any Infrastructure
Needs in HIP
FFuturee Add--iins::
x Job clusters data
x Master Water Report data
x Transportation
Access Factors:
x 1 mile from
interchange
x ½ mile from a bike way
x ½ mile from bus stop
x Has water capacity
x Has wastewater
i

EEFFICIENTT PPOTENTIAL
FFuturee Add--iins::
x Job clusters data
x Master Water Report
data
Missing 1 of the 3
efficiency factors
High Medium
Needed to support
new housing
Limited barriers to
development
Low
Outside barriers to
development that
would likely delay or
prohibit
development
Low Benefit/Cost
Needed to support
new housing
Limited barriers to
development
Located in Jobs Cluster
HHousing Efficient Areas (HEA) Analysis
Considers 3 efficiency factors: (1) transportation access, (2) water capacity, (3) wastewater capacity High Benefit/Cost Moderate Benefit/Cost
Needed to support
new housing
Combine HIP Projects from Efficient & Potential HEA
into one list and prioritize
HIP Project Prioritization
Considers: (1) if project is needed for new housing, (2) Benefit/Cost (investment cost per additional potential housing units served), (3) barriers to development Include any
infrastructure needs
that would help make
area efficient
Attachment 1

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10 | HIP
WWATER
$$296M

TTRANSPORTATION
$$618M
Infrastructure projects were divided into two lists, water and transportation, and then prioritized. It was concluded that transportation projects, in general, could be built at various stages of housing development. Whereas, housing cannot be built without adequate water distribution and collection infrastructure. Each list was sorted by highest benefit/cost. The total funding need for the list was divided by three to categorize projects as high, medium, or low.

The premise of the HIP is to help accelerate housing development, so the current prioritization factors relate solely to the total amount of proposed housing. In the future, other factors like jobs-housing balance factors and proposed housing unit type could be considered.

Findings
The draft HIP list contains 78 infrastructure projects with an estimated cost of nearly one billion dollars in need. As seen in Figure 6: Draft HIP List Summary, about one third of the needed infrastructure investments are water-related (supply & wastewater) and two-thirds are transportation-related. Interestingly, each priority category (high, medium, low) are relatively similar at around $300 million. However, the cost of nine medium ranked projects is equivalent to 53 high priority projects.

Figure 6: Draft HIP List Summary
Figure 7: Priority Projects by Community breaks down the total number of HIP priority projects, the total investment needed for each proposed housing unit, and the total estimate investment needed by community. Within the 78 total projects, three are listed as multijurisdictional projects including Central Coast Blue, the Regional Transit Authority Cashless Fare System Conversion, and the North County Transit Charging Facility. In Figure 7, these are listed as a separate row and are not included individually in the "HIP Projects" column for each community. However, multijurisdictional project costs are included in the community's total investment needed. The number of multijurisdictional projects by priority can be seen in Figure 8.

Estimate
($ millions)Projects
Total Estimate $ 919 78
High $ 323 53
Medium $ 315 9
Low $ 281 16
WATER $ 301 19
TRANSPORTATION $ 618 59
Attachment 1

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11 | HIP
Figure 7: Priority Projects by Community
Community
Total
Proposed
Dwelling
Units
HIP
Projects High Medium Low
Total Investment
needed per
proposed unit
Total Estimated
Investment
Needed ($
millions)
Multijurisdictional*3 2 1 $ 95
Arroyo Grande 600 1 1 $ 227,254 $ 136 Atascadero 722 2 1 1 $ 23,734 $ 17 Grover Beach 624 4 3 1 $ 85,920 $ 54 Morro Bay 120 1 1 $ 183,368 $ 22 Paso Robles 4,959 17 16 1 $ 37,055 $ 184 Pismo Beach 297 $ 61,179 $ 18 San Luis Obispo 6,171 26 23 3 $ 43,197 $ 267 County 2,221 22 6 3 13 $ 77,286 $ 172 Cayucos 7 2 1 1 $ 1,185,714 $ 8 Los Osos -3 3 $ -$ 15 Nipomo 1,351 6 4 1 1 $ 25,171 $ 34 Oceano 4 1 1 $ 950,000 $ 4 San Miguel 152 1 1 $ 269,737 $ 41 Santa
Margarita 514 1 1 $ 2,918 $ 2 Templeton 193 7 1 1 5 $ 341,647 $ 66 Cal Poly 2,780 2 2 $ 17,986 $ 50 Total Projects 15,714 78 53 9 16 $ 58,547 $ 920 Priority Category Total Cost Estimate ($
millions)$ 323 $ 315 $ 281
Figure 8: Multijurisdictional Projects by Priority
Community Multijurisdictional HIP
Projects High Medium Low
Arroyo Grande1,2 2 1 1
Atascadero2,3 2 2
Grover Beach1,2 2 1 1
Morro Bay2 1 1
Paso Robles2,3 2 2
Pismo Beach1,2 2 1 2
San Luis Obispo2 1 1
County2,3 2 2
The 3 multijurisdictional projects include the following:Central Coast Blue1, Cashless Fare System Conversion 2, North
County Charging Facility3
Attachment 1

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Ninety-nine percent of the region’s population lives in four out of five subregions: North County, Central County, North Coast, and South County. Both North and Central County have 29 HIP projects. Even though projects in these two regions make up the majority of the HIP list, North County and Central County combined make up 81% of the proposed new housing units in the region.

Figure 9: Priority Projects by Subregion
Subregion Total Proposed
Dwelling Units
HIP
Projects High Medium Low
Total Investment
needed per
proposed unit
Total
Estimated
Investment
Needed
($ millions)
North County 6,540 29 20 3 6 $ 47,401 $ 310 Central County 6,171 29 25 3 1 $ 51,693 $ 319 North Coast 127 6 0 1 5 $ 354,331 $ 45 South County 2,876 13 7 2 4 $ 85,535 $ 246 The draft list can be viewed in Appendix A: HIP Project List.

FFuturee Dataa Considerationss
Creating balanced communities is one of the six 2020 Regional Housing Compact goals. The 2023 Sustainable Communities Strategy defines a jobs-housing balanced community as A community where residents can both live and work. With jobs and housing in close proximity, vehicle trips and commute times reduce and active transportation and transit use increase. These balanced communities also provide a broad mix of housing options to accommodate households with a range of incomes.

As a proactive measure, the jobs-housing balance of communities was analyzed using live/work percentages. A live/work percentage is the total number of employees living and working in the city or community boundaries divided by the total workers living in that boundary. In future iterations of the HIP, jobs-housing balance could be integrated through the live/work percentage and additional job cluster data as mentioned in Figure 5: HIP Analysis Process. The data displayed in
Figure 10 and Figure 11 was not used to prioritize projects in the 2023 HIP. The information is for reference purposes only. This information is included since it relates to goals found in the 2020 Regional Housing Compact, HIP stakeholder interest, and or relates to the 2023 Affordable-by-Design Study. The 2023 Affordable-By-Design Study has shown that units within the multi-family category are more aligned units in the low- and moderately-priced income Attachment 1

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13 | HIP
categories. Understanding the proposed multi-family percentage of each community provides better insight on how the region will fulfill the needs of working households.

Figure 10: Future Data Considerations by Community
Community
Number of Total
Proposed
Dwelling Units
% of Multi-
family units
proposed
Live Work
Percentage
Arroyo Grande 600 18%14%
Atascadero 722 75%21%
Grover Beach 624 81%9%
Morro Bay 120 47%21%
Paso Robles 4,959 42%28%
Pismo Beach 297 30%12%
San Luis Obispo 6,171 58%41%
County 2,221 25%
Cayucos 7 0%13%
Los Osos - 0%11%
Nipomo 1,351 34%9%
Oceano 4 100%4%
San Miguel 152 0%3%
Santa Margarita 514 10%2%
Templeton 193 19%12%
Total 15,714
Source: Longitudinal Employer-Household Dynamics (LEHD) 2019, SLOCOG GIS Figure 11: Future Data Considerations by Subregion
Subregion
Number of Total
Proposed
Dwelling Units
% of Multi-family
units proposed
Live Work
Percentage
North County 6,540 42%40%
Central County 6,171 58%44%
North Coast 127 44%27%
South County 2,876 41%27%
Source: Longitudinal Employer-Household Dynamics (LEHD) 2019, SLOCOG GIS Attachment 1

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HIP MAPPING TOOL
The HIP Mapping Tool was created to display GIS analysis and foster future collaboration. The tool was created using ArcGIS Experience Builder, ArcGIS Online, and ArcGIS Storymaps. Users have the ability to pan around the map in the "Explore" tab and turn map layers on and off.

The "Project List" tab allows the user to browse through HIP projects categorized by transportation or water projects and is color coded by priority category. When a project is selected on the list, the map will zoom to the project. The user may also click on projects from the map to view a pop-up showing the name, description, and estimated cost. The "Story" tab of the tool gives a summary of the HIP and provides the four-step process of how the analysis was carried out in GIS. Individual layers are shown along with project tables.

Attachment 1

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AFFORDABLE-BY-DESIGN STUDY
The Affordable-by-Design (ABD) Study evaluates housing affordability characteristics for the seven incorporated Cities and unincorporated San Luis Obispo County. The intention of the ABD study is to show certain units (built without financial assistance or deed restrictions) as either low- or moderate-income units in annual Housing and Community Development RHNA reports. For purposes of the ABD Study, “affordable by design” (ABD) is defined as new housing that is not income- or rent-restricted, but where typical market rents or sales prices would be affordable to low or moderate-income households (earning 50-120% of Area Median Income).

The San Luis Obispo County’s published rent and sale price limits by income level define the rent and price range affordable at this income level as seen in Figure 12.

Figure 12: San Luis Obispo County’s Rent and Sale Price Limits (May 2022) Attachment 1

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The ABD Study includes the following approach:

1. Identify common physical characteristics for ABD housing

2. Interviews with local housing developers

3. Consider whether ABD housing examples from other regions could meet ABD criteria in SLO County’s market

4. Financial feasibility analysis of illustrative “prototypical” development examples

5. Identify regulatory barriers to development to ABD housing

6. Highlight potential policy measures to support ABD housing EcoNorthwest used development “prototypes” to highlight characteristics of housing that could potentially meet the Study’s ABD definition. These are prototypical developments informed by (or extrapolated from) actual development. Each development prototype is a specific combination of key characteristics, such as number of units and configuration (e.g., detached, attached side-by- side, stacked), Lot size / density, height, unit size and parking. In May 2023, preliminary findings were presented to five stakeholder groups. The following information provides a brief summary and more preliminary information can be viewed in Appendix B: Affordable-by-Design Study Preliminary Information. The final report will be completed in July for SLOCOG Board consideration in August.

RRentall Preliminaryy Findingss
On the rental side of new development (within the last 5 years), some new apartments are affordable at a moderate-income level. This may include some mixed-income buildings but 1- bedroom units are most likely to be affordable whereas no 3-bedroom units are categorized as affordable. Design helps but does not guarantee affordability. Most of the buildings that fit within the ABD definition are 3-story, they have a smaller average unit sizes, but not all small units are affordable to moderate-income households.

EcoNorthwest looked at examples from other housing markets within California, Washington, and Oregon to add a few possibilities to a financial feasibility analysis. These protypes included:

A. 3-story walk-up apartments—standard
x Larger units (~880 sf average)
x Typical density, parking ratio, and landscaping
B. 3-story walk-up apartments—compact
x Smaller units (~620 sf average)
x Higher density, lower parking ratio, less landscaping C. 4-story micro-unit apartments
x Very small units (~300 sf, shared kitchens, individual kitchenettes) x Very high density, no parking, no landscaping
Attachment 1

12.A-21Council Agenda 7-18-2023

17 | HIP
Figure 13: Feasibility of Rental Prototypes by Subregion The financial feasibility analysis uses a metric called “return on cost” (ROC), which reflects the income potential of the completed development0F
1 divided by the total cost of development.

This ratio is often used as an initial indicator of development feasibility for rental developments, as it provides a preliminary indication of whether the completed property will provide competitive financial returns that could attract investors and meet loan underwriting requirements. More data on the Market Assumptions can be found in Appendix B: Affordable- by-Design Study Preliminary Information.

Figure 14: Key Takeaways from Financial Feasibility Analysis (Rental)

1 Net Operating Income (NOI), the revenue after accounting for vacancy and operating expenses.

Attachment 1

12.A-22Council Agenda 7-18-2023

18 | HIP
FFor-Salee Preliminaryy Findingss
In the last five years, only manufactured housing in manufactured home parks met target price points for new for-sale housing using County calculations. This does not factor in the lot cost associated with manufactured home parks. There are few small detached homes that came close and could potentially meet the City of San Luis Obispo’s affordability standards since they calculate income limits differently. Looking at examples from other housing markets:

A. Small detached units
x ~350-800 square feet units
x Shared yards with clustered parking
x Smallest units may be affordable at close to 120% of AMI in that market x Affordability:: Comparable Units in SLO region exceed target price B. Small condo units
x ~325-600 square feet units
x Little or no on-site parking
x Can be affordable to Moderate Income households in portions of some high- cost regions
x Feasibility:May not be viable in SLO region’s market
C. Simple condo development
x ~600-1000 square feet units
x Little or no on-site parking with few shared amenities x Can be affordable to Moderate Income households in portions of some high- cost regions.
x Feasibility:May not be viable in SLO region’s market
D. Smaller townhouse units
x ~1,000-1,600 square feet units
x Can be affordable to Moderate Income households in portions of some high- cost regions
x Affordability:Comparable units in SLO region exceed target price E. Smaller single-detached homes
x 3BR, ~1200-1500 square feet units
x Can be affordable to moderate-income households in moderate-cost areas (e.g., Central Valley)
x Affordability:Comparable units in SLO region exceed target price San Luis Obispo’s regional market conditions do not support new for-sale housing at prices affordable to moderate-income households, with the possible exception of manufactured homes in housing parks. A few developments have attempted to produce ABD for-sale housing, but even with very small homes, prices are still too high for the moderate-income target price range. Factors that make for-sale housing more affordable in other areas may not translate to the SLO County market (lower land cost, no parking, few amenities, micro units).

Attachment 1

12.A-23Council Agenda 7-18-2023

19 | HIP
MMarkett Conditionss
In summary, the rental market is close and regulatory change could help with smaller units in cost-effective developments. The market is not close in the for-sale side and a longer-term approach is needed. Increasing the housing production overall can help bring supply and demand into balance and make ABD achievable over the longer term. These preliminary findings are not surprising but sobering. Looking at a wide-angle view, ECONorthwest looked at what conditions make for lower-cost housing.

Figure 15: Market Conditions for Lower-Cost Housing
As seen in Figure 15: Market Conditions for Lower-Cost Housing, there are four factors that have to come together in the housing market to product lower-cost housing including simple design with lower-cost materials, lower cost locations, efficient production, and smaller units with a higher density.

A primary deliverable for the ABD Study is to create a menu of policy change options that will incentivize ABD units in the region. Figure 16 depicts how the public sector impacts the conditions for ABD. ECONorthwest interviewed six developers that work within the San Luis Obispo Region. Those interviews provided four market barrier themes to ABD Development including land cost, demand for high-end housing, construction costs, and demand for parking.

They also identified six regulatory barrier themes to ABD development including: discretionary review, density caps, minimum unit sizes, parking requirements that exceed market demand, impact fees and inclusionary zoning, and required infrastructure improvements. More of these details will be made available in July.

Attachment 1

12.A-24Council Agenda 7-18-2023

20 | HIP
Figure 16: Public Sector and ABD Market Conditions
In coordination with HIP stakeholders, ECONorthwest identified potential policies and incentives that local governments in the region could implement to support ABD housing development. In the next few months, the consultant will identify relevant case studies from jurisdictions that have implemented programs or policies similar to the relevant incentives, and, where possible, the impact they have had on housing production for ABD housing.

FUNDING STRATEGIES ASSESSMENT
The Funding Strategies Assessment seeks to identify funding and financing sources that can reasonably implement the water, wastewater, and transportation infrastructure needs of the HIP. BKF Engineering has drafted a grant inventory that connects each specific HIP project to various public sources of funding. They also include a grant glossary with factors such as eligibility requirements, deadlines, funding amounts available. These draft pieces can be reviewed in Appendix C: Funding Strategies Assessment Preliminary Information.

A Gap Analysis is currently being conducted which aims to determine the difference between the required funding for the projects and the potential funding that can be secured through grants and other funding sources. The Gap Analysis approach includes:

Attachment 1

12.A-25Council Agenda 7-18-2023

21 | HIP

1. Assessing the Projects & Determining Funding Requirements:

2. Identifying Potential Funding Sources

3. Estimating Potential Grant Funding

4. Calculating the Funding Gap

5. Proposing Strategies to Bridge the Funding Gap
The Funding Strategies Assessment will include a detailed breakdown on a project-by-project basis, covering funding requirements, corresponding funding sources, projected grant funding, and the residual funding gap, including shortfalls and match requirements. An actionable timeline and a roadmap, along with recommendations for implementing the proposed strategies aimed to maximize the probability of securing the requisite funds for HIP projects.

The complete Funding Strategies Assessment will be available in July/August.

HOUSING HIGHLIGHTS
Stakeholder Engagement Strategy
The HIP engagement strategy established four outreach objectives:
x Foster ongoing collaboration and buy-in among private and public stakeholders. x Remind government/elected officials of the Regional Compact and the motives behind it to lay groundwork for their commitment to the 2023 regional HIP. x Build public sentiment in support of solutions and regional planning efforts related to HIP.
x Support effective coordination with and communication among SLOCOG, HIP consultants and the Comprehensive Economic Development Strategy (CEDS) teams.

The San Luis Obispo region has strategic goals for the future of housing and infrastructure, but they can only be achieved through the decisions and actions of organizations and stakeholders.

The stakeholder meetings are designed to have honest conversations about what each organization can and needs to do to realize those goals.The December 2022 Regional Managers Retreat guided the stakeholder engagement process which is depicted in Figure 17: HIP Stakeholder Process.

Attachment 1

12.A-26Council Agenda 7-18-2023

22 | HIP
Figure 17: HIP Stakeholder Process
The following list are the key stakeholder groups engaged – totaling approximately 100 individuals that participated during the HIP development process in January - June 2023:

Regional Managers/ Key Staff: A key driving force behind developing this plan has been regional leadership, including eight City Managers, County Administrative Officer, SLOCOG Executive Director (and key directors from their organizations).

Elected Officials: Two City Council Members with knowledge of regional differences bring the various perspectives and concerns voiced by their respective constituents for this Steering Committee. The full 40 elected officials within the region will have an opportunity to hear about the plan through public updates to SLOCOG Board as well as through presentations of the recommended HIP to their Councils and Boards in Summer 2023.

Building & Development Cluster: Leaders in the building and development industry that convene quarterly with the goal of regional coordination focused on aligning housing and infrastructure needs to create a strong local economy.

Housing Advocacy Group: Organizations and individuals that have significant influence in the community, with representation from the non-profit builders, local chambers of commerce and various advocate organizations.

Housing Action Team: Existing work group made up of planning/ community development staff from Cities, County, and SLOCOG.

Community Stakeholders: The broader community will be engaged in partnership with the SLO Chamber of Commerce Housing Summit in Spring 2023. Feedback from this event will be brought to the HIP Steering Committee to discuss and adjust the communications plan accordingly.

Attachment 1

12.A-27Council Agenda 7-18-2023

23 | HIP
HIP Steering Committee: Formed to oversee the vision for the HIP Outreach Strategy and to bring leaders in each of these areas together, aligning and integrating the various interests that will lead to action on the region’s priorities.

A HIP Steering Committee was selected to represent broader interests and to allow for cross- sector collaboration and cohesion. It is a small group of representatives with a balance of public and private backgrounds and a variety of expertise in issues related to development around the region. The HIP Steering Committee guided the development of a balanced plan, and helped to identify paths for the plan’s successful adoption and implementation. The HIP Steering Committee includes Matthew Bronson (Grover Beach), Mayor Heather Moreno (Atascadero), Councilmember Andy Pease (SLO City), Trevor Keith (County of SLO), Aaryn Abbott (Abbott | Reed), Lenny Grant (RRM), Jeff Eckles (SLOCHTF), Courtney Howard (SLO Flood Control & Water Conservation District), Anthony Palazzo (Cal Poly), and Jorge Aguilar (Wallace Group).

Regional Housing Success Stories
Available following Summer 2023 Outreach

NEXT STEPS
Available following Summer 2023 Outreach

APPENDIX
Appendix A: Draft List of HIP Infrastructure Priorities Appendix B: Affordable-by-Design Study Preliminary Information Appendix C: Funding Strategies Assessment Preliminary
Information
Appendix D: Regional Compact & Housing Element Regional Chapter
Appendix E: Additional Housing Data July 2023
Attachment 1

12.A-28Council Agenda 7-18-2023

Housing Needs and Highlights
July 2023
Prepared for: San Luis Obispo Council of Governments
Council Agenda 7-18-2023 12.A-29

SETTING THE STAGE FOR NEW PROGRESS
San Luis Obispo County has long been prized for its quality of life, but the perception is increasingly overshadowed by high, often out-of-reach housing costs.

It’s an issue that ripples throughout the community, and one that holds our collective future.

What’s at stake is whether SLO County becomes a place where our children, friends and neighbors are forced to move elsewhere in search of housing they can afford, where our local businesses are stunted because they can’t find or keep employees — or whether we work collaboratively to build a housing stock sufficient to achieve balanced communities.

There have been bright spots of success: thoughtful projects developed with engagement from the community, progress in streamlining processes and allowing new types of housing. There’s been increased collaboration between cities as well as between public and private partners.

Through these collaborations, projects are shifting to balance community character and ranges of affordability. These are positive steps. Meeting the scale of the need, however, requires a strategic, coordinated approach.

The seven Cities, SLO County and SLOCOG lit the path with the 2020 Regional Compact, a shared commitment to developing the housing and infrastructure needed to support vibrant communities and economic prosperity. The Regional Housing and Infrastructure Plan folds in the strategic framework and private-sector engagement to operationalize that commitment.

To supplement those components, here’s a quick look at what’s driving the effort, some highlights of progress, and the opportunities ahead.

Council Agenda 7-18-2023 12.A-30

THE CASE FOR ACTION

1. Sufficient housing is a vital element of a healthy
community and economy.

This encompasses a diversity of housing types across
income types.

2. Housing production on the Central Coast has not
kept pace with community needs.

Like many communities, the Central Coast has a severe
housing shortage that has fueled an affordability crisis.

3. Planned well, new construction can mitigate
impacts of growth.

Increasing housing availability near jobs can reduce traffic, emissions, and other environmental impacts.

4. Action is needed from a spectrum of public and
private sector players.

Each is needed to play their part in a functioning housing ecosystem.

5. A united framework is the key to progress.

With the 2020 Regional Compact as a solid foundation, we can collectively accelerate housing production in a way that makes sense for the region.

Council Agenda 7-18-2023 12.A-31

1. SUFFICIENT HOUSING IS A VITAL ELEMENT OF A
HEALTHY COMMUNITY AND ECONOMY.

At its core, housing is about supporting
people’s basic needs. It’s a cornerstone of
a community’s quality of life.

Housing plays an outsized role in individual
and community outcomes, from health
and education to productivity and
prosperity.

For businesses, housing is a key factor in
attracting and retaining local employees,
which in turn influences location and
expansion decisions and ultimately, the
community’s economic resilience.

A healthy housing supply includes a
diversity of housing types across income types.

A diversity of housing options is needed to adequately serve all residents of a community, from growing families needing more space, seniors looking to downsize and workers looking for housing near jobs.

This continuum can also be viewed as a ladder, providing opportunity to move up the rungs.

When rungs are missing or broken, friends and colleagues are forced to move away or set aside dreams of attaining home ownership, which widens the gap for those below to move up, while the number of unsheltered residents swells.

Canada Mortgage and Housing Corporation
Council Agenda 7-18-2023 12.A-32

2. HOUSING PRODUCTION HAS NOT
KEPT PACE WITH COMMUNITY NEEDS.

The contributing factors are many and the problem is not unique to SLO County, but the bottom line is our region has not produced enough housing to support our residents and jobs.

This gap has fueled an affordability crisis that reaches into every corner of our community, from young families looking to grow to seniors looking to downsize affordably.

The many impacts span longer commutes as workers seek more affordable housing, parents unable to find childcare,
classroom overcrowding from lack of teachers, and up to year- long waits for rescheduled doctor visits.

Cumulatively, the undersupply of housing is the region’s biggest drag on individual and community prosperity and job creation.

High housing prices widen the income disparity and push jobs that were traditionally middle class, such as nursing, teaching and public safety, down the economic ladder.

Employers struggle to attract and retain workers while workers struggle to find housing near jobs. That’s led to a 6- to 8-month recruitment timeline for public safety positions and local businesses cutting back services or deciding to expand
elsewhere.
“The lack of affordable housing along the
coast is the primary constraint holding back
job expansion.”
—Taner Osman
Research Manager at Beacon Economics and the UCR
Center for Economic Forecasting
Council Agenda 7-18-2023 12.A-33

3. PLANNED WELL, NEW HOUSING CAN MITIGATE
IMPACTS OF GROWTH.

Planned and sited strategically, new housing can reduce the strains of growth rather than compound them – building more thriving and sustainable communities. This can be accomplished by building housing close to jobs in areas with the transportation, water and wastewater infrastructure to support them.

Building in housing-efficient areas
closer to jobs:
reduces air pollution from
greenhouse gas emissions
reduces road congestion and
time spent sitting in traffic
reduces sprawl and preserves
agricultural land and open
space
Plus, new units are almost always
more energy- and water-efficient than
existing housing.

The region has long worked to strike a
balance between growth and
preserving our natural amenities. This
has led to projects that enhance our
sense of place by connecting our
commercial corridors, integrating
walking paths through public spaces,
and matching architectural lines with
the shapes of the surrounding hills.

Continuing to grow in a way that makes sense for our region calls for robust analysis of existing infrastructure and resources as well as targeted investment in new infrastructure projects that can pave the way for efficient growth.

Council Agenda 7-18-2023 12.A-34

4. ACTION IS NEEDED FROM A SPECTRUM OF PUBLIC AND

PRIVATE SECTOR PLAYERS
An ecosystem of stakeholders contribute to the housing landscape, from the government agencies that set policy and approve projects to the developers and builders who construct them.

It follows that no single agency, jurisdiction or organization can solve our region’s housing and infrastructure challenges alone. Each is needed to play its part in overcoming barriers, streamlining processes and ramping up production.

Source: REACH
Our public and private sectors have worked together on many successful projects and hold the potential to make meaningful progress on our housing shortage. To navigate that road, we must resist pointing fingers and deflecting responsibility and instead rise to the challenges of optimizing our particular role and collaborating toward a shared vision. Collective interests must rise above independent ones in pursuit of outcomes that lift the region as a whole.

Council Agenda 7-18-2023 12.A-35

5. A UNITED FRAMEWORK IS THE KEY TO PROGRESS.

A systems-level approach is needed to make headway on such a complex and entrenched challenge.

The 2020 Regional Compact laid the foundation, with a shared regional commitment to accelerate housing production in alignment with values around quality of life, natural resources and inclusivity.

The Regional Housing and Infrastructure Plan provides the tools to put that commitment into action, including pinpointing the most efficient areas for growth, a robust analysis of infrastructure needs, affordable-by-design strategies, and potential funding sources.

These tools enable the region to direct infrastructure and housing development where it makes sense, in harmony with community plans and the need for jobs-housing balance.

The work to align resources, policies and actions lies ahead, but with the signatories committed to acting as partners, this framework holds the promise for SLO County to become a statewide leader in sustaining vibrant communities.

Shared Goals of the Regional Compact
Council Agenda 7-18-2023 12.A-36

PROGRESS HIGHLIGHTS
Progress can be seen across the county, from regional leadership and collaboration on housing to growing political and community support. Planners are embracing density and reducing barriers, and new projects are getting built. Here are some highlights.

SLO County
To be added
To be added
To be added
Arroyo Grande
63 affordable units coming to Oak Park
Adopted an ordinance to allow tiny homes
on wheels
Pursuing multiple water projects to meet
current and future needs
Streamlined permitting and reviews to
provide some certainty for developers
Council Agenda 7-18-2023 12.A-37

Atascadero
Infill sites and mixed use projects in
commercial zones added density where it
makes sense
Led the County in making stock plans for
ADUs available at no charge
Small ABD cottage home community
project currently in development
Currently drafting a program that will
defer the payment of impact fees for low
and very low housing units
Grover Beach
Rezoned “opportunity sites” for the
potential development of affordable
housing within the city
$48 million invested in improvements to
local streets from Measure K-14
Developing Objective Design Standards for
all new residential and mixed-use projects
Approved projects resulting in 104 units
added to the community
Council Agenda 7-18-2023 12.A-38

Morro Bay
Partnership between HASLO and the City
of Morro Bay fully funded a major
affordable housing project
35-unit low income rental project at one of
the primary city entryways
Streamlined review process by increasing
ministerial approvals and adding clarity in
the requirements for applications and
design review
Paso Robles
Oak Park project doubled density while
providing much needed affordable
housing
Creston Corridor Project and Niblick
Corridor Project will help both existing
and future housing added over the next
two decades
Strong history of meeting RHNA numbers
Community voted to approve a ½ percent
sales tax measure (Measure K) and funds to be used for sidewalk and road maintenance
Council Agenda 7-18-2023 12.A-39

Pismo Beach
50-unit affordable housing project on 4th
Street and senior affordable housing
project on Shell Beach Road
Adopted a Residential Very-High Density
overlay that allows 50 units per acre for
appropriately zone sites
Adopted ADU regulations that balanced
ADU aims with the Coastal Act
San Luis Obispo City
Preserved 68 residential units for very low
income levels through creative funding
and partnerships
Pro-housing culture in council and staff
SLO Water Resource Recovery Facility
(WRRF) upgrade allows recovery of
resources traditionally classified as waste
214 affordable units under construction
and another 257 affordable units entitled
Streamlined discretionary review
Council Agenda 7-18-2023 12.A-40

THE ROAD AHEAD: CHALLENGES AND OPPORTUNITIES.

SLO County’s housing shortage will not be solved overnight. Change will take dedicated focus over years to come. But the scale of the challenge facing our residents and prosperity requires concerted action.

Challenges come in many forms, including: government
workflows/process/procedures, state regulations, CEQA requirements, local ordinances or restrictions, lack of funding, lack of water resiliency or capacity to support growth, and labor costs.

But so do opportunities, from sharing and adopting best practices to collaborating on water supplies or ordinance templates.

The primary opportunities for HIP is to continue as a living strategic planning tool that helps to focus regional effort and offers tools for your agency and your community to consider in the future. More conversations will happen in the future regarding what implementation looks like but it will be important for each agency's continued commitment to making positive progress to address the challenges this county faces.

Council Agenda 7-18-2023 12.A-41

Draft Regional Housing Infrastructure Plan Appendix A
Community Total Proposed
Dwelling Units
HIP
Projects High Medium Low Total Investment needed
per proposed unit
Total Estimated
Investment Needed
($ millions)
Multijurisdictional*3 2 1 95$
Arroyo Grande 600 1 1 227,254$ 136$
Atascadero 722 4 2 2 155,313$ 112$
Grover Beach 624 4 3 1 85,920$ 54$
Morro Bay 120 1 1 183,368$ 22$
Paso Robles 4,959 17 16 1 37,055$ 184$
Pismo Beach 297 61,179$ 18$
San Luis Obispo 6,171 26 23 3 43,197$ 267$
County 2,221 22 6 3 13 77,286$ 172$
Cayucos 7 2 1 1 1,185,714$ 8$
Los Osos - 3 3 -$ 15$
Nipomo 1,351 6 4 1 1 25,171$ 34$
Oceano 4 1 1 950,000$ 4$
San Miguel 152 1 1 269,737$ 41$
Santa Margarita 514 1 1 2,918$ 2$
Templeton 193 7 1 1 5 341,647$ 66$
Cal Poly 2,780 2 2 17,986$ 50$
Total Projects 15,714 80 54 10 16 64,592$ 1,015$
323$ 315$ 281$
Subregion Total Proposed
Dwelling Units
HIP
Projects High Medium Low Total Investment needed
per proposed unit
Total Estimated
Investment Needed
($ millions)
North County 6,540 31 21 4 6 61,927$ 405$
Central County 6,171 29 25 3 1 51,693$ 319$
North Coast 127 6 0 1 5 354,331$ 45$
South County 2,876 13 7 2 4 85,535$ 246$
1,015$
Priority Category Total Cost Estimate ($ millions)
*Multijurisdictional projects are listed as a separate row and are not included individually in the "HIP Projects" Column for each community. However, multijurisdictional project costs are included in the community's total investment need. The number of multijurisdictional projects by priority can be seen below.

Attachment 1.B

12.A-42Council Agenda 7-18-2023

Draft Regional Housing Infrastructure Plan Appendix A
Community Multijurisdictional
HIP Projects High Medium Low Low
Arroyo Grande1,2 2 1 1
Atascadero2,3 2 2
Grover Beach1,2 2 1 1
Morro Bay2 1 1
Paso Robles2,3 2 2
Pismo Beach1,2 2 1 2
San Luis Obispo2 1 1
County2,3 2 2
The 3 multijurisdictional projects include the following:

Central Coast Blue 1
Cashless Fare System Conversion 2
North County Charging Facility 3

Attachment 1.B

12.A-43Council Agenda 7-18-2023

Draft Regional Housing Infrastructure Plan Appendix A
Priority
Supports
new
housing
Benefit/Cost
Proposed
Units within
Community
Outside
Barriers Project Type Community Project Name Project Description 2023 Cost Estimate 2023 Time Horizon
High Y 74$ 1,351 Wastewater Nipomo CSA 1 Nipomo Capital Improvement Projects 100,000$ next 5 years High Y 2,083$ 2,780 Water
/Wastewater San Luis Obispo Cal Poly
Increase water storage capacity for
campus domestic use and fire suppression 15,000,000$ by 2026 High Y 2,884$ 4,959 Wastewater Paso Robles Paso Robles City wastewater There are some areas of the City’s
wastewater collection (sewer) system that
must be upsized in conjunction with new
development
14,300,000$ next 10 years
High Y 2,884$ 4,959 Water Paso Robles Paso Robles City water some portions of water system
experiencing infrastructure constraints 14,300,000$ next 10 years High Y 2,917$ 6,171 Water
/Wastewater San Luis Obispo
San Luis Obispo (City)
capacity constraints on sewer conveyance
network, additional water storage tanks
and water transmission main needed
18,000,000$ n/a
High Y 2,918$ 514 Water Santa Margarita CSA 23- Santa Margarita undersized pipelines, pipeline loops 1,500,000$ n/a High Y 4,861$ 7,200 Water
/Wastewater San Luis Obispo Cal Poly
plans to build on-campus Water
Reclamation Facility 35,000,000$ by 2026
High Y 13,850$ 722 Water Atascadero Atascadero Mutual Water Company treatment facility to remove PFAS
(planning stages)10,000,000$ next 2 years
High Y 34,626$ 722 Wastewater Atascadero
Wastewater Upgrade
Wastewater upgrade to address some
Regional Water Quality Control Board
water quality permitting standards.
25,000,000$ 5-7 years
High Y 1$ 624 Transit Grover Beach Grover Beach Service Addition South County Transit provide service to Urban Reserve (Strawberry Field)
High Y 1$ 1,351 Transit Nipomo Nipomo Service Addition RTA provide service to Dana Reserve *working with developer
High Y 1$ 4,959 Transit Paso Robles Paso Robles Service Addition Paso Express provide service to Beechwood development
High Y 1$ 4,959 Transit Paso Robles Paso Robles Service Addition Paso Express provide service to Olsen/South Chandler development
High Y 1$ 6,171 Transit San Luis Obispo San Luis Obispo Service Addition SLO Transit provide an additional stop along Board or Tank Farm
High Y 1$ 6,171 Transit San Luis Obispo San Luis Obispo Service Addition SLO Transit provide access between
Broad and South Higuera in the Margarita
Area
High Y 35$ 15,714 Transit Countywide Cashless Fare System Conversion (further study is required)550,000$
High Y 72$ 624 Active TransportationGrover Beach S. 4th St. bike lanes: Grand Ave. to city limits
Restripe to provide Class II/Class IV bike
lanes 45,000$ Unconstrained
High Y 149$ 624 Active TransportationGrover Beach The Pike Complete Street Improvements striping, bike lanes 93,225$ By 2035
*When working with development
early, stop can be added with
minimal cost.
*When working with development
early, stop can be added with
*When working with development
early, stop can be added with
*When working with development
early, stop can be added with
*When working with development
early, stop can be added with
*When working with development
early, stop can be added with
Draft- July 5, 2023 Page 3 of 9
Attachment 1.B

12.A-44Council Agenda 7-18-2023

Draft Regional Housing Infrastructure Plan Appendix A
Priority
Supports
new
housing
Benefit/Cost
Proposed
Units within
Community
Outside
Barriers Project Type Community Project Name Project Description 2023 Cost Estimate 2023 Time Horizon
High Y 151$ 6,171 Active TransportationSan Luis Obispo Froom Ranch Frontage & Streetscape Improvements
Install sidewalks on west side and median
between Irish Hill Plaza and Calle Joaquin.932,250$ By 2028 High Y 153$ 6,540 Transit North County North County Charging Facility Charging facility at 1735 Paso Robles St., Paso Robles 1,000,000$
High Y 162$ 6,171 Non-Highway San Luis Obispo Los Osos Valley Rd/Auto Park Wy Intersection Improvements
Install traffic signal, median refuges, hi-vis
crosswalks and bicycle protected
intersection element
1,000,000$ By 2028
High Y 248$ 6,171 Active TransportationSan Luis Obispo Tank Farm Road Complete Street Convert from 5-lane to 3-lane, add Class
IV bikeways, landscaped medians, and
pedestrian crossings
1,533,000$ By 2045
High Y 302$ 6,171 Active TransportationSan Luis Obispo Madonna Rd. - Class IV - Madonna Inn to Higuera Ave.

On Madonna Ave. install Class IV from
Madonna Inn to Higuera Ave.1,864,500$ By 2035
High Y 322$ 6,171 Non-Highway San Luis Obispo Buckley Rd. widening: Thread Ln. to Buttonwood Wy.

Widen Buckley Rd. to provide paved
shoulders, center left turn lane and to
flatten existing horizontal curve
1,988,800$ By 2035
High Y 343$ 4,959 Transit Paso Robles Paso Robles New Route Paso Express provide service to North
Chandler Ranch* $700,000 yearly
operating
1,700,000$
High Y 373$ 6,171 Non-Highway San Luis Obispo Broad St/Tank Farm Rd Intersection Improvements
Add NB right turn lane, WB right turn lane,
and ped/bike crossing enhancements.2,299,500$ By 2045 High Y 496$ 6,171 Non-Highway San Luis Obispo Orcutt Rd. widening: Johnson Ave. to Tank Farm Rd. (Phase 1)
Widen road to three lanes with Class II
bike lanes and sidewalks 3,057,780$ By 2035
High Y 497$ 6,171 Non-Highway San Luis Obispo Johnson Ave/Orcutt Rd Roundabout Install roundabout 3,066,000$ After 2045 High Y 501$ 4,959 Non-Highway Paso Robles South River Rd. / Charolais Rd. roundabout Construct roundabout 2,486,000$ By 2035
High Y 514$ 6,171 Active TransportationSan Luis Obispo Broad St. Median Improvements Install landscaped medians on Broad St. north of Tank Farm Rd.3,169,650$ By 2035
High Y 514$ 6,171 Active TransportationSan Luis Obispo Railroad Safety Trail (Phase 7): Bike connection south of Tank Farm Rd.

Construct Class I bike path and ped/bike
bridge over Tank Farm 3,169,650$ By 2035
High Y 608$ 6,171 Active TransportationSan Luis Obispo Los Osos Valley Road Protected Bike Lanes
Install Class IV bike lanes along LOVR
between Diablo and S. Higuera 3,750,250$ By 2028
High Y 618$ 4,959 Non-Highway Paso Robles Airport Road extension North Chandler Ranch
Extend Airport Road as 2-lane arterial
from Linne Rd. to Union Rd.3,066,000$ by 2045
High Y 619$ 6,171 Non-Highway San Luis Obispo Santa Fe Rd. extension: Santa Fe Rd. to Tank Farm Rd.

Extend Santa Fe Rd north w/ new bridge
over creek and roundabout intersection at
Tank Farm/Santa Fe
3,822,225$ By 2035
High Y 633$ 6,171 Active TransportationSan Luis Obispo Railroad Safety Trail: bike bridge crossing at Industrial Way
Construct bike bridge across UPRR tracks
at Industrial Wy. to the RRST 3,909,150$ By 2045
High Y 648$ 4,959 Active TransportationPaso Robles N. River Rd.Class I trail multi-use paved trail from 13th St. to SR46 along river trail 3,214,500$ By 2028
Draft- July 5, 2023 Page 4 of 9
Attachment 1.B

12.A-45Council Agenda 7-18-2023

Draft Regional Housing Infrastructure Plan Appendix A
Priority
Supports
new
housing
Benefit/Cost
Proposed
Units within
Community
Outside
Barriers Project Type Community Project Name Project Description 2023 Cost Estimate 2023 Time Horizon
High Y 726$ 4,959 Active TransportationPaso Robles Creekside Bike Path: Phase 1 and 2 Construct path: Nicklaus to Old S. River Rd.3,600,000$ Unconstrained
High Y 745$ 6,171 Active TransportationSan Luis Obispo South of Broad St. and Santa Barbara Ave. Protected Bike Lanes
Install Class IV bikeway on Santa Barbara
(Upham to Broad) and Broad from Santa
Barbara to Farmhouse
4,599,000$ By 2045
High Y 870$ 4,959 Non-Highway Paso Robles Creston Rd.: Niblick Rd. to Meadowlark Dr. (Phase 3)
Install traffic-calming and intersection
improvements- roadway diet and signals 4,313,210$ By 2035 High Y 1,242$ 6,171 Non-Highway San Luis Obispo Horizon Lane Extension Extend Horizon Ln between Buckley and
Tank Farm as commercial collector w/
roundabout at Tank Farm
7,665,000$ by 2045
High Y 1,429$ 6,171 Active TransportationSan Luis Obispo Higuera Protected Bike Lanes Install Class IV bikeways along Higuera from Marsh to southern City Limits 8,817,000$ By 2045 High Y 1,577$ 4,959 Active TransportationPaso Robles Huer Huero Creek Trail Construct Class II bike lanes 7,818,300$ by 2045 High Y 1,615$ 6,171 Non-Highway San Luis Obispo Buckley Rd. widening: Vachell Ln. to Broad St.

Widen to three lanes between Hoover St.
and Broad St.9,964,500$ By 2045
High Y 1,945$ 6,171 Non-Highway San Luis Obispo Prado Rd. Bridge Replacement & Multimodal Corridor Enhancements
Replace SLO Creek bridge w/ 6-lane
bridge (2 each direction + turn lanes),
sidewalks, Class IV bike lanes & construct
2nd NB turn lane from S. Higuera to Prado
and a bicycle protected intersection
12,000,000$ By 2028
High Y 2,014$ 6,171 Highway San Luis Obispo US 101 / Prado Rd. I/C Improvements (Phase 2)
Construct SB off ramp and on ramp; SB
auxiliary lane btw Madonna Rd. to Prado
Rd.
12,430,000$ By 2035
High Y 2,017$ 4,959 Non-Highway Paso Robles Creston Rd.: South River Rd. to Niblick Rd.

Streetscape enhancements and pedestrian
crossing improvements 10,000,000$ By 2028
High Y 2,024$ 1,351 Highway Nipomo Interchange Improvements at Willow Rd US 101 NB & SB ramp signalization 2,734,600$ By 2035 High Y 2,256$ 4,959 Active TransportationPaso Robles Paso Robles Eastside Grand Loop Complete gaps in the Grand Loop Bikeway
Route on the eastside of town, not already
completed by Olsen, Chandler,
Beachwood, North River Rd., and Huer
Huero Creek to complete a connected
orbital Class I network.
11,187,000$ By 2035
High Y 2,484$ 6,171 Non-Highway San Luis Obispo Santa Fe Rd. extension: south of Tank Farm Rd.

Realign and extend Santa Fe Rd. from
Hoover Ave. to Tank Farm 15,330,000$ by 2045
High Y 2,837$ 1,351 Non-Highway Nipomo Roadway Extension of Hetrick Rd Extend Hetrick Rd from Glenhaven Place
to Pomeroy Rd to two travel lanes and 8'
shoulder
3,832,500$ After 2045
High Y 3,091$ 4,959 Highway Paso Robles SR 46E / Union Rd. improvements (Phase 2)
Construct Phase 2 improvements: new
interchange 15,330,000$ by 2045
Draft- July 5, 2023 Page 5 of 9
Attachment 1.B

12.A-46Council Agenda 7-18-2023

Draft Regional Housing Infrastructure Plan Appendix A
Priority
Supports
new
housing
Benefit/Cost
Proposed
Units within
Community
Outside
Barriers Project Type Community Project Name Project Description 2023 Cost Estimate 2023 Time Horizon
High Y 3,480$ 4,959 Active TransportationPaso Robles
Niblick Rd. Corridor enhancements,
operational improvements, Complete
Streets
Transportation demand management
improvements 17,257,000$ By 2035
High Y 4,186$ 193 Non-Highway Templeton Las Tablas Rd. at Florence St.

Improvements
Traffic signal, ADA ramps, and left-turn
lane at Las Tablas Rd. at Florence St.807,950$ By 2035 High Y 4,386$ 4,959 Highway Paso Robles US 101 / SR 46W I/C construct two roundabouts
Operational improvements: modify
interchange, EB and WB roundabouts
(Phase 3)
21,752,500$ By 2035
Medium Y 41,451$ 193 Water/WastewaterTempleton
Templeton Community Services
District
new sewer force main needed; water
supply availability is a limitation and a
Nacimiento Recharge and Retrieval
Project is needed to add water to the
District water system (will include a new
pipeline turnout, recharge basin, water
filtration and two new wells)
8,000,000$ 2027 or later
Medium Y 42,857$ 7 Wastewater Cayucos Cayucos Sanitary District (wastewater)Capital Improvement Projects 300,000$ 1 year Medium Y 61,144$ 1,521 Water/WastewaterArroyo Grande, Grover Beach, Pismo Beach
Central Coast Blue: GB, AG, PB
Water Supply & Sewer Main
Regional Recycled water project (PB,
GB, AG); Phase 1-pipe treated
wastewater from Pismo Beach’s
Wastewater Treatment Plant (WWTP) to
a new advanced treatment facility
located in Grover Beach. Phase 2 -
expand to treat wastewater from South
San Luis Obispo County Sanitation
District’s WWTP.
93,000,000$ next 5 years
Medium Y 96,953$ 722 Wastewater Atascadero Wastewater Treatment Plant Expansion
Expand the capacity of our wastewater
treatment plant.70,000,000$ Next 2-4 years
Medium Y 4,583$ 6,171 Non-Highway San Luis Obispo Tank Farm Rd. widening: Higuera St. to Broad St.

Widen to five lanes with Class II bike lanes
& Class I paths between Horizon and
Santa Fe
28,283,850$ After 2045
Medium Y 7,360$ 1,351 Non-Highway Nipomo Roadway Extension of North Frontage Rd
Extend North Frontage from Sandydale Dr
to Willow Rd 9,944,000$ By 2035
Medium Y 8,418$ 6,171 Non-Highway San Luis Obispo Prado Rd. extension: South Higuera St. to Broad St.

Construct extension as 4-lane road (plus
median/LT lane), Class I shared-use
paths, and new intersection at Broad St. &
Prado Rd.
51,948,771$ By 2045
Medium Y 9,695$ 722 Highway Atascadero US 101 / Del Rio Rd. I/C modifications
Construct interchange improvements in
association with developments 7,000,000$ By 2028
Draft- July 5, 2023 Page 6 of 9
Attachment 1.B

12.A-47Council Agenda 7-18-2023

Draft Regional Housing Infrastructure Plan Appendix A
Priority
Supports
new
housing
Benefit/Cost
Proposed
Units within
Community
Outside
Barriers Project Type Community Project Name Project Description 2023 Cost Estimate 2023 Time Horizon
Medium Y 10,331$ 6,171 Highway San Luis Obispo US 101 / Prado Rd. I/C and NB auxiliary lane (Phase 1)
Construct Prado Rd. overcrossing; NB
auxiliary lane. Extend Prado Rd. east to
Froom Ranch Way; construct bike lanes,
sidewalks.
63,750,000$ By 2028
Medium Y 10,587$ 4,959 Highway Paso Robles SR 46E / Union Rd. improvements (Phase 1)
Construct overcrossing; realignment,
vertical sight distance improvements,
channelization & bike lanes/sidewalks on
Union Road from Ardmore Road to Barney
Schwartz Park
52,500,000$ by 2028
Low Y 183,333$ 120 Water/WastewaterMorro Bay Morro Bay (City)Fire flow limitations; aging infrastructure 22,000,000$ next 10 years Low Y 269,737$ 152 Water/WastewaterSan Miguel
San Miguel CSD
water pumping capacity, wastewater sewer
treatment capacity, and water water
treatment plant expansion
41,000,000$ 1 to 10 years
Low Y 950,000$ 4 Water/WastewaterOceano
Oceano CSD
Water Resource Reliability Program
(capital improvements), and upgrade of
water mains
3,800,000$ next 10 years
Low Y 1,142,857$ 7 Water Cayucos CSA 10/10A- Cayucos (Cayucos Water Treatment Plant)water line loops and replacements 8,000,000$ next 5 years Low Y -- Building MoratoriumWater Los Osos
S&T Mutual Water Company
pipeline to secure a secondary water
source, which would run between their
water system and the Los Osos CSD,
Shared Bike path Easement
2,900,000$ next 5 years
Low Y -- Building MoratoriumWater Los Osos S&T Mutual Water Company North Water Tank 2,500,000$ next 5 years Low Y -- Building MoratoriumWater/WastewaterLos Osos Los Osos CSD infrastructure to import supplemental water 10,000,000$ next 5 years
Low Y -- Wastewater San Luis Obispo County CSA 18 Los Ranchos Sewer Rehabilitation 1,500,000$ next 10years Low Y 12,875$ 1,351 Non-Highway Nipomo
North Frontage Rd. extension:

Sandydale Rd. to Summit Station
Rd.

Extend North Frontage Rd. from
Sandydale Rd. to Summit Station Rd.17,394,568$ By 2045 Low Y 15,855$ 193 Active TransportationTempleton Las Tablas Rd. Class II bike lanes:

US 101 to Old County Rd.Construct Class II bike lanes 3,060,000$ Unconstrained Low Y 16,101$ 193 Highway Templeton Las Tablas Rd Interchange Improvements
On Las Tablas Rd from Bennett Way to
US 101, widen US 101 SB off-ramp and
add westbound lane
3,107,500$ By 2035
Low Y 24,519$ 624 Active TransportationGrover Beach Beach Cities Trail: Boardwalk Dune Trail Construct bike/ped trail 15,300,000$ Unconstrained Low Y 28,982$ 193 Non-Highway Templeton
Bennett Way connection/ frontage
road: Templeton Hills Rd. to
Vineyard Dr.

Connect Bennett Way between Templeton
Hills Road and Vineyard Drive 5,593,500$ By 2035
Low Y 115,927$ 193 Highway Templeton US 101 / Main St. I/C improvements Reconstruct interchange and widen Main St. from US 101 to Creekside Ranch Rd.22,374,000$ By 2035 Draft- July 5, 2023 Page 7 of 9
Attachment 1.B

12.A-48Council Agenda 7-18-2023

Draft Regional Housing Infrastructure Plan Appendix A
Priority
Supports
new
housing
Benefit/Cost
Proposed
Units within
Community
Outside
Barriers Project Type Community Project Name Project Description 2023 Cost Estimate 2023 Time Horizon
Low Y 119,145$ 193 Highway Templeton Interchange Improvements at Las Tablas Rd
Phase 3 Widening to 5 lanes (Bridge
Removal and replacement) or
Roundabouts
22,995,000$ By 2045
Low Y 166,075$ 600 Highway Arroyo Grande US 101 Traffic Way/El Campo Interchange
Closure of SB Fair Oaks off-ramp & Traffic
Way NB & SB ramps, and all at-grade
access points between Traffic Way and
Los Berros Road and construct new
interchange in the vicinity of El
Campo/Traffic Way.
99,645,000$ By 2045
Estimate Projects
Estimate for all HIP Projects 1,014,252,229$ 80
High 348,000,000$ 54
Medium 385,000,000$ 10
Low 281,000,000$ 16
Water/Wastewater 396,000,000$ 21
Transportation 618,000,000$ 59
Total Purposed Units 15,714
Total Investment needed per purposed unit 64,544$
Total HIP Projects 80
Estimate ($ Millions)Projects
Estimate for all HIP Projects 1,014$ 80
High 348$ 54
Medium 385$ 10
Low 281$ 16
Draft- July 5, 2023 Page 8 of 9
Attachment 1.B

12.A-49Council Agenda 7-18-2023

Draft Regional Housing Infrastructure Plan Appendix A
Pismo Beach Priority Projects
Priority
Supports
new
housing
Benefit/Cost
Proposed
Units within
Community
Outside
Barriers Project Type Community Project Name Project Description 2019 RTP
Time
Horizon
2021 Cost
Estimate
2023 Cost
Estimate
2023 Time
Horizon
Y $ 64,144 297 Water/Waste Pismo Beach Central Coast Blue Regional Recycled water project $ 18,159,763 next 5 years High Y $ 35 297 Transit Pismo Beach Cashless Fare System Conversion (further study is required)$ 10,395
$ 18,170,158
$ 61,178.98
-
TOTAL
Total Investment needed
per proposed unit
Community Specific
Projects
* Multijurisdictional Project Cost Estimate = Total
Benefit/Cost per unit * number of proposed units within community
Draft- July 5, 2023 Page 9 of 9
Medium
Attachment 1.B

12.A-50Council Agenda 7-18-2023

Working With the Market:

Understanding and Supporting
Affordable-by-Design Housing
in San Luis Obispo County
June 26, 2023
Prepared for: San Luis Obispo Council of Governments
Draft Report
Attachment 1.C

12.A-51Council Agenda 7-18-2023

Acknowledgements
ECONorthwest prepared this report for the San Luis Obispo Council of Governments (SLOCOG).

ECONorthwest and SLOCOG thank those who helped develop the Affordable-by-Design Study.

HHousingg Actionn Team
x Andrew Perez, Arroyo Grande
x Ani Garibyan, County of SLO
x Cory Hanh, Pismo Beach
x Darcy Delgado, Paso Robles
x Katie Banister, Paso Robles
x Kelly Gleason, Atascadero
x Kyle Bell, City of SLO
x Megan Martin, Grover Beach
x Nancy Hubbard, Morro Bay
x Phil Dunsmore, Atascadero
x Rafael Castillo, Grover Beach
x Teresa McClish, City of SLO
LLocall Housingg Industryy Expertss thatt providedd inputt x Abbott | Reed Inc.
x Z Villages Management and Development
x Coastal Community Builders
x Ambient Communities
x Midland Pacific Homes
x Peoples' Self-Help Housing
x Housing Authority of SLO (HASLO)
x Paso Robles Housing Authority
x North San Luis Obispo County Association of
Realtors
x California Association of Realtors Region 31
x Compass Real Estate
x San Luis Obispo County Housing Trust Fund
x Habitat for Humanity
x Home Builders Association
x YIMBY
x SLO Chamber of Commerce
x South County Chamber of Commerce
x Morro Bay Chamber of Commerce
x Paso Robles Chamber of Commerce
x League of Women Voters
x Kovesdi Consulting
x Covelop
x Specialty Construction
x Wallace Group
x The HRM Corp.
x Ten Over Studio
x People's Self-Help Housing
x RRM Design Group
x Vivian Hanover Ventures Real Estate
x California Polytechnic University
x First American Title Company, San Luis Obispo
x Omni Design Group
x Midland Pacific Homes
x NKT Commercial
x San Luis Obispo County Housing Trust Fund

SSLOCOG
x Sara Sanders
CConsultingg Teamm (ECONorthwest))
x Becky Hewitt
x Emmanuel Lopez
x Rasik Hussain
x Jamil Ditter
Attachment 1.C

12.A-52Council Agenda 7-18-2023

Table of Contents
Executive Summary .............................................................................................................................................1 Introduction ..........................................................................................................................................................1 Part 1: Understanding ABD Housing in SLO County ...........................................................................................2 Part 2: Supporting ABD Housing in SLO County ...............................................................................................17 Recommendations for Affordable-By-Design Policies in San Luis Obispo County ............EError!! Bookmarkk nott defined.

Attachment 1.C

12.A-53Council Agenda 7-18-2023

1 EXECUTIVE SUMMARY
We will add this to the final version, following initial review Attachment 1.C

12.A-54Council Agenda 7-18-2023

1 INTRODUCTION
The intention of the Affordable-by-Design (ABD) Study is to determine whether certain types of market-rate housing units are likely to be affordable to low- or moderate-income households in San Luis Obispo County “by design”, and what jurisdictions in the San Luis Obispo Council of Governments (SLOCOG) can do to support this type of housing. Identifying physical characteristics that are commonly associated with the targeted level(s) of affordability could allow the jurisdictions to count these developments towards RHNA requirements in annual reports to Housing and Community Development (HCD) and align local policies to support this type of housing production.

For purposes of this study, “affordable by design” is defined as new housing that is not income- or rent- restricted, but where typical market rents or sales prices would be affordable to low or moderate-income households (earning 50-120% of San Luis Obispo County’s Area Median Income or AMI). The study encompasses the seven incorporated Cities and unincorporated San Luis Obispo (SLO) County.

The study included the following components:

Part 1: Understanding ABD Housing in San Luis Obispo County ▪Identify common physical characteristics for ABD housing based on a review of market data and development examples from SLO County as well as other regions. ▪Market and financial feasibility analysis to determine whether housing built with the identified physical characteristics would meet ABD criteria and be financially feasible for a market-rate developer to build in the different parts of the county.

Part 2: Supporting ABD housing in San Luis Obispo County ▪Identification of a barriers to ABD development and a range of potential policy measures that could help support ABD housing based on interviews with local housing developers and ECONorthwest’s analysis.
▪Stakeholder feedback on the study’s findings and on priorities for policy measures to explore further through this study, resulting in selection of six policy measures for further evaluation. ▪Additional analysis of the selected policy measures, including a survey of current planning practices among the SLOCOG jurisdictions related to these policies and research on how other jurisdictions outside SLOCOG have implemented the selected policy measures. ▪Draft recommendations for SLOCOG jurisdictions to consider in support ABD housing.

The balance of this report summarized the results of this analysis and the recommended policy measures for consideration.

Attachment 1.C

12.A-55Council Agenda 7-18-2023

2 PART 1: UNDERSTANDING ABD HOUSING IN SLO COUNTY
Identifying Examples and Characteristics of ABD Housing RRent and Sales Price Limits for ABD Housing in SLO County San Luis Obispo County’s published rent and sale price limits by income level define the rent and price range affordable at this income level (see Figure 1).1
Figure 1: San Luis Obispo County’s Rent and Sale Price Limits (May 2022) Source: San Luis Obispo County Department of Planning and Building, Affordable Housing Standards, May 20222 1 The City of San Luis Obispo has its own way of calculating maximum sale prices for its inclusionary housing program, which results in somewhat higher maximum sales prices. However, for consistency across the County, this analysis uses the County’s price limits. 2 “Affordable Housing Standards.” San Luis Obispo County Department of Planning and Building, June 1, 2022. https://www.slocounty.ca.gov/Departments/Planning-Building/Forms-Documents/Housing-Forms-and-Documents/Informational- Documents/Affordable-Housing-Standard-(Post-2009).pdf.

Attachment 1.C

12.A-56Council Agenda 7-18-2023

3 EExampless off ABDD Rentall Housingg
Rental Housing Examples from SLO County
ECONorthwest used data from CoStar, a proprietary market data service, to identify recently -constructed market-rate multifamily rental housing in SLO County where rents appear to meet the rent limits shown in Figure 1by unit type (number of bedrooms).This search yielded five properties where at least some unit sizes appear to meet moderate-income rent limits.3 These example properties are shown in Figure 2below, and their characteristics are summarized in
Figure 3.

Figure 2: Examples of ABD Rental Housing in SLO County
Source: CoStar
3 Note that CoStar reports rents on average by unit type and does not separate rents for affordable units from those for market -rate units within mixed-income buildings.

Connect SLO La Plaza
Ramona Gardens Laurel Lane
The Junction
Attachment 1.C

12.A-57Council Agenda 7-18-2023

4 Figure 3: Characteristics of ABD Housing Examples in SLO County Source: ECONorthwest analysis of CoStar data, February 2023.

Connect SLO La Plaza Laurel Lane Ramona
Gardens The Junction
Jurisdiction San Luis Obispo Atascadero San Luis Obispo Grover Beach San Luis Obispo Land Area (AC)Not Available 1.83 Not Available 0.51 1.58 # Units 78 42 22 19 69
# Stories 3 3 3 3 3
Studio
Affordability Above Moderate Moderate N/A Moderate Above Moderate Studio Unit Size 477 sf 534 sf N/A 400 sf 531 sf
1 BR Affordability Moderate*Moderate Low/ Moderate*Moderate Moderate* 1 BR Unit Size 664 sf 721 sf 514 sf 800 sf 568 sf
2 BR Affordability Above Moderate Above
Moderate Moderate*Moderate Above Moderate
2 BR Unit Size 1,032 sf 1,537 sf 877 sf 800 sf 799 sf
3 BR Affordability N/A Above
Moderate Above Moderate N/A N/A
3 BR Unit Size N/A 2,808 sf 1,288 sf N/A N/A
*CoStar does not isolate market rents in mixed-income buildings. Reported average rents may be artificially low due to some units being below market rate, particularly where inclusionary housing regulations apply.

This analysis suggests that some new apartments are affordable at Moderate Income rents in at least some parts of the County, but this may be skewed by mixed-income buildings. Among these examples, one- bedroom units were most likely to be affordable, and no three-bedroom units met affordability criteria.

A review of the physical characteristics of these developments shows that design plays a role in making them affordable, but it does not guarantee affordability. Most of the examples are three story buildings, and most have small average unit sizes; however, many other apartments built in the County are also three stories, and not all small units are affordable to Moderate Income households.

ABD Rental Housing from Other Regions
ECONorthwest looked at examples of other types of rental housing recently developed in other housing markets for housing types that could potentially meet ABD criteria if built in SLO County. The primary type of housing that consistently achieved moderate-income affordability (or below) in similar housing markets is Micro Units. These typically have:

Attachment 1.C

12.A-58Council Agenda 7-18-2023

5 ▪Unit sizes between 150-350 sf with individual kitchenettes and shared kitchens4 ▪No vehicle parking but on-site bike storage
▪Generally, four or more stories, high density, with minimal setbacks/landscaping ▪Highly walkable and desirable locations
Figure 4: Examples of Micro Unit Developments
Image credits: Alcove PDX ( https://pdxalcove.com); Stenberg Hart ( https://www.steinberghart.com/design/projects/mccadden-place-micro-units/) EExamples of ABD For-Sale Housing
ABD For-Sale Housing Examples from SLO County
ECONorthwest used sales transaction data from Redfin to identify sales within the last year of recently constructed housing units that sold for less than the sales price threshold listed in Figure 1. Only manufactured housing in manufactured home parks met these target price points (see examples in Figure 5).5
4 Because of the shared kitchens, groups of four to eight micro-units are often regulated as a single dwelling unit under the zoning codes where these developments have been permitted.
5 Because these manufactured homes must pay space rent for the manufactured home park, when this space rent is accounted for, even these units may not be affordable for moderate income households.

Attachment 1.C

12.A-59Council Agenda 7-18-2023

6 Figure 5: Examples of ABD For-Sale Housing in SLO County Source: Redfin
A few small detached homes (such as the examples shown in Figure 6) came close to meeting the County’s affordability standards, and would meet the County’s Workforce housing price limits, but exceeded the County’s Moderate Income sales price limits.

Figure 6: Examples of Small Detached Homes Close to ABD Sales Limits Source: Redfin
ABD For-Sale Housing from Other Regions
Looking at examples from other regions, ECONorthwest identified three types of for-sale housing that tended to offer the lowest price-points in other relatively high-cost housing markets. These included:
▪VVery small detached units (roughly 350-800 sf) with shared yards, and clustered parking. The smallest units may be affordable at close to 120% of AMI in that market, but the most comparable units in SLO County exceed the target price. It is possible that the smallest detached units (e.g., under 800 sf) could meet the affordability targets in some cases.

Attachment 1.C

12.A-60Council Agenda 7-18-2023

7 Figure 7: Examples of Very Small Detached Units from Other Markets Image credits: Redfin6; Connect Architecture7; South Park Cottages8 ▪SSmall condo units (roughly 325-600 sf) with little or no on-site parking. These can be afforHdable to Moderate Income households in portions of some high-cost regions, but may not be viable in SLO County’s market given the small size and lack of parking.

Figure 8: Examples of Small Condo Units from Other Markets Image Credits: Portland’s Best Real Estate9; Redfin10
▪Simple condo development with simple design, medium-sized units (roughly 600-1000 sf), little or no on-site parking, and few shared amenities. These units can be affordable to Moderate Income households in portions of some high-cost regions, but may not be viable in SLO County’s market given high development costs.
6 https://www.redfin.com/OR/Bend/61301-Benham-Rd-97702/unit-1/home/167021238 7 https://www.connectarchitecture.us/posh-pockets
8 https://southparkcottages.com/
9 https://www.portlandsbestrealestate.com/division-43-studio-condo 10 https://www.redfin.com/OR/Portland/7360-N-Atlantic-Ave-97217/unit-3/home/185141446 Attachment 1.C

12.A-61Council Agenda 7-18-2023

8 Figure 9: Examples of Simple Condo Developments from Other Markets Image Credits: Redfin11
▪SSmall townhouse units (roughly 1,000-1,600 sf). These can be affordable to Moderate Income households in portions of some high-cost regions, but comparable units in SLO County exceed the target price.

Figure 10: Examples of Small Townhouse Units from Other Markets Image Credits: Redfin12
▪Smaller single-detached homes (“starter homes”) that are typically three-bedroom units roughly 1200-1500 sf. These can be affordable to moderate-income households in moderate-cost areas (e.g., California’s Central Valley), but comparable units in SLO County exceed the target price. 11 https://www.redfin.com/CO/Federal-Heights/1401-W-85th-Ave-80260/unit-B101/home/176995897; https://www.redfin.com/OR/Portland/1801-N-Rosa-Parks-Way-97217/unit-303/home/172577477; https://www.redfin.com/OR/Portland/5025-N-Minnesota-Ave-97217/unit-102/home/185246763 12 https://www.redfin.com/CO/Denver/2206-E-38th-Ave-80205/home/185222737; https://www.redfin.com/OR/Portland/7308-NE- 11th-Ave-97211/home/185109359
Attachment 1.C

12.A-62Council Agenda 7-18-2023

9 Figure 11: Examples of Small Single-Detached Homes from Other Markets Image Credits: Redfin13
Based on developer interviews and review of market data from SLO County, none of these models from other regions seemed likely to be viable as a way to deliver ABD for-sale housing in SLO County, and they were not further evaluated.

Overall, the data suggests that SLO County market conditions are unlikely to support new for-sale housing at prices affordable to moderate-income households, with the possible exception of manufactured housing in parks. A few developments have attempted to produce ABD for-sale housing, but even with very small homes, prices are still too high for the moderate-income target price range. In addition, even if jurisdictions were to change policies, factors that make for-sale housing more affordable in other areas may not translate to the SLO County market (e.g., lower land cost, no parking, few amenities, micro units).

Market and Development Feasibility Analysis
PPotential ABD Housing Types Selected for Analysis
Based on the review of ABD examples from SLO County and other market areas, ECONorthwest selected three development “prototypes” that typify the physical characteristics that showed potential viability and affordability to moderate income households in the San Luis Obispo market:
▪A 3-story walk-up apartment with typical unit sizes and site layout for the region ▪A more compact 3-story walk-up apartment with smaller unit sizes, less parking, and less landscaping / setbacks
▪A 4-story micro-units development with very small units and no parking Additional characteristics and physical features assumed for these prototypes are listed in Figure 12.

Figure 12: ABD Prototype Assumptions
Source: ECONorthwest
Description 3-story walkup
-standard
3-story walkup -
compact
4-story micro
units
Site Size (sf) 65,340 65,340 8,000
# of Units 51 91 71
13 https://www.redfin.com/CA/King-City/611-Cecily-St-93930/home/167240703; https://www.redfin.com/CA/Shafter/9710- Amberdale-Way-93263/home/178358767
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12.A-63Council Agenda 7-18-2023

10 Density (DU/Ac) 34.0 60.7 386.6
Parking location surface surface none
Parking ratio 1.54 1.00 0.00
Unit Mix (% of units)
Studio 5% 30% 100%
1-bed 40% 40% 0%
2-bed 50% 30% 0%
3-bed 10% 0% 0%
Unit Size (net sf)
Studio 500 425 300
1-bed 675 575
2-bed 1,000 875
3-bed 1,350
Average Unit Size 880 620 300
Note: This analysis treats each micro-unit as its own unit, although under many codes they would not be considered stand-alone units because of their shared kitchens.

MMarket Conditions
While the affordability targets and AMI are set countywide, the market conditions vary across the county.

The analysis addresses this by dividing the county into different market areas for purposes of the analysis (see Figure 13). The analysis focuses on four market areas:
ƒNorth Coast
ƒNorth County
ƒSouth County
ƒCentral County
East County is not included in the analysis because there is little development or development opportunity in that area.

Attachment 1.C

12.A-64Council Agenda 7-18-2023

11 Figure 13: SLO County Market Areas
ECONorthwest estimated the market rents in each market area for each prototype based on the most comparable developments and adjusted to reflect differences between market areas and prototypes. The estimated market rents for each area are listed in Figure 14, along with the relevant moderate income rent limit by unit type.

Figure 14: Estimated Market Rents by Market Area and Prototype Source: ECONorthwest analysis based on CoStar data; San Luis Obispo County Department of Planning and Building, Affordable Housing Standards, May 202214
Region -
Bedroom Size
3-story walkup -
standard
3-story walkup
-compact
4-story
micro units
Moderate-Income
Rent Limit
Central County $2,750 $2,327 $1,470 $0
Studio $2,250 $2,083 $1,470 $2,047
1-bed $2,430 $2,156 - $2,329
2-bed $2,950 $2,800 - $2,597
3-bed $3,375 - - $2,877
14 https://www.slocounty.ca.gov/Departments/Planning-Building/Forms-Documents/Housing-Forms-and- Documents/Informational-Documents/Affordable-Housing-Standard-(Post-2009).pdf Attachment 1.C

12.A-65Council Agenda 7-18-2023

12 Region -
Bedroom Size
3-story walkup -
standard
3-story walkup
-compact
4-story
micro units
Moderate-Income
Rent Limit
North Coast $1,925 $1,513 $956 $0
Studio $1,575 $1,354 $956 $2,047
1-bed $1,701 $1,402 - $2,329
2-bed $2,065 $1,820 - $2,597
3-bed $2,363 - - $2,877
North County $2,465 $1,972 $1,176 $0
Studio $1,800 $1,594 $1,176 $2,047
1-bed $2,147 $1,898 - $2,329
2-bed $2,650 $2,450 - $2,597
3-bed $3,240 - - $2,877
South County $2,289 $1,747 $956 $0
Studio $1,450 $1,275 $956 $2,047
1-bed $1,856 $1,639 - $2,329
2-bed $2,600 $2,363 - $2,597
3-bed $3,038 - - $2,877
Note: market rents reflect 2023 market conditions with an estimated 3% annual escalation prior to opening.

These rents are shown graphically in comparison to the moderate-income threshold in Figure 15.

Attachment 1.C

12.A-66Council Agenda 7-18-2023

13 Figure 15: Estimated Market Rents by Market Area and Prototype Compared to Moderate-Income Rent Limit
Source: ECONorthwest analysis based on CoStar data; San Luis Obispo County Department of Planning and Building, Affordable Housing Standards, May 202215
This highlights that while many of the prototypes are estimated to offer market rents below the moderate- income threshold, this may not be the case for all prototypes / unit sizes in all market areas.

DDevelopment Feasibility Analysis
ECONorthwest’s financial feasibility analysis uses a metric called “return on cost” (ROC), which reflects the income potential of the completed development16 divided by the total cost of development. This ratio is often used as an initial indicator of development feasibility for rental developments, as it provides a preliminary indication of whether the completed property will provide competitive financial returns that could attract investors and meet loan underwriting requirements. Because both lenders and investors will expect higher returns for riskier investments, market areas that have stronger demand fundamentals will likely have a lower threshold for ROC to make development viable. Thus, the target ROC is assumed to be higher in smaller markets (North County and South County) than in Central County (North County is estimated to fall between these book-ends).

ECONorthwest used cost information calibrated based on interviews with local developers and research on average local fee amounts in SLO County to estimate development costs by prototype. 15 https://www.slocounty.ca.gov/Departments/Planning-Building/Forms-Documents/Housing-Forms-and- Documents/Informational-Documents/Affordable-Housing-Standard-(Post-2009).pdf 16 Net Operating Income (NOI), the revenue after accounting for vacancy and operating expenses. $-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
St
u
d
i
o
1-
b
e
d
2-
b
e
d
3-
b
e
d
St
u
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i
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b
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b
e
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3-
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e
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Central County North Coast North County South County
Mo
n
t
h
l
y

R
e
n
t

p
e
r

U
n
i
t
3-story walkup - standard 3-story walkup - compact
4-story micro units Moderate-Income Rent Limit
Central County North Coast North County South County
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12.A-67Council Agenda 7-18-2023

14 Figure 16: Estimated Return on Cost by Prototype and Market Area Source: ECONorthwest analysis
Because costs and market conditions can vary substantially between sites even within the same market area and for the same prototype, these results should be taken as a general indication of the relative feasibility of different prototypes, and not an absolute indication that a given prototype will consistently be feasible or infeasible in a given area. To account for the inherent uncertainties associated with this type of generalized analysis, ECONorthwest summarized the results based on how likely they indicate a given prototype is to meet affordability and feasibility criteria. This is shown in Figure 17. 0%
1%
2%
3%
4%
5%
6%
7%
8%

ABCABCABCABC
3-story
walkup -
standard
3-story
walkup -
compact
4-story
micro units
3-story
walkup -
standard
3-story
walkup -
compact
4-story
micro units
3-story
walkup -
standard
3-story
walkup -
compact
4-story
micro units
3-story
walkup -
standard
3-story
walkup -
compact
4-story
micro units
Central County North Coast North County South County
Re
t
u
r
n

o
n

C
o
s
t

Estimated Return on Cost Target Return on Cost
Central County North Coast North County South County
Attachment 1.C

12.A-68Council Agenda 7-18-2023

15 Figure 17: Summary of Affordability and Feasibility Results by Prototype and Market Area Source: ECONorthwest analysis
Conclusions on Market and Development Conditions for ABD Housing in SLO County
The key take-aways from this analysis are summarized below by market area .

Overall, it appears that the rental market is close to being able to achieve ABD housing production in at least some parts of the County, and is likely within a range where regulatory changes could make a Central
Countyyyyyy
•Smaller units
help achieve
affordability
•Market likely
to suppor t
feasibility
North Coast
•Market rents
provide
affordability
• Feasibility is
difficult
North County
•Market rents
likely
affordable
except for
largest units
•Market likely
to support,
except for
the smallest
South County
•Market rents
likely
affordable
except for
largest units
•Market
support is
borderline
Attachment 1.C

12.A-69Council Agenda 7-18-2023

16 difference. While ABD housing may not require subsidy, it may not be able to absorb inclusionary zoning requirements at the targeted moderate-income rents. Affordability through smaller unit sizes may not meet needs of larger households, and market rents may not stay within target affordability range over time, but delivering more lower-cost units to the market can help maintain the affordability of market-rate housing over time, and smaller households may benefit from greater availability of small units .

In the for-sale housing market, prices are too far above Moderate-Income affordability level for the market to deliver new ABD for-sale housing with regulatory changes alone. Increasing housing production overall can help bring supply and demand into balance and potentially make ABD achievable over the longer term.

Attachment 1.C

12.A-70Council Agenda 7-18-2023

17 PART 2: SUPPORTING ABD HOUSING IN SLO COUNTY
Barriers to ABD Housing
To understand how to support ABD housing, it is essential to understand what makes it possible for the market to produce lower-cost housing, and how the public-sector can influence this. These factors are illustrated in Figure 18 and Figure 19.

Figure 18: Factors that Allow the Market to Produce Lower-Cost Housing Source: ECONorthwest
Figure 19: Public Sector Influence on Market's Ability to Produce Lower-Cost Housing Source: ECONorthwest
Attachment 1.C

12.A-71Council Agenda 7-18-2023

18 In sum, it takes a confluence of multiple factors for the market to produce lower-cost housing, and local regulations and fees can have an impact on the market’s ability to achieve those factors.

Looking specifically at SLO County, ECONorthwest’s interviews with local housing developers, market research, and development feasibility analysis suggested the following barriers to ABD housing:

Market Barriers
▪Land Cost
▪Demand for high-end housing
▪Construction costs
▪Demand for parking
Regulatory Barriers
▪Discretionary review
▪Density caps
▪Minimum unit sizes
▪Parking requirements that exceed market demand
▪Impact fees, inclusionary zoning
▪Required infrastructure improvements
Potential Policy Measures to Support ABD Housing
OOverview
ECONorthwest identified a range of potential policy measures jurisdictions could consider to support development of ABD housing. These generally fall under the following categories:
▪Streamline development review and permitting
▪Align development standards to support ABD housing
▪Allow ABD housing in cost-effective locations
▪Adjust impact fee rates and policies to incentivize ABD housing Based on feedback from multiple different stakeholder groups, including home builders and market-rate housing developers, affordable housing providers, other housing advocates, and local planners, SLOCOG and ECONorthwest identified the following six measures for additional research and evaluation:

1. Objective Design Standards

2. Ministerial Approvals and Streamlined Approval Processes

3. Density Limits

4. Zoning Vacant Land for Multifamily Housing

5. Aligning Infrastructure Investments with Land for Multifamily Housing

6. Adjusting Impact Fee Policies or Rate Structures to Incentivize ABD Housing Having identified these measures as priorities, ECONorthwest distributed a survey to the planning departments of the 8 jurisdictions in SLOCOG: Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, City of San Luis Obispo, and County of San Luis Obispo to gather information on how they currently address these topics. The results of the survey are incorporated into the sections that follow.

Attachment 1.C

12.A-72Council Agenda 7-18-2023

19 Finally, to illustrate how other jurisdictions have approached some of the policy measures highlighted to support ABD housing, ECONorthwest collected information on practices by jurisdictions in California that were recognized as “pro housing” as well as jurisdictions in other states. These examples are also integrated into the following sections.

SState Housing Laws and ABD Housing
Many state housing laws aim to remove barriers to developing affordable housing; however, these do not necessarily apply to ABD housing. This section summarizes how key state laws and recent bills relate to ABD housing as defined for this study.

Legislation Relevant Eligibility Criteria
(ABD Eligible?)
Benefits for Qualifying
Housing Developments
SB 35 (2018)
ABD not eligible
x At least 10% or 50% of units must be affordable
depending on which income categories
jurisdictions have failed to produce
x Affordable units must be for less than 80% AMI
only, requires lasting affordability restrictions
x Jurisdictions that have not met RHNA targets
(applies to most SLOCOG jurisdictions)
x Ministerial approvals
x Objective design standards
(ODS)
SB 330
(2019) and
the Housing
Accountability
Act (HAA)
ABD ppotentially eligible
x Housing for Very Low, Low-, or Moderate-Income
Households qualifies for additional protections
x One option is if 100% of units are affordable to
moderate (80-120% of AMI) or middle (<150% of
AMI) income households; units for moderate
income households must be affordable at 100%
of AMI.
x Lasting affordability requirements apply only to
units for very low or low-income households
x Locks in regulations and
fees when a preliminary
application is submitted
x Burden of proof is on the
jurisdiction if denying the
application; limited basis
for denial if application
complies with objective
standards
x Maximum review timelines
AB 2345
(2020) and
the Density
Bonus Law
ABD not eligible
x Multiple affordability criteria; for-sale housing can qualify if at least 10% of units are affordable to
moderate-income (80-120% of AMI) households
x Requires lasting affordability restrictions (at least 45 years)
x Increased density, reduced
setbacks, other zoning
modifications
In sum, ABD housing may be eligible for increased protections from being denied or having density reduced under the HAA if it meets the requirements for moderate income housing, but it would not qualify for ministerial approvals, ODS, or zoning concessions under SB 35 or the Density Bonus law.

Objective Design Standards
Description
Objective design standards (ODS) are defined in California State Law as standards which “involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark.”
While basic development standards, such as lot size requirements, etc. are typically objective, many jurisdictions apply design requirements to new housing development that introduce subjectivity, Attachment 1.C

12.A-73Council Agenda 7-18-2023

20 considering compatibility with surrounding structures or otherwise leaving room for interpretation of whether a development has met the requirements through ambiguous language. ODS are often related to building design elements, such as window size and location, roof lines, building articulation, etc. Having objective design standards can streamline the process of getting planning approvals by establishing a common set of expectations for developers and allowing development to avoid lengthy discretionary review processes.

While, as noted above, SB 35 does not apply to ABD housing, jurisdictions could potentially offer ABD housing the option to use the same ODS applicable to SB 35-eligible development. HCD published an objective design standards toolkit for California jurisdictions in 2021 with guidance and examples.17 Current Practice for SLOCOG Jurisdictions
Only the City of San Luis Obispo and Grover Beach have adopted specific ODS . In the limited time since these standards were adopted, they have been used a few times in Grover Beach, but have not yet been used successfully in the City of San Luis Obispo. Grover Beach allows "modification to standards" for minor modifications to respond site conditions, which may make it easier for development to comply with most of the standards while seeking flexibility where needed. (San Luis Obispo County uses only objective basic development and site design standards and does not have building design standards , therefore all development uses objective development standards.) Three additional jurisdictions are in the process of developing standards.

Jurisdiction ODS Status Eligibility for
ODS Topics Addressed Usage
of ODS
Atascadero In progress
All multi-family
and mixed-use
developments

TBD N/A
City of San
Luis Obispo
Adopted
(2021)
SB-35 projects
only
Specific building & site design
standards (materials, window
trim, building length, window
placement, roof design,
articulation, landscaping)
None to
date
County of San
Luis Obispo Adopted Not limited
Basic development & site design
standards (no building design
standards)
All
projects
Pismo Beach Not Available N/A N/A N/A
Paso Robles In progress TBD TBD N/A
Morro Bay In progress TBD TBD N/A
Arroyo Grande Not Available N/A N/A N/A
Grover Beach Adopted
(2022)
All single
family, multi-
family, and
mixed-use
developments
Site & structure design (façade
articulation, entrances, ground
floor height, transparency,
building orientation, blank walls,
building materials, upper story
A few
high-
density
projects
17 California HCD, “Approaches and Considerations for Objective Design Standards,” January 2021, https://hcdcagov.app.box.com/s/baznxdyweq6a8txcrb22li0gogqodzz6 Attachment 1.C

12.A-74Council Agenda 7-18-2023

21 Jurisdiction ODS Status Eligibility for
ODS Topics Addressed Usage
of ODS
windows, parking and access,
pedestrian circulation, etc.)
Modifications to standards
allowed
Other Examples
Sacramento, CA
Sacramento, CA received the first Pro-Housing Designation from the California Department of Housing and Community Development in February 2022 for its housing reform efforts. These include establishing objective design standards for infill development of projects with two units or more including additional dwelling units attached to single unit housing.

Citrus Heights, CA
Citrus Heights was awarded a pro housing designation from the State of CA for their use of objective design standards to spur development in their city. The designation was awarded for the city’s efforts to develop the Sunrise Tomorrow Specific Plan, a plan to convert a 100-acre mall property to a mixed-use residential property.18 The plan zoned for new uses on the site, including multifamily residential, retail, and hotels, tripling the amount of development allowed on the site and providing the opportunity for 2,200 new units in a city that is 98% built out. The plan also introduced objective design standards for the Sunrise Tomorrow Specific Plan area, which will streamline future development.19 The city is currently experiencing challenges encouraging development on the site because it is owned by six different companies, b ut it is continuing to work with developers and the community to improve the site.

Oregon Model Development Codes
In Oregon, all “needed housing” (effectively all housing development that is designed to fulfill a housing need rather than a resort or short-term rental purpose) must have the option to be reviewed against only clear and objective standards. Oregon’s Department of Land Conservation and Development (DLCD) publishes a model development code for small cities to facilitate compliance with this and other state requirements and smart growth principles. The model code includes “Community Design Standards” that address building orientation and design as well as site design factors such as access and circulation, parking, landscaping. The Residential Building design standards provide clear and objective standards to address building orientation, articulation, inclusion of certain design features (using a menu approach), and an option to require house plan variety in new subdivisions. While the Model Code was last updated in 2012, it 18 Murillo, Alicia. “Six California Cities Earn State Prohousing Designation.” hcd.ca.gov. California Department of Housing and Community Development, December 15, 2022. https://www.hcd.ca.gov/about-hcd/newsroom/six-california-cities-earn-state- prohousing-designation.
19 citrusheights.net. “Sunrise Mall Specific Plan.” City of Citrus Heights, CA. Accessed June 20, 2023. https://www.citrusheights.net/1009/Sunrise-Mall-Specific-Plan .

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12.A-75Council Agenda 7-18-2023

22 may provide a useful example for smaller cities considering ODS.20 Oregon’s middle housing model codes, published in 2020, also include clear and objective design standards applicable to middle housing.21 Eugene, OR
A study of multifamily development in Eugene, Oregon evaluated whether public opposition expressed in a discretionary review process had an impact on development outcomes. It found that although the City allows most multifamily development by-right, 12% of multifamily development projects during the period analyzed (2010-2016) required a land use application. The land use applications ranged from minor adjustments to site plan reviews to planned development applications. Applications most commonly sought adjustments to building orientation and entrance standards, parking standards, building massing and façade standards, and access/circulation standards. While opponents of the projects raised concerns including traffic increases, pedestrian safety, and neighborhood chara cter, there was no evidence that these concerns resulted in changes to the development or design for the projects evaluated in the study. The study concluded that offering more flexibility on the standards that most commonly caused challenges could reduce the need for land use applications.22
Preliminary Recommendations
▪AAdopt simple ODS: Avoid overly detailed requirements when adopting ODS, and provide flexibility where possible (e.g., through a menu-based approach).
▪Simplify minor adjustments: Offer a process for minor deviations from the ODS that can still be reviewed by staff.

Ministerial Approvals and Streamlined Approval Processes Description
Ministerial approvals refer to non-discretionary staff-level approval of development projects. Robust ministerial approval processes provide a faster process and lower fees for development review. California’s SB 35 requires cities and counties which have failed to meet their RHNA obligations to allow developments that include a certain percentage of affordable units and meet other criteria23 to proceed through a ministerial review process.
20 Oregon Department of Land Conservation and Development, Oregon Model Development Code and User's Guide for Small Cities, 3rd Edition (2012), https://www.oregon.gov/lcd/tgm/pages/model-code.aspx 21 Oregon Department of Land Conservation and Development, Large Cities Middle Housing Model Code, December 2020, https://www.oregon.gov/lcd/UP/Documents/OAR660046%20EXHIBIT%20B%20- %20Large%20Cities%20Middle%20Housing%20Model%20Code%2020201209.pdf 22 Seth Thompson, “Public Opposition to Increased Housing Density in Eugene, Oregon: How Opposition to Multifamily Housing Impacts the Built Environment,” University of Oregon Department of Planning, Public Policy, and Management, Masters of Community and Regional Planning, 2018 Professional Project, June 2018. https://scholarsbank.uoregon.edu/xmlui/bitstream/handle/1794/25087/SThompson_ExitProj_Final.pdf?sequence=1&isAllowed=y 23 At least 50% of the proposed residential units should be affordable to households at 80% of AMI.

The project must net two or more new residential units.

The project must be zoned in the proper parcel and two-thirds of the project must be residential.

Attachment 1.C

12.A-76Council Agenda 7-18-2023

23 Current Practice for SLOCOG Jurisdictions
Most of the cities offered some form of ministerial approval for developers; two offered SB 35 ministerial approvals. The criteria or maximum number of units eligible for ministerial approvals in each jurisdiction are summarized below.

Jurisdiction What is the maximum number of units that can receive ministerial approvals outside of SB 35 provisions?
Atascadero 11 (unless on a designated site in the housing element) City of San Luis Obispo No max threshold
County of San Luis Obispo 38
Pismo Beach No Response
Paso Robles 1 outside of State intervention; 3 when including ADUs and JADUs; 4 utilizing SB9
Morro Bay 2 dwelling units and Multi-family projects of 6000 sf or less, Single family homes under 2500 sf
Arroyo Grande No Response
Grover Beach No cap per year, or within the jurisdiction. SB 35 unit limits are based on land use density controls.

The jurisdictions differ on processing times for ministerial approvals. The cities of San Luis Obispo, Paso Robles, and Grover Beach gave the shortest timelines. All three gave initial reviews timelines of maximum up to a month while the County gave a minimum time period of 6 months. For non-ministerial approvals the estimates differed widely but they ranged from 3 months to 18 months.

Other Examples
Sacramento, CA
As noted previously, the City of Sacramento received recognition by the state for its housing reform efforts, which included several measures related to streamlining approvals, including allowing projects of up to 150 units to bypass the requirement for a public hearing and qualify for ministerial approval. The city set a 90- The location of the project may not be within a coastal zone, prime farmland, wetlands, a high fire hazard severity zone, hazardous waste site, a delineated earthquake fault zone, a floodplain, a floodway, a community conservation plan area, a habitat for protected species, or under a conservation easement.

The project does not demolish a historic building, a building where housing units have been occupied for the last 10 year s, or a building subject to rent control.

The project must meet all objective design standards.

If the project is a private development project, it must pay prevailing wage and if it is more than 50 units it must use a skilled and trained workforce.

The project must not involve the subdivision of a parcel that is subject to the California Subdivision Map Act, unless the project pays prevailing wage and receives a low-income housing tax credit or uses a skilled and trained workforce.

Attachment 1.C

12.A-77Council Agenda 7-18-2023

24 day timeline for ministerial approval of these projects.24 It also allowed single-unit, duplex, and multi-unit dwelling to be built by-right.25
Oakland, CA
The city of Oakland introduced a “one stop shop” for permits that coordinates between three permitting departments to streamline and simplify procedures for developers. The departments are Fire Prevention Services, Planning & Building, and Transportation. Oakland introdu ced the “one stop shop” in September 2021.26
Grand Rapids, MI
According to a study by the Terner Center, zoning reforms in Grand Rapids, MI, which included up-zoning, allowing a wider range of housing types by right, and other changes, found a balance between opportunities for community input and streamlined project approvals. “If projects conform to zoning and design guidelines, the project is approved within approximately six weeks. Moreover, it is nearly unheard of for the city to deny a project application, largely because complying with the city’s land use regulations has proven to be straightforward for developers. City officials noted that the predictability of their approval process has resulted in more interest in development in their community.” Preliminary Recommendations
▪EExpand eligibility for Ministerial Approvals: For jurisdictions that currently limit availability of ministerial approvals based on the number of units, this threshold could be increased (e.g., to 150 units) or eliminated for multifamily developments in medium and high-density residential zones. ▪Have staff review projects using ODS: Even if the review is not considered truly ministerial, avoiding having a body accustomed to doing discretionary reviews serve as the approval body f or projects subject to ODS can help streamline the process and avoid raising concerns that cannot be addressed.

Density Limits and Parking Requirements
Description
If an area is zoned to allow multifamily but the maximum density is too low, it can preclude efficient multifamily development. As noted above, while California jurisdictions are required to allow density bonuses and other regulatory concessions for qualifying affordable housing developments, this does not apply to ABD housing where units are market-rate but offer affordability for moderate-income households.

Some jurisdictions use “fractional density” in which small units are counted as a fraction of a unit for purposes of density calculations. This approach is more aligned with ABD housing. Other jurisdictions 24 Herriges, Daniel. “Did Sacramento Just Approve the Best Local Housing Reform Yet?” Strong Towns, January 21, 2021. https://www.strongtowns.org/journal/2021/1/21/did-sacramento-just-approve-the-best-local-housing-reform-yet . 25 “Sacramento Becomes First California Jurisdiction to Earn State Prohousing Designation.” California Department of Housing and Community Development, February 24, 2022. https://www.hcd.ca.gov/about-hcd/newsroom/sacramento-becomes-first-california- jurisdiction-to-earn-state-prohousing-designation.
26 “One-Stop Permit Center: In-Person & Expanded Digital Services,” City of Oakland, accessed June 26, 2023, https://www.oaklandca.gov/resources/one-stop-permit-center .

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12.A-78Council Agenda 7-18-2023

25 simply increase (or even remove) their maximum density standards for all housing to prioritize housing production.

Reducing or eliminating minimum parking requirements can also be a tool to encourage ABD development and can be an important complement to higher density limits, because achieving higher densities sometimes requires lower parking ratios (e.g., for the micro-units and compact walk-up apartment prototypes analyzed in Part 1). Reducing parking requirements also eliminates a mandatory cost for developers and can lower rental costs for households in some cases. However, in areas where there is strong market demand for parking, developers may choose to build parking even if it is not required, or build more than is required to meet market demand.

Current Practice for SLOCOG Jurisdictions
The survey asked the departments to list their jurisdictions highest density zones and the maximum by -right density in those zones.

Jurisdiction
Which zones in your jurisdiction allow the highest residential density? What is your maximum by-right density in these zones? Atascadero RMF-24 - 24 units per acre
City of San
Luis Obispo
C-D - 36DU/acre, C-C 36DU/acre
County of San
Luis Obispo
Residential Multi-Family (density not specified)
Pismo Beach Our Residential Very-High Density overlay zone. Once a property is rezoned with the overlay, it is 50 units per acre
Paso Robles T4-N, T4-F, T4-NC, TC-1, TC-2, and RSC all allow up to 30 units/acre Morro Bay RH (Residential High Density). Currently 2 units by right or Multi-family projects with total SF of 6000 or less.

Arroyo Grande Multi-Family Very High Density and mixed use zones allow up to 25 du/acre Grover Beach No Response
The City of San Luis Obispo also utilizes fractional density for all zones outside the AG, C/OS, R-1 zones. The City of Paso Robles also allows fractional density in some of its zones. The details are included in the table below.

Jurisdiction Housing Type Fractional Density
City of San Luis
Obispo
Studio and one-bedroom dwellings less than 600 sq. ft. .5 One-bedroom dwellings between 601–1,000 sq. ft. .66
Two-bedroom dwelling 1
Three-bedroom dwelling 1.5
Dwellings with four or more bedrooms 2
Paso Robles
Studio and one-bedroom dwellings less than 600 sq. ft. .5 One-bedroom dwellings 600–1,000 sq. ft. .66
Dwellings with two or more units 1
Attachment 1.C

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26 Other Examples
San Diego, CA
The City of San Diego introduced several changes to its density bonus program in 2018. The new program language included several provisions that offer bonuses for smaller units:27 ▪A 10 percent density bonus for developments that do not go beyond the maximum permitted building footprint.
▪A 100 percent density bonus for micro-unit production for developments that do not go beyond the permitted building footprint.

Cottage Grove, Oregon
The small city of Cottage Grove, Oregon, recently eliminated maximum density limits in its residential zones. Minimum lot size standards apply, but do not scale with the number of units, meaning that they are primarily a constraint on density for single-unit detached development. Multifamily development is limited only by height and building coverage standards.28
San Jose, CA
The city of San Jose eliminated their parking minimum requirements in December 2022. It is one of a number of cities in California that have reduced or eliminated their parking requirements, including Sacramento, San Diego, and San Francisco. In the same ordinance that repealed the parking minimums the city council also included requirements for bicycle parking to encourage other forms of transportation.29 Preliminary Recommendations
▪AAdjust density limits in high-density residential and mixed-use zones: This could take several different forms:
▪For density limits expressed in dwelling units per acre, increase the maximum density allowed by-right. Allowing at least 35 units per acre will generally allow for three-story walk-up apartment development, which may meet ABD criteria.
▪Use Floor Area Ratio (FAR) or other physical form limits (e.g., height) to regulate the amount of development. This can serve as an incentive for buil ding smaller units.

Zoning Vacant Land for Multifamily Housing
Description
Many jurisdictions seek to focus higher-density development in core areas, downtown, or near transit.

However, these areas are often largely developed already, and redevelopment means higher land costs along with demolition and sometimes environmental remediation costs. Zoning vacant land for multifamily housing can offer a lower-cost development opportunity, particularly if the land has or is in close proximity 27 “City of San Diego Density Bonus Regulations for Affordable Housing,” San Diego Housing Commission, accessed June 20, 2023, https://www.sdhc.org/doing-business-with-us/developers/density-bonus/ . 28 City of Cottage Grove Municipal Code, Chapter 14.22 Residential Districts:
https://www.codepublishing.com/OR/CottageGrove/#!/CottageGrove14/CottageGrove1422.html#14.22.120 29 Kamisher, Eliyahu. “Bye-Bye Parking Requirements: San Jose Becomes Largest City in U.S. to Abolish Minimum Parking.” The Mercury News, December 7, 2022. https://www.mercurynews.com/2022/12/07/bye-bye-parking-requirements-san-jose-becomes- largest-city-to-abolish-minimum-parking/.

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27 to the necessary infrastructure to support development. This makes it easier for ABD multifamily housing projects to be economically viable.

Current Practice for SLOCOG Jurisdictions
All but two jurisdictions noted that they had vacant sites listed on their Housing Element in their most dense zones. Atascadero noted the vacant sites are very small and Arroyo Grande and County of San Luis Obispo did not list any vacant sites. The table below lists all the responses.

Jurisdiction
Are there vacant sites listed on your Housing
Element in your highest density zones?
Atascadero yes....with a caveat that they are small since the original colony subdivided in 1913
City of San Luis Obispo Yes
County of San Luis Obispo None listed
Pismo Beach Yes
Paso Robles Yes
Morro Bay Yes
Arroyo Grande No
Grover Beach Yes
Other Examples
Study on Up-Zoning in Portland, OR
A recent study on the impact of up-zoning and higher-density zoning on development and housing production in Portland, OR found that “both upzoning and higher density zoning led to significantly greater development probabilities, higher development densities, and more housing supply,” suggesting that “Upzoning could be an effective policy tool for increasing housing supply, particularly when it is applied to vacant and underutilized parcels.”30
Preliminary Recommendations
▪Zone vacant buildable sites large enough to accommodate multifamily developm ent to allow it by- right at an appropriate density. Ideally, this would include sites over an acre with access to infrastructure.

AAligning Infrastructure Investments
Description
The cost of extending or upgrading infrastructure (e.g., roads, sewer and water lines) to serve a site can be cost-prohibitive for ABD housing. It also adds significant time and uncertainty to the development process.

To the extent that jurisdictions can invest in the infrastructure upgrades and extensions needed to make ABD housing development possible, this will can mean substantial cost savings and a major increase to development feasibility.
30 Hongwei Dong, “Exploring the Impacts of Zoning and Upzoning on Housing Development: A Quasi-experimental Analysis at the Parcel Level,” Journal of Planning Education and Research. February 1, 2021. https://doi.org/10.1177/0739456X21990728 Attachment 1.C

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28 Current Practice for Local Jurisdictions
The Regional Housing & Infrastructure Plan (HIP) is a collaborative action plan between the seven Cities, County of San Luis Obispo, and SLOCOG in response to the San Luis Obispo region’s growing housing and infrastructure shortage. The HIP is intended to help accelerate housing development where it makes the most sense given regional conditions and readiness. The HIP inventories infrastructure barriers to housing, identifies funding to implement infrastructure needs, and develops foundational information for the future 2027 Regional Housing Needs Assessment (RHNA). The 2023 HIP identified 80 water, wastewater, and transportation infrastructure projects and possible grant funding sources.

Other Examples
Bend, OR
The City of Bend, Oregon conducted a study in 2018 to evaluate infrastructure and planning needs to make land development-ready in various areas of the city, including areas on the edge that had been recently authorized for development with complete communities including a range of housing types and commercial services and infill/redevelopment “opportunity areas”. The study analyzed the type and amount of development that each area was expected to yield (including affordable housing); the cost of providing needed water, sewer, and/or transportation improvements; other factors that could inhibit development; and estimated revenues from impact fees and property taxes from each area. The analysis informed decisions about where to focus staff time, political will, planning energy, and infrastructure investments .31 Preliminary Recommendations
▪Use the on-going HIP process to prioritize infrastructure investments that can unlock multifamily development in appropriate areas.

AAdjusting Impact Fee Policies or Rate Structures
Description
While impact fees are a vital source of funding for local infrastructure needs, they tend to disproportionately affect the feasibility of building smaller and lower-cost housing units.32 This is particularly true when the fee structures do not account for differences in impact based on unit size or location-efficient developments.

While many localities in California waive impact fees for affordable housing, this does not apply to ABD housing. A full waiver of impact fees is not necessarily an appropriate policy measure for ABD housing; however, there are other adjustments that jurisdictions can make to reduce the effects of impact fees on ABD housing. For example, impact fees can be deferred until later in the construction process or financed over a period of years. Rate structures can also be adjusted to account for reduced demand from smaller units while keeping the overall average rates constant to minimize the impact to revenue collections. 31Bend Growth Management Department in collaboration with Angelo Planning Group, ECONorthwest, Cascadia Partners, DKS Associates, and MURRAYSMITH, “Bend Urban Growth Boundary Implementation Return on Investment Analysis and Next Steps,” April 26, 2018. https://www.bendoregon.gov/home/showpublisheddocument/36542/636637940683270000 32 ECONorthwest on behalf of Oregon Housing and Community Services, “Oregon System Development Charges Study: Why SDCs Matter and How They Affect Housing,” December 2022.
https://www.oregon.gov/ohcs/development/Documents/Oregon%20SDC%20Study_FinalReport_121422.pdf Attachment 1.C

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29 Current Practice for SLOCOG Jurisdictions
Impact fee policies vary across the jurisdictions. Three jurisdictions, Morro Bay, Arroyo Grande, and Grover Beach do not offer any impact fee deferrals. Most other jurisdictions allow deferral or exemptions for affordable housing projects. Atascadero indicated that all impact fees are deferred for all developments.

All of the jurisdictions indicate that their impact fees vary by housing type/unit size. Some vary by unit type, lot size, or zoning. Some are lower for affordable units. Others vary based on square footage. Specific answers are listed below.

JJurisdiction
If your impact fees vary by housing type and/or unit size, please describe which fees and what the variables are (e.g., housing type / ITE code, square footage, number of bedrooms, etc.).

Atascadero Vary by lot size, zoning
City of San Luis
Obispo
Transportation, water, wastewater, are reduced for smaller units (based on square-footage).

County of San Luis
Obispo
Certain building types may qualify for fees based on square footage of project
Pismo Beach By unit type, yes. Not by unit size.

Paso Robles They vary by "Transportation Area" within the City and the fee can vary by size/sf
Morro Bay Size and cost of project.

Arroyo Grande Fees are lower for low and very-low income units Grover Beach Housing type, square footage, etc.

Other Examples
Fontana, CA
The city of Fontana, CA reduced its impact fees for infill development by 50% as part of their Housing Element update in June 2021. City officials defined infill development as development in the central third of Fontana.33 Projects located in that zone were eligible for this impact fee reduction. Impact fees can range from “approximately 9.3% to 10.3% of the direct cost of development for a single -family residential project and 4.3% to 4.4% for a multi-family residential project” which can represent a significant cost for the developer.34
Preliminary Recommendations
▪Scale by unit size: Wherever reasonable, adjust impact fees by unit size to reflect lower impacts from smaller units. This could also mean increasing fees for larger units so that the change is revenue-neutral.
▪Defer collection: Allow deferrals for multifamily development regardless of whether it includes affordable units.
33 “City of Fontana 2021-2029 6th Cycle Housing Element” (City of Fontana, CA, June 25, 2021), 4–6, https://www.hcd.ca.gov/housing-elements/docs/fontana-6th-draft062521.pdf . 34 “City of Fontana 2021-2029 6th Cycle Housing Element,” 3–27.

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30 ▪AAdjust for infill locations: Set fee rates lower where infrastructure needs are lower due to proximity to existing facilities. This can off-set some of the higher cost of building in closer-in, more developed areas.

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2023 HIP Appendix D
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Regional Vision for Housing
In early 2020, local agencies adopted a San Luis Obispo Countywide Regional Compact to establish a united regional framework to unlock our potential to develop an adequate supply of housing and infrastructure that support our economic prosperity.

1.Overview
San Luis Obispo County is a rural coastal county with seven vibrant cities and numerous unincorporated communities that depend on collaborative relationships between and among government agencies, community organizations, and residents to solve the region’s significant issues including inadequate supply of affordable housing and resilient water, wastewater, and transportation infrastructure and resources.

The County and all seven Cities are working collaboratively to develop the region’s first Regional Infrastructure and Housing Strategic Action Plan (Regional Plan) that will identify actions to address these issues. A key component of the Regional Plan is the integration of efforts to address critical housing and related infrastructure needs. As part of the Housing Element update process, representatives of the County, seven Cities and San Luis Obispo Council of Governments (SLOCOG) developed this chapter to showcase the ongoing commitment of each agency to this collaborative effort. This Chapter presents a regional vision and policies focused specifically on fostering regional collaboration to plan and develop housing and supportive infrastructure.

2.Alignment with Regional Compact
This effort is guided by the San Luis Obispo Countywide Regional Compact (Regional Compact). The Regional Compact, adopted by each jurisdiction in early 2020, outlines six shared regional goals to guide collaborative resolution of underlying housing and infrastructure needs:

Goal 1. Strengthen Community Quality of Life – We believe that our Region’s quality of life depends on four cornerstones to foster a stable and healthy economy for all: resilient infrastructure and resources, adequate housing supply, business opportunities, and educational pathways.

Goal 2. Share Regional Prosperity – We believe that our Region should share the impacts and benefits of achieving enduring quality of life among all people, sectors and interests.

Goal 3. Create Balanced Communities – We believe that our Region should encourage new development that helps to improve the balance of jobs and housing throughout the Region, providing more opportunities to residents to live and work in the same community. 2023 HIP Appendix E
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Goal 4. Value Agriculture & Natural Resources – We believe that our Region’s unique agricultural resources, open space, and natural environments play a vital role in sustaining healthy local communities and a healthy economy, and therefore should be purposefully protected.

Goal 5. Support Equitable Opportunities – We believe that our Region should support policies, actions, and incentives that increase housing development of all types, available to people at all income levels.

Goal 6. Foster Accelerated Housing Production – We believe that our Region must achieve efficient planning and production of housing and focus on strategies that produce the greatest impact.

3.Policies
It will take regional collaboration and local actions to realize the vision and goals outlined in the Regional Compact. Below is an initial list of aspirational regional policies that further the Regional Compact vision, in addition to local policies. By listing these below, it does not mandate any individual agency to implement actions, but rather offers ways that the County, cities, SLOCOG, and other partners can consider moving forward, together. In addition, and consistent with each Housing Element cycle, each of the seven cities and the County has the opportunity to choose to implement local policies and programs that help to support their achievement of its RHNA, and if an agency chooses to, can also support the Regional Compact vision and goals in a way that works for its jurisdiction and community. See Section B for local programs and policies for Atascadero’s anticipated actions during this Housing Element cycle.

R-1: Promote awareness and support of regional efforts that further housing and infrastructure resiliency by utilizing community engagement, and consistent and transparent communication.

R-2: Encourage an adequate housing supply and resilient infrastructure, services, and resources to improve the balance of jobs and housing throughout the Region.

R-3: Develop inter-agency partnerships as appropriate to implement goals and policies related to housing and infrastructure.

R-4: Coordinate State, Federal, and other funding opportunities for housing and infrastructure development throughout the Region.

R-5: Encourage developers to sell newly constructed housing units to individuals residing or employed within the area of the development (a city or the County) first before selling to individuals from outside the County, to promote local preference.

R-6: Encourage rental units be prioritized for long term residents rather than short term users or vacation rentals.
2023 HIP Appendix E
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R-7: Support housing development that is located within existing communities and strategically planned areas.

R-8: Encourage regional collaboration on a menu of housing types, models, and efforts to support streamlined approvals for such developments (i.e. Accessory Dwelling Units, etc.).

4. Moving Forward
The County, cities, SLOCOG, and other partners engaged in housing and infrastructure development will continue to collaborate on efforts moving forward – recognizing the benefits of working together to achieve an enduring quality of life among the region’s people, sectors and interests. This ongoing collaboration will include learning from each other and sharing possible tools, policies and actions that can allow the collective region to move towards our adopted Regional Compact vision. Ongoing collaborative efforts will be described in the Regional Plan, anticipated to be complete in 2021, and related regional efforts will live outside of each individual agency’s Housing Element. 2023 HIP Appendix E
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