PUBLIC COMMENTS
HOUSING ELEMENT ACTION PLAN -
OBJECTIVE DESIGN STANDARDS
Attachment 2
The proposed standards should not create barriers for development of new affordable housing developments. By creating requirements on conversion of motels to have equivalent new lower cost visitor serving accommodations or unless required to be approved pursuant to State law, it creates an impediment to the transition of these properties to create affordable housing opportunities.
Additionally, Program D3 outlines that In Lieu Fees “could be used to acquire existing apartments, construct new apartments, or the purchase and conversion of old motels.” Yet, the City's changes to the Housing Overlay are obstructing these options, thereby impeding overall housing development. In program 5 of the Housing Element, Affordable Housing Overlay, states that the City will “prioritize inclusionary in lieu fees for lower income affordable housing projects proposed in the affordable housing overlay/ housing overlay…” The City has committed to using their in-lieu fees for projects within the housing overlay, which included motel conversions, but the new changes in the zoning amendment will remove this option, further complicating efforts to meet housing goals.
Furthermore, the staff report doesn’t have an analysis that supports how the revisions will impact the City’s current Housing Element goals for housing opportunities. San Clemente needs to address this issue by providing an analysis on the changes the proposed revisions to the Zoning Amendment will create. The Kennedy Commission requests that the city honor its commitments in their Housing Element to facilitate affordable developments on motel sites. Zoning Amendments should not create barriers for redevelopment or conversion of these sites.
Hindering the conversion of motels will prematurely affect future sites of affordable housing. As noted in The Kennedy Commission’s letter on December 7, 2021, the Commission expressed concerns of the Candidate Sites for Rezoning stating that “sites listed for lower income have existing structures on them, rendering these sites unlikely to redevelop into affordable housing.” Allowing the conversion of motels will create more opportunities for affordable housing since the opportunity sites may not have the potential to create affordable developments. Motel sites need to be identified as potential opportunity sites in order to realistically meet RHNA goals and housing needs.
RHNA Progress
Addressing the Zoning Amendment change is critically important given that the City’s RHNA Progress has not shown any advancement in reaching its goal. San Clemente’s RHNA goal is 282 units for Very Low, 184 units for Low, 188 units for Moderate, and 348 units for Above Moderate. The City only has 1 unit for Very Low and 14 units for Low, which are all non-deed restricted. Compared to Moderate and Above Moderate, the city has made more progress (216 units) in these income levels than the rest. By restricting the conversion of motels it hinders the 2 September 17, 2024
San Clemente Planning Commission
City of San Clemente
910 Calle Negocio, Suite 100
San Clemente, CA 92673
RE: Item 8C- Housing Element Action Plan- Objective Design Standards and Zoning Code Amendment ZA24-193
Dear Chairman Cosgrove and San Clemente Planning Commissioners, The San Clement Affordable Housing Coalition (the Coalition) is a grassroots association of individuals and organizations committed to advocating for increased affordable housing opportunities for San Clemente’s lower-income residents. To that end, our group was deeply involved in all stages of the city’s adoption of its recent Housing Element (September 20, 2022 and approved by HCD on October 12, 2022). We remain intensely interested in the city’s progress in meeting the goals stated in this document.
In light of that experience and commitment, we write to express our strong opposition to the proposed Zoning Code Amendment ZA24-193, Item 8C of the agenda for the Planning Commission Meeting on September 19, 2024. We believe certain parts of the proposed Zoning Code Amendment (the Amendment) conflict with provisions of the city’s certified Housing Element. Accordingly, if the city adopts the Amendment as proposed, the Zoning Code will be inconsistent with the General Plan, putting the city at legal peril. At the least, the city will be in the cross-hairs of the enforcement arm of the California Department of Housing and Community Development. Not a good place to be, as San Clemente well knows.
What are the problems with the proposed Amendment? At least two are immediately apparent.
1. The Amendment Guts the Affordable Housing Overlay Zone.
Under the guise of implementing the Housing Element’s “Housing Action Plan,” the city proposes to gut the existing Affordable Housing Overlay Zone set forth in section 17.56.90 of the Municipal Code. The tip off, of course, is the proposed name change. The city wants to rename the code section “Housing Overlay,” dropping the words “Affordable Housing” and thereby signaling a huge change in intent. As amended, the section will no longer encourage affordable housing for very low-income residents. Instead, the code section will allow developers of market rate housing to take advantage of its provisions without providing any lower income affordable housing.
Here's the proof: At page 27 of “Attachment 2-Redline of Zoning Amendment ZA24-193,” under “C. Project Qualification,” the Amendment defines “Qualified Affordable Housing Development” to include “multi-family rental or for sale housing” in which “At least 40% of the housing units are restricted to moderate-income households.” The Amendment would allow the developer of such a project to rent or sell the other 60% of the units at market rate.
The effect of this proposed change is staggering. Where the existing Affordable Housing Overlay Zone requires a developer to provide “a minimum of 51 percent of the housing units for households earning no greater than 50 percent of Orange County Median Income” – i.e., very low-income households – the new Housing Overlay requires zero very low-income units or lowincome units. Of course, a developer could choose to qualify for the Housing Overlay’s benefits by providing “At least 20% of the housing units . . . restricted to low-income households,” but the lure of the more lucrative other route – providing 40% moderate-income units—will be hard for developers to ignore. The very likely result is that any future residential development in the new Housing Overlay will not include any lower-income affordable housing.
San Clemente has a dire need for very low-income affordable housing, which is the most expensive housing for a developer to include in a mixed-income project. That’s why the provisions of the existing Affordable Housing Overlay Zone were so promising: They specifically incentivized exactly the sort of housing the community desperately needs. With the proposed Amendment, that promise will be lost.
And that loss creates a big legal problem for San Clemente. Many of the programs, goals, strategies and polices of the certified Housing Element are based on and incorporate the existing provisions of section 17.56.90. The proposed Amendment throws everything off, including the RHNA assumptions underlying the list of the Candidate Sites for Rezoning. Which brings up the second obvious problem with the Amendment . . . .
2. The Amendment Creates Barriers to Converting Motels Into Affordable Housing The proposed Amendment to section 17.56.090 will restrict the conversion of motels for use as Qualified Affordable Housing Developments. (See note 25 on pp. 33, 41; note 33 on p. 51.) More specifically, the Amendment would effectively outlaw the conversion of motels into affordable housing or permanent supportive housing, with just two exceptions. Those exceptions are (1) if the motel conversion includes an equivalent amount of new, lower-cost visitor-serving accommodations, or (2) if approval of the motel conversion is “required to be approved pursuant to State law.” (The latter exception is left conveniently undefined.) Of course, neither “exception” is easily met. Instead, the Amendment creates a huge impediment to transitioning aging motel properties into affordable housing. Accordingly, this proposed revision conflicts with the Housing Element in several ways, creating further legal peril for San Clemente.
For example, the Amendment conflicts with affordable housing strategies in Housing Element Goal 5.3. Strategy 5.3.1 states: The city will “Encourage redevelopment and adaptive reuse of infill sites and properties in Affordable Housing Overlay Zone, such as conversion of residential motels to apartments.” Contrary to the Housing Element’s express intent here to encourage such redevelopment and adaptive reuse of the motels in the Affordable Housing Overlay Zone, the Amendment creates significant barriers.
Program 5 of the Housing Element, “Affordable Housing Overlay,” states that the city will “prioritize inclusionary in lieu fees for lower income affordable housing projects proposed in the affordable housing overlay/ housing overlay…” Program D3 of the Housing Element states that In Lieu Fees “could be used to acquire existing apartments, construct new apartments, or the purchase and conversion of old motels.” In other words, in these provisions the city has committed to using its in-lieu fees for projects within the housing overlay, specifically including motel conversions, but the Amendment would obstruct these options, thereby impeding affordable housing development.
Significantly, the staff report does not include an analysis of how these revisions will impact the city’s current Housing Element goals for housing opportunities. This is a fatal flaw. San Clemente needs to address this issue by providing an analysis of the changes that will flow from the proposed Amendment and the consequences of those changes on the city’s ability to meet its obligations under the Housing Element.
The Coalition requests that the city honor its commitments in its Housing Element to facilitate affordable lower-income developments on motel sites and as prescribed in the Affordable Housing Overlay. These sites and the existing Overlay are critical to addressing affordable housing needs in the city. The proposed restrictions on the conversion of motels into affordable housing, and the changes to the Affordable Housing Overlay, will hinder the city’s attainment of its lower-income RHNA goals, and directly limit potential affordable housing developments.
Thank you for considering our concerns on these important issues. We urge you to vote no on the proposed Amendment to section 17.56.090.
Sincerely,
Kathy Esfahani
Kathy Esfahani,
San Clemente resident and Chair, San Clemente Affordable Housing Coalition cc: Andy Hall, San Clemente City Manager
Mr. Paul McDougall & Marissa Prasse - CA Dept. of Housing and Community Dev.
Cesar Covarrubias, Kennedy Commission
Richard Walker, Public Law Center
October 2, 2024
San Clemente Planning Commission
City of San Clemente
910 Calle Negocio, Suite 100
San Clemente, CA 92673
RE: Item 8D- Housing Element Action Plan- Objective Design Standards and Zoning Code Amendment ZA24-193
Dear Chairman Cosgrove and San Clemente Planning Commissioners, The San Clemente Affordable Housing Coalition (the Coalition) submits this letter as a follow-up to our September 17, 2024, public comment on the proposed Zoning Code Amendment ZA24-193. We write to elaborate on two main points and to ask a few questions.
1. The Proposed New Housing Overlay is Inconsistent with the Housing Action Plan.
There is a big flaw in the proposed new Housing Overlay. Where the existing Affordable Housing Overlay provides a developer with the benefit of ministerial approval for a project with 51% of its units designated for very low-income households, the new Housing Overlay provides that valuable incentive to developments with zero lowerincome units.
At page 27 of “Attachment 2-Redline of Zoning Amendment ZA24-193,” under “C.
Project Qualification,” the Amendment defines “Qualified Affordable Housing Development” to include “multi-family rental or for sale housing” in which “i. At least 20% of the housing units are restricted to low-income households; or ii. At least 40% of the housing units are restricted to moderate-income households.” Of course, a developer could choose to qualify for the Housing Overlay’s benefits by providing at least 20% lower income units, but that choice is unlikely. It is far more lucrative for a developer to provide 40% moderate-income units. According, the likely result of adopting this overly broad definition of “Qualified Affordable Housing Development” is that any future residential development in the new Housing Overlay will not include any lower-income affordable housing.
This proposed “40% moderate-income units” requirement brings the new Housing Overlay into direct conflict with important parts of the Housing Action Plan. For example, Program 5: “Affordable Housing Overlay” includes as one of its “Objectives” the following:
“Concurrently with the housing overlay in Program 1, and by-right approvals in Program 2A, modify the Affordable Housing Overlay Zone to improve the effectiveness of the Overlay Zone and make amendments as necessary.
Specifically, evaluate the effectiveness and create one Housing Overlay (H) with objective design standards, minimum levels of affordable housing units, and byright approval if 20 percent of the units are set aside for lower income (very low and low) households (see Program 2A).”
Notably, the Housing Action Plan says nothing about allowing moderate-income housing to qualify for the Affordable Housing Overlay’s “by-right approval” benefit.
Similarly, this proposed change is also inconsistent with “Program 2A—By-Right Approval for Projects with 20 Percent Affordable Units.” In that program, the City commits to the following:
“[T]he City will amend the Zoning Ordinance and apply a Housing Overlay (H) to require by-right approval of housing development that includes 20 percent of the units as housing affordable to lower income (very low and low) households, on the following types of sites for meeting the City’s RHNA:
● Sites being used to meet the 6th cycle RHNA that represent a ‘reuse’ of sites previously identified in the 4th and 5th cycles Housing Element. The ‘reuse’ sites are specifically identified in the inventory (Table 4-4). ● Candidate sites that are rezoned within three years from the statutory deadline of the 6th cycle Housing Element (Table 4-6).”
Again, the City’s Housing Action Plan does not express any intention to expand the Affordable Housing Overlay’s by-right approval benefit to moderate income housing.
Moreover, as explained above, expanding the Overlay’s benefits to moderate income housing will siphon off potential opportunities for developing lower-income units at sites within the Housing Overlay. That change will interfere with the City’s ability to meet its Housing Element obligations, and thus get the City in trouble with the Department of Housing and Community Development.
2. Moderate-income Units Should Not Qualify as Affordable Housing for Purposes of the New Housing Overlay.
The Housing Element itself shows why the City should focus its efforts on facilitating the development of low- and very low-income housing, not moderate-income housing.
The RHNA numbers are a good starting point. In this Planning Period, San Clemente must plan for 448 lower-income units, but only 188 moderate-income units. Making matters worse, the “residential site inventory” falls far short of meeting the lower income RHNA numbers, while that same inventory comes close to meeting the moderate income RHNA numbers. As noted in Program 1 of the Housing Action Plan, the City must rezone additional “candidate sites with a housing overlay (H) . . . to accommodate the City’s RHNA shortfall of 244 lower income units, 21 moderate income units . . .” In other words, rezoning enough sites for lower income units is a much greater need than rezoning sites for moderate income units.
The Housing Element further illustrates the need for focusing City efforts on lowerincome housing with two tables. Table 2-24 (HE-18) shows that “affordable” monthly rents for a four-person household are: $689 for extremely low-income households; $1329 for very low-income households; $2289 for low-income households; $2818 for moderate-income households.
Table 2-23 (HE-17) shows that average rent in San Clemente for a two-bedroom apartment is $2549 ($2484 on Craigslist, $2832 on Zillow).
What these two tables show is that “moderate-income” rents are essentially market rate rents. These rents are already available in San Clemente. It is lower-income housing that is in critically short supply. Consequently, the City will miss a crucial opportunity to expand its supply of critically-needed affordable housing by including “moderate income” units in its definition of Qualified Affordable Housing for purposes of the Housing Overlay.
3. The Amendment Creates Barriers to Converting Motels Into Affordable Housing
The proposed Amendment to section 17.56.090 will restrict the conversion of motels for use as Qualified Affordable Housing Developments. (See note 25 on pp. 33, 41; note 33 on p. 51.) More specifically, the Amendment would effectively outlaw the conversion of motels into affordable housing or permanent supportive housing, with just two exceptions. Those exceptions are (1) if the motel conversion includes an equivalent amount of new, lower-cost visitor-serving accommodations, or (2) if the motel conversion is “required to be approved pursuant to State law.” Of course, neither “exception” is easily met. Instead, the Amendment creates a huge impediment to transitioning aging motel properties into affordable housing. Accordingly, this proposed revision conflicts with the Housing Element in several ways, creating further legal peril for San Clemente. These conflicts were specifically addressed in our letter of September 17.
Here, we would like to ask the Planning Commission a few questions related to this proposed restriction on motel conversions into affordable housing:
1. Why is the City proposing to adopt this restriction on motel conversions if the Coastal Commission does not require such an ordinance?
2. Why does the proposed restriction apply to motels outside of the Coastal Zone, given the fact that the Housing Element commits the City to “Encourage redevelopment and adaptive reuse of infill sites and properties in Affordable Housing Overlay Zone, such as conversion of residential motels to apartments.” (Housing Action Plan, Strategy 5.3.1.)
Conclusion
The Coalition requests that the City honor its commitments in its Housing Element to facilitate affordable lower-income developments on motel sites and as prescribed in the Affordable Housing Overlay. These sites and the existing Overlay are critical to addressing affordable housing needs in the city. The proposed restrictions on the conversion of motels into affordable housing, and the changes to the Affordable Housing Overlay, will hinder the city’s attainment of its lower-income RHNA goals, and directly limit potential affordable housing developments.
Thank you for considering our concerns on these important issues. We urge you to vote no on these specific changes proposed in the Amendment to section 17.56.090.
Sincerely,
Kathy Esfahani
Kathy Esfahani,
San Clemente resident and Chair, San Clemente Affordable Housing Coalition cc: Andy Hall, San Clemente City Manager
Mr. Paul McDougall & Marissa Prasse - CA Dept. of Housing and Community Dev.
Cesar Covarrubias, Kennedy Commission
Richard Walker, Public Law Center