City Council
Report
City Council Meeting: October 11, 2022
Agenda Item: 11.A
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Adoption of Resolution Amending the 6th Cycle (2021-2029) Housing Element to the City’s General Plan and Approval of Addendum to the Final Environmental Impact Report for the 6th Cycle (2021-2029) Housing Element Recommended Action
Staff recommends that the City Council:
1. Review, approve, and adopt the Addendum to the 6th Cycle Housing Element Environmental Impact Report (SCH No. 20212269242021); and
2. Adopt a Resolution adopting an Amended 6th Cycle (2021-2029) Housing Element of the City’s General Plan.
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Summary
On June 21, 2022, the City Council reviewed the revised draft 6th Cycle Housing Element and directed staff to transmit to the State of California’s Housing and Community Development Department (HCD) for review and comment. On September 6, 2022, HCD issued a letter determining that the revised draft 6th Cycle Housing Element will comply with State Housing Element law when it is adopted, submitted to, and approved by HCD. This report presents the same revised draft that Council previously reviewed with only the following changes, which are highlighted in redline in Attachment C:
1) Updated implementation dates for Housing Element programs to reflect updates in Housing Element law, and
2) Minor typographical errors.
Council adoption of this revised Housing Element is necessary to ensure that the City is able to transmit the adopted revised Housing Element to HCD to try and meet the October 15, 2022, State deadline by which HCD must determine that the adopted revised Housing Element complies with State Housing Element Law. If the City meets this deadline, in accordance with Government Code Section 65583.4, which became effective on June 30, 2022, the one-year deadline for rezoning will be extended to three years and 120 days. If the City does not meet the October 15, 2022 deadline, the City will continue to be out of compliance and will not be able to be in compliance until rezoning is completed and subject to the consequences detailed below.
Discussion
Revised Housing Element
The attached Resolution (Attachment B) includes Exhibit A, the June 21, 2022, draft redline revisions, as already reviewed by HCD, and Exhibit B, further redlines made on September 22, 2022 to implementation dates for Housing Element programs as recommended by the Planning Commission. The revised implementation dates reflect updates to Housing Element law that could potentially provide the City an additional three years and 120 days from the dates of the statutory deadline (i.e. October 15, 2021). The Planning Commission recommended shortening the implementation timing 3 of 7
from three years (October 15, 2024) to two years (October 15, 2023) for Programs 1F (Downtown standards), 1J (Citywide standards), 2C (AHPP Update), and 2D (State Density Bonus) given the need to provide more certainty for housing providers. The September 2022 revisions to the Housing Element also includes corrections for minor typographical errors.
In order to qualify for the additional time, the City Council must adopt the revised draft 6 th Cycle Housing Element and HCD must deem the adopted Housing Element in compliance prior to October 15, 2022. If the October 15, 2022 deadline is not met, the City’s deadline to complete rezoning by October 15, 2022. If the City does not come into compliance by October 15, 2022, the City will continue to be deemed out of compliance until rezoning is completed. Consequences of continuing to being out of compliance are summarized in the following tables.
Consequences of Being out of Compliance in Short Term
Gov’t Code
Section Trigger Point Short Summary
Housing
Accountability Act:
65589.5(d)(1) &
(5)(B)
“Builder’s Remedy”
projects
• Housing
Element is out
of compliance
• Must approve any project with at least
20% affordable to 60% AMI or 100%
Moderate, even if the project exceeds
zoning or general plan maximums
• Conditions cannot render the project
infeasible
65583.2(c)(1)(A) • Failure to adopt
a Housing
Element that
has been
certified by
February 12,
2022
• Required to complete rezoning for
RHNA by October 15, 2022
• HCD has indicated that City would need
to prepare a Suitable Sites Inventory
(SSI) specifically for this purpose to
demonstrate compliance with the
rezoning requirement
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Consequences of Being out of Compliance in Short Term
Gov’t Code
Section Trigger Point Short Summary
65583(g) • Rezoning for
RHNA not
completed by
October 15,
2022
• City must approve any project that is at
least 49% affordable on an SSI site that
meets the densities in SSI table
• Staff is seeking further clarification from
HCD whether this applies only to sites
identified on the SSI or all sites that are
slated for rezoning
65588(e)(4)(C) • Rezoning for
RHNA not
completed by
October 15,
2022
• State can start enforcement proceedings
against the City
Housing funding
programs
dependent on
Housing Element
compliance
• Housing
Element is out
of compliance
• Ineligible for funding programs where the
City has previously been awarded
funding for affordable housing such as
Local Housing Trust Fund (LHTF) and
Permanent Local Housing Allocation
(PLHA)
• Others include Affordable Housing and
Sustainable Communities program
(AHSC), SB1, and SB2
Consequences in Long Term
Gov’t Code
Section Trigger Point Short Summary
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Consequences in Long Term
Gov’t Code
Section Trigger Point Short Summary
Senate Bill 35
(65400, 65582.1,
65913.4)
• Starting with April 1, 2023
Annual Progress Report
(APR) to HCD,
determination by HCD
that Santa Monica has
not issued sufficient
building permits to meet
pro-rated RHNA for
market rate units and
lower-income units
• Determination typically
made in June reviewing
data from January 1 –
December 1, 2022
• Requires ministerial approval
(no public hearing) for
projects that include
minimum percentage of
affordability and meet SB35
preconditions
o If Above Moderate (i.e.
market-rate) RHNA not
met then projects with at
least 10% affordability
o If Lower Income RHNA
not met then projects with
at least 50% affordability
• City can only impose
objective standards, including
for design review
The above table highlights primarily the City’s obligations to approve projects and potential impacts to funding for affordable housing but it should be noted that being out of compliance also means that the State can seek judicial relief in addition to imposing penalties and fines. As part of the 2021-2022 State budget, HCD created a new Housing Accountability Unit to hold jurisdictions accountable for their housing element commitments and compliance with State housing laws, as detailed here.(https://www.hcd.ca.gov/community-development/accountabilityenforcement.shtml).
Environmental Analysis
The 2021-2029 6th Cycle Housing Element Environmental Impact Report (EIR) [SCH No. 20212269242021] was certified by Council on October 12, 2021. Subsequent to certification, the June 21, 2022 revisions to the 6th Cycle Housing Element required the City to plan for a total of up to 13,600 housing units, which constitutes an approximately 53% buffer, including approximately 6,168 affordable units. Therefore, in comparison to 6 of 7
the 11,025 units analyzed in the previously certified Final EIR for the 6th Cycle 2021- 2029 Housing Element Update, the proposed revisions would add approximately 2,575 new units, including an increase of approximately 776 affordable units.
Pursuant to the California Environmental Quality Act (CEQA) Guideline 15164(a), a lead agency must prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in CEQA Guideline 15162; calling for preparation of an EIR have occurred (i.e. substantial changes that involve new significant environmental effects or substantially increase the severity of previously identified significant effects, substantial changes in the circumstances under which the project was undertaken, or new information of substantial importance that was not known at the time the previous EIR was certified).
Analyses of the revised 6th Cycle Housing Element was completed in October 2022 and are detailed in the Addendum to the Housing Element Environmental Impact Report (Attachment 3). As required by CEQA, all 22 environmental factors were reviewed. In summary, the revisions to the Housing Element (which would provide a capacity of 13,600 units through the next 8 years) would not constitute a substantial change nor would it result in a new or greater environmental impact.
In light of these proposed modifications to the Housing Element, an Addendum is appropriate because none of the conditions described in CEQA Guideline 15162 have occurred which would warrant preparation of a supplemental or subsequent EIR. Based on the analysis in the Addendum, the revisions to the Housing Element do not result in new or substantially more significant environmental effects than were identified in the EIR and would not require new mitigation measures than were already required by the EIR.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action.
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Prepared By: Jing Yeo, Planning Manager
Approved Forwarded to Council
Attachments:
A. Addendum to 6th Cycle (2021-2029) Housing Element Update EIR B. Resolution Adopting Revised 6th Cycle Housing Element C. Housing Element September 2022 Final Draft (Redlines) - Web Link D. Housing Element September 2022 Final Draft (Clean) - Web Link E. Housing Element June 2022 Draft (Redlines) - Web Link F. Housing Element June 2022 Draft (Clean Version) - Web Link G. HCD Letter Determining Draft Housing Element in Compliance, September 6, 2022 - Web Link
H. Public Comments Received by City on Housing Element since February 2022 I. Written Comments
J. PowerPoint Presentation