Tuesday, September 13, 2022
4:00 PM
City of Salinas
200 Lincoln Ave., Salinas, CA 93901
www.cityofsalinas.org
SALINAS ROTUNDA
City Council
Mayor Kimbley Craig
Councilmembers:
Carla Viviana González, District 1 - Tony Barrera, District 2 Steve McShane, District 3 - Orlando Osornio, District 4 Christie Cromeenes, District 5 - Anthony Rocha, District 6 Steven S. Carrigan, City Manager
Christopher A. Callihan, City Attorney
City Clerk’s Office: (831) 758-7381
Meeting Agenda - Final
STUDY SESSION
September 13, 2022City Council Meeting Agenda - Final
STUDY SESSION - 4:00 P.M. TO 6:00 P.M.
PUBLIC NOTICE
This meeting is being conducted consistent with State of California Executive Order N-29-20 dated March 17, 2020, regarding the COVID-19 pandemic. The public may view the meeting on television and/or online and may participate in-person in the Council Chamber.
PLEDGE OF ALLEGIANCE
ROLL CALL
PUBLIC COMMENT PROCEDURES
Public comments are restricted to items on the special meeting agenda pursuant to California Government Code section § 54954.3(b). Public comment may also be submitted via email at [email protected] and will be entered into the record.
PUBLIC COMMENT TIME RESTRICTIONS
Public comments generally are limited to two minutes per speaker; the Mayor may further limit the time for public comments depending on the agenda schedule.
STUDY SESSION
ID#22-491 Visión Salinas 2040 General Plan Update
Recommendation: No action required. This report presents information to the City Council regarding the Visi�n Salinas 2040 General Plan update.
ID#22-502 Inclusionary Housing Ordinance Discussion
Recommendation: No action required. This report presents information to the City Council regarding the Inclusionary Housing Ordinance and Downtown Area exemption.
ADJOURNMENT - 6:00 p.m.
_____________________________
Patricia M. Barajas, City Clerk
AGENDA MATERIAL / ADDENDUM
Any addendums will be posted within 72 hours of regular meetings or 24 hours of special meetings and in accordance with Californian Government Code Section 54954.2, unless otherwise allowed under the Brown Act. City Council agenda item reports may be viewed at the Salinas City Clerk’s Office, 200 Lincoln Avenue, Salinas, and are posted on the City’s website at www.cityofsalinas.org via the hyperlinks provided on the agenda. The City Council may take action that is different than the proposed action reflected on the agenda.
September 13, 2022City Council Meeting Agenda - Final
Disability-related modification or accommodation, including auxiliary aids or services, may be requested by any person with a disability who requires a modification or accommodation in order to participate in the meeting. Requests should be referred to the City Clerk’s Office At 200 Lincoln Avenue, Salinas, 758-7381, as soon as possible but by no later than 5 p.m. of the last business day prior to the meeting. Hearing impaired or TTY/TDD text telephone users may contact the city by dialing 711 for the California Relay Service (CRS) or by telephoning any other service providers’ CRS telephone number.
PUBLIC NOTIFICATION
This agenda was posted on Wednesday, September 7, 2022 at the City Clerk’s Office, in the Council Rotunda, and the City's website.
Meetings are streamed live at https://salinas.legistar.com/Calendar.aspx and televised live on Channel 25 at 4 p.m. on the date of the regularly scheduled meeting and will be broadcast throughout the day on the Wednesday, Friday, Saturday and Monday following the meeting. For the most up-to-the-minute Broadcast Schedule for The Salinas Channel on Comcast 25, please visit or subscribe to our Google Calendar located at http://tinyurl.com/salinas25. Recent City Council meetings may also be viewed on the Salinas Channel on YouTube at http://www.youtube.com/thesalinaschannel.
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#22-491, Version: 1
Visión Salinas 2040 General Plan Update
No action required. This report presents information to the City Council regarding the Visión Salinas 2040 General Plan update.
City of Salinas Printed on 9/7/2022Page 1 of 1
powered by Legistar™
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CITY OF SALINAS
COUNCIL STAFF REPORT
DATE: SEPTEMBER 13, 2022
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: MEGAN HUNTER, DIRECTOR
BY: JONATHAN MOORE, SENIOR PLANNER
MONICA GURMILAN, ASSOCIATE PLANNER
THROUGH: LISA BRINTON, ASSISTANT DIRECTOR
TITLE: VISIÓN SALINAS 2040 GENERAL PLAN UPDATE
RECOMMENDED MOTION:
This is an Administrative Report on the Visión Salinas 2040 General Plan update. No action is required.
RECOMMENDATION:
It is recommended that the City Council receive and accept the Administrative Report on the Visión Salinas 2040 General Plan.
EXECUTIVE SUMMARY:
The City is updating its General Plan and preparing its first Climate Action Plan under the umbrella of Visión Salinas 2040 . Since the last update to Council in March 2022, staff have continued community engagement efforts (workshops, working groups, pop ups and surveys) . The next big engagement topics to be addressed this calendar year include environmental justice, public safety, and the Housing Element. Based on community input, staff have developed draft Place Type land use designations and map. Place Types respond to a variety of community needs by emphasizing how uses come together to create a sense of place to maximize limited infill development opportunities. This Administrative Report summarizes community engagement efforts and the development of the draft Place Type designations and map.
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BACKGROUND:
Since launching Visión Salinas 2040 in 2021, the Community Development Department (CDD) has presented regular reports on the General Plan Update (GPU) to Council. Prior to this Study Session, the most recent update was March 2022, which coincided with the preparation of the state General Plan Annual Progress Report (APR). The March 2022 report summarized General Plan implementation and accomplishments during the 2021 calendar year (APR) and Visión Salinas 2040 engagement efforts including hosting an Existing Conditions Webinar to present research that will help frame the GPU and community discussions.
DISCUSSION:
Visión Salinas 2040 Community Engagement Update
Below is a summary of engagement activities since March 2022. Primary activities include community workshops, working group meetings and pop ups and community events.
Community Workshops
First Climate Action Plan Workshop via Zoom , reporting on the major sources of greenhouse gas emissions in Salinas, and the unique challenges and vulnerabilities faced by the community. (April 2022)
Community Design Webinar via Zoom, focused on neighborhood improvements and the proposed shift from traditional land use and street classifications to place -based Place Types and Street Types. (June 2022)
Working Groups
Staff held seven (7) Working Group meetings from February through April 2022. Working Groups reviewed and discussed current General Plan and related policies in areas such as housing, transportation, economic development, environmental justice, sustainability, and water management.
Attachment 1 provides a detailed summary of workshops and Working Group meetings including links to complete meeting notes.
Taking Engagement to the Community
Entered into an agreement the Center for Community Advocacy (CCA) to directly outreach to farmworkers and hir e resident “ambassadors” to hold small group discussions on General Plan topics.
Conducted pop-ups at events such as Ciclovía and Movie Night at the Park (July and September), and other community locations.
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Distributed notebooks, water bottles, blankets, and other items branded with Visión Salinas 2040 to build awareness.
Preparing 400 youth activity kits which will be distributed through Library and Community Services. Using the kits, youth can design their own Visión Salinas 2040 city and post photos of their creations to visionsalinas.org. The kits will also have an information sheet on the General Plan Update.
Staff is p lanning two e nvironmental justice workshops in September (one in English, one in Spanish) and outreach around the topic of public safety will begin in October.
Housing Element Update
Housing has been discussed at many General Plan meetings and in many other recent planning processes, but specific engagement is necessary to elevate this Element. Staff anticipates that the City’s overall production target for the next eight years will be 6,674 units, based on the Regional Housing Needs Allocation (RHNA) methodology the Association of Monterey Bay Area Governments adopted in April 2022. A key component of the Housing Element is a Sites Inventory that identifies potential locations for housing production . Staff has started drafting the Sites Inventory and will align it with the Place Types to facilitate future housing development. The City is closing in on one year until the statutory deadline of December 2023 submission of its 6th Cycle Housing Element. Because of state mandated deadline and review procedures, the Housing Element preparation and approval process may need to run ahead of the other parts of the General Plan.
Place Type Land Use Designations
Through this General Plan Update, staff is proposing a new approach to land use designations and land use map that aims to create and reinforce quality places where people want to live, work, play, and learn. The draft Place Types and Place Type Map were developed from community feedback heard at the seven (7) land use workshops held in 2021, Working Group and Steering Com mittee meetings. Draft Place Types incorporate land use policies and recommendations of recent strategic plans including the Alisal Vibrancy Plan and Economic Development Element. In general, residents and stakeholders wanted to see more housing and mixed-use development, sufficient area for businesses to grow, and a variety of entertainment and recreation for all ages.
The draft Place Types (Attachment 2) and Place Type map (Attachment 3, also available as a an interactive map) respond to community identified needs by increasing flexibility to make the most use of limited infill sites and new development opportunities in the Future Growth Area (FGA).
Even with the FGA buildout, there is a need to grow up, not just out. Place Type and map details will continue to be vetted and refined through future engagement and work on the Housing Element Sites Inventory. Some key changes include
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addition of two (2) mixed-use designations, plus special districts for the downtown and Alisal Marketplace,
residential Place Types that allow for more housing in the “Missing Middle” (bungalows, duplexes, townhomes etc.) range that may be more affordable through design, unique place types for the West Area and Central Area Specific Plan s that reference the recently approved documents, and
and update to East Area of the FGA to blend the community’s desire for higher housing density with the vision and objective of a previous draft specific plan.
DEPARTMENT COORDINATION:
Although the development of this report was led by Community Development, it is expected that all departments, the City Council and Com missions continue to be involved in the General Plan Update.
CEQA CONSIDERATION:
The proposed action of accepting the GP APR and the administrative report on the GPU are not a project as defined by the California Environmental Q uality Act (CEQA) per Guidelines Section 15378. An Environmental Impact Report will be prepared for the General Plan.
STRATEGIC PLAN INITIATIVE:
Visión Salinas 2040 furthers multiple components of the 2022-2025 Strategic Plan. The GPU will help implement the AVP through incorporating major land use and other poli cies. The SALC economic studies will include recommendations for actions to support Ag Tech business development. The Land Use and Housing Elements are crucial tools for identifying housing sites at multiple income levels and encouraging Transit Oriented Development. The Climate Action Plan (CAP) itself is a part of Infrastructure and Environmental Sustainability and the Safety and Environmental Justice Elements will also address vulnerability and resiliency.
FISCAL AND SUSTAINABILITY IMPACT:
This report has no direct fiscal impact to the General Plan . However, it is anticipated that the General Plan process will cost approximately $ 3.4 million dollars. The City currently has approximately $2.6 million for this effort planned in the C apital Improvement Program (CIP, Project # 9701). The Local and Regional Early Action entitlement grants received total $855,000 and combined with the Sustainable Agricultural Land Conservation grant (all reimbursable grants) of $250,000 brings total available funding to approximately $3.4 million. In anticipation of the need to offset the costs of the General Plan, a General Plan/Zoning Maintenance Fee was established in 2015 and has surpassed the original estimate of generating between $150,000 to $200,000 annually. This funding will be used to ward future needs to maintain the General Plan Page | 5
including the Housing Element, which must be updated ever eight (8) years to be eligible for grant funding.
ATTACHMENTS:
1) 2022 (January – August) Workshop and Working Group Summary 2) Draft Place Type Description Table
3) Draft Place Type Map
4) Current General Plan Land Use Map
Engagement Activity Summary
January 20th, 2022: Existing
Conditions/Working Group Kick-off
Online webinar, over 90 participants
1st part included presentation reviewing existing
conditions and breakdown of working group topics.
2nd part - meeting was split into 3 breakout groups
(Built Environment, Socioeconomic Systems, Natual
Systems), one for every working group. Participants
had the opportunity to choose one group or to visit
all three. Facilitators asked 3 questions- What stood
out to you? What’s something you want to change?
What other information would you want?
Meeting notes: Existing Conditions Breakout Notes
February 2022: Working Group
Meetings
Built Environment:
Online meeting, 40+ participants
Meeting served as an introduction to the General
Plan Update process. Breakout groups explored
challenges and opportunities related to housing &
land use.
Meeting notes: Built Environment Meeting #1
March 2022: Working Group
Meetings
Built Environment:
Online meeting, 20+ participants
The meeting presentation focused on our current
Housing goals, as well as a policy scan review.
Breakout groups explored current housing priorities,
policy changes, as well as missing topics.
Meeting notes: Built Environment Meeting #2
Socioeconomic Systems:
Online meeting, 15+ participants
The meeting presentation included a short intro to
the General Plan Update and engagement structure,
as well as the topics included in the Socioeconomic
Systems pillar. Breakout groups explored current
Economic Development and Health/Environmental
Justice goals.
Meeting notes: Socioeconomic Systems Meeting #1
Natural Systems:
Online meeting, 10+ participants
The meeting presentation included a short into to the General Plan Update and an intro to the Climate
Action Plan and its connection to the Environmental
Justice Element, as well as a review of the Salinas
greenhouse gas emissions inventory. Group
discussion was focused on areas of interest and
questions related to the GHG inventory.
Meeting notes: Natural Systems Meeting #1
April 2022: Working Group Meetings Built Environment:
In person meeting at El Gabilan Library, 10+
participants
The meeting presentation focused on our current
Circulation Element goals. Group discussion explored
current challenges and opportunities.
Meeting notes: Built Environment Meeting #3
Socioeconomic Systems:
In person meeting at El Gabilan Library, 15+
participants
The meeting presentation included a review of
Economic Development goals discussed in the
previous meeting and an introduction to the
Environmental Justice Element. Group discussion was
focused on potential Environmental Justice goals and
policies.
Meeting notes: Socioeconomic Systems Meeting #2
Natural Systems:
In person meeting at El Gabilan Library, 10+
participants
The meeting presentation focused on water and
water governance, as well as some discussion
pertaining to agriculture and pesticides.
Meeting notes: Natural Systems Meeting #2
April 28th, 2022: Climate Action Plan
Webinar
Online webinar, 25+ participants
The first part of the meeting was a presentation led
by consultants from PlaceWorks and served as an
introduction to the City’s first Climate Action Plan and the current Vulnerability Assessment. The small
group discussions focused on the different strategies
residents can help reduce emissions in their daily
lives.
Meeting summary: CAP Summary
June 29th, 2022: Community Design
Webinar
Online webinar, 60+ participants
Webinar presentation focused on Community Design
and its importance, the shift from traditional Land
Use designations to Place Types as well as Street
Types. The webinar included polling, a Q&A portion,
and raffle prizes for 3 lucky participants.
Comments and Poll Results
Category Place Type Description Example Images
Common
Uses/Development
Types
● = number of dots
represents the typical level
of prevalence of the use or
development type within the
place type
●●●●● Most Common
● Least Common
Development
Standards
Most
Comparable
Zoning
Open Space
and Public
Service
1. Natural
Preservation
and Open Space
This place type intends to
protect natural resources in
Salinas, such as creeks,
habitats, and hillslope
areas.
Gabilan Creek
Between Circle Dr. and N Madeira
Open space ●●●●●
Resource preservation
●●●●●
Flood management/green
infrastructure ●●●●
Trails ●●
Development of buildings
and structures not
permitted
Open Space (OS)
2. Parks and
Recreation
This place type provides a
flexible designation for
existing and future publicly-
and privately-owned
recreation areas. Parks can
range from neighborhood
tot lots to large
multipurpose sports
facilities, with many active
recreation uses in between.
Closter Park
Natividad Creek Park
Public parks ●●●●●
Playgrounds ●●●●●
Sports fields ●●●●
Recreation centers ●●●
Trails ●●●
Flood management/green
infrastructure ●●●
Dog parks ●
Community Gardens ●
Max 0.2 FAR Parks (P)
3. Civic and
Institutional
This place type includes
schools, recreation centers,
government offices, and
hospitals, as well as the
Salinas Airport. Some of
these institutions require
differing development
standards to use space
efficiently, including for
associated housing, such as
for school teachers and
Grade schools ●●●●●
Government buildings ●●●●
College/post-secondary ●●
Hospitals ●●
Recreation centers ●●
Residential ●
Typically 2-3 stories,
maximum 4 stories
Max 1.0 FAR
Up to 30 DU/Acre for
workforce/student housing
only
Public/Semi-
Public (PS)
staff on school sites, which
can include tiny homes and
other alternative housing
types.
El Gabilan Library Hartnell College - photo by “Sgerbic” Airport ● Navigation
center/permanent
supportive housing ●
Residential
4. Traditional
Neighborhood
These established
neighborhoods include
primarily detached single-
family homes, accessory
dwelling units, and small
multifamily structures.
Supporting uses include
schools, parks/community
centers, and places of
worship.
Salinas home
Salinas Accessory Dwelling Unit (ADU)
Single-family residential
(detached homes, small lot
homes) ●●●●●
Small-scale multifamily units
(accessory dwelling units,
duplexes, bungalow courts)
●●●
Education/worship/parks ●
1-2 stories. Scale and
setbacks should be
consistent with surrounding
development.
Up to 12 DU/Acre
Residential – Low
Density (R-L)
5. Blended
Residential
Neighborhood
These residential areas
generally have a mix of
housing types, including
duplexes and triplexes,
small apartment buildings,
courtyard bungalows, and
townhomes. Supporting
uses include schools,
parks/community centers,
and places of worship.
These areas are typically
walkable to nearby
commercial services.
Bungalow court – Riker Street
Salinas small apartment building – Riker
Street
Multifamily (small apartment
buildings, bungalow courts,
townhomes, duplexes, and
triplexes) ●●●●●
Single-family residential ●●
Education/worship/parks ●
1-3 stories. Scale and
setbacks should be
consistent with surrounding
residential development.
Up to 20 DU/Acre
Residential –
Medium Density
(R-M)
6. Multifamily
Neighborhood
These areas feature
apartment buildings large
enough to support on-site
community spaces, such as
playgrounds and gardens,
with supporting uses similar
to other neighborhoods and
commercial districts nearby,
often along major roads.
Haciendas apartments – Calle Cebu
La Gloria apartments – E Market Street
Larger apartment and
condominium developments
●●●●●
Rowhomes/townhomes ●●●
Education/worship/parks ●
Navigation
center/permanent
supportive housing ●
2-5 stories. Provides
opportunity to build higher
than most existing
residential structures and
include more amenities on
site.
Up to 40 DU/Acre
Residential – High
Density (R-H)
Mixed Use
7. Neighborhood
Center
These key intersections
include commercial uses
that provide a variety of
services and a social hub for
nearby residents. Buildings
are encouraged to provide
retail, dining, and service
uses on ground floors with
residences above, and
horizontal mixed use with
offices, personal services,
and small-scale retail.
Montana Avenue – Santa Monica
Romie Lane
Retail and dining ●●●●
Medical and professional
offices ●●●●
Personal services and offices
●●●
Multifamily residential ●●●
Vertical mix of uses ●●●
Public gathering spaces ●
1-4 stories. Stacking of uses
is encouraged.
Opportunities exist to
increase sidewalk width and
build to sidewalk.
Up to 30 DU/Acre
Max 1.0 FAR
Commercial
Office/Residential
(CO/R)
Mixed Use – (MX)
8. Mixed Use
Corridor
These major thoroughfares
feature a vertical mix of
commercial activity, such as
retail shopping centers,
offices, and professional
services with residential
uses above.
Fremont Boulevard – Fremont
Lighthouse Avenue - Monterey
Vertical mix of uses ●●●●●
Retail and dining ●●●●●
Offices and services ●●●●
Multifamily residential ●●●●
Entertainment ●●●
Hotels/lodging ●●
Public gathering/open space
●
2-6 stories. New
development should be
oriented to the street, be
accessible to pedestrians
and transit riders, and
include a mix uses to create
a walkable and transit-
friendly environment.
Minimum 12 DU/Acre
Up to 40 DU/Acre
Max 3.0 FAR (non-
residential only)
Mixed Use (MX)
Mixed Arterial
Frontage (MAF)
9. Mixed Use
Village
This place type is designed
to accommodate both a
vertical and horizontal mix
of uses, often in clusters of
multiple buildings in a
planned development, or
via redevelopment of big
box retail centers. Mixed
use villages should be well-
integrated with surrounding
development, including
residential and commercial
uses.
Fruitvale Station – Oakland
Constitution Blvd – Creekbridge Village
Mix of uses ●●●●●
Retail and dining ●●●●●
Offices and services ●●●●
Multifamily residential ●●●●
Entertainment ●●●
Hotels/lodging ●●
Public gathering/open space
●
1-6 stories. New
development should be
oriented to the street, be
accessible to pedestrians,
and include a mix uses to
create a walkable
environment.
Minimum 12 DU/Acre
Up to 50 DU/Acre
Max 1.0 FAR (non-
residential only)
Mixed Use (MX)
Commercial/
Employment
10. Commercial
Retail
The Commercial Retail
place type primarily
provides for larger-scale
stores, as well as
restaurants and personal
and business services.
These uses are commonly
located in local- and
regional-serving shopping
centers on major roads.
This place type also allows
for hotels and some
multifamily housing.
North Main Street – Northridge Mall
West Davis Road - Costco
Regional shopping centers
and malls ●●●●●
Retail and dining ●●●●●
Offices and services ●●●●
Entertainment ●●●●
Multifamily residential ●●●
Hotels/lodging ●●●
Auto sales/service ●●●
1-4 stories.
Up to 30 DU/Acre
Max 0.5 FAR
Commercial Retail
(CR)
11. Employment
Center
These areas with business
parks, research and
development laboratories,
office clusters, and limited
manufacturing include
landscaping and design
standards intended to
buffer noise, traffic, and
other impacts to be
compatible with
apartments and workforce
housing.
Abbot Street - Primecare
Rossi Street and Quail Run
Office/business parks ●●●●●
Research facilities ●●●●
Medical offices/labs ●●●
Multifamily
residential/workforce
housing ●●
Light industrial ●●
1-4 stories
Max 2.0 FAR
Up to 30 DU/Acre
Includes form and
screening/landscaping
requirements to make
compatible with adjacent
residential development.
Development often planned
as a cohesive “campus” or
business park.
Industrial -
Business Park
(IBP)
Industrial –
General
Commercial (IGC)
Commercial
Office (CO)
12. Emerging
Industry
These areas support a
variety of light
manufacturing, workshops,
arts and crafts production,
commercial kitchens, and
other small-scale, lower-
impact uses. This place type
also accommodates
live/work and supporting
retail.
–
Office building – Santa Monica
Industrial/business incubator/office
building – Richmond
Light industrial ●●●●
Workshops ●●●●
Maker space ●●●●
Business incubators ●●●
Auto-repair ●●●
Live/work ●●
Retail ●
1-4 stories
Max 2.0 FAR
Up to 12 DU/Acre
Includes form and
screening/landscaping
requirements to make
compatible with residential.
Mixed Arterial
Frontage (MAF)
Industrial –
General
Commercial (IGC)
Light intensity
13. Medium
Industrial
The Medium Industrial
place type provides for
manufacturing, distribution
and
warehousing/wholesaling,
automobile sales and
repairs, and building
materials sales that would
generally not be
appropriate in place types
with residential uses
West Market Street
Light manufacturing ●●●●
Warehousing and
distribution ●●●●
Vehicle sales and repair
●●●●
Wholesaling ●●●●
Business parks ●
1-2 stories
Max 0.4 FAR
Industrial –
General (IG)
Medium intensity
Industrial
because of potential
impacts. In areas where this
place type is adjacent to
residential uses, there
should be screening or a
landscaped buffer between
the uses.
Industrial building – San Luis Obispo Energy production ●
14. Heavy Industry
and Production
These areas dedicated to
intense manufacturing,
distribution, freight, and
other heavy industry and
infrastructure are located
near rail and highways for
efficient movement of
goods. They provide
significant space for large-
scale operations and other
uses that may generate
significant noise, odors, or
other potential effects that
require buffering from
surrounding areas.
Harkins Road
Hansen Street
Packing and shipping centers
●●●●●
Plants and factories ●●●●●
Warehousing and
distribution ●●●●●
Waste
management/processing
●●●
Auto salvage ●
Energy production ●
1-3 stories depending on
internal production
activities required for
facility
Max 0.5 FAR
Includes buffering,
landscaping, and green
infrastructure to limit
nuisances and
environmental harm.
Industrial –
General (IG)
Heavy Intensity
Unique
15. City Center
a. Core
b. Edge
The City Center place type is
centered along the vibrant
heart of Main Street in
Salinas. This place type
builds off the area’s strong
historic character, while
encouraging innovation,
adaptive reuse, multi-story
mixed use, and transit-
oriented development,
especially near the
Intermodal Transit Center.
The City Center Core area
should feature the tallest
buildings in Salinas, with
development intensity
tapering off in City Center
Edge areas.
South Main Street – Downtown Core
Transit Oriented Development – Pleasant
Hill BART Station Area
East Alisal Street – Downtown Edge
Retail and dining ●●●●●
Entertainment ●●●●
Multifamily residential
●●●●●
Office ●●●●
Government ●●●●
Hotels ●●
Public gathering/open space
●
Core:
1-8 stories
Max 6.0 FAR
Up to 80 DU/Acre
Edge:
1-5 stories
Max 3.0 FAR
Up to 40 DU/Acre
Mixed Use (MX) +
Central City
Overlay
Downtown Core
Area and
Downtown
Neighborhood
Area
16. Alisal
Marketplace
This place type offers a
major redevelopment
opportunity to connect the
City Center to the Alisal
through a new walkable
neighborhood that includes
larger-scale residential,
mixed use, civic,
commercial, and even
flexible light industrial
development.
Mixed use building – Berkeley
Tannery Arts Center – Santa Cruz
Source: Jscotannery.com
Large
apartments/multifamily
residential ●●●●
Retail and dining ●●●●
Office ●●●●
Live/work ●●●
Light industrial/maker space
●●●
Hotel/lodging ●●
Civic
(government/education) ●
Public gathering/open space
●
1-6 stories
Max 4.0 FAR
Up to 60 DU/Acre
Mixed Use (MX)
Mixed Arterial
Frontage (MAF)
Industrial –
Business Park
(IBP)
Specific Plan
Areas
17. West Area
Specific Plan
(WASP)
Approved in 2019, the
WASP is located on 797
acres north of Boronda
Road between San Juan
Grade and Natividad Road.
It plans for more than 4,300
housing units at a variety of
densities, mixed use
commercial areas, and
community uses such as
parks and schools.
WASP Land Use Map
Low – medium density
residential ●●●●●
High density residential ●●
Schools ●●
Parks and open space ●●
Mixed use and commercial
space ●●
Set by adopted specific plan The WASP and
CASP each have
their own land
use/zoning plans
18. Central Area
Specific Plan
(CASP)
Approved in 2020, the CASP
is located on 760 acres
north of Boronda Road
between Natividad Road
and Constitution Boulevard.
Designed according to New
Urbanism principles, it plans
for about 3,900 housing
units, a mixed-use village
center, and community uses
such as parks and schools.
Low – medium density
residential ●●●●●
High density residential ●●
Schools ●●
Parks and open space ●●●
Mixed use and commercial
space ●●
Library/fire station ●
Set by adopted specific plan The WASP and
CASP each have
their own land
use/zoning plans
CASP Land Use Map
19. East Area
Specific Plan
(Neighborhood
Center,
Traditional
Neighborhood,
Blended
Residential
Neighborhood,
and Natural
Preservation
and Open
Space, Parks
and Recreation,
Civic and
Institutional
place types)
The General Plan shows this
area as a residential
neighborhood with two
mixed use nodes at key
intersections. These nodes
also include new schools.
Residential neighborhoods
are made up of
predominantly low-density
housing with a mix of
housing types concentrated
more along major roadways
and intersections. The
Natividad Creek corridor
will also be preserved as
open space throughout the
neighborhood. A specific
plan will refine the locations
and types of planned land
uses for the East Area.
General Plan Land Use and Circulation Policy Map of the East Area Low – medium density
residential ●●●●●
Parks and open space ●●●●
Schools ●●●
High density residential ●●
Mixed use and commercial
space ●●
Civic and institutional ●
Set by specific plan – would
have to determine broad
numbers in General Plan
M
ai
nSt
E Boronda
Rd
NSanborn
Rd
W B
lanco Rd
Constitution Blvd
Central Ave
E Blanco Rd
E Romie Ln
Abbott St
Clay St
E Alisal St
WAcaciaSt
W Alis
alSt
Alisal Rd
Airpor
t Blvd
N Main St
Russell Rd
Bardin Rd
S S
anbor
n
Rd
T owt St
E Alvin Dr
Williams Rd
(/101
183
68 Source: City of Salinas, 2021.
0 21
Miles
City Limit
Sphere of Influence
Proposed Sphere of Influence
Current General Plan Land Use
General Plan Land Use
Residential Low Density
Residential Medium
Density
Residential High Density
Retail
Arterial Frontage
Office
Mixed Use
General Commercial/Light
Industrial
General Industrial
Business Park
Public/Semipublic
Open Space
Park
Jonathan Moore, Senior Planner
September 13, 2022
General Plan Study Session
Visión Salinas Community Engagement – 2022
Topics
• Existing conditions
• Climate action
• Community design
• Housing
• Land use
• Economic
development
• Transportation
• Water
• Environmental
justice
Sustainable Agricultural Land
Conservation Grant Farmworker
Engagement
Draft Place Type Basis
More housing and mixed-use development
Family-friendly entertainment – mini-golf or go-
karts
Additional park and recreation space
Space for new and growing businesses
Development limitations
Adopted plans but
ongoing litigation
No adopted specific plan
Largest undeveloped
areas in the center face
flood risks
Ag-Industrial Specific Plan
What do place types achieve?
Focus on building form and placemaking
Mixed Use Village
Mixed Use Corridor
Neighborhood Center
What do place types achieve?
Include more housing and mixed-use options than in the current General Plan Traditional Neighborhood Blended Residential
Neighborhood
Multifamily Neighborhood
What do place types achieve?
Identify different types of allowed land use activities Civic and Institutional Heavy Industry and Production
Emerging Industry
Where could we see
development in the next 20
years?
Draft Place Types
• Detailed descriptions of draft Place
Types and interactive map
available on visiónsalinas.org –
Place Type Tool
Housing Element
New components
Affirmatively Furthering
Fair Housing
Higher scrutiny of Sites
and Constraints
Increase in Regional
Housing Needs Allocation
Questions/Comments
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#22-502, Version: 1
Inclusionary Housing Ordinance Discussion
No action required. This report presents information to the City Council regarding the Inclusionary Housing Ordinance and Downtown Area exemption.
City of Salinas Printed on 9/7/2022Page 1 of 1
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CITY OF SALINAS
COUNCIL STAFF REPORT
DATE: SEPTEMBER 13, 2022
DEPARTMENT: COMMUNITY DEVELOPMENT DEPARTMENT
FROM: MEGAN HUNTER, COMMUNITY DEVELOPMENT DIRECTOR
BY: ROD POWELL, PLANNING MANAGER
TITLE: INCLUSIONARY HOUSING ORDINANCE DISCUSSION
RECOMMENDED MOTION:
This is an Administrative Report on the Inclusionary Housing Ordinance and Downtown Area exemption. No action is required.
RECOMMENDATION:
It is recommended that the City Council receive and accept the Administrative Report on the Inclusionary Housing Ordinance and Downtown Area exemption.
EXECUTIVE SUMMARY:
In 2017, following two years of multi -faceted community and stakeholder engagement, comprehensive data collection and analysis, and careful planning and consideration, the City Council adopted its current Inclusionary Housing Ordinance to amend Article III of Article 17 (Housing) of the Salinas Municipal Code . In doing so, the Council satisfied its stated intent to provide greater flexibility and addition al development options reflective of current market conditions while continuing to support a primary goal of encouraging affordable housing production.
In recognition of the number of inclusionary units and projects that encompass the Central City Overlay District (Downtown Area) and in support of the community perspective outlined in the Downtown Vibrancy as well as findings and recommendation made in a 2017 Housing Target Market Analysis (HTMA) Study, the Council acknowledged the untested residential development potential within the Downtown Area and exercised its authority to implement a market-based exemption to the Ordinance . Based on the 2022 updated HTMA (Attachment 1), City staff is recommending that the exemption remain in place and be re-evaluated as the Inclusionary Housing Ordinance Update is initiated in the summer of 2023.
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BACKGROUND:
The City currently has nearly 800 inclusionary housing units (rental and ownership) in its existing housing portfolio. City Council first adopted an Inclusionary Housing Ordinance in 1992 (Ordinance No. 2178). During the 2002 update of the City’s General Plan, it was determined that the need for affordable housing was such that inclusionary policies should be reviewed to determine if it was feasible to increase the requirements of the ordinance . On May 1, 2003, the City engaged B ay Area Economics to update the study and to provide additional information regarding options for increasing the required percentage of affordable units within new residential development. In 2005, the City updated and adopted Ordinance No. 2451. Unfortunately, the new ordinance coupled with the Great Recession had a chilling effect on housing production and not a single inclusionary unit was built under the 2005 Ordinance.
As part of the City’s 2015-23 General Plan Housing Element update, the City Council authorized direction under “Action H-8: Inclusionary Housing” to update the existing Ordinance along with a nexus study. The City was anxious to update the Ordinance in anticipation of the entitlement processes for the West Area and Central Area Specific Plans, which were well underway. To ensure stakeholder engagement, the City Council approved the selection of the Technical Advisory Committee (TAC) to serve as the recommendation committee regarding the ordinance update. The TAC was made up of various members from the development community and community stakeholders. The City also contracted with Baird and Driskell Community Planning to assist with drafting the ordinance update. The TAC began meeting in December of 2014 and after fifteen (15) working group meetings, the amended ordinance was introduced to City Council on May 16, 2017, and subsequently adopted on June 6, 2017.
DISCUSSION:
Inclusionary housing is a complex topic involving many factors which often seeks to balance the socio-economic needs of a jurisdiction with the profit-driven nature of developers. Local policies typically seek to tap the economic gains from rising real es tate values and emerging markets to create affordable housing opportunities for lower income families using various development alternatives, incentives or requirements imposed on developers. The Inclusionary Ordinance is one of several tools used by the City to encourage and promote the production of housing that is affordable to low and moderate-income households.
The City ’s current Inclusionary Housing Ordinance represents a convergence of parallel initiatives, policies, and data-driven decisions that simultaneously emerged and developed from 2015 to 2017. These include the General Plan Housing Element, Downtown Vibrancy Plan (DVP), 2014-2023 Regional Housing Needs Allocation , and 2017 Housing Target Market Analysis for the Downtown, Chinatown, and Alisal neighborhoods . The explicit intent of the Ordinance is to provide a range of developer -friendly alternatives and options that will also support the need for housing production within Salinas. Conceptually, these initiatives seek to ba lance the need for responsible future growth in consideration of existing identified opportunities and socioeconomic conditions.
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Inclusionary Housing Ordinance 2017
The goal of the 2017 Inclusionary Housing Ordinance was to present a variety of options that would not be a barrier to the development of inclusionary units on -site. Notable provisions of the ordinance include the establishment of an Inclusionary Housing T rust Fund, on-site inclusionary options for - for sale and rental residential units, in -lieu payment options, limited residential development exemptions, and flexibility that allows City Council to approve an option not on menu.
At the time of its development, the Ordinance had to be consistent with the court decision on the Palmer/Sixth Street Properties L.P. v City of Los Angeles case and the Costa-Hawkins Residential Rent Control Act, which did not allow the City to require on-site inclusionary rental units.
It should be noted that t he West Area Specific Plan (WASP) and Central Area Specific Plan (CASP) have approved Development Agreements that lock in the provisions of the 2017 Inclusionary Housing Ordinance. This means that when the Inclusionary Housing Ordinance is updated, the new provisions of that ordinance would not apply to either the WASP or CASP.
On-site Inclusionary Options:
On-site For-Sale On-site
Rental Mixed For-Sale/Rental Option
Option 1 Option 2 Option 3 Option 4
20% 15% 12% 20%
Very Low 4% not
required 8% 4% Rental / Option to pay rental impact fees Low 8% not
required 4% 8% Rental / Option to pay rental impact fees Median not
required 6% not required not required
Moderate 4% 6% not required 4% Ownership
Workforce 4% 3% not required 4% Ownership
In Lieu Fees:
Developers may pay an in-lieu fee instead of providing the unit on site. The current in-lieu fee for a for-sale unit is $14.05 per square foot. For a rental unit, the current in-lieu fee is $2.40 per square foot. As stated above, developers of rental housing may voluntarily elect to mitigate the impact by providing affordable rental housing on site. If the developer chooses to pay the rental housing impact fee, the applicant will also make twelve percent (12%) of the units within the development available to Section 8 Housing Choice Voucher (Section 8) Program participants.
Residential Development Exemptions:
Developments creating fewer than ten (10) additional dwelling units or lots Developments under a development agreement executed prior to the effective date of the Ordinance (June 6, 2017)
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Developments exempted by Government Code section 66474.2 or 66498.1 and in compliance with any predecessor Ordinance in effect on the date the application for the development was complete
Developments that have submitted a complete planning or building permit application along with full payment of required application fees prior to the effective date of the Ordinance (June 6, 2017), provided it complies with any approved affordable housing plan and any applicable predecessor Ordinance
Developments in the Downtown Area (Central City Overlay District) , unless determined by Council resolution that, based upon market conditions, the provisions of Article 17 would apply
Downtown (Central City Overlay District) Residential Inclusionary Housing Ordinance Exemption
In the Downtown (Central City Overlay District), there are 3 94 income restricted units (1996 - 2022) including 6 – Extremely Low, 191 – Very Low, 190 – Low, and 7- Moderate units. This is one of the largest concentrations of affordable housing in the City (see Attachment 2). Chinatown, which is near the Downtown, is ho me to the most recently completed large affordable housing developments including Hikari, Dai -Ichi, and Moongate Plaza representing 1 77 units (see Attachment 2 & 3).
While Downtown has experienced significant affordable housing development over the years , market rate housing construction has lagged. In fact, only 24 market rate units have been developed over the last 5 years. In recognition of this challenge, the D owntown Vibrancy Plan (DVP) promoted the production of market -rate housing to bring more res idents with disposable income to the Downtown to create vibrancy and income diversity. Because the DVP was developed at the same time the Inclusionary Housing Ordinance was undergoing an update , the DVP specifically recommended an exemption to the Inclusionary Housing Ordinance for Downtown based on the following considerations:
Most recent housing units built in the downtown are heavily subsidized with restricted rents
Market-rate housing is desirable for retail businesses Favorable existing policies that allow for higher densities, reduced open space, reduced parking, greater height requirements, and the allowed conversion of commercial space to residential use may not be enough
Absence of a Downtown exemption greatly reduces the profitability of developments There are few opportunity sites left in the Downtown
Downtown housing opportunities promot ing market rate housing should be a goal in evaluating and modifying all City policies
While there are encouraging signs of new market rate housing in development including 300 Main Street (Bruhn Building) with 19 units and 301 Main (Rabobank Building) with 49 units, affordable units still represent the preponderance of housing development in the area.
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Because of the current Counc il’s interest in the potential removal of the Downtown Area exemption from the Inclusionary Housing Ordinance, City staff initiated an update to the 2017 Housing Target Market Analysis (HTMA) to reflect current market conditions. The findings of the 2017 HTMA and 2022 HTMA Update are similar, and both concluded that the Downtown Area exemption remain in place.
The 2017 HTMA found that:
There is s ubstantial demand for near -term ownership and rental residential projects in Downtown.
Consumer preference exists for market rate infill housing opportunities. There is traction for Downtown adaptive reuse projects. There are s ignificant market risks to Downtown housing development including crime/public safety, homelessness, lack of open space, low school performance, traffic, and an untested market.
The City should incorporate housing incentives that might contribute to development cost reductions to improve the market for downtown development including the exemption to the Inclusionary Housing Ordinance
2022 HTMA Update found that:
Implementing inclusionary housing in the Downtown Area would constrain the current momentum of residential development in the Downtown as the early adopters establish proof of market in this nascent environment.
The housing market in Salinas has become more expensive since the onset of the Covid - 19 pandemic.
Home ownership is becoming less affordable as housing prices continue to increase, rental units generally present a more affordable option for residents. Current construction costs are extremely high.
Market rate rental and ownership RD-60 (density of 60 units per acre) prototypes both have a negative residual value land value (the difference between a project’s high construction costs and its lower market value).
Micro-rental units show the best project feasibility.
Timing of Inclusionary Housing Ordinance Update
The Housing Element recommends that the Inclusionary Housing Ordinance is re-evaluated every five years for a potential update. Since the ordinance was adopted in 20 17, technically the City should begin the re-evaluation of the ordinance this year in 2022. Unfortunately, current capacity of Community Development Department Staff is severely limited by the City’s pandemic response including administration of Project Roomkey, Project Homekey, the Emergency Rental Assistance Program (ERAP), and HUD COVID -19 Funding. Staff has gone from administering approximately $3 million in grant funds annually to $30 million over just two years. In addition, staff must complete the update to the Housing Element by the end of 2023 or lose access to state grant funds. For these reasons the update to the Inclusionary Housing Ordinance will begin in summer 2023, allowing adequate time to close out COVID programming and to complete a draft
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of the Housing Element. As part of the update to the Inclusionary Housing Ordinance, the Downtown Area exemption can be more thoroughly analyzed for possible modification.
CEQA CONSIDERATION:
The proposed action of accepting the informational report regarding the Inclusionary Housing Ordinance is not a project as defined by the California Environmental Quality Act (CEQA) per Guidelines Section 15378.
STRATEGIC PLAN INITIATIVE:
The Inclusionary Housing Ordinance supports multiple City of Salinas Strategic Plan 2022-2025 Goals and Strategies including Economic Development, Housing/Affordable Housing, and Effective and Culturally Responsive Government.
DEPARTMENTAL COORDINATION:
Although this informational report was developed by the Community Development Department Housing Division, implementation of the Inclusionary Ordinance is coordinated and supported by multiple Divisions and Departments including, Current Planning, Advanced Planning & Project Implementation, Permit Services, Economic Development, Legal and Public Works.
FISCAL AND SUSTAINABILITY IMPACT:
To provide the necessary data for City Council to consider elimination of the Downtown Inclusionary Housing Ordinance Exemption, a contract with EPS, Inc. was executed to update the Housing Target Market Analysis. EPS updated the HTMA and completed the initial findings memo on August 30, 2022, which is attached to this report. EPS will follow up with a more detailed analysis that looks at different development prototypes and their corresponding financial viability.
The contract for EPS to complete the HTMA is at a not to exceed amount of $24,990.
It is anticipated that consultant costs for a future update of the Inclusionary Housing Ordinance including Legal Counsel will be approximately $100,000. Next fiscal year, the Department is likely to request funding for this purpose.
ATTACHMENTS:
1. HTMA Downtown 2022 Update – Initial Findings, August 30, 2022
2. Table of Affordable Housing Units Produced in Downtown
3. Map of Downtown and Surrounding Area Map of Affordable Housing Developments
4. Inclusionary Housing Ordinance Study Session Powerpoint
M EMORANDUM
To: City of Salinas
From: David Zehnder and Kate O’Beirne
Subject: HTMA Downtown 2022 Update—Initial Findings—
August 2022; EPS #222102
Date: August 30, 2022
Economic & Planning Systems, Inc. (EPS) was retained by the City of Salinas (City) to conduct a short-term update in advance of a more comprehensive update of the Housing
Target Market Analysis (HTMA) for Downtown Salinas.
The City is located in the Salinas Valley and is the most populated community in Monterey County (County). As such, it faces acute pressures for additional affordable housing in all its districts, including downtown. At the present time, inclusionary housing is exempted in this area to allow sufficient time for “early-adopters” to successfully respond to the combined market/regulatory environment.
A central objective of this update is to determine whether the time is right to impose inclusionary requirements of the City on Downtown projects, or to allow additional time for the above- referenced market response to occur. A key conclusion to this evaluation, discussed below, is that the inclusionary housing exemption should be extended and reconsidered
at the time of the Housing Element update.
As is well-known, the City is under pressure by the State to demonstrate its ability to facilitate affordable housing.
However, it is important to have an eye toward private sector feasibility as various regulations are considered for housing prototypes in the downtown environment.
The HTMA examines existing socioeconomic trends and
residential real estate market conditions to gain an
understanding of local dynamics that will influence demand and test the feasibility of residential development in the Downtown Study Area to help determine potential approaches to an implementation of inclusionary requirements Downtown.
Memorandum: City of Salinas HTMA Downtown—Initial Findings August 2022
Economic & Planning Systems, Inc. (EPS) 2
Initial key findings derived from EPS’s market study along with a detailed technical analysis table set are presented in the sections below. At the time the City begins its evaluation of the housing element and corresponding inclusionary policy, EPS will update these initial findings and continue to solicit input or requests for additional information to finalize a draft report. The intention is to allow an opportunity to compare notes and expectations with the City before finalizing this initial update. An expanded report would provide ample time and opportunity to more fully assess evolving market conditions, regulatory opportunities and constraints, and private sector feasibility responses.
Recommendations
Since about 2020, the housing development in Downtown Salinas has started to gain momentum following the completion of the initial HTMA in 2017. Recent residential development projects, such as the Bruhn and Rabobank buildings, which are currently under construction and together will provide an addition of about 70 units to the Downtown, and there are additional units in the pipeline.
The below examination of the existing conditions and pro forma analysis predicated on the larger city market, as well as discussions with local developers, indicate that at this time implementing inclusionary housing Downtown would constrain the current momentum of residential development in the Downtown as the early adopters establish proof of market in this nascent environment.
The City’s population increases have contributed to an undersupply of housing units reflected by rising housing costs and a continuous decline in residential vacancy rates since 2010, with a low rate of 3.3 percent currently for all unit types. The undersupply of housing most prominently affects underserved populations, including students, teachers, young families, low-income families and individuals, seniors, people with disabilities, and the unhoused population indicating the need for focused strategies to increase a variety of housing types at different levels of affordability. Providing affordable housing, whether subsidized by the government or affordable by design (e.g., housing that is affordable based on physical design, tenancy, or financing elements), is a necessity now with more than half of renters and more than a quarter of homeowners defined as housing cost burdened.
The initial feasibility analysis shows some positive indicators without costs associated with inclusionary requirements, especially for the development of micro rental units and missing middle ownership product, though our preliminary recommendation is to continue to provide exemptions for parking, outdoor space, and inclusionary requirements for residential development within the Central City Overlay as well as Adaptive Reuse. Extending these exemptions will continue to provide incentive to build in the Downtown, as discussions with developers revealed that these exemptions are a large factor in getting the residential Memorandum: City of Salinas HTMA Downtown—Initial Findings August 2022
Economic & Planning Systems, Inc. (EPS) 3
projects "to pencil". While providing inclusionary housing is extremely important at this time, the addition of all net new units to the Downtown can help alleviate some of the demand. The City should hold off on implementing inclusionary requirements until the examination of the housing element and inclusionary ordinance, which will then provide an opportunity to analyze the market, product types, and how the current policies affect development more closely.
Existing Socioeconomic Conditions
The City has experienced significant growth in its population and household populations, with a slight decline in persons per household over the last 12 years. With its central location and role as County Seat, the City is the most populous city in the County, home to about 160,000 residents as of 2022. Over the past decade, the City added almost 9,500 residents and more than 2,880 households, comprising more than half of the County’s population growth (as of 2022) and almost 40 percent of household growth.
Persons per household in both the City and the County declined by about 1 percent. See Table 1-1.
Household incomes have increased over the past decade. Median household income in the City increased by about 7.5 percent between 2010 and 2020, rising from $63,180 to $67,900 (in 2020 dollars). The increase in incomes is also reflected while looking at where City households lie in the income range categories. The fastest growing income range category was for households earning $200,000 or more annually with an absolute increase of over 1,905 households and the percentage of households earning $100,000 or more annually increased from 17 percent up to 30 percent. See Table 1-2. Resident worker growth in Salinas was more than double the growth in jobs within Salinas. The City has almost 62,600 resident workers with an increase of over 10,000 workers between 2010 and 2019 compared to the City’s 58,800 jobs, which only grew by 4,600 over the same period. The top industry for both resident workers and jobs remains Agriculture, Forestry, Fishing, and Hunting. The top growth industry for resident workers was Health Care and Social Assistance, with the addition of 2,900 resident workers, matched as the top growth industry for jobs with an increase of 2,430 jobs.
While nearly 60 percent of employed residents commute outside of the City for work about 57 percent of local jobs are filled by workers that do not live in the City. Amongst the 58,800 jobs in the City, about 43 percent (25,350) are residents who both live and work in the City, and the remaining are in- commuters (33,380) traveling into the City for work from cities and CDPs such as Soledad, Prunedale, Seaside, Marina, San José, Greenfield, Monterey, and Hollister. See Tables 1-3, 1-4, and 1-5.
Memorandum: City of Salinas HTMA Downtown—Initial Findings August 2022
Economic & Planning Systems, Inc. (EPS) 4
A little more than half of the households in Salinas are renter- occupied dwelling units but detached single dwelling units are the most occupied unit type. Approximately 52 percent of households in the City are renter-occupied following a similar pattern to the County’s 48 percent. Approximately 57 percent of all households live in detached single dwelling units and about 28 percent of those are renter-occupied. Single detached dwelling units comprise 30 percent of renter-occupied households, making single dwelling units the second most occupied unit type for renters following multifamily buildings with 5 or more units (44 percent). See Table 2-1.
Almost half of the households in Salinas have 4 or more occupants, and overcrowding has increased by almost 20 percent over the last decade. In both renter- and owner-occupied households the highest proportion of households are those with 5 or more occupants, more than 50 percent of renter-households, and 42 percent of owner-occupied households have 4 or more occupants. An overcrowded household is defined by the U.S. Census as having 1 or more persons per room (excluding bathrooms and kitchens). The number of households considered overcrowded has increased in both renter- and owner-occupied households, by 28 percent and 11 percent, respectively for a combined increase of 20 percent. See Table 2-2 and Table 2-3.
Most renter-occupied households in the County are considered rent- burdened. Of the renter-occupied households, about 55 percent are considered rent-burdened, which means that a household pays more than 30 percent of its income on housing costs. Of these rent-burdened households, about 26 percent are considered severely cost-burdened, which means they pay more than 50 percent of their income on rent. Approximately 33 percent of owner-occupied households are considered cost burdened. See Table 2-4 and Table 2-5.
Housing Market Trends
The City’s housing inventory is comprised mainly of single-family detached units. The City’s housing inventory is estimated to include 55 percent single detached dwelling units and 26 percent multifamily projects with 5 or more units. The supply allocation by type has remained relatively static over the last decade. See Table 3-1.
Salinas’ increase in housing supply has not kept pace with household growth leading to a decline in available units. The U.S. Department of Housing and Urban Development estimates 1,136 net new housing units between 2010 and 2021, increasing the total supply by about 3 percent. With significant household growth over the same period of about 2,890 households, vacancy rates have decreased from around 5 to 6 percent to about 3 percent, Memorandum: City of Salinas HTMA Downtown—Initial Findings August 2022
Economic & Planning Systems, Inc. (EPS) 5
indicating a tight market with very little product available to existing or future residents looking to move, especially compared to the County’s vacancy rate of about 9 percent. See Tables 3-2 and 3-3.
The housing market in Salinas has become much more expensive since the onset of the COVID-19 Pandemic. While Salinas falls in the middle of affordability within the County’s housing supply, home prices have increased 196 percent since 2012 (2022 average median sales price is $684,000) and rents by 57 percent since 2010 (2022 average asking rent is $1,760) as more people are seeking affordable housing markets and taking advantage of moving to more remote locations by being able to work from home. The housing market is tight with overall low vacancy and an average monthly inventory of for-sale units decreasing from over 1,200 available units to 370 units since 2012. See Tables 3-4, 3-5, and 3-6.
Homeownership in the City is becoming less affordable as housing prices continue to increase, rental units generally present a more affordable option for residents. About 13 percent of City households have the financial capability (annual household incomes of $150,000 or more) to purchase a median-or-higher priced home in the City based on current housing prices ($683,800), whereas approximately 50 percent of households can afford (annual household incomes of $70,400) to rent an average-or- higher priced unit of $1,760. See Table 3-7 and Table 1-2.
For decades, California has faced a housing crisis related to its significant unhoused population and rising housing costs. For those living in poverty, high rental rates have translated into large proportions of their income allocated to housing costs, leaving little remaining for basic living expenses, let alone bolstering savings accounts to build wealth.
1 Rising home sales prices have
translated into larger down payment requirements, leading to homeownership challenges for households with median and higher incomes.2 These challenges point to a root problem of limited housing supply. Indeed, several recent reports have estimated an undersupply of housing in the State that ranges from about 3 million to 4 million units. This undersupply represents the amount of housing that was needed over the last several decades to maintain housing costs in
1 Kimberlin, Sara and Esi Hutchful, 2019. New Census Figures Show More Than 1 in 6 Californians Struggle to Afford Basic Necessities. California Budget and Policy Center. [online] Available at https://calbudgetcenter.org/resources/number-of-californians-living-in-poverty-has- been-declining-but-more-than-1-in-6-residents-still-struggle-to-afford-basic- necessities/#:~:text=Approximately%207.1%20million%20Californians%20lived,Supplemental% 20Poverty%20Measure%20(SPM) [Accessed January 2021].
2 Levin, Matt, 2021. Commentary: Five things I’ve learned covering California’s housing crisis that you should know. Cal Matters. [online] Available at https://calmatters.org/housing/2021/01/california-housing-crisis-lessons/ [Accessed January 2021].
Memorandum: City of Salinas HTMA Downtown—Initial Findings August 2022
Economic & Planning Systems, Inc. (EPS) 6
alignment with the rest of the country.3 4 With an overall housing shortage within the entire state and the above-referenced socioeconomic and residential market conditions within the City it is a critical time to address the potential inclusion of affordable housing for future development within Downtown Salinas. Below is a preliminary analysis to help start this conversation, which tests the feasibility of residential development in Downtown Salinas and the inclusion of affordable units.
Residential Feasibility Pro Forma
Analysis
Based on the socioeconomic and residential market assessments presented in the previous section, EPS performed a financial feasibility analysis to test the viability of different development prototypes. To gain an understanding of the relative financial viability of the various land use concepts evaluated, EPS used a measure of financial feasibility commonly referred to as a “residual land value analysis,” (RLV) which models the revenues achieved by operating or selling a particular building to arrive at an estimated building value, or “finished real estate value.” For residential ownership products, the finished real estate value is based on the estimated sales price of the unit. For rental residential products, finished real estate values are estimated using valuation techniques that consider annual net operating income. A prototype that would be considered feasible will have a RLV equal to about 20 to 30 percent of total asset value (finished lot plus structure).
This analysis assumes that the developer obtained the land at no cost.
Capitalization rates, revenue, and cost assumptions are based on current market conditions, but are subject to change with fluctuations in the market, such as the rising interest rates, which have been taken into consideration.
It is important to note that the feasibility findings presented in this section are preliminary and additional analysis will be needed to evaluate the financial viability of specific land use programs.
For purposes of the financial feasibility analysis and based on the residential real estate market dynamics, EPS evaluated the financial feasibility of the following land use prototypes.
3 Taylor, Mac, 2015. California’s High Housing Costs: Causes and Consequences. Legislative Analyst Office. [online] Available at https://lao.ca.gov/reports/2015/finance/housing- costs/housing-costs.pdf [Accessed January 2021].
4 Dillon, Liam, 2018. California lawmakers killed one of the biggest housing bills in the country.
Los Angeles Times. [online] Available at https://www.latimes.com/politics/la-pol-ca-big-housing- bill-dies-20180417-story.html [Accessed January 2021].
Memorandum: City of Salinas HTMA Downtown—Initial Findings August 2022
Economic & Planning Systems, Inc. (EPS) 7
Renter-Occupied Units
Very High-Density Micro Apartment Units: a very high-density rental product at a density of approximately 180 dwelling units per acre with units averaging 270 square feet.
High-Density Apartment Units: a traditional high density apartment complex project with a density of 60 units per acre.
Owner-Occupied Units
High-Density Attached Units (Condominium): a traditional high density condominium project with a density of 60 units per acre. Medium-Density Attached Units (Townhomes/Rowhouse): a medium density attached townhomes/row house project with a density of 30 units per acre.
Appendix A presents the assumptions of the financial model that evaluates the feasibility of each development prototype.
The financial feasibility outcomes from Tables 4-1, Table 4-2, and Table 4-3 are summarized below:
Current construction costs are extremely high and are projected to continue to increase through 2022 for a total estimated 14.1 percent increase over 2021. Cost escalations are predicted to continue to increase in 2023 and 2024 but dropping down to lower rates around 2 to 4 percent. 5 6
The exorbitant construction costs are hindering the feasibility of both the market rate rental and ownership RD-60 prototypes, both have a negative residual land value.
Based on the RLV, micro-rental units show the best prospect of feasibility, though this is a somewhat new product type that has been untested in the Salinas market.
Under certain circumstances, RD-30 ownership product may be viable.
This may require a low master developer land basis or other factors that
5 Fahey, Ashley, The National Observer: Real Estate Edition, “Report: Construction costs may escalate 14.1% this year, but relief expected soon,” August 25, 2022 [accessed online August 2022] https://www.bizjournals.com/sacramento/news/2022/08/25/construction-costs-increase- this-year.html.
6 EPS relied on a variety of sources to estimate approximate construction costs, including the Saylor 2020 Construction Cost Manuel, updated for inflation and adapted to the Monterey region, interviews of builders in the Monterey and Bay Area regions, and discussions with the City. See Appendix A Table A-2.
Memorandum: City of Salinas HTMA Downtown—Initial Findings August 2022
Economic & Planning Systems, Inc. (EPS) 8
reduce costs and improve revenue performance and could require a City write-down if sought in the near-term.
Actual rents and home sales prices may outperform that evaluated here, which would improve feasibility outcomes substantially. This analysis calibrates rents and home sales prices to current income demographics, highlighting the challenges associated with delivering housing targeted at the “missing-middle” income segment.
After folding in the existing inclusionary requirement options that are currently imposed on residential development outside of the City Center Overlay District per Municipal Code Ordinance Chapter 17 Article III. Section 17-8, the already negative residual land values are reduced further and the RD- 30 ownership product RLV becomes negative. The only exception is the micro unit prototype using the inclusionary fee option of providing 12 percent units as Section 8 and paying the housing impact fee.
Again, it is important to note that the general measures of financial feasibility offered in this report are intended to serve as an initial diagnostic comparing the relative viability of various residential prototypes to inform housing policy. This analysis is highly sensitive to assumptions made regarding achievable real estate values and development costs. It is possible that more fully developed concepts targeting specific niche markets could outperform the generic speculative concepts modeled here. Conversely, if development costs are substantially higher than estimated here, or sales prices and lease rates are substantially lower, the actual feasibility outlook could worsen.
Technical Analysis Organization
The technical analysis is presented in the following sections:
1. Table 1-1 through Table 1-6 present an analysis of existing conditions in the City and the County, including population, households, income, employment and jobs, jobs-housing balance, and commuting patterns.
2. Table 2-1 through Table 2-5 examine existing housing tenure by various demographic and socioeconomic variables, as well as an assessment of rent- and cost-burdened households.
3. Table 3-1 through Table 3-7 present a real estate market overview to provide context to current residential market conditions in the City.
4. Table 4-1 through Table 4-3 provide the static pro forma examining the feasibility of both renter- and owner-occupied prototypes in the City and the addition of inclusionary requirements.
List of Tables
Existing Conditions
Table 1-1 Population an d Household Trends .................................................. 9 Table 1-2 Household Income by Range ...................................................... 10 Table 1-3 City of Salinas Job Trends .......................................................... 11 Table 1-4 City of Salinas Re sident Worker Trends ........................................ 12 Table 1-5 Commuting Patterns .................................................................. 13 Table 1-6 Nonresident Worker Profile ......................................................... 14
Existing Housing Tenure
Table 2-1 Tenure by Units In Structure ...................................................... 15 Table 2-2 Household Size and Tenure ........................................................ 16 Table 2-3 Occupants per Room by Tenure .................................................. 17 Table 2-4 Overall Rent Burden .................................................................. 18 Table 2-5 Owner’s Costs as a Percentage of Household Income by Household Income .................................................................... 19
Real Estate Market Overview
Table 3-1 Units in Structure ...................................................................... 20 Table 3-2 Units Permit ted by Year ............................................................. 21 Table 3-3 Total Va cancy Rate ................................................................... 22 Table 3-4 Home Value Changes by County .................................................. 23 Table 3-5 For-Sale Housing Market Summary .............................................. 24 Table 3-6 Multifamily Hous ing Market Summary .......................................... 25 Table 3-7 Estimated Housing Unit Value Based on Income and Housing Costs in Monterey County .......................................................... 26
Static Pro Forma Feasibility
Table 4-1 Inclusionary Residential Development Static Pro Forma Summary .... 27 Table 4-2 Feasibility Analysis Pro Forma: Renter-Occupied Units (2 pages) ...... 28 Table 4-3 Feasibility Analysis Pro Forma: Owner-Occupied Units (2 pages) ...... 30 DRAFT
Table 1-1
City of Salinas
Downtown HTM
A
Population and Household Trends (2010-2022)
Item
Total
Population
Household
Population
Year-Over-Year
Population
Change Households
Year-Over-
Year
Household
Change
Persons
per
Household
[1]
Total
Population
Household
Population
Year-Over-
Year
Population
Change Households
Year-Over-
Year
Household
Change
Persons per
Household
[1]
Year
2010 150,441 147,976 - 40,387 -
3.66 415,057 393,814 - 124,899 -
3.15 2011 150,899 148,603 0.3% 40,417 0.1%
3.68 416,644 394,891 0.4% 124,984 0.1%
3.16 2012 153,286 151,057 1.6% 40,525 0.3%
3.73 422,621 400,631 1.4% 125,067 0.1%
3.20 2013 155,406 152,909 1.4% 40,495 (0.1%)
3.78 425,968 404,919 0.8% 124,695 (0.3%)
3.25 2014 156,532 154,055 0.7% 40,594 0.2%
3.80 427,733 407,663 0.4% 124,885 0.2%
3.26 2015 157,206 154,880 0.4% 40,641 0.1%
3.81 430,277 410,375 0.6% 125,204 0.3%
3.28 2016 158,973 156,750 1.1% 40,684 0.1%
3.85 435,185 414,591 1.1% 125,135 (0.1%)
3.31 2017 159,708 157,475 0.5% 40,665 (0.0%)
3.87 438,358 417,555 0.7% 125,358 0.2%
3.33 2018 159,846 157,605 0.1% 40,737 0.2%
3.87 438,639 418,163 0.1% 125,640 0.2%
3.33 2019 160,522 158,280 0.4% 40,777 0.1%
3.88 440,199 419,729 0.4% 126,116 0.4%
3.33 2020 161,577 159,198 0.7% 43,163 5.9%
3.69 440,393 420,316 0.0% 126,604 0.4%
3.32 2021 161,777 159,482 0.1% 43,084 (0.2%)
3.70 435,721 417,293 (1.1%) 131,316 3.7%
3.18 2022 159,932 157,569 (1.1%) 43,270 0.4%
3.64 433,716 413,361 (0.5%) 132,496 0.9% 3.12
Growth Estimates 2010-2022
Number 9,491 9,593 -- 2,883 -- (0.0) 18,659 19,547 -- 7,597 -- (0.0) % Change 6.3% 6.5% -- 7.1% -- (0.6%) 4.5% 5.0% -- 6.1% -- (1.1%) Avg. Annual Change 0.5% 0.5% -- 0.6% -- (0.1%) 0.4% 0.4% -- 0.5% -- (0.1%) Source: California Department of Finance Table E-5; EPS. [1] Includes household population only
.
City of Salinas Monterey County
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Table 1-2
City of Salinas
Downtown HTM
A
Household Income by Range (2020 Estimate)
Item 2010 [1] % 2020 % % Change 2010 [1] % 2020 % % Change Income Range
<$15,000 4,019 9.8% 2,643 6.4% (34.2%) 10,872 8.7% 8,265 6.5% (24.0%) $15,000 - $24,999 5,208 12.7% 3,262 7.9% (37.4%) 12,121 9.7% 9,409 7.4% (22.4%) $25,000 - $34,999 4,798 11.7% 3,015 7.3% (37.2%) 11,996 9.6% 10,045 7.9% (16.3%) $35,000 - $49,999 6,151 15.0% 5,286 12.8% (14.1%) 17,245 13.8% 15,131 11.9% (12.3%) $50,000 - $74,999 8,284 20.2% 8,383 20.3% 1.2% 24,118 19.3% 24,159 19.0% 0.2% $75,000 - $99,999 5,413 13.2% 6,483 15.7% 19.8% 16,870 13.5% 18,056 14.2% 7.0% $100,000 - $149,999 4,921 12.0% 6,814 16.5% 38.5% 18,495 14.8% 20,981 16.5% 13.4% $150,000 - $199,999 1,435 3.5% 2,726 6.6% 89.9% 6,498 5.2% 9,791 7.7% 50.7% $200,000+ 779 1.9% 2,684 6.5% 244.5% 6,623 5.3% 11,317 8.9% 70.9% Total 41,009 100.0% 41,296 100.0% 0.7% 124,963 - 127,155 100.0% 1.8% Median Household Income in 2020$ $63,178 $67,914 7.5% $73,701 $71,015 -3.6% Source: U.S. Census Bureau ACS 2020, Table S1901; EPS.
[1] The median household income for 2010 has been escalated to 2020 dollars using the CPI rate of 24.3% between 2010 and 2020.
City of Salinas Monterey County
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Table 1-3
City of Salinas
Downtown HTMA
City of Salinas Job Trends (2010 and 2019)
Item No. % No. % Change
Industry Secto
r
Agriculture, Forestry, Fishing and Hunting 13,113 24.2% 12,122 20.6% (991) (0.9%) Mining, Quarrying, and Oil and Gas Extraction 6 0.0% 0 0.0% (6) (100.0%) Utilities 171 0.3% 109 0.2% (62) (4.9%)
Construction 1,036 1.9% 1,542 2.6% 506 4.5%
Manufacturing 2,567 4.7% 1,921 3.3% (646) (3.2%)
Wholesale Trade 1,726 3.2% 2,741 4.7% 1,015 5.3%
Retail Trade 5,245 9.7% 6,474 11.0% 1,229 2.4%
Transportation and Warehousing 924 1.7% 1,102 1.9% 178 2.0% Information 615 1.1% 657 1.1% 42 0.7%
Finance and Insurance 1,119 2.1% 884 1.5% (235) (2.6%)
Real Estate and Rental and Leasing 359 0.7% 366 0.6% 7 0.2% Professional, Scientific, and Technical Services 1,268 2.3% 1,339 2.3% 71 0.6% Management of Companies and Enterprises 628 1.2% 558 1.0% (70) (1.3%) Administration & Support, Waste Management and Remediation 2,053 3.8% 2,574 4.4% 521 2.5% Educational Services 5,293 9.8% 6,240 10.6% 947 1.8%
Health Care and Social Assistance 6,435 11.9% 8,862 15.1% 2,427 3.6% Arts, Entertainment, and Recreation 409 0.8% 463 0.8% 54 1.4% Accommodation and Food Services 3,147 5.8% 4,254 7.2% 1,107 3.4% Other Services (excluding Public Administration) 2,784 5.1% 1,589 2.7% (1,195) (6.0%) Public Administration 5,204 9.6% 4,936 8.4% (268) (0.6%) Total 54,102 100.0% 58,733 100.0% 4,631 0.9%
worker trends
Source: US Census LEHD OnTheMap, 2019; EPS.
Industry Trends
City of Salinas
2010-2019
Average
Annual
Growth
2010 2019
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Table 1-4
City of Salinas
Downtown HTMA
City of Salinas Resident Worker Trends (2010 and 2019)
Item No. % No. % Change
Industry Secto
r
Agriculture, Forestry, Fishing and Hunting 9,956 19.0% 10,200 16.3% 244 0.3% Mining, Quarrying, and Oil and Gas Extraction 70 0.1% 57 0.1% (13) (2.3%) Utilities 214 0.4% 222 0.4% 8 0.4%
Construction 1,765 3.4% 3,304 5.3% 1,539 7.2%
Manufacturing 2,924 5.6% 3,348 5.3% 424 1.5%
Wholesale Trade 1,950 3.7% 2,535 4.1% 585 3.0%
Retail Trade 5,629 10.7% 6,457 10.3% 828 1.5%
Transportation and Warehousing 1,260 2.4% 1,718 2.7% 458 3.5% Information 627 1.2% 692 1.1% 65 1.1%
Finance and Insurance 995 1.9% 927 1.5% (68) (0.8%)
Real Estate and Rental and Leasing 555 1.1% 651 1.0% 96 1.8% Professional, Scientific, and Technical Services 1,706 3.2% 2,013 3.2% 307 1.9% Management of Companies and Enterprises 611 1.2% 775 1.2% 164 2.7% Administration & Support, Waste Management and Remediation 2,460 4.7% 3,485 5.6% 1,025 3.9% Educational Services 4,462 8.5% 5,354 8.6% 892 2.0%
Health Care and Social Assistance 5,443 10.4% 8,347 13.3% 2,904 4.9% Arts, Entertainment, and Recreation 657 1.3% 829 1.3% 172 2.6% Accommodation and Food Services 4,507 8.6% 6,096 9.7% 1,589 3.4% Other Services (excluding Public Administration) 2,808 5.3% 1,837 2.9% (971) (4.6%) Public Administration 3,937 7.5% 3,735 6.0% (202) (0.6%) Total 52,536 100.0% 62,582 100.0% 10,046 2.0%
worker trends
Source: US Census LEHD OnTheMap, 2019; EPS.
Resident Worker Trends
City of Salinas
2010-2019
Average
Annual
Growth
2010 2019
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Table 1-5
City of Salinas
Downtown HTMA
Commuting Patterns: City of Salinas (2019)
Item Count % of Total Count % of Total
Resident Workers
Residents both Living and Employed in the Study Area 22,143 42.1% 25,354 40.5% Residents Living in the Study Area but Employed Outside (Outflow) 30,393 57.9% 37,228 59.5% Subtotal Resident Workers 52,536 100.0% 62,582 100.0%
Employmen
t
Residents both Living and Employed in the Study Area 22,143 40.9% 25,354 43.2% Workers Employed in the Study Area but Living Outside 31,959 59.1% 33,379 56.8% Total Employment in Area (Inflow) 54,102 100.0% 58,733 100.0% Inflow/Outflow Ratio [1] 178.0% 157.8%
Source: U.S. Census OnTheMap 2019; U.S. Census ACS 5-Year Estimates Table S0801 2019; EPS. 2019
[1] The inflow/outflow ratio is the percentage of residents living in the specified area that travel outside of that area for work compared to the total employment for that specified area. 2010
City of Salinas
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Table 1-6
City of Salinas
Downtown HTMA
Nonresident Worker Profile (2010 and 2019)
Item Nonres. Workers % of Total Nonres. Worker
s % of Total
Salinas Jobs Filled
by Nonresident Workers 54,102 100% 58,733 100%
Worker Ages
29 Years or Younger 12,959 24% 12,973 22%
30 Years to 54 Years 30,507 56% 31,402 53%
55 Years or Older 10,636 20% 14,358 24%
Total 54,102 100% 58,733 100%
Monthly Worker Earnings
$1,250 or Less 13,846 26% 12,295 21%
$1,251 to $3,333 20,791 38% 18,464 31%
$3,334 or More 19,465 36% 27,974 48%
Total 54,102 100% 58,733 100%
Worker Industry Class
"Goods Producing" [1] 16,722 31% 15,585 27%
"Trade, Transportation, and Utilities" [2] 8,066 15% 10,426 18% "All Other Services" [3] 29,314 54% 32,722 56%
Total 54,102 100% 58,733 100%
Source: US Census Bureau, OnTheMap Application and LEHD Origin-Destination Statistics for 2019; EPS. [3] Includes all other NAICS industry classes not listed above. [1] Bureau of Labor Statistics (BLS) identifies Agriculture, Forestry, Fishing, and Hunting (NAICS 11); Mining, Quarrying, and Oil and Gas Extraction (NAICS 21); Construction (NAICS 23); and Manufacturing (NAICS 31-33) as industries in this industry class.
[2] BLS identifies Wholesale Trade (NAICS 42); Retail Trade (NAICS 44-45); Transportation and Warehousing (NAICS 48-49); and Utilities (NAICS 22) as industries in this industry class. 2010 2019
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Table 2-1
City of Salinas
Downtown HTMA
Tenure by Units In Structure (2020)
Item
Owner-
Occupied
Renter
Occupied
Share
Renter
Occupied
Owner-
Occupied
Renter
Occupied
Share
Renter
Occupied
Unit Type
Detached Single-Family 17,213 6,513 27.5% 58,100 22,528 27.9% Attached Single-Family 857 1,813 67.9% 2,819 5,227 65.0% Duplex 31 918 96.7% 272 3,525 92.8% 3 to 4 unit building 323 2,256 87.5% 697 7,364 91.4% 5 + unit building 132 9,526 98.6% 811 20,975 96.3% Other 1,210 504 29.4% 3,647 2,038 35.8% Total 19,766 21,530 52.1% 66,346 61,657 48.2% Source: American Community Survey 2016-2020 5-Year Estimates, Table B25032; EPS.
City of Salinas Monterey County
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Table 2-2
City of Salinas
Downtown HTMA
Household Size and Tenure (2010 and 2020)
Item Total % Total %
Renter-Occupied Households
1-person 4,267 19.8% 3,544 16.5% (16.94%)
2-person 3,699 17.2% 3,757 17.5% 1.57%
3-person 3,504 16.2% 3,341 15.5% (4.65%)
4-person 4,269 19.8% 4,569 21.2% 7.03%
5+ -person 5,828 27.0% 6,319 29.3% 8.42%
Total 21,567 100.0% 21,530 100.0% (0.17%)
Owner-Occupied
1-person 3,224 16.6% 3,060 15.5% (5.09%)
2-person 5,122 26.3% 5,008 25.3% (2.23%)
3-person 3,301 17.0% 3,346 16.9% 1.36%
4-person 3,517 18.1% 3,310 16.7% (5.89%)
5+ -person 4,278 22.0% 5,042 25.5% 17.86%
Total 19,442 100.0% 19,766 100.0% 1.67%
Source: American Community Survey 5-Year Estimates Table B25009; EPS. 2010 2020 Change
(2010-2020)
City of Salinas
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Table 2-3
City of Salinas
Downtown HTMA
Occupants per Room by Tenure: City of Salinas (2010 and 2020) Item Total % Total %
OCCUPANTS PER ROOM [1]
Renter-occupied
Less than 0.5 6,856 31.8% 6,038 28.0% (11.9%)
0.51 - 1.00 9,804 45.5% 9,559 44.4% (2.5%)
1.01 - 1.50 3,168 14.7% 4,249 19.7% 34.1%
1.51 - 2.00 1,392 6.5% 1,267 5.9% (9.0%)
2.01 or more 347 1.6% 417 1.9% 20.2%
Total 21,567 100% 21,530 100% (0.2%)
Subtotal Overcrowded 4,907 22.8% 5,933 27.6% 20.9% Owner-occupied
Less than 0.5 10,529 54.2% 10,297 52.1% (2.2%)
0.51 - 1.00 7,152 36.8% 7,287 36.9% 1.9%
1.01 - 1.50 1,273 6.5% 1,664 8.4% 30.7%
1.51 - 2.00 456 2.3% 260 1.3% (43.0%)
2.01 or more 32 0.2% 258 1.3% -
Total 19,442 100% 19,766 100% 1.7%
Subtotal Overcrowded 1,761 9.1% 2,182 11.0% 23.9% Total
Less than 0.5 17,385 80.6% 16,335 39.6% (6.0%)
0.51 - 1.00 16,956 78.6% 16,846 40.8% (0.6%)
1.01 - 1.50 4,441 20.6% 5,913 14.3% 33.1%
1.51 - 2.00 1,848 8.6% 1,527 3.7% (17.4%)
2.01 or more 379 1.8% 675 1.6% 78.1%
Total 41,009 190% 41,296 100.0% 0.7%
Subtotal Overcrowded 6,668 16.3% 8,115 19.7% 21.7% Source: American Community Survey Table 5-Year estimates Table B25014; EPS. 2010 2020 Change
(2010-2020)
[1] The US Census Bureau defines an overcrowded housing unit as having 1 or more persons per room (excluding bathrooms and kitchens). Units with more than 1.5 persons per room are considered severely overcrowded.
City of Salinas
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Table 2-4
City of Salinas
Downtown HTMA
Overall Rent Burden (2020)
Item
Total Renter
Households
% of Total Renter
Households
Rent as a Percentage of
Household Income [1]
Less than 30% of Income 9,355 44.7%
30% to 50% of Income 6,098 29.2%
More than 50% of Income 5,465 26.1%
Total Renter Households 20,918 100.0%
City of Salinas
Source: American Community Survey 5-Year Estimates, Table B25070; EPS.
[1] The US Department of Housing and Urban Development defines a household spending more than 30% of their income on housing as "rent burdened." Households spending more than 50% of their income on housing are considered "severely rent burdened." Approximately 612 households were not computed.
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Table 2-5
City of Salinas
Downtown HTMA
Owner's Costs as a Percentage of Household Income by Household Income (2020) Item
Owner-Occupied
Households
Share within
Income Bracket
Share with
Mortage
Housing Cost Burden by Income Bracket [1]
Less than $20,000
Less than 30% 183 16.7% 3.8%
30% or more 911 83.3% 56.1%
Total 1,094 100.0% 47.3%
$20,000 to $49,999
Less than 30% 1,118 36.9% 10.3%
30% or more 1,909 63.1% 83.9%
Total 3,027 100.0% 56.7%
$50,000 to $74,999
Less than 30% 1,849 53.7% 43.6%
30% or more 1,597 46.3% 100.0%
Total 3,446 100.0% 69.8%
$75,000 or More
Less than 30% 8,971 84.7% 74.7%
30% or more 1,621 15.3% 100.0%
Total 10,592 100.0% 78.6%
Totals
Less than 30% 12,121 66.7% 63.0%
30% or more 6,038 33.3% 88.3%
Totals 18,159 100.0% 71.8%
Source: American Community Survey Year Estimates, Table B25101; EPS.
City of Salinas
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Table 3-1
City of Salinas
Downtown HTM
A
Units in Structure (2010 and 2022)
Item Units % of Total Units
% of
Total Total % Units
% of
Total Units
% of
Total Total %
Units in Structure [1]
Single Detached Units 23,540 55.2% 24,377 54.9% 837 3.6% 87,355 63.3% 90,834 63.2% 3,479 4.0% Single Attached Units 2,731 6.4% 2,799 6.3% 68 2.5% 8,902 6.5% 9,039 6.3% 137 1.5% 2-4 Units 4,165 9.8% 4,307 9.7% 142 3.4% 12,388 9.0% 12,830 8.9% 442 3.6% 5+ Units 10,864 25.5% 11,541 26.0% 677 6.2% 23,593 17.1% 25,122 17.5% 1,529 6.5% Mobile Homes 1,351 3.2% 1,381 3.1% 30 2.2% 5,672 4.1% 5,806 4.0% 134 2.4% Total Housing Units 42,651 100.0% 44,405 100.0% 1,754 4.1% 137,910 100.0% 143,631 100.0% 5,721 4.1% Average annual Units 146 3
Source: California Department of Finance Table E-5; EPS. [1] Per DOF, the 2010 and 2022 figures differ significantly because they are derived from different benchmarks. The 2010-2020 file is based on the 2010 Census benchmark and has not been resolved for errors. The 2020-2022 file is based on the 2020 Census benchmark. DOF cannot close the 2010-2020 decade series and resolve any errors until the Census Bureau releases their Detailed Demographic and Housing Characteristics file, estimated in mid-2023.
City of Salinas Monterey County
2010 2022 Change 2010 2022 Change
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Table 3-2
City of Salinas
Downtown HTMA
Units Permitted by Year (2000-2021)
Item 1-Unit
2-Unit
3- and 4-
Unit 5-Unit
+ Total
Year
2000 579 4 18 50 651 2001 268 - - 160 428 2002 442 14 9 92 557 2003 257 - 14 273 544
2004 231 - 6 25 262
2005 224 - - 21 245
2006 119 - - - 119
2007 72 2 - 170 244
2008 24 2 8 58 92 2009 19 - - 18 37 2010 35 - 16 88 139
2011 7 - 8 10 25
2012 11 2 - - 13
2013 3 2 3 51 59
2014 30 - - 36 66 2015 46 2 - 46 94
2016 2 2 - 48 52
2017 26 - - - 26
2018 57 - - 106 163
2019 80 4 - 12 96
2020 96 - - 109 205
2021 64 4 - 130 198
Total 2000-2021 2,692 38 82 1,503 4,315 Average per Year (2000-2021) 128 2 4 72 205 Total 2010-2021 457 16 27 636 1,136 Average per Year (2010-2021) 42 1 2 58 103 City of Salinas
Source: United States Department of Housing and Urban Development State of the Cities Database; EPS.
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Table 3-3
City of Salinas
Downtown HTMA
Total Vacancy Rate (2010-2022)
Item City of Salinas Monterey County
Year
2010 5.3% 9.4%
2011 5.3% 9.6%
2012 5.3% 9.6%
2013 5.5% 9.9%
2014 5.5% 10.0%
2015 5.5% 10.0%
2016 5.6% 10.3%
2017 5.6% 10.3%
2018 5.6% 10.5%
2019 5.7% 10.6%
2020 2.8% 10.7%
2021 3.3% 8.8%
2022 3.3% 8.7%
Source: California Department of Finance E-5; EPS.
Total Residential Vacancy Rate
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Table 3-4
City of Salinas
Downtown HTMA
Home Value Changes by County (2012-2022)
Item City July 2012 July 2022
Percentage Change
(July 2012-July 2022)
Rank [2]
1 Soledad $179,274 $606,385 238%
2 King City $159,997 $506,613 217%
3 Salinas $256,349 $733,725 186%
4 Castroville $259,358 $709,994 174%
5 Monterey $534,783 $1,217,425 128%
6 Marina $334,200 $873,884 161%
7 Seaside $307,352 $798,493 160%
8 Del Rey Oaks $362,954 $921,085 154%
9 Pacific Grove $619,794 $1,491,032 141%
10 Carmel-by-the-Sea $1,142,538 $2,692,137 136%
Average $415,660 $1,055,077 154%
Source: Zillow, EPS.
[2] Rank based on percentage change in home value from 2012 to 2022.
Zillow
Home Value Index [1]
[1] The Zillow Home Value Index represents the typical value of a home or condominium, defined as a home with a value between the 33rd percentile and the 67th percentile.
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Table 3-5
City of Salinas
Downtown HTMA
For-Sale Housing Market Summary (2012-2022)
Item
Year
2012 [1] 1,214 - $231,336 - 183 23
2013 1,120 (7.7%) $290,813 25.7% 119 15
2014 917 (18.1%) $350,669 20.6% 190 26
2015 958 4.5% $381,208 8.7% 203 37
2016 989 3.2% $415,417 9.0% 242 57
2017 870 (12.0%) $448,229 7.9% 208 55
2018 899 3.3% $464,792 3.7% 193 51
2019 885 (1.6%) $506,250 8.9% 186 53
2020 796 (10.1%) $554,458 9.5% 138 46
2021 956 20.1% $642,363 15.9% 113 35
2022 [2] 368 (61.5%) $683,833 6.5% 90 32
Average/Total Change [3] 960 (21.3%) $451,761 195.6% 93 39 Source: RedFin; EPS.
[1] Data for 2012 starts in Feburary.
[2] Year-to-date for 2022 is through June 2022.
[3] Average and percentage change for the number of homes sold excludes 2022 as it is not a full year of data.
City of Salinas
% Change
from Previous
Year
Average of the
Monthly Median
Sale Price
% Change from
Previous Year
Average
Days on
Market
Average
Monthly
Inventory
Homes
Sold
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Table 3-6
City of Salinas
Downtown HTM
A
Multifamily Housing Market Summary (2010-2022)
Item
Year
2010 172 2,743 - 0 $1,119 - 3.6% 475 9,830 - - $1,047 - 4.0% 2011 173 2,766 0.8% 23 $1,124 0.4% 4.2% 475 9,830 0.0% - $1,056 0.9% 4.4% 2012 173 2,766 0.0% 0 $1,149 2.2% 3.8% 475 9,830 0.0% - $1,078 2.1% 4.1% 2013 173 2,766 0.0% 0 $1,180 2.7% 3.5% 475 9,830 0.0% - $1,107 2.7% 3.6% 2014 175 2,785 0.7% 19 $1,208 2.4% 3.2% 475 9,830 0.0% - $1,151 4.0% 3.1% 2015 175 2,785 0.0% 0 $1,293 7.0% 2.2% 475 9,830 0.0% - $1,275 10.8% 2.7% 2016 176 2,826 1.5% 41 $1,355 4.8% 2.8% 475 9,830 0.0% - $1,369 7.4% 2.8% 2017 175 2,796 (1.1%) (30) $1,419 4.7% 2.1% 476 9,878 0.5% 48 $1,471 7.5% 2.6% 2018 176 2,846 1.8% 50 $1,494 5.3% 2.2% 476 9,878 0.0% - $1,546 5.1% 2.2% 2019 176 2,846 0.0% 0 $1,517 1.5% 2.1% 476 9,878 0.0% - $1,586 2.6% 2.7% 2020 176 2,846 0.0% 0 $1,584 4.4% 1.7% 476 9,878 0.0% - $1,684 6.2% 2.4% 2021 176 2,846 0.0% 0 $1,823 15.1% 1.6% 476 9,878 0.0% - $1,892 12.4% 2.1% 2022 176 2,846 0.0% 0 $1,760 (3.5%) 1.9% 476 9,878 0.0% - $1,938 2.4% 2.6% Average/
Total Change 4 103 3.8% 8 $1,387 57.3% 2.7% 1 48 0.5% 4 $1,400 85.1% 3.0% Source: CoStar; EPS.
Downtown Study Area
Total
Buildings Total Units
% Change,
Total Units New Units
Monthly
Rent
% Change,
Rent Asked
Vacancy
Rate
City of Salinas Multifamily Housing
Total
Buildings Total Units
% Change,
Total Units New Units
Monthly
Rent
% Change,
Rent Asked
Vacancy
Rate
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Table 3-7
City of Salinas
Downtown HTMA
Estimated Housing Unit Value Based on Income and Housing Costs in Monterey County (2022 in 2022$) Item Annual
Assumptions
Maximum Monthly Housing Cost as % of Income [3] 30.00% A Mortgage Term (In Years) [4] 30 B
Mortgage Interest Rate [5] 4.00% C
Down Payment as a % of Unit Value 12.00% D
Formula E F = A * E G = F / 12 H [6] J = I / (1 - D)
Income Level
Extremely Low $30,500 $9,150 $763 $489 $102,413 $116,378 Very Low Income $50,850 $15,255 $1,271 $814 $170,478 $193,726 Low Income $81,350 $24,405 $2,034 $1,304 $272,996 $310,223 Median Income $81,600 $24,480 $2,040 $1,307 $273,729 $311,056 Moderate Income $97,900 $29,370 $2,448 $1,569 $328,600 $373,410 Above Moderate Income $100K $100,000 $30,000 $2,500 $1,508 $315,720 $358,773 Above Moderate Income $150K $150,000 $45,000 $3,750 $2,261 $473,528 $538,100 Above Moderate Income $200K $200,000 $60,000 $5,000 $3,015 $631,441 $717,546 Source: Freddie Mac; EPS.
[1] EPS assumes a household size of 4, rounding the average persons per household for the City of Salinas. Refer to Table A-5 for income limits. [2] Refer to Table A-12 for detailed monthly costs calculation. [3]
Assumes affordable housing prices shall be based on no more than 30% of income being applied to housing expenses. [4] Based on a 30-year fixed-rate conventional mortgage. [5]
[6] Estimated mortgage amounts works backwards using the monthly housing costs, see Table A-12 for details.
Interest rates are based on the average for 30-year fixed-rates from 2010 to 2020 per Freddie Mac.
Assumptions
Estimated Housing Costs
Monthly Costs
(Homeowner
Costs / Rent +
Utilites) [2]
Estimated Unit
Value
Loan
Amount
Monthly
Mortgage
Cost
I (see above assumptions B & C)
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Table 4-1
City of Salinas
Downtown HTMA
Inclusionary Residential Development Static Pro Forma Summar y
Item Source Formula Option 1 Option 2 Option 1 Option 2 Option 1 Option 2 Option 1 Option 2 Revenue Assumptions per Unit
Market-Rate Sales Price/Capitalized Value Table 4-2 and Table 4-3 A Affordable Sales Price/Capitalized Value Table A-3 B $126,790 $73,452 $64,916 $34,367 $354,136 $340,675 $300,136 $258,936 Cost Assumptions Per Unit
Infrastructure Burden Table 4-2 and Table 4-3 $22,001 $22,001 $27,558 $27,558 $22,672 $22,672 $24,699 $24,699 Direct Building Construction Costs Table 4-2 and Table 4-3 $90,170 $90,170 $280,698 $280,698 $326,010 $326,010 $284,520 $284,520 Indirect Costs Table 4-2 and Table 4-3 $9,017 $9,017 $28,070 $28,070 $65,202 $65,202 $56,904 $56,904 Financing & Builder Profit Costs Table 4-2 and Table 4-3 $19,768 $19,768 $54,861 $54,861 $58,916 $58,916 $52,118 $52,118 Total Costs per Unit C $140,956 $140,956 $391,187 $391,187 $472,801 $472,801 $418,240 $418,240 Residual Land Value (RLV) per Unit
Market Rate D = A - C
Market Rate RLV as % of Total Market Rate Value [1] E = D / A Affordability Gap F = B - C ($14,167) ($67,504) ($326,271) ($356,820) ($118,664) ($132,126) ($118,104) ($159,304) Total Gap with Inclusionary Requirements G = D + F $19,513 ($33,824) ($335,258) ($365,807) ($203,865) ($217,327) ($84,904) ($126,104) RLV as % of Total Value with Inclusionary Requirements [1] H = G / A 11.2% (19.4%) (87.7%) (95.7%) (52.6%) (56.1%) (18.8%) (27.9%) Source: City of Salinas; EPS.
[1] A prototype that would be considered feasible will have a RLV equal to about 20% to 30% of total asset value (finished lot plus structure).
19.3% (2.4%) (22.0%) 7.4%
$33,200
$387,600 $451,440$174,636 $382,200
$33,680 ($8,987) ($85,201)
For-Sale Units + Inclusionary Options
Micro Units RD-180 RD-60 RD-60 (Condos) RD-30 (Townhomes/Rowhouses) Multifamily Renter-Occupied Units + Inclusionary Options Prepared by EPS 8/30/2022 Z:\Shared\Projects\SAC\222000\222102 Salinas Updated Housing Target Market Analysis\Model\222102_Salinas_DowntownHTMA_08-25-22 27 DRAFT
Table 4-2
City of Salinas
Downtown HTMA
Feasibility Analysis Pro Forma: Renter-Occupied Units
Item
DEVELOPMENT PROGRAM ASSUMPTIONS [1]
Site Acres 1.00 - - - -
No. of Units 180 - 60 -
Weighted Avreage Unit Sq. Ft. 270 875
No. of Parking Spaces 0 - 0 -
Gross Building Sq. Ft. 60,750 - 65,625 -
Net Leasable/Saleable Sq. Ft. 48,600 - 52,500 -
REVENUE ASSUMPTIONS [2]
Residential Apartmen
t
Gross Potential Income per Year $2,245,320 7.1% $1,638,000 7.1% Less Vacancy 5.0% - - - -
Less Operating & Maintenance Expenses 25.0% - - - - Net Annual Income $1,571,724 5.0% $1,146,600 5.0%
Capitalized Value
Cap Rate 5.0% - - - -
Total Building Value $31,434,480 100.0% $22,932,000 100.0% Attached For-Sale Supported Price
Sales Price - -
Less Commissions - -
Net Total For-Sale Revenue per Unit - -
TOTAL ESTIMATED SALES PRICE/CAPTIALIZED VALUE $31,434,480 100.0% $22,932,000 100.0% PER UNIT $174,636 $382,200
Renter-Occupied Units
Renter-Occupied Units
General
Assumptions
% of
Total
% of
TotalMicro Units RD-60
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Table 4-2
City of Salinas
Downtown HTMA
Feasibility Analysis Pro Forma: Renter-Occupied Units
Item
Renter-Occupied Units
Renter-Occupied Units
General
Assumptions
% of
Total
% of
TotalMicro Units RD-60
COST ASSUMPTIONS [2]
Direct Building Construction Costs
Site Work $435,600 - 1.7% - 1.9%
Building Construction Costs $15,795,000 62.3% $16,406,250 69.9% Total Direct Building Construction Costs $16,230,600 64.0% $16,841,850 71.8% Other Soft Costs
As a % of Direct Costs 10.0% - - - -
Total Other Soft Costs $1,623,060 6.4% $1,684,185 7.2%
Total Building & Development Impact Fees $3,960,173 15.6% $1,653,502 7.0% Financing
Interest (7.0%, 50% LTC, 50% Outstanding) $534,439 2.1% $494,399 2.1% Fees (2.0% of loan amount) $305,394 1.2% $282,514 1.2%
Total Financing Costs $839,833 3.3% $776,912 3.3%
Builder Fee
As a % of All Costs 12.0% - - - -
Total Builder Fee $2,718,440 10.7% $2,514,774 10.7%
TOTAL ESTIMATED COSTS $25,372,106 100.0% $23,471,223 100.0% PER UNIT $140,95
6 $391,187
RESIDUAL LAND VALUE $6,062,374 - ($539,223) -
Per Acre $6,062,374 - ($539,223) -
Per Unit $33,680 ($8,987)
As a % of Value 19.3% - (2.4%) -
Source: EPS.
[1] See Table A-1.
[2] See Table A-2.
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Table 4-3
City of Salinas
Downtown HTMA
Feasibility Analysis Pro Forma: Owner-Occupied Units
Item
DEVELOPMENT PROGRAM ASSUMPTIONS [1]
Site Acres 1.0 - - - -
No. of Units 60 - 30 -
No. of Parking Spaces 0 - 0 -
Gross Building Sq. Ft. 76,500 - 40,500 -
Net Leasable/Saleable Sq. Ft. 61,200 - 32,400 -
REVENUE ASSUMPTIONS [2]
Attached Townhome For-Sale Supported Price
Total Sales Price $24,480,000 - $14,256,000 -
Less Marketing/Commissions 5.0%
Net Total For-Sale Revenue $23,256,000 100.0% $13,543,200 100.0%
TOTAL ESTIMATED SALES PRICE/CAPTIALIZED VALU
E $23,256,000 100.0% $13,543,200 100.0%
PER UNIT $387,600 $451,440
% of
Total
Attached Owner-Occupied Units
Owner-Occupied Units
General
Assumptions Condo RD-60
% of
Total
Townhome/
Rowhouse RD-30
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Table 4-3
City of Salinas
Downtown HTMA
Feasibility Analysis Pro Forma: Owner-Occupied Units
Item
% of
Total
Attached Owner-Occupied Units
Owner-Occupied Units
General
Assumptions Condo RD-60
% of
Total
Townhome/
Rowhouse RD-30
COST ASSUMPTIONS [2]
Direct Building Construction Costs
Site Work $435,600 - 1.5% - 3.5%
Building Construction Costs $19,125,000 67.4% $8,100,000 64.6% Total Direct Building Construction Costs $19,560,600 69.0% $8,535,600 68.0% Other Soft Costs
As a % of Direct Costs 20.0% - - - -
Total Other Soft Costs $3,912,120 13.8% $1,707,120 13.6% Total Building & Development Impact Fees $1,360,346 4.8% $740,956 5.9% Financing
Interest (7.0%, 50% LTC, 50% Outstanding) $608,410 2.1% $269,100 2.1% Fees (2.0% of loan amount) $347,663 1.2% $153,771 1.2%
Total Financing Costs $956,073 3.4% $422,872 3.4%
Builder Fee
As a % of All Costs 10.0% - - - -
Total Builder Fee $2,578,914 9.1% $1,140,655 9.1%
TOTAL ESTIMATED COSTS $28,368,053 100.0% $12,547,202 100.0% PER UNIT $472,801 $418,24
0 RESIDUAL LAND VALUE ($5,112,053) - $995,998 -
Per Acre ($5,112,053) - $995,998 -
Per Unit ($85,201) $33,200
As a % of Value (22.0%) - 7.4% -
Source: EPS.
[1] See Table A-1.
[2] See Table A-2.
Prepared by EPS 8/30/2022 Z:\Shared\Projects\SAC\222000\222102 Salinas Updated Housing Target Market Analysis\Model\222102_Salinas_DowntownHTMA_08-25-22 31 APPENDIX A
Table A-1 Development Standards and Assumptions:
Market Rate .............................................................. 32 Table A-2 Development Cost an d Revenue Assumptions ................ 33 Table A-3 Inclusionary Residential Development
Prototype Detail ........................................................ 34 Table A-4 Estimated Rent and Housing Value Based on
Income and Housing Costs .......................................... 35 Table A-5 Monterey Count y Income Limits .................................. 36 Table A-6 Micro Unit Comparables .............................................. 37 Table A-7 Detailed Multifamily Market Analysis ............................. 38 Table A-8 Attached Ownership Comparable Properties .................. 39 Table A-9 New Home Asking Price Comparison ............................. 40 Table A-10 Estimated Monthly Housing Costs by Category in Monterey County ....................................................... 41
DRAFT
Table A-1
City of Salinas
Downtown HTMA
Development Standards and Assumptions: Market Rate
Rate or Rate or Rate or Rate or
Item Percentage Amount Percentage Amount Percentage Amount Percentage Amount Site Area (Acres
) 1.0 1.0 1.0 1.0
Density (DU/Acre) [1] 180.0 60.0 60.0 30.0
Height Limit (in Feet) [1] 75 75 75 35
Height Limit (in Stories) 66 6 3
Market-Rate Units 100% 180 100% 60 100% 60 100% 30
Bedroom Mix % of Total % of Total % of Total % of Total Studio 80% 144 25% 15 10% 6 0% 0
1 Bedroom 20% 36 25% 15 30% 18 30% 9
2 Bedroom 0% 0 50% 30 60% 36 70% 21
Total 100% 180 100% 60 100% 60 100% 30
Bedroom Mix Sq. Ft. Sq. Ft. Sq. Ft. Sq. Ft. Sq. Ft.
Studio 250 36,000 550 8,250 600 3,600 600 0
1 Bedroom 350 12,600 750 11,250 800 14,400 800 7,200
2 Bedroom 0 0 1,100 33,000 1,200 43,200 1,200 25,200
Weighted Average/Net Total 270 48,600 875 52,500 1,020 61,200 1,080 32,400 Gross Building Sq. Ft. [2] - 60,750 - 65,625 - 76,500 - 40,500 Source: City of Salinas Municipal Code; EMC; EPS.
[1] Assumes Mixed Use in Central City Overlay District. [2] Applies a 80 percent efficiency factor to the net leasable square footage.
Owner-Occupied Attached
Townhome/Rowhouse RD-30
Development Assumptions:
Market Rate
Renter-Occupied Micro Units RD-180 Renter-Occupied RD-60 Owner-Occupied RD-60 Prepared by EPS 8/30/2022 Z:\Shared\Projects\SAC\222000\222102 Salinas Updated Housing Target Market Analysis\Model\222102_Salinas_DowntownHTMA_08-25-22 32 DRAFT
Table A-2
City of Salinas
Downtown HTM
A
Development Cost and Revenue Assumptions
Item Assumptions Micro RD-60 RD-60 Townhome RD-30
Market-Rate Revenue Assumptions
Residential Revenue [1] per leasable (monthly)/saleable sq. ft. - $3.85 $2.60 $400.00 $440.00 Cap Rates [2]
Residential 5.00% 5.00% - -
Hard Construction Cost Assumptions
Basic Site Work/Grading per land site sq. ft. $10.00 - - - - Building Construction Cost [3] per gross building sq. ft. $260.00 $250.00 $250.00 $200.00 [1]
[2] Cap rates based on data for Northern California per various soures such as CBRE and CoStar. [3] Hard construction costs based on discussions with developers and ar chitects and Saylor.com for 2020, adjusted using the index f or the City of Salinas/Monterey of 90% and escalated to 2022 dollars per the 2020 to 2022 ENR Construction Cost Index of 10.2%.
Multifamily rental rates based on data shown in Table A-6 and Table A-7 per CoStar and project websites. For-sale figures are b ased on a survey of comparable for-sale properties from RedFin as of August 2022, as shown in Table A-8, as well as new construction in Table A-9.
Source: RedFin; CoStar; CBRE Research United States Cap Rate Survey H2 2021, March 2022; Saylor; ENR; RS Means; CA Board of Eq ualization; Victoria Transport Policy Institute; WGI Parking Solutions; EPS.
Owner-Occupied
Cost and Revenue
Assumptions
General
Assumptions
Renter-Occupied
Multifamily Residential
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Table A-3
City of Salinas
Downtown HTMA
Inclusionary Residential Development Prototype DetailItem Assumptions Unit Count 60
Unit Mix [1] % Units Value % Units Value % Units Value % Units Value % Units Value % Units Value % Units Value % Units Value Studio 1- 80% 17 - 80% 17 - 25% 2- 25% 2- - 10% 1- 10% 1- 0% - - 0% - - One Bedroom 2- 20% 5- 20% 4- 25% 2- 25% 2- - 30% 4- 30% 3- 30% 2- 30% 2- Two Bedroom/2 Bath 3- 0% - - 0% - - 50% 3- 50% 3- - 60% 7- 60% 5- 70% 4- 70% 3- - - 12% 22 - 12% 22 - 12% 7 - 12% 7 - - 20% 12 - 15% 9 - 20% 6 - 15% 5 - .
% % % %
Very Low Unit Mix Percentage
Studio $35,600 $12,474 - - - 80% 12 $149,688 - - - 25% 1 $12,474 $112,889 10% - - - - - 0% - $0 - - - One Bedroom $40,700 $12,474 - - - 20% 3 $37,422 - - - 25% 1 $12,474 $112,889 30% 1 $112,889 - - - 30% - $0 - - - Two Bedroom/2 Bath $45,800 $12,474 - - - 0% - $0 - - - 50% 2 $24,948 $135,378 60% 1 $135,378 - - - 70% 1 $135,378 - - - - - - - - 8% 15 $187,110 - - - 8% 4 $49,896 - 4% 2 $248,267 0% - - 4% 1 $135,378 0% - - Low Unit Mix Percentage
Studio $57,025 $12,474 - - - 80% 6 $74,844 - - - 25% 1 $12,474 $181,129 10% 1 $181,129 - - - 0% - $0 - - - One Bedroom $65,100 $12,474 - - - 20% 1 $12,474 - - - 25% 1 $12,474 $181,129 30% 2 $362,258 - - - 30% 1 $181,129 - - - Two Bedroom/2 Bath $73,250 $12,474 - - - 0% - $0 - - - 50% 1 $12,474 $216,517 60% 3 $649,550 - - - 70% 2 $433,034 - - - - - - - - 4% 7 $87,318 - - - 4% 3 $37,422 - 8% 6 $1,192,937 0% - - 8% 3 $614,162 0% - - Median Unit Mix Percentage
Studio $57,100 $12,474 - - - - - - - - - - - - $181,349 - - - 10% 1 $181,349 - - - 0% - - One Bedroom $65,300 $12,474 - - - - - - - - - - - - $181,349 - - - 30% 1 $181,349 - - - 30% 1 $181,349 Two Bedroom/2 Bath $73,450 $12,474 - - - - - - - - - - - - $217,178 - - - 60% 2 $434,356 - - - 70% 1 $273,645 - - - - - - - - - - - - - - - - - - 6% 4 $797,055 - - - 6% 2 $454,994 Moderate Unit Mix Percentage
Studio $68,550 $12,474 80% 17 $212,058 - - - 25% 2 $24,948 - - - $217,619 10% - - 10% 1 $217,619 0% - $0 0% - - One Bedroom $78,300 $12,474 20% 5 $62,370 - - - 25% 2 $24,948 - - - $217,619 30% 1 $217,619 30% 1 $217,619 30% - $0 30% 1 $217,619 Two Bedroom/2 Bath $88,100 $12,474 0% - $0 - - - 50% 3 $37,422 - - - $260,393 60% 1 $260,393 60% 2 $520,787 70% 1 $260,393 70% 1 $260,393 - - 12% 22 $274,428 - - - 12% 7 $87,318 - - - - 4% 2 $478,013 6% 4 $956,025 4% 1 $260,393 6% 2 $478,013 Work Force Unit Mix Percentage
Studio $95,178 $12,474 - - - - - - - - - - - - $311,215 10% - $0 10% - - 0% - $0 0% - - One Bedroom $105,754 $12,474 - - - - - - - - - - - - $311,215 30% 1 $311,215 30% - - 30% - $0 30% - - Two Bedroom/2 Bath $117,504 $12,474 - - - - - - - - - - - - $357,848 60% 1 $357,848 60% 1 $357,848 70% 1 $357,848 70% 1 $357,848 - - - - - - - - - - - - - - - 4% 2 $669,063 3% 1 $357,848 4% 1 $357,848 3% 1 $357,848 Total Estimated Annual Revenue/Value - - 22 $274,428 - 22 $274,428 - 7 $87,318 - 7 $87,318 - - 12 $2,588,279 - 9 $2,110,928 - 6 $1,367,782 - 5 $1,290,855 Weighted Avg. Residential Per Unit $8,093 $4,897 $4,328 $2,291 $354,136 $340,675 $300,136 $258,936 Less Vacancy and Maintenance 25% $6,069 $3,673 $3,246 $1,718 NA NA NA NA Capitalization Rate 5.0% $121,390 $73,452 $64,916 $34,367 NA NA NA NA Housing Impact Fee $5,400 NA NA NA NA NA NA NA
Source: City of Salinas; State of California Department of Finance; State of California Housing and Community Development (HCD); EPS. [1] Household sizes per HCD determination of projects with federal assistance. [2] Household income per HCS 2021 Income limits.
[3] See Table A-4 for estimated unit values.
Inclusionary Residential
Prototypes
180
Option 1
RD-60
Option 2
RD-60 (Condos)
60 Option 1 Option 2
Micro Units RD-180
Household
Size
Annual
Rent
Household
Income [2]
Assumptions
Multifamily Renter-Occupied Units
Option 2Option 1
For-Sale
Unit Value
For-Sale Units Inclusionary Options
RD-30 (Townhomes/Rowhouses)
Option 1 Option 2
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Table A-4
City of Salinas
Downtown HTMA
Estimated Rent and Housing Value Based on Income and Housing Costs Item Annual
Assumptions
Maximum Monthly Housing Cost as % of Income [3] 30.00%
A
Mortgage Term (In Years) [4] 30 B
Mortgage Interest Rate [5] 4.00% C
Down Payment as a % of Unit Value 5.00% D
Formula E F = A * E G = F / 12 H J = I / (1 - D)
Income Level
Extremely Low $21,350 $6,405 $534 $308 $64,409 $67,799
Very Low Income $35,600 $10,680 $890 $512 $107,244 $112,889 Low Income $57,025 $17,108 $1,426 $822 $172,072 $181,129 Median Income $57,100 $17,130 $1,428 $823 $172,282 $181,349 Moderate Income $68,550 $20,565 $1,714 $987 $206,738 $217,619 Work Force $95,178 $28,553 $2,379 $1,412 $295,655 $311,215 Income Level
Extremely Low $24,400 $7,320 $610 $368 $76,977 $81,028
Very Low Income $40,700 $12,210 $1,018 $614 $128,609 $135,378 Low Income $65,100 $19,530 $1,628 $982 $205,691 $216,517 Median Income $65,300 $19,590 $1,633 $985 $206,319 $217,178 Moderate Income $78,300 $23,490 $1,958 $1,181 $247,374 $260,393 Work Force $105,754 $31,726 $2,644 $1,623 $339,956 $357,848 Income Level
Extremely Low $27,450 $8,235 $686 $428 $89,649 $94,368
Very Low Income $45,800 $13,740 $1,145 $715 $149,660 $157,537 Low Income $73,250 $21,975 $1,831 $1,143 $239,309 $251,905 Median Income $73,450 $22,035 $1,836 $1,146 $239,938 $252,566 Moderate Income $88,100 $26,430 $2,203 $1,375 $288,009 $303,168 Income Level
Extremely Low $30,500 $9,150 $763 $489 $102,427 $107,817 Very Low Income $50,850 $15,255 $1,271 $814 $170,501 $179,475 Low Income $81,350 $24,405 $2,034 $1,304 $273,033 $287,403 Median Income $81,600 $24,480 $2,040 $1,307 $273,766 $288,175 Moderate Income $97,900 $29,370 $2,448 $1,569 $328,645 $345,942 value
Source: Freddie Mac; EPS.
[1] Refer to Table A-5 for income limits.
[2] Refer to Table A-10 for detailed monthly costs calculation. [3]
EPS assumes affordable housing prices shall be based on no more than 30% of income being applied to housing expenses. [4] Based on a 30-year fixed-rate conventional mortgage. [5] The 4.0% interest rate estimate is based on the average for 30-year fixed-rates from 2010 to 2020 per Freddie Mac. 2-Person Household
3-Person Household
4-Person Household
Annual
Income [1]
Monthly
Mortgage
Cost
Estimated Unit
Value
Estimated Housing Costs
Loan
Amount
Monthly Costs
(Homeowner
Costs / Rent +
Utilites) [2]
I (see above
assumptions B & C)
1-Person Household
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Table A-5
City of Salinas
Downtown HTMA
Monterey County Income Limits (2022 in 2022$)
Income Level % of AMI 1 2 3 [1] 4
Extremely Low ≤ 30% AMI 30% $21,350 $24,400 $27,450 $30,500 Very Low Income >30% to ≤50% AMI 50% $35,600 $40,700 $45,800 $50,850 Low Income >50% to ≤80% AMI 80% $57,025 $65,100 $73,250 $81,350 Median Income >80% to ≤100% AMI 100% $57,100 $65,300 $73,450 $81,600 Moderate Income >100% AMI to ≤120% AMI 120% $68,550 $78,300 $88,100 $97,900 Work Force >120% AMI to ≤160% AMI 160% $95,178 $105,754 $117,504 $130,560 limits
[1] The average persons per household for the City of Salinas is 3.6 per the 2022 DOF.
Source: United States Department of Housing and Urban Development FY 2022 Income Limits; State of California Department of Housing and Community Development, "State Income Limits for 2022"; EPS.
Monterey County Income Limits
Based on HH Size:
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Table A-6
City of Salinas
Downtown HTMA
Micro Unit Comparables
Averag
e Property Number of Average
Number Unit Size Size Parking Spaces Year Averag e Rent per Item Address of Units (Sq. Ft.) (Sq. Ft.) (Sq. Ft.) Acres DU/Acre Spaces per Unit Built Rent Sq. Ft.
Micro Unit Apartments
19J Sacramento 175 484 80,000 12,807 0.3 595.2 50 0.3 2019 $2,082 $4.30 Sonrisa [1] Sacramento 58 267 19,358 11,326 0.3 223.1 0 0.0 2023 $887 $3.32 259 Meridian Ave [1] San Jose 226 400 122,300 56,192 1.3 175.2 162 0.7 2024 $1,150 $2.88 388 Fulton San Francisco 69 488 50,750 12,520 0.3 240.1 0 0.0 2016 For-Sale NA Total/Average/Weighted Averag
e 528 425 68,102 23,211 0.5 328.1 53 0.4 2021 $1,280 $3.01 Source: CoStar; Sacramento Business Journal; project websites; The Sacramento Bee; City of San Jose; Mercury News; EPS. [1] These projects are 100% affordable.
Land Area
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Table A-7
City of Salinas
Downtown HTMA
Detailed Multifamily Comparables Market Analysi
s
Average Property Number of Average
Number Unit Size Size Parking Spaces Yea r Average Rent per Property [1] Address of Units (Sq. Ft.) (Sq. Ft.) (Sq. Ft.) Acres DU/Acre Spaces per Unit Built Rent Sq. Ft.
Apartment Complex
- 16 Natividad Rd 48 528 43,220 65,301 1.5 32.0 - - 1966 $1,226 $2.32 Tahitian Village Apartments 976 W Alisal St 35 691 31,584 46,801 1.1 32.6 35 1.0 1964 $1,473 $2.13 The Reef Apartments 333 W Laurel Dr 54 680 33,004 72,000 1.7 32.7 69 1.3 1964 $1,533 $2.25 Northridge Manor Apartments 105 N Prado St 32 700 22,400 42,253 1.0 33.0 42 1.3 1978 $1,515 $2.16 The Courtyard Apartments 22 Capitol St 40 710 28,400 52,799 1.2 33.0 40 1.0 1984 $1,846 $2.60 Maple Manor Apartments 300-320 Maple St 24 618 14,793 31,459 0.7 33.2 27 1.1 1966 $1,075 $1.74 East Park Apartments 904-908 Acosta Plz 36 720 25,920 47,149 1.1 33.3 58 1.6 1985 $1,934 $2.69 The Gables 2186-2198 Brutus Cir 60 816 58,952 78,538 1.8 33.3 120 2.0 1989 $1,717 $2.10 California Pride 454 California St 15 945 20,952 19,602 0.5 33.3 34 2.3 - $1,357 $1.44 93 North 93 Castro St 104 695 71,275 135,297 3.1 33.5 118 1.1 1986 $2,264 $3.26 The Park Terrace Apartments 619 E Romie Ln 52 613 30,170 67,514 1.5 33.6 - - 1963 $1,691 $2.76 Pointe at Northridge 424-436 Noice Dr 187 789 149,415 231,739 5.3 35.2 257 1.4 1979 $2,146 $2.72 Glenhaven Apartments 415 Williams Rd 22 932 15,936 27,007 0.6 35.5 30 1.4 1977 $1,328 $1.42 - 401 Monterey St 16 452 8,090 18,652 0.4 37.4 21 1.3 2019 $660 $1.46 - 270 Harvest St 26 800 24,794 30,100 0.7 37.6 30 1.2 1964 $1,440 $1.80 Pointe at Westlake 60 Stephanie Dr 139 593 100,650 157,761 3.6 38.4 18 0.1 1975 $1,765 $2.98 Sheridan Apartments 1450 N 1st St 116 749 93,760 130,680 3.0 38.7 166 1.4 2019 $2,248 $3.00 - 1009 Sieber Ave 18 792 14,604 19,936 0.5 39.3 26 1.4 1980 $1,176 $1.48 Park View Apartments 715 Elton Pl 28 575 22,282 27,417 0.6 44.5 30 1.1 1971 $1,135 $1.97 Nissen Village Apartments 75 Nissen Rd 70 530 38,336 67,082 1.5 45.5 70 1.0 1976 $1,450 $2.74 Kipling Manor Apartments 82-90 Kip Dr 92 791 132,016 71,918 1.7 55.7 117 1.3 1993 $1,615 $2.04 Park View Apartments 707 Elton Pl 54 660 41,895 39,653 0.9 59.3 30 0.6 1986 $1,982 $3.00 - 618 N Sanborn Rd 12 675 14,188 5,798 0.1 90.2 16 1.3 1979 $1,335 $1.98 Terrace View Apartments 787-791 Garner Ave 45 768 34,541 12,380 0.3 158.3 56 1.2 1989 $1,030 $1.34 Total/Average/Weighted Average 1,325 701 44,632 62,452 1.4 43.0 64 1.1 1981 $1,747 $2.49 Source: CoStar; EPS.
[1] Includes properties with 10 or more units, and excludes properties without a listed asking rent price.
Land Area
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Table A-8
City of Salinas
Downtown HTMA
Attached Ownership Comparable Properties
Item Lot Sq. Ft.
Condominium
689 Las Casitas Dr 2002 1,513 - August-10-2022 $509,000 $336.42 705 Garner Ave #103 2004 988 - June-14-2022 $362,000 $366.40 711 Garner Ave #103 2004 988 - February-15-2022 $355,000 $359.31 18235 Caldwell St 2017 1,847 - January-27-2022 $725,000 $392.53 14814 Kit Carson Dr 2018 1,330 - Jan-00 $284,000 $213.53 17619 Reynolds St 2019 1,847 - April-15-2022 $796,000 $430.97 14881 Kit Carson Dr 2019 2,199 - May-4-2022 $800,000 $363.80 14746 Kit Carson Dr 2019 1,726 - March-24-2022 $750,000 $434.53 Total/Weighted Average 12,438 $620,616 $368.00
Townhome
1860 Cherokee Dr #2 1982 1,621 1,961 October-25-2021 $525,000 $323.87 1832 Cherokee Dr #4 1982 1,243 2,052 August-20-2021 $450,000 $362.03 1883 Cherokee Dr #3 1983 1,083 550 May-12-2022 $407,500 $376.27 142 Nissen Rd #1 1985 1,358 2,555 September-17-2021 $560,000 $412.37 120 Nissen Rd #4 1985 1,358 2,495 November-16-2021 $550,000 $405.01 102 Nissen Rd 1985 1,293 3,433 February-18-2022 $595,000 $460.17 2360 N Main St #1 1986 1,152 742 September-30-2021 $342,000 $296.88 949 Nantucket Blvd #18 1996 1,597 3,060 February-3-2022 $620,000 $388.23 17819 Banks St 2018 1,847 1,181 March-31-2022 $700,000 $378.99 16230 E Garrison 2019 2,199 1,462 September-10-2021 $750,000 $341.06 Total/Weighted Average 14,751 1,949 $573,160 $373.00
Source: The Gregory Group; EPS.
Attached Projects
Year Built
Unit
Sq. Ft. Date Sold Sale Price
Price per
Sq. Ft.
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Table A-9
City of Salinas
Downtown HTMA
New Home Asking Price Comparison
Starting
Asking Asking
Project Sales Sales Price
Project-Location Type Price Sq. Ft. per Sq. Ft. Bed Bath The Dunes - Marina, CA
Beach House
Plan 1 [1] SFR Detached $1,114,500 2,315 $481.43 3 2.5
Plan 2 [1] SFR Detached $1,249,000 2,401 $520.20 4 3.0
Plan 3 SFR Detached $1,233,000 2,432 $506.99 4 3.0
Average Beach House $1,198,833 2,383 $503.15 4 3.0
Sea House
Plan 1 SFR Attached $847,033 1,581 $535.76 2 2.5
Plan 2 [1] SFR Attached $865,440 1,735 $498.81 3 2.5
Plan 3 SFR Attached $912,651 1,969 $463.51 3 2.5
Plan 4 [1] SFR Attached $910,276 1,919 $474.35 3 2.5
Average Sea House $883,850 1,801 $490.76 3 2.5
Surf House
Plan 1 SFR Detached $995,378 2,012 $494.72 3 2.5
Plan 2 [1] SFR Detached $1,028,945 2,222 $463.07 3 2.5
Plan 3 [1] SFR Detached $1,061,452 2,280 $465.55 4 3.0
Average Surf House $1,028,592 2,171 $473.71 3 2.5
Average The Dunes $1,021,768 2,087 $489.68 3 2.5
Vintage Estates - Soledad, CA
Residence 1550 SFR Detached $581,990 1,550 $375.48 3 2.0 Residence 1803 SFR Detached $604,990 1,803 $335.55 3 2.5 Residence 1994 SFR Detached $619,990 1,994 $310.93 3 2.5 Residence 2131 SFR Detached $629,990 2,131 $295.63 3 2.5 Residence 2438 SFR Detached $662,990 2,438 $271.94 4 3.0 Average Vintage Estates $619,990 1,983 $312.62 3 2.5
The Enclave - Seaside, CA
Residence 1 SFR Detached $1,748,000 2,941 $594.36 4 4.5 Residence 2 SFR Detached $2,025,000 3,456 $585.94 4 4.5 Residence 3 SFR Detached Sold Out 3,456 NA 4 3.5
Residence 4 SFR Detached $2,202,500 3,724 $591.43 4 4.5 Residence 5 SFR Detached Sold Out 3,533 NA 4 3.5
Residence 6 SFR Detached $1,947,000 3,033 $641.94 3 3.5 Average The Enclave $1,980,625 3,357 $589.97 4 4.0
Roberts Ranch - Hollister, CA
Plan 1478 SFR Detached NA 1,478 NA 3 2.0
Plan 1896 [1] SFR Detached $815,000 1,896 $429.85 3 2.0 Plan 1967 SFR Detached $825,000 1,967 $419.42 4 2.0
Plan 2209 [1] SFR Detached NA 2,209 NA 3 2.0
Plan 2273 SFR Detached NA 2,273 NA 4 2.5
Plan 2321 SFR Detached NA 2,321 NA 4 2.5
Plan 2525 SFR Detached NA 2,525 NA 5 3.0
Plan 2775 SFR Detached NA 2,775 NA 5 3.0
Plan 3465 SFR Detached NA 3,465 NA 5 3.5
Average Roberts Ranch $820,000 2,323 $352.96 4 2.5
Montclair - Hollister, CA
Residence 1 SFR Detached $780,990 1,628 $479.72 3 2.0
Residence 2 SFR Detached $803,990 1,743 $461.27 3 2.5
Residence 3 SFR Detached $841,990 2,054 $409.93 4 2.5
Residence 4 SFR Detached $857,990 2,176 $394.30 4 2.5
Residence 5 SFR Detached $871,990 2,320 $375.86 4 3.0
Residence 6 SFR Detached $874,990 2,493 $350.98 4 3.0
Residence 7 SFR Detached $894,990 2,833 $315.92 5 3.0
Residence 8 SFR Detached $914,990 3,153 $290.20 5 3.5
Average Montclair $855,240 2,300 $371.84 4 3.0
new_sales
Source: Shea Homes; Legacy Homes; Mertiage Homes; KB Homes; EPS. [1] Model plan includes option for 1 more bedrooms.
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Table A-10
City of Salinas
Downtown HTMA
Estimated Monthly Housing Costs by Category in Monterey County (2022 in 2022$) Item Assumptions Total
Annual Property Taxes and Homeowners Insurance 2.00%
Mortgage Insurance as a % of Loan Amt. [1] 1.50%
Income Level Annual Income [2]
Extremely Low $21,350 $489 $128 $146 $763
Very Low Income $50,850 $814 $213 $244 $1,271
Low Income $81,350 $1,304 $341 $389 $2,034
Median Income $81,600 $1,307 $342 $391 $2,040
Moderate Income $97,900 $1,569 $411 $468 $2,448
Above Moderate Income $100K $100,000 $1,508 $395 $598 $2,500 Above Moderate Income $150K $150,000 $2,261 $592 $897 $3,750 Above Moderate Income $200K $200,000 $3,015 $789 $1,196 $5,000 Source: Realtor.com; Zillow; bankrate.com; wellsfargo.com; chase.com; nerwallet.com; EPS. [1]
[2] Refer to Table A-5 for income limits.
Estimated Monthly Cost
Mortgage
Payment
Mortgage
Insurance
Taxes and
Insurance
Mortgage insurance rate is based on an average of the estimated range from 0.55% to 2.25%. Rates are based on credit and down payment amounts.
Prepared by EPS 8/30/2022 Z:\Shared\Projects\SAC\222000\222102 Salinas Updated Housing Target Market Analysis\Model\222102_Salinas_DowntownHTMA_08-25-22 41 SRO S 1B 2B 3B 4B 8B
Extremely
Low
Very
Low
Low Moderate
Plaza Grande 50 E. Market St 95 95 95 0 95 0 0 2003 40 12/1/2043 Forester Building 369 Main St 10 8 2 0 0 0 0 0 2000 20 4/12/2020* Pajaro Triplex 139 Pajaro St 3 3 3 0 0 3 0 1996 30 5/6/2026 Lupine Gradens 118 E. Alisal St 20 20 20 0 20 0 0 2006 30 8/8/2036 California House 436 California St 8 3 5 8 0 8 0 0 2002 30 7/3/2032 Sun Rose Apartments
439 Soledad St 11 7 3 1 10 0 9 1 0 2022 30 2/11/2036
Tynan Village 323 Front St 171 8 25 32 8 106 0 33 73 0 2008 55 12/4/2063 Gateway 25 Lincoln St 52 25 21 6 51 6 24 14 7 2012 55 12/17/2068 401 Monterey Street 401 Monterey St 16 16 2 0 2 0 0 2019 55 1/10/2074 Steinbeck Commons 10 Lincoln 100 99 1 99 0 0 99 0 1999 / 2021 55 1/1/2076 Total 486 131 51 155 41 8 0 1 394 6 191 190 7 * Affordability Period Expired 394 SRO S 1B 2B 3B 4B 8B Extremely
Low
Very
Low
Low Moderate
Haciendas Phase I 201-233 Calle Cebu 53 9 27 14 3 52 38 14 2013 55 1/8/2068 Haciendas Phase II 221, 225, 237, 241 Calle Cebu 46 6 20 17 3 45 2 43 2014 55 6/30/2068 Hacienda Phase III - Hikari 131 E. Rossi Street 50 19 16 15 49 49 2019 30 3/18/2049 Haciendas Phase IV - Dai-Ichi 34-54 Rossi Street 41 41 40 40 2016 30 3/17/2045 Moon Gate Plaza 21 Soledad St 90 81 4 5 88 12 76 2020 55 11/24/2075 Catalyst Apartments 235 Martella St 5 5 5 5 2022 15 11/18/2020 Total 285 81 0 84 68 46 6 0 279 0 52 227 0
Income LevelBedrooms
Updated Table 5-1 Housing Units in Downtown (Central City Overlay) Between 1996 - 2022 Property Name Total
Units
Property Address Year
Constructed
Affordability
Term
Restricted
Expiration
No. of
Restricted
Units
Housing Units Near Downtown Between 2013- 2022
Property Name Property Address Total
Units
Bedrooms No. of
Restricted
Units
Income Level Year
Constructed
Affordability
Term
Restricted
Expiration
13 14
9 10
1 2
3 4
5 6
7 8
1112
15 1216
Downtown Core Area
Map Legend
City Restricted Projects
1 2
3 4
5 6
7 8
9 10
Plaza Grande
Forester Building*
Pajaro Triplex
Lupine Gardens
Sun Rose
Tynan Village
11 12
13 14
15 Haciendas Phase II
Haciendas Phase III - Hikari
Haciendas Phase IV - Dai-Ichi
Moon Gate Plaza
401 Monterey Street
Catalyst Apartments
Gateway
Haciendas Phase I
California House
CTCAC Restricted Projects
16 Steinbeck Commons
Downtown Neighborhood Area
Downtown Neighborhood Area
(Continues to the South)
Affordability Period Expired*
INCLUSIONARY HOUSING ORDINANCE
STUDY SESSION
Megan Hunter, Community Development Director &
Rod Powell, Planning Manager
City Council
September 13, 2022
Background
Nearly 800 housing units (rental and
ownership)
1992 – 1st Inclusionary Housing Ordinance
2005 amendment increased inclusionary
percentages
No inclusionary units built under 2005
ordinance
Update to ordinance initiated in 2014
Technical Advisory Committee (TAC)
formed of stakeholders
Current ordinance adopted on June 6, 2017
Discussion
2017 ordinance amendment took 2½ years to complete
Goal: Support developer-friendly options to facilitate housing production and result in more affordable housing through:
Flexibility
Market informed alternatives
Regulations that encourage on-site development
Regulations informed by:
Community Engagement and Input
Downtown Vibrancy Plan
2017 Housing Target Market Analysis
On-site Inclusionary Options
On-site For Sale On-Site Rental Mixed For-Sale/Rental
Option 1 Option 2 Option 3 Option 4
20% 15% 12% 20%
Very Low 4% not required 8% 4% Rental / Option to pay impact fees Low 8% not required 4% 8% Rental / Option to pay impact fees Median not required 6% not required not required
Moderate 4% 6% not required 4% Ownership
Workforce 4% 3% not required 4% Ownership
Inclusionary Ordinance Provisions
In-lieu Fees and Rental Housing Impact Fees
$14.05 per square foot for ownership housing
$2.40 per square foot for rental housing, plus 12% of units available to Section 8 Housing Choice Voucher Program
Ordinance applicable to:
Developments of 10 or more new, for-sale residential units Subdivision of property into 10 or more lots
Additions/alterations to existing structure to create 10 or more new units Requires approval of Affordable Housing Plan
West Area and Central Area Specific Plans have Development Agreements that lock in the 2017 ordinance
Ordinance Exemptions
Creating fewer than 10 additional units or lots
Development Agreements executed prior to June 6, 2017 Monte Bella (Mountain View) followed 1992 ordinance
Developments with a submitted, complete Planning or Building permit and full payment of application fees prior to June 6, 2017 and compliant with predecessor ordinance
Developments in the Downtown Area (Central City Overlay District) Downtown Area (Central City Overlay) Exemption
Adopted Downtown Vibrancy Plan called out exemption for Downtown to promote housing development
395 housing units built in Downtown have restricted rents Market-rate housing is desirable for retail businesses Other favorable policies may not be enough to encourage housing development Absence of a Downtown Area exemption greatly reduces the profitability of developments
There are few opportunity sites left in the Downtown
Downtown housing opportunities promoting market rate housing should be a goal in evaluating and modifying all City policies
Only 24 market rate units built over the last few years Affordable Housing Units in/near Downtown
SRO S 1B 2B 3B 4B 8B
Extremely
Low
Very
Low
Low Moderate
Plaza Grande 50 E. Market St 95 95 95 0 95 0 0 2003 40 12/1/2043 Forester Building 369 Main St 10 8 2 0 0 0 0 0 2000 20 4/12/2020* Pajaro Triplex 139 Pajaro St 3 3 3 0 0 3 0 1996 30 5/6/2026 Lupine Gradens 118 E. Alisal St 20 20 20 0 20 0 0 2006 30 8/8/2036 California House 436 California St 8 3 5 8 0 8 0 0 2002 30 7/3/2032 Sun Rose Apartments 439 Soledad St 11 7 3 1 10 0 9 1 0 2022 30 2/11/2036 Tynan Village 323 Front St 171 8 25 32 8 106 0 33 73 0 2008 55 12/4/2063 Gateway 25 Lincoln St 52 25 21 6 51 6 24 14 7 2012 55 12/17/2068 401 Monterey Street 401 Monterey St 16 16 2 0 2 0 0 2019 55 1/10/2074 Steinbeck Commons 10 Lincoln 100 99 1 99 0 0 99 0 1999 / 2021 55 1/1/2076 Total 486 131 51 155 41 8 0 1 394 6 191 190 7 * Affordability Period Expired SRO S 1B 2B 3B 4B 8B Extremely
Low
Very
Low
Low Moderate
Haciendas Phase I 201-233 Calle Cebu 53 9 27 14 3 52 38 14 2013 55 1/8/2068 Haciendas Phase II 221, 225, 237, 241 Calle Cebu 46 6 20 17 3 45 2 43 2014 55 6/30/2068 Hacienda Phase III - Hikari 131 E. Rossi Street 50 19 16 15 49 49 2019 30 3/18/2049 Haciendas Phase IV - Dai-Ichi 34-54 Rossi Street 41 41 40 40 2016 30 3/17/2045 Moon Gate Plaza 21 Soledad St 90 81 4 5 88 12 76 2020 55 11/24/2075 Catalyst Apartments 235 Martella St 5 5 5 5 2022 15 11/18/2020 Total 285 81 0 84 68 46 6 0 279 0 52 227 0
Housing Units Near Downtown Between 2013- 2022
Property Name Property A ddress Total
Units
Bedrooms No. of
Restricted
Units
Income Level Year
Constructed
Affordability
Term
Restricted
Expiration
Income LevelBedrooms
Updated Table 5-1 Housing Units in Downtown (Central City Overlay) Between 1996 - 2022 Property Name Total
Units
Property A ddress Year
Constructed
Affordability
Term
Restricted
Expiration
No. of
Restricted
Units
Map of Downtown Area
Affordable Housing Projects
2017 Housing Target Market Analysis
Demand for ownership and rental residential projects
Consumer preference for market rate infill housing
Traction for adaptive reuse projects
Significant development risks:
Public safety
Homelessness
Lack of open space
Low school performance
Traffic
Untested market
Housing incentives to reduce costs needed
2022 Housing Target Market Analysis Update
Inclusionary housing would constrain momentum
Salinas market has become more expensive since Covid-19 Ownership less affordable, rental more affordable
Construction costs are extremely high
Higher density market rate rental and ownership have negative residual value
Micro-rental units show best project feasibility
Downtown Area exemption should remain in place
Timing for Inclusionary Housing Update
Inclusionary Housing Ordinance re-evaluated every 5 years Review of ordinance due in 2022
Staff capacity severely limited:
COVID 19 Funding
Project Roomkey
Project Homekey
Emergency Rental Assistance Program
6th Cycle of Housing Element
Scheduled to begin update of ordinance in summer 2023 During update of ordinance, ability to conduct “deeper dive” into Downtown Exemption
Questions?