Planning and Building Agency
www.anta-ana.org/planning-and-building
Item # 31
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 21, 2023
Topic: Density Bonus Agreement No. 2023-02: Residential Development (322 N Harbor Blvd.)
AGENDA TITLE
Density Bonus Agreement No. 2023-02 to Facilitate the Construction of a Rental Residential Development Consisting of 22 Apartment Units, with Two Units Proposed as Affordable to Very Low Income Households
RECOMMENDED ACTION
1. Adopt a resolution approving Density Bonus No. 2023-02 as conditioned.
RESOLUTION NO. 2023-XXX entitled A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA ANA APPROVING DENSITY BONUS AGREEMENT NO. 2023-02 AS CONDITIONED FOR A NEW RENTAL RESIDENTIAL
DEVELOPMENT WITH TWENTY-TWO UNITS FOR THE PROPERTY
LOCATED AT 322 NORTH HARBOR BOULEVARD (APN: 198-051-17) (includes determination that no additional environmental review will be required in accordance with the California Environmental Quality Act as a Notice of Exemption, Environmental Review No. 2022-12 will be filed for this project)
2. Authorize the City Manager to execute a Density Bonus Agreement with P&P Bros Corp., for a 55-year term, for a rental residential development consisting of 22 apartment units, with two units proposed as affordable to very low income households at 322 N. Harbor Boulevard, subject to non-substantive changes approved by the City Manager and City Attorney (Agreement No. 2023-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
EXECUTIVE SUMMARY
The Jager Company, Ltd. (applicant), on behalf of P&P Bros Corp. (property owner), is requesting approval of Density Bonus Agreement (DBA) No. 2023-02 to allow the construction of a rental residential development consisting of twenty-two (22) apartment units, with two units proposed as affordable to very low income households earning less than 50% of the area median income (AMI), on a 0.34-acre site located at 322 North Harbor Boulevard. As proposed, the project will utilize waivers from development
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standards and/or development concessions through the density bonus agreement pursuant to California Government Code Sections 65915 through 65918 and Santa Ana Municipal Code (SAMC) Section 41-1600 through 41-1607. Moreover, the project requires approval by the Planning Commission and City Council for a density bonus to allow up to
64.71 dwelling units per acre (du/ac). The request satisfies the purpose and intent of the Harbor Mixed Use Corridor Specific Plan (SP2) to provide additional affordable housing stock to an underserved segment of the region’s population. As a result, staff recommends approval of the DBA.
Planning Commission Action
On September 25, 2023, the Planning Commission held a public hearing for the project and unanimously voted to approve Site Plan Review (SPR) No. 2023-02 as conditioned, and to recommend that the City Council approve Density Bonus Agreement No. 2023- 02 with conditions. Following this vote, the item requires City Council approval of the density bonus agreement.
DISCUSSION
Table 1: Project and Location Information
Project Description
The project includes the construction of a new four-story residential building with flats consisting of 22 apartment units, 3,377 square feet of open space, 22 parking spaces, and five bicycle spaces. The residential development will include 18 one-bedroom units, four two-bedroom units, a fitness room, and a community room/leasing office. Each of the 22 units will contain full kitchens, bedrooms, bathrooms, open/common (living) areas, and private decks. Out of the total units in the development, two units are proposed to be affordable to very low income households earning less than 50% of the area median Item Information
Project Address and Council Ward 322 N. Harbor Blvd. – Ward 1 Nearest Intersection North Harbor Boulevard and West Fifth Street General Plan Designation Urban Neighborhood-Medium High (UN-50) Zoning Designation Corridor (CDR) district within the Harbor Mixed Use Corridor Specific Plan (SP2)
North Commercial
East Vacant
South Commercial
Surrounding Land Uses
West Multi-Family Residential
Property Size 0.34-acres (14,824 square feet)
Existing Site Development The site is currently developed with a 1,495 square-foot single story commercial building.
Use Permissions Multi-Family Residential (permitted under Corridor district within SP2)
Uses Article XVI.I (Density Bonus); CDR,
Table 3-2. Permitted UsesZoning Code Sections Affected Development Standards
CDR, Tables 3-3 through 3-9.
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income (AMI), which is currently set at $71,750, adjusted for a four-person household size, as published by California Department of Housing and Community Development (HCD).
The project features a contemporary architectural style similar to many multiple-family or mixed-use residential communities under construction in the region and is complementary to the emerging architectural style in the Specific Plan area. The overall design, massing, features, and materials of the new construction will be compatible with, but differentiated from, the existing neighborhood. The contemporary architectural style would include synthetic exterior board siding, stucco finishes, vinyl frame windows, metal railings for proposed decks, wood framed awnings, split-face CMU walls, and high- quality architectural detailing. Moreover, the structure is designed to fully screen all mechanical equipment within the structure and parapet walls. Overall, the project will include a design and solid construction materials that will ensure that the project ages well for the duration of the building’s lifetime.
Density Bonus
The California Density Bonus (Government Code § 65915 et seq.) law allows developers proposing five or more residential units to seek increases in base density for providing on- site housing units in exchange for providing affordable units on site. To help incentivize constructing on-site affordable units, the law allows developers to seek a density bonus that allows a project to exceed local density restrictions, as specified by state law, and up to three incentives/concessions and an unlimited number of waivers that facilitate production of units, which are essentially variances from development standards that would help the project be built without significant burden and without detriment to public health. The first version of the Density Bonus Law was adopted in 1979 and has since been amended at various times. In early 2017, the law was amended to restrict the ability of local jurisdictions to require studies to “justify” the density bonus and requested incentives/waivers and places the onus on local jurisdictions to prove that the incentives/concessions or waivers are not financially warranted.
Pursuant to the California Density Bonus law, a project’s affordability level is determined by dividing the number of proposed affordable units by the allowable “base” density (i.e., 50 du/ac). Moreover, the State density bonus law states that units added by a density bonus are excluded from the calculations. As outlined by Table 2 below, the base density for the 0.34-acre site at 50 du/ac is 17 units. Out of the total units in the development, two units are proposed to be affordable to very low income. Therefore, the project would provide eleven-percent (11%) of the base units for very low income households. As such, State density bonus law allows the developer to request a maximum density bonus of 35%. This would allow a project with a total of 23 units, but the applicant is proposing to develop 22 units on the site.
Due to the project’s 11% affordability rate, under Government Code Section 65915, the developer can seek two density bonus concessions and unlimited waivers.
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Table 2: Density Bonus Calculation
Affordable Unit – 11% (2 units)* Density Bonus Calculation Units Allowed Base Density - Stacked Dwelling Building type
(most “intense” type allowed in CDR) 0.34 acres x 50 du/ac 17 Units** 35-Percent State Density Bonus (17 units x 0.35) +6 Units** Total Potential Units 23 Units
Proposed Units 22 Units
*Affordable unit percentage is calculated excluding units added by a density bonus. **AB 2501 states that any density calculations resulting units shall be rounded up to the next whole number. Applies to: Number of affordable units required to be eligible for the density bonus; Base density (i.e. the number of affordable units in the base project); and Eligible bonus units.
The purpose of the State’s Density Bonus Law is to encourage the development and availability of affordable housing by requiring the inclusion of affordable housing units within new developments. Pursuant to California Government Code Sections 65915 (d)(1) and 65915 (e)(1), a local jurisdiction is limited in its ability to deny requested concessions and waivers and is preempted from denying the increased density required by the Density Bonus Law.
Pursuant to Government Code § 65915 (d)(1), a requested concession or incentive shall be granted unless the City makes written findings, based on substantial evidence of any of the following: (1) the concession or incentive does not result in identifiable and actual cost reductions to provide the proposed affordable housing, (2) the concession or incentive would have a specific, adverse impact on public health and safety, or on any real property listed on the California Register of Historical Resources, and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact without rendering the project unaffordable to low-income and moderate-income households, or (3) the concession or incentive would be contrary to state or federal law.
The Density Bonus Law also constrains the ability to deny requested waivers. Subject to exceptions for projects that receive a waiver from controls on maximum density, Government Code Section 65915 (e)(1) provides that the City cannot apply any development standard that would physically preclude the construction of a development entitled to a density bonus at the increased density or with the concessions or incentives, unless the City makes findings that the waiver would have a specific, adverse impact on public health or safety, and there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact.
Although the City has analyzed the project and has identified several areas of concern, the conditions of approval proposed for the project are intended to address any of the project’s potential impacts. Table 3 outlines the incentives/concessions and waivers requested by the applicant.
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Table 3: Requested Incentives/Concessions
SP2 Standard Requirement Provided
Open Space –
Minimum Common
Open Space
(Stacked Dwelling
building type)
•Common Open Space - 15% of lot
(2,224 square feet)
SP-2, Table 3-9. Onsite Open Space
Requirements
•Common Open Space - 5% of lot
(800 square feet)
Requires Concession (1 of 2), Cal.
Gov’t Code Sec. 65915 (d)(1)(2)(B)
Building Frontage
Type and Floor
Height
•Requires building to provide a
Frontage Type identified.
SP-2, Table 3-4. Frontage Floor
Height Minimums and Districts
•Proposed design does not provide a
frontage consistent with the SP2.
Requires Concession (2 of 2), Cal.
Gov’t Code Sec. 65915 (d)(1)(2)(B)
Lot Size/Width
(Stacked Dwelling
building type)
•Lot width required for Stacked
Dwellings is between 125 feet and
200 feet.
SP2, Table 3-3. Building Type and
Form
•Existing lot width is 100 feet
Requires Waiver, Cal. Gov’t Code
Sec. 65915 (e)(1)
Onsite Open Space
(Stacked Dwelling
Type)
•Minimum 2/3 of open space is
required to be open to the sky
(1,482 square feet)
•Designed as courtyard of forecourt.
SP-2, Table 3-9. Onsite Open Space
Requirements
•800 square feet of open space
provided that is open to sky,
deficient 682 square feet; does not
meet definition of courtyard or
forecourt
•Open space that is open to the sky
is design as a deck
Requires Waiver, Cal. Gov’t Code
Sec. 65915 (e)(1)
Onsite Parking
In addition, the site is parked in compliance with California Government Code Section 65915 (p)(2)(A) and provides 22 total surface parking spaces or one space per unit. Per the California Density Bonus Law, a jurisdiction cannot impose a vehicular parking ratio that exceeds 0.5 spaces per unit, inclusive of handicapped and guest parking, when the development includes a minimum of 11% very low income units, is located within one-half mile of a major transit stop, and when there is unobstructed access to the major transit stop from the development. At one space per unit, the proposed development exceeded the minimum required parking ratio by 0.5 space per unit.
Analysis of the Issues
Density Bonus Agreement
Pursuant to Section 41-1607 of the SAMC, because the applicant requested “deviations” (incentives/concessions and waivers), it was subject to review and approval by the Planning Commission. The Planning Commission approved the application with the following findings:
1. The proposed development will materially assist in accomplishing the goal of providing affordable housing opportunities in economically balanced communities throughout the city.
2. The development will not be inconsistent with the purpose of the underlying zone or applicable designation in the general plan land use element.
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3. The deviation is necessary to make it economically feasible for the applicant to utilize a density bonus authorized for the development pursuant to section 41- 1603.
Table 4: Analysis of the Requested Incentives/Concessions (2) and Waivers (2) Standard Analysis
Minimum Common Open
Space Requirement
Table 3-9 (Onsite Open Space Requirements) in the Harbor Mixed-Use Transit Corridor Plan (SP2) requires a minimum of 15% of the lot size to be provided as common open space or plaza space.
As proposed, the project provides 5 percent common open space or 800 square feet in the form of a common open deck on the second floor. Strict adherence to this common open space requirement would result in a reduction in the number of units that can be provided in the overall project, thus reducing the applicant’s ability to achieving the full 35-percent density bonus to which the applicant is entitled under State Housing Law and affecting the feasibility to construct the project. In order to provide the required common open space and maintain the current proposed unit count, the developer would be required to construct additional floor levels, which would exceed the maximum allowable height as part of the Harbor Mixed Use Transit Corridor Plan (SP-2), and would further increase development costs making the project economically infeasible. To help alleviate the common open space deficiency, the project proposes a 1,477-square-foot community room, a separate fitness room, and an average of 50 square feet of private open space per unit (1,100 square feet total), through use of private balconies/decks for each unit.
Building Frontage Type
and Floor Height
Table 3-4 (Frontage Floor Height Minimums and Districts) of the SP2 indicate that arcade, gallery, shop front, forecourt, stop, and front yard/porch are the six allowed frontage types. As proposed, the project does not identify a frontage type that is consistent with SP2.
Maintaining the required frontage type and minimum floor heights would result in a complete site and architectural redesign, involving more of the site area dedicated to the frontages design. In order to maintain the current proposed unit count, the developer would be required to redesign the site and elevation design, further increasing development costs and potentially leading to a loss of residential units, and a loss of further open space.
Additionally, adherence to the frontage and floor height minimum requirements would be economically infeasible, as it would require additional cost to provide the materials required for the allowed frontage types.
Lot Size/Width (Stacked
Dwelling building type)
Table 3-3 (Building Type and Form) of the SP2 required Stacked Dwellings to have the minimum lot size dimensions of 130 feet deep and 125-200 feet wide. As proposed, the project is located in a lot with the lot size dimensions of 148.25 feet deep and 100 feet wide.
The proposed development is located on an existing lot surrounded by existing commercial and residential development. Specifically, the project is abutting an apartment complex that was first constructed in 1986 to the west and commercial buildings that were constructed in 1962 to the north and south. In order to comply with lot width standards, the developer would be required to purchase a lot to the north or south and demolish the existing Density Bonus Agreement No. 2023-02: Residential Development (322 N Harbor Blvd.) November 21, 2023
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When analyzed cumulatively, the requested concessions and waivers could be avoided if the project were designed on a different site or using a different site plan. If the project were designed on a larger site with a multi-level parking and/or subterranean parking structure, or if the applicant used different building materials to construct a taller project on a larger site, additional area on site would become available to provide the open space requirements and the allowed building frontage type. However, these changes would increase development costs, resulting in the housing project becoming financially infeasible due to the significantly increased financial implications of an alternative construction type compared to the relatively smaller scale of the project. In addition, these changes would reduce the number of units that could be constructed on the site and therefore eliminate the affordable housing units that would result from the project.
In addition, the changes would increase development costs and reduce the financial feasibility of redeveloping the site, resulting in the affordable housing project becoming financially infeasible due to the significantly increased financial implications. Lastly, the proposed deviations are necessary to make the project economically feasible for the development on either site. This would result in increasing costs and would make the project infeasible. Moreover, the development site and adjacent properties all have smaller than average lot widths, compared lots along north Harbor Boulevard. These lots range in lot depth and width, but most exceed 200 feet in lot width. In comparison, the site would have a lot width and depth of 148.25 feet deep and 100 feet wide, with a deviation of 25 feet for the minimum required lot width. Although the site has a deviation of 25 feet in the lot width, the applicant’s stacked dwelling building design still accomplishes the intention of the SP2 by providing a compatible design and balanced composition of massing on the project site, with appropriate interior floor area and individual unit sizes.
Onsite Open Space
(Stacked Dwelling
building type)
Pursuant to the Open Space Standards in SP2, the total onsite open space open to the sky must be two-thirds and designed as a courtyard or forecourt.
Based on the lot size for the proposed project, the total onsite open space open to the sky should be 1,482 square feet and designed as a courtyard or forecourt. As proposed, the project will have an 800 square-foot deck.
As proposed, the project provides 800 square feet of open space that is designed as a deck open to the sky. The deck will be furnished, landscaped, and connected to the interior 1,477-square-foot community room. The proposed configuration would provide a contiguous 2,277 square feet of open space. Strict adherence to the two-thirds requirement would lead to the elimination of two or more units, which would affect the feasibility to construct the project. In order to maintain the current proposed unit count, the developer would be required to construct additional floor levels or required to provide underground parking, which would further increase development costs and make the project financially infeasible. Moreover, due to the site’s limited size, the project proposed podium level parking, and the residential units stacked above the podium parking. Creating a courtyard or forecourt, would result in the project reducing the number of units by two or more in order to adhere to the open space standards.
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applicant to utilize a density bonus authorized for the development pursuant to Section 41- 1603 of the SAMC.
Affordable Housing Opportunity and Creation Ordinance (AHOCO) The proposed development is subject to the requirements of the City’s Affordable Housing Opportunity and Creation Ordinance (AHOCO), which requires rental unit developments to provide a minimum number of affordable units, depending on the proposed affordability level (i.e., low income, very low income, extremely low income, or a combination). In this case, the developer is proposing to provide very low income units. Pursuant to the AHOCO, the applicant is required to provide ten percent (10%) very low income onsite affordable units. Therefore, two very low income units would be required to be provided onsite to be rented for occupancy, or held vacant and available for immediate occupancy, by very low income tenants.
The developer is proposing to satisfy the AHOCO by providing two onsite rental units for rent to very low income tenants. These units will be dispersed throughout the community and will each contain one bedroom and will be approximately 633 square feet in size (gross area), with a 50-square-foot deck. The developer’s Inclusionary Housing Plan has been reviewed and approved by the City’s Housing Division, which determined the unit type to be restricted as affordable (i.e., one-bedroom) based on the breakdown of total unit types proposed (e.g., 18 one-bedroom units proposed).
Public Notification and Community Outreach
Project notifications were posted, published, and mailed in accordance with City and State regulations. In addition, staff contacted the provided contacts for the Riverview West and Santa Anita Neighborhood Association to ensure they were aware of the project and public hearing. At the time this report was printed, no issues of concern were raised regarding the proposed development.
ENVIRONMENTAL IMPACT
Pursuant to the requirements of the California Environmental Quality Act (CEQA), an Environmental Impact Report (EIR) was prepared and certified in 2014 in order to address the potential environmental impacts associated with the Harbor Mixed Use Corridor Specific Plan. A mitigation monitoring and reporting program (MMRP), findings of fact, and a statement of overriding consideration were adopted with the 2014 EIR.
As proposed, the development is not anticipated to have additional environmental impacts not addressed in the 2014 EIR. Therefore, no additional environmental review will be required. Based on this analysis, a Notice of Exemption, Environmental Review No. 2022-12 will be filed for this project. However, all applicable mitigation measures in the original EIR and associated MMRP will be enforced.
FISCAL IMPACT
There is no fiscal impact associated with this action.
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EXHIBIT(S)
1. Resolution – Density Bonus Agreement
2. Draft Density Bonus Agreement
3. September 25, 2023 – Planning Commission Staff Report and Exhibits Submitted By: Minh Thai, Executive Director of Planning and Building Agency Approved By: Steven A. Mendoza, Acting City Manager