Draft Resolution with Housing Element and other Exhibits — Sunnyvale City Council, December 12, 2023 (part 6 of 6)

Pro
cessing and Permit Procedures: While the element provides a description of the types of permits required for housing developments (p. 6-31), it must describe and analyze the permits’ processes, identify what is reviewed, typical findings and approval procedures by zone and housing type. The analysis must specifically address the threshold for a conditional use permit on multifamily uses and special development permits. The analysis must evaluate impacts on housing supply (number of units), costs, timing, feasibility and approval certainty.

Persons with Disabilities: The element identifies the definition of family and concludes the definition is not a constraint on housing for persons with disabilities. However, the element should evaluate the impacts of the provision for an “individual or group is in possession of the entire unit” and include a program to address identified constraints.

B. Housing Programs

1. Include a program which sets forth a schedule of actions during the planning period, each with a timeline for implementation, which may recognize that certain programs are ongoing, such that there will be beneficial impacts of the programs within the planning period, that the local government is undertaking or intends to undertake to implement the policies and achieve the goals and objectives of the Housing Element... (Gov. Code, § 65583, subd. (c).)

Some programs list implementation timelines as “ongoing.” While this may be appropriate for some programs, programs with specific implementation actions must include completion dates resulting in beneficial impacts within the planning period.

Examples include Program H6 (Affordable Housing Development Assistance) and H29 (Programs to Address Homelessness).

Additionally, several programs and actions have timelines that should be moved earlier in the planning period to ensure a beneficial impact. Examples include Programs H4 (ADU Toolkit with Preapproved Plans and DUO Units), H17 (Open Space Requirements), H18 (Review Development Fees).

Additionally, programs must have specific commitment to clear outcomes or deliverables. Several programs include actions with no description of how those actions will be implemented (e.g., “support”, “study”, “explore”, “evaluate”, etc.,). For example, Program H18 states that the City will "review and consider whether reductions to the park in-lieu fee... and development impact fees are appropriate". However, it does not state when and to what extent these fees will be reduced. Programs should be amended, to include specific commitment to a housing related outcome. Examples include Programs H3 (Increase Affordable Housing in High Resource Areas), H12 (Preservation of Government Assisted Housing, H16 (El Camino Real Specific Plan Active Ground Floor Requirement), H17 (Open Space Requirements) H18 (Review Development Fees), H19 (Adaptive Reuse), H20 (Preventing Displacement / Homelessness), H29 (Programs to Address Homelessness), H32 (New Age Friendly Housing), H35 (Prioritize Capital Improvement Program in low resource areas).

Attachment 2

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2. Ident
ify actions that will be taken to make sites available during the planning period with appropriate zoning and development standards and with services and facilities to accommodate that portion of the city’s or county’s share of the regional housing need for each income level that could not be accommodated on sites identified in the inventory completed pursuant to paragraph (3) of subdivision (a) without rezoning, and to comply with the requirements of Government Code section 65584.09. Sites shall be identified as needed to facilitate and encourage the development of a variety of types of housing for all income levels, including multifamily rental housing, factory-built housing, mobilehomes, housing for agricultural employees, supportive housing, single-room occupancy units, emergency shelters, and transitional housing. (Gov. Code, § 65583, subd. (c)(1).)

As noted in Finding A3, the element does not include a complete site analysis; therefore, the adequacy of sites and zoning were not established. Based on the results of a complete sites inventory and analysis, the City may need to add or revise programs to address a shortfall of sites or zoning available to encourage a variety of housing types.

3. Address and, where appropriate and legally possible, remove governmental and nongovernmental constraints to the maintenance, improvement, and development of housing, including housing for all income levels and housing for persons with disabilities.

The program shall remove constraints to, and provide reasonable accommodations for housing designed for, intended for occupancy by, or with supportive services for, persons with disabilities. (Gov. Code, § 65583, subd. (c)(3).)

As noted in Finding A4, the element requires a complete analysis of potential governmental and nongovernmental constraints. Depending upon the results of that analysis, the City may need to revise or add programs and address and remove or mitigate any identified constraints.

In addition, Program H20 (Zoning Amendments) commits to amend zoning (“as necessary”) to ensure requirements for group homes (6 or fewer and seven or more persons) are consistent with fair housing requirements. These uses, in most cases, are either excluded from residential zones or subject to a use permit which typically acts as a constraint on housing for persons with disabilities. The Program should specifically commit to amend zoning to allow these uses in all residential zones and replace or revise procedures to promote objectivity and approval certainty.

4. Promote and affirmatively further fair housing opportunities and promote housing throughout the community or communities for all persons regardless of race, religion, sex, marital status, ancestry, national origin, color, familial status, or disability, and other characteristics... (Gov. Code, § 65583, subd. (c)(5).)

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as appropr
iate, address housing mobility, encourage new housing choices in higher resource areas, improve place-based strategies toward community revitalization and protect existing residents from displacement.

5. The housing program shall preserve for low-income household the assisted housing developments identified pursuant to paragraph (9) of subdivision (a)... (Gov. Code, § 65583, subd. (c)(6).)

Program H12 states an objective to preserve 46 at risk units and notes the importance of facilitating long-term preservation of existing below market rate housing, committing to “track affordability agreements” (p. 2-10). However, the program should make a specific and firm commitment to maintain the long-term affordability of these units, including compliance with all noticing requirements, coordination with qualified entities and assistance with funding and support, education and assistance for tenants.

6. Develop a plan that incentivizes and promotes the creation of accessory dwelling units that can be offered at affordable rent... (Gov. Code, § 65583, subd. (c)(7).)

Program H4 (ADU Toolkit) should commit to monitor permitted ADUs and affordability every other year and take appropriate action such as adjusting assumptions or rezoning within a specified time (e.g., 6 months) if assumptions are not realized. In addition, as noted in Finding A3, the Program should commit to amend the ordinance as necessary to comply with ADU law by a specified date.

C. Public Participation

Local governments shall make a diligent effort to achieve public participation oof all segments of the community in the development of the Housing Element and the element shall describe this effort. (Gov. Code, § 65583, subd.(c)(9).)

While The City made extensive efforts to reach the public, including hosting events and meeting with key stakeholders and summarizing community feedback, it should also discuss how input was incorporated into the housing element.

In addition, HCD received comments with many meaningful and valuable suggestions related to the housing element and HCD strongly encourages the City to consider and address these comments, including revising the document as appropriate. Examples include park-in-lieu fees for lot splits, timing and affordability of housing in specific plans (e.g., Moffett Park Specific Plan), specific commitment with metrics to promote housing choices or affordability in relatively higher income neighborhoods, additional suitable sites (e.g., Village Centers along Hollenbeck Avenue and Homestead Road), parking and facili
tating missing middle housing types throughout the City.

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STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911
/ FAX (916) 263-7453
www.hcd.ca.gov
July 21, 20
23 Trudi Ry
an, Director
Community Development Department
City of Sunnyvale
456 West Olive Avenue
Sunnyvale, CA 94086
Dear Trudi
Ryan:

RE: City
of Sunnyvale’s 6th Cycle (2023-2031) Revised Draft Housing Element Thank you for
submitting the City of Sunnyvale’s (City) revised draft housing element update that was received for review on May 24, 2023 along with revisions received on July 10, 2023. Pursuant to Government Code section 65585, subdivision (b), the California Department of Housing and Community Development (HCD) is reporting the results of its review. Our review was facilitated by a conversation on June 15, 2023 with you, Ryan Dyson, Housing Specialist; Jenny Carloni, Housing Officer; and your consultant, Chelsey Payne. In addition, HCD considered comments from several stakeholders, pursuant to Government Code section 65585, subdivision (c).

The revise
d draft element addresses many statutory requirements described in HCD’s October 6, 2022 review; however, additional revisions are necessary to substantially comply with State Housing Element Law (Gov. Code, § 65580 et seq). The enclosed Appendix describes the revisions needed to comply with State Housing Element Law.

Public p
articipation in the development, adoption and implementation of the housing element is essential to effective housing planning. Throughout the housing element process, the City must continue to engage the community, including organizations that represent lower-income and special needs households, by making information regularly available while considering and incorporating comments where appropriate. Please be aware, any revisions to the element must be posted on the local government’s website and to email a link to all individuals and organizations that have previously requested notices relating to the local government’s housing element at least seven days before submitting to HCD.

Several f
ederal, state, and regional funding programs consider housing element compliance as an eligibility or ranking criteria. For example, the CalTrans Senate Bill (SB) 1 Sustainable Communities grant; the Strategic Growth Council and HCD’s

EXHIBIT C
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Affordable Housing and Sustainable Communities programs; and HCD’s Permanent Local Housing Allocation consider housing element compliance and/or annual reporting requirements pursuant to Government Code section 65400. With a compliant housing element, the City will meet housing element requirements for these and other funding sources.

For your information, some general plan element updates are triggered by housing element adoption. HCD reminds the City to consider timing provisions and welcomes the opportunity to provide assistance. For information, please see the Technical Advisories issued by the Governor’s Office of Planning and Research at:
https://www.opr.ca.gov/planning/general-plan/guidelines.html.

HCD appreciates the hard work and dedication you, Ryan Dyson, Housing Specialist; and Jenny Carloni, Housing Officer provided in preparation of the City’s housing element and looks forward to receiving the City’s adopted housing element. If you have any questions or need additional technical assistance, please contact Shawn Danino, of our staff, at [email protected].

Sincerely,

Paul McDougall
Senior Program Manager

Enclosure

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APPE
NDIX

CITY OF SUNNYVALE

The following changes are necessary to bring the City’s housing element into compliance with Article 10.6 of the Government Code. Accompanying each recommended change, we cite the supporting section of the Government Code.

Housing element technical assistance information is available on HCD’s website at https://www.hcd.ca.gov/planning-and-community-development/hcd-memos. Among other resources, the housing element section contains HCD’s latest technical assistance tool, Building Blocks for Effective Housing Elements (Building Blocks), available at https://www.hcd.ca.gov/planning-and-commun
ity-development/housing-elements/building-
blocks and includes the Government Code addressing State Housing Element Law and other resources.

A. Housing Needs, Resources, and Constraints

Affirmatively Furthering Fair Housing (AFFH) and Identified Site s: While the element
discusses the isolation of the regional housing need allocation (RHNA), including programs to the circumstances, it should quantify the RHNA by area or lack of RHNA by area or location and evaluate impacts or lack of impacts to better formulate an appropriate policy response. For example, the element was revised to explain the timeline for the Moffett Park Specific Plan area as well as some discussion of “built out areas”. However, while information was provided regarding the number of units by planning area, it should analyze why areas like the Downtown Specific Plan are expected to include only 224 units, versus the 4,815 units credited in the Moffett Park Specific Plan. In addition, the element was revised to clarify the Downtown Specific Plan’s maximum allowable housing per block, with densities as low as 7 to 16 dwelling units per acre. The element should analyze these maximum allocations for impacts.

Based on the outcomes of this analysis, the element should add or modify programs.

2. An inve
ntory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality’s housing need for a designated income level, and an analysis of the relationship of zoning and public facilities and services to these sites. (Gov. Code, § 65583, subd. (a)(3).)

Realistic Capacity: The el
ement revised several parts of its realistic capacity
assumptions and analysis, including information on the phasing guidelines for the Moffett Park Specific Plan Area. However, the element still must analyze how commercial requirements will affect realistic capacity in the City’s mixed use zones. In addition, the element should adjust its assumptions of 105 dwelling units per acre in the Moffett Plan Specific Plan area, given this requirement. Minimum densities may be Attachment 2

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Attachment
: Response to October 6, 2022, HCD Comments on Sunnyvale Draft Housing Element On October 6, 2022, S
unnyvale received a comment letter from the California Department of Housing and Community Development (HCD) on the HCD Review Draft Housing Element, which was submitted to HCD on July 8, 2022. The City reviewed these comments, revised the document, and prepared the Revised HCD Draft Housing Element. This latest version of the Housing Element shows all revisions in track changes. To help the reader track the revisions, this attachment to the Housing Element outlines the comments from HCD’s October 6, 2022, letter with responses from the City describing how and where comments were addressed in the Revised HCD Draft Housing Element.

A. Housing Needs, Resources, and Constraints

1. Affirmatively further[ing] fair housing in accordance with Chapter 15 (commencing with Section 8899.50) of Division 1 of Title 2…shall include an assessment of fair housing in the jurisdiction. (Gov. Code, § 65583, subd. (c)(10)(A).)
HCD Comment 1: Disproportionate Housing Needs, Including Displacement Risk: The element reports data on housing conditions and persons experiencing homelessness; however, it should also utilize local data and knowledge and analyze the patterns and magnitude of needs throughout the City. For example, the element discusses a housing condition survey and observations by City staff but could also discuss neighborhood planning areas with higher and less concentrations of housing rehabilitation needs. Further, the element briefly mentions the number of persons experiencing homelessness and disproportionate needs relative to protected characteristics such as disability and race but should also discuss patterns (areas of higher and lower need) throughout the City and access to opportunities such as shelter and services.

Response 1
• Added dis
cussion of 2008 Housing Conditions Survey results to Chapter 4, Fair Housing Assessment (pg.4-52), to discuss neighborhood planning areas with higher concentrations of code violations and potential rehabilitation needs • Added discussion of patterns in the residence of homeless populations based on access to opportunities including shelter and services (pg.4-52-53) HCD Comment 2: Affirmatively Furthering Fair Housing (AFFH) and Identified Sites: The element provides some analysis of the identified sites and socio-economic concentrations and brief statements on areas such as displacement vulnerability in the downtown area and high proportion of the regional housing need allocation (RHNA), including lower-income in northern planning areas. However, it should provide some quantification by area and evaluate the impacts on the existing patterns of socio-economic characteristics. For example, the element should discuss the impacts of isolating a large portion of the RHNA by income group or lack of RHNA by income group in other planning areas. A complete analysis should fully assess how the site inventory is expected to improve and/or exacerbate fair housing conditions. This analysis should address the location, number of units by income group, magnitude of the impact and any isolation of the RHNA and could consider topics such as existing or proposed anti-displacement policies and place-based investments, and how such strategies will improve fair housing conditions when paired with the identified sites. Based on the outcomes of this analysis, the element should add or modify programs.

Response 2: Update and expande
d analysis of site inventory in relation to all AFFH
factors on pages 4-67 through 4-81.

EXHIBIT D
Attachment 2

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HCD Comment 3: Local Data and Knowledge and Other Relevant Factors: The element provides demographics and information on housing choice vouchers and location of publicly supported affordable housing. However, the purpose of local data and knowledge and other relevant factors is to complement state and federal data and complete an analysis of fair housing conditions. The element could consider knowledge from City officials such as the Neighborhood Preservation staff and other related planning and needs assessment documents such as infrastructure assessments or capital improvement programs. Other relevant factors could include past and current land use and zoning practices (e.g., low intensity, specific plans, inclusionary) and state, federal and local investments, including transportation relative to socio-economic patterns.

Response 3
• A
dded discussion of land use and zoning practices on pages 4-61 and 4-62 • Added discussion of public investments on pages 4-62 through 4-64

HCD Comment 4: Contributing Factors to Fair Housing Conditions: Based on a complete analysis, the element should reassess and prioritize contributing factors.

Response 4: Str
engthened and expanded the list of AFFH actions (i.e.,
implementation programs) addressing fair housing issues in Table 4-21 on pages 4-83 through 4-87

HCD Comment 5: Goals, P riorities, Metrics, Actions & Milestones: While the element provides additional analysis and identifies contributing factors to fair housing issues, it does not include sufficient action to overcome patterns of segregation and foster inclusive communities. As a result, programs must be added as appropriate to sufficiently respond to contributing factors to fair housing issues. In addition, all actions related to AFFH must contain specific commitment, timing, geographic targeting and metrics or numerical targets.

The element may
, for example, as discussed on the August 11, 2022, call:
• revise Program H20 (Zoning Code Amendments) to make a firm commitment for removing design review requirements and establishing development standards for missing middle housing types that are feasible in higher opportunity or income areas. • The element may also, for example, revise Program H20 to allow SROs by right in additional zones, for example in the El Camino Real Specific Plan Area. • To improve housing opportunities for persons experiencing homelessness or lower- income households employed in the City, the element could also evaluate zones to expand residential uses, including the North Washington District or target investments such as Project Homekey in areas of higher need and opportunity. • The City may also, for example, discuss its efforts to improve pedestrian safety and active mobility as a way to increase access to opportunity.

Additionally, the element should commit to assessing and revising programs through a mid- cycle review. Please see HCD’s AFFH memo for more information:
https://www.hcd.ca.gov/community-development/affh/docs/affh_document_final_4-27- 2021.pdf#page=23.

Response 5:

The City added or modified several implementation programs including the following to make a firmer commitment to affirmatively further fair housing, strengthen program language, and add more specific timelines and objectives:
• Modified Program H3 (Increase Affordable Housing in High Resource Areas) to Attachment 2

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commit to specific density increases in the Village Centers and increase the objective from 100 to 750 lower-income units in high resource areas • Modified Program H6 (Affordable Housing Development Assistance) to increase the target to 500 lower-income units in high resource areas • Added new Program H7 (Local Funding Assistance) with an objective of $60 million and 2,500 lower-income units, including 500 units in high resource areas. • Modified Program H11 (Home Improvement Program) to increase the objective and target outreach to neighborhoods with the greatest need • Added new Program H21 (Missing Middle Housing) to adopt regulations and standards that facilitate missing middle housing
• Revised Program H23 (Zoning Code Amendments) to allow SROs by right in additional zones
• Added new Program H33 (Capital Projects to Address Homelessness) • Revised Program H39 (Prioritize ADA and Pedestrian Infrastructure) to address access to opportunity

2. Include an analysis of population and employment trends and documentation of projections and a quantification of the locality's existing and projected needs for all income levels, including extremely low-income households. (Gov. Code, § 65583, subd. (a)(1).)

Include an analysis and documentation of household characteristics, including level of payment compared to ability to pay, housing characteristics, including overcrowding, and housing stock condition. (Gov. Code, § 65583, subd. (a)(2).)

Analyze any special housing needs such as elderly; persons with disabilities, including a developmental disability; large families; farmworkers; families with female heads of households; and families and persons in need of emergency shelter. (Gov. Code, § 65583, subd. (a)(7).)

HCD Comment 6: Extremely Low-Income (ELI) Households: The element includes analysis regarding ELI households such as the number of households and overpayment but must also identify projected housing needs. The projected housing need for ELI households can be calculated by using available census data to determine the number of very low-income households that qualify as ELI households or presume that 50 percent of the RHNA for very low-income households qualify as ELI households.

Response 6: The proj
ected need for ELI households is already addressed on page 3- 23 (see paragraph following Table 3-6). The City assumed that the ELI housing need is equal to 50 percent of the very low income RHNA.

HCD Comment 7: Over
payment: The element must quantify and analyze the number of lower-income households overpaying by tenure (i.e., renter and owner).

Response 7: Added new Fi
gure 3-41 and description of overpayment of lower-income households on pages 3-52 and 3-53.

HCD Comment 8: Housi ng Costs: While the element includes estimated rents for residents, it utilizes American Community Survey (ACS) data. The element should supplement census data with other sources (e.g., local knowledge).

Response 8: Added
more recent rental data on page 3-47 and 3-48.

HCD Comment 9: Speci al Needs Populations: While the element quantifies the City’s Attachment 2

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special needs populations, it must also analyze their special housing needs, particularly for persons with disabilities, large households, and female-headed households. For a complete analysis, the element should discuss challenges faced by the population, the existing strategies, and resources to meet those needs, an assessment of any gaps in resources and magnitude of needs, and proposed policies, programs, and funding to help address those needs.

Response 9: Expanded the analysis of housing needs for special needs populations on pages 3-26 through 3-30. Added new data from the 2022 point in time count to the discussion of homelessness on pages 3-32 and 3-33.

3. An inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality’s housing need for a designated income level, and an analysis of the relationship of zoning and public facilities and services to these sites. (Gov. Code, § 65583, subd. (a)(3).)

HCD Comment 10: Progr ess in Meeting the RHNA: The City’s RHNA may be reduced by pending, approved, or completed projects; however, the element must demonstrate their availability in the planning period. The element lists many projects by affordability and status in various stages of the entitlement process, including several projects that are pending approval. The element should generally discuss any remaining steps, barriers to development, phasing, build out or planning horizons and other relevant factors to demonstrate their availability in the planning period.

Response 10: Table 5-2 s
tarting on page 5-11 has been updated to only reflect
approved projects that have completed the planning entitlement phase or have an approved development agreement. Projects that are still pending approval have been removed from the table and, in most cases, these preliminary project sites have been added to the sites inventory and inventoried based on realistic capacity assumptions.

HCD Comment 11: Reali stic Capacity: The element describes a realistic capacity of 9,626 units as part of the Moffett Park Specific Plan, 3,852 of which will be available to lower- income households, with a realistic capacity of 100 percent of allowable densities in the planning period. However, the element must clarify, as stated on the September 22, 2022 call, the build out period for the Specific Plan and provide supporting evidence that these units will be constructed during the planning period.

Response 11: Once adopted, the M
offett Park Specific Plan will create capacity for
20,000 new housing units. The Housing Element includes the sites that, upon close review by City staff, have been determined to be most likely to develop during the timeframe of the Housing Element. Based on realistic density assumptions, these sites have capacity for 9,626 units, which represents 48 percent of the total capacity in Moffett Park. This comment from HCD states that the capacity numbers are calculated at 100 percent of allowable densities, but this is not accurate. The Specific Plan regulates development using floor area ratio (FAR). The FAR standards range from 350% in the Mixed Use zone to 400% in the Residential zone and 450%in the Activity Center zone, which allows for an achievable maximum density of about 150 to 180 units per acre. The Housing Element applies realistic densities of:

• 40 units per acre in the Activity Center zone, which is the minimum density; • 37.5 units per acre in the Mixed Use zone, which is equal to 25 percent of the maximum achievable density; and
• 105 units per acre in the Residential zone, which is 70 percent of the maximum Attachment 2

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achievable density.

This information has been added to Table 5-22 and additional description has been added on pages 5-62 through 5-63. Staff also provided additional evidence in Table 5-23 (starting on page 5-66) of the site availability for the sites that were selected for inclusion in the Housing Element. In addition, Staff has updated the income assumptions from 60% lower-income to 50% lower-income to reduce the reliance on Moffett Park in meeting the lower-income RHNA. This reduced the assumed lower-income unit count by almost 25 percent, from 5,774 to 4,418 units.

HCD Comment 12: Additi onally, the element should support or adjust realistic residential capacity assumptions in the Downtown Specific Plan and El Camino Real Specific Plan. For the Downtown Specific Plan, the element should support the assumption of 100 percent of maximum base densities based on land use controls and recent trends by affordability. This analysis may utilize minimum density policies (Policy H-1.4). For the El Camino Real Specific Plan, the element should discuss assumptions relative to the 10 to 15 year build out period that exceed the 8 year housing element planning period.

Response 12
• Added i
nformation on pages 5-20 through 5-22 showing development trends within the Downtown Specific Plan Area to support the assumptions in the sites inventory for the Downtown
• Added analysis on pages 5-36 and 5-37 of density of recently proposed projects in El Camino Real Specific Plan to support density assumptions for the Plan Area • Added discussion on page 5-37 about how the sites inventory accounts for only 32 percent of the full buildout of the El Camino Real Specific Plan

HCD Comment 13: Sui tability of Nonvacant Sites: The element must include analysis demonstrating the potential for additional development on nonvacant sites. While the element mentions underutilized sites were identified based on assessed value (AV) and floor area (FAR) ratios, it must support the validity of these assumption in demonstrating the potential for redevelopment. For example, the element could utilize recent development activity. In addition, the element should consider additional factors such as building age, structural conditions, expressed interest in residential development and reflect those values in the sites inventory. Finally, the element should account for the extent existing uses impede additional residential development including market demand for the existing use and existing leases or contracts that would perpetuate the existing use or prevent additional residential development.

Response 13:
• Added desc
ription of non-vacant site factors on pages 5-5 through 5-7 and identified these factors for each non-vacant site in Tables 5-6, 5-9, 5-12, 5-15, 5-18, and 5-23

HCD Comment 14: In addition, i f the housing element relies upon nonvacant sites to accommodate more than 50 percent of the RHNA for lower-income households, the housing element must demonstrate existing uses are not an impediment to additional residential development and will likely discontinue in the planning period (Gov. Code, § 65583.2, subd. (g)(2).). Absent findings (e.g., adoption resolution) based on substantial evidence, the existing uses will be presumed to impede additional residential development and will not be utilized toward demonstrating adequate sites to accommodate the RHNA.

Response 14: Noted. The Ci
ty will include findings in the adoption resolution based on substantial evidence that the existing uses will not impede additional residential development
Attachment 2

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HCD Comment 15: Envi ronmental Constraints: While the element generally describes environmental constraints were considered (p. C-68), it must also describe any other known environmental or other conditions (e.g., shape, easements, contamination) that could impact housing development on identified sites in the planning period.

Response 15: Ex
panded discussion of site constraints on page 5-71

HCD Comment 16: Priori ty Water and Sewer: For your information, water and sewer service providers must establish specific procedures to grant priority water and sewer service to developments with units affordable to lower-income households. (Gov. Code, § 65589.7.) The element should demonstrate compliance with this requirement or include a program to establish a procedure by a specified date.

Response 16: The foll
owing program has been added to the Housing Plan:

H42. Infrastructure Priority for Affordable Housing. Establish procedures for granting priority water and sewer service to developments with lower -income units in compliance with California Government Code Section 65589.7. [Source: New program]
 Objective: Compliance with State law.
 Policy(ies) Implements: H-6.2
 Timeframe: 2023
 Responsible Department or Agency: Community Development Department, Housing and Planning Divisions

HCD Comment 17: Elec tronic Sites Inventory: For your information, pursuant to Government Code section 65583.3, the City must submit an electronic sites inventory with its adopted housing element. The City must utilize standards, forms, and definitions adopted by HCD. Please see HCD’s housing element webpage at https://www.hcd.ca.gov/planning- and- community-devel opment/housing-elements for a copy of the form and instructions. The City can reach out to HCD at [email protected] for technical assistance.

Response 17: Noted. The electronic sites inventory spreadsheet will be provided with the adopted Housing Element.

Zoning for a Vari ety of Housing Types:

HCD Comment 18: Acce ssory Dwelling Units (ADUs): HCD records indicate permitted ADUs of 29 in 2018, 17 in 2019, 56 in 2020, and 30 in 2021, figures that are inconsistent with those in the element submitted. The element should reconcile these numbers, resubmit Annual Progress Reports (APRs) and adjust assumptions as appropriate.

Response 18: The Ci
ty had miscalculated ADU production in the APRs submitted for years 2018-2021 due to errors in the permitting software. The City has updated the ADU building permit data in Table 5-19 as well as the APRs for 2018-2021 and resubmitted the APRs to HCD along with the 2022 APR. The update data shows that the City permitted an average of 55 ADUs per year between 2018 and 2022.

HCD Comment 19: In addition, after a cursory review of the City’s ordinance, HCD discovered some areas which are not consistent with State ADU Law. HCD will provide a Attachment 2

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complete listing of ADU non-compliance issues under a separate cover. As a result, the element should add a program to update the City’s ADU ordinance to comply with state law.

Response 19: HCD sent a letter to the City on December 9, 2022, with comments on the City’s adopted ADU Ordinance. The Sunnyvale Planning Department provided a response to HCD on January 6, 2023. Many of the comments were addressed in the amended ordinance adopted in December 2022. However, as noted in the response letter, additional changes are needed. Based on this response, the City has expanded Program H4 to include an update to the City’s ADU Ordinance in July 2023 to bring it into full compliance with State law.

HCD Comment 20: Singl
e Room Occupancies (SRO): The element describes the zones in which SROs are currently permitted. However, given the success of SROs in providing housing for ELI households, the element should also describe how zoning will encourage and facilitate SRO development.

Response 20: Modi
fied Program H23 to include the following action “Identify zoning districts to allow SROs by right, such as R4, R5, C-2, MS-POA, and select mixed use zoning districts.”

4. An analysis of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, including the types of housing identified in paragraph (1) of subdivision (c), and for persons with disabilities as identified in the analysis pursuant to paragraph (7), including land use controls, building codes and their enforcement, site improvements, fees and other exactions required of developers, and local processing and permit procedures... (Gov. Code, § 65583, subd. (a)(5).)

HCD Comment 21: Land Use C
ontrols: The element identifies many land use controls as potential constraints on a variety of housing types. However, the analysis should analyze land use controls independently and cumulatively with other land use controls. The analysis should specifically address requirements related to floor area ratios, open space, setbacks, height limits, parking and limits on allowable densities. The analysis should address any impacts on cost, supply, housing choice, affordability, timing, approval certainty and ability to achieve maximum densities and include programs to address identified constraints.

Response 21: Expanded the di
scussion of land use controls, independently and
cumulatively, on pages 6-7 and 6-8.

HCD Comment 22: Fees and Ex actions: The element includes some discussion of required fees for single family and multifamily housing development, including impact fees. However, the element must analyze their impact as potential constraints on housing supply and affordability. For example, the analysis could identify the total amount of fees on ADUs, Junior Accessory Dwelling Units (JADUs), and other forms of small housing, and analyze their proportion to the development costs for both single family and multifamily housing.

Specifically, the element must analyze the use of its $95,832 park in-lieu fee applied to lot splits in addition to all “Sense of Place” fees provided. For additional information and a sample analysis and tables, see the Building Blocks at http://www.hcd.ca.gov/community- development/building-blocks/constraints/fees-and- exactions.shtml.

Response 22:
• Added new Table 6-34 on pages 6-52 and 6-53 showing fees for ADUs and JADUs
• Clarified the Park Dedication fees for single-family lot splits and multi-family units and updated fee in Table 6-33 to remove the Park-in-lieu and traffic impact fees, Attachment 2

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which do not apply to single-family units.
• Added a footnote to Table 6-32 on page 6-49 describing the Sense of Place fee • Added new Program H19 (Review Park Dedication Requirements) to establish a reduced park in-lieu fee for Dual Urban Opportunity (i.e., SB 9) lots splits

HCD Comment 23: Proc essing and Permit Procedures: While the element provides a description of the types of permits required for housing developments (p. 6-31), it must describe and analyze the permits’ processes, identify what is reviewed, typical findings and approval procedures by zone and housing type. The analysis must specifically address the threshold for a conditional use permit on multifamily uses and special development permits.

The analysis must evaluate impacts on housing supply (number of units), costs, timing, feasibility and approval certainty.

Response 23: Expanded anal
ysis of permit processing procedures on pages 6-40
through 6-44 and added new Program H20 (Housing Development Plan Review Permit) to establish a new, non-discretionary permit type for housing development projects.

HCD Comment 24: Pers
ons with Disabilities: The element identifies the definition of family and concludes the definition is not a constraint on housing for persons with disabilities.

However, the element should evaluate the impacts of the provision for an “individual or group is in possession of the entire unit” and include a program to address identified constraints.

Response 24: Expanded analy sis of definition of family on page 6-66 and added the following language to Program H23: Amend the definition of “family” to remove language about possession of the entire unit.

B. Housing Programs

HCD Comment 25: Some pr
ograms list implementation timelines as “ongoing.” While this may be appropriate for some programs, programs with specific implementation actions must include completion dates resulting in beneficial impacts within the planning period. Examples include Program H6 (Affordable Housing Development Assistance) and H29 (Programs to Address Homelessness).

Response 25: Modifi
ed timeframe and objectives for Program H6 and H32 (previously H29), added new Program H7 (Local Funding Assistance for Affordable Housing), and modified Program H8 (New Funding Mechanisms and Partnerships for Affordable Housing).

HCD Comment 26: Additi onally, several programs and actions have timelines that should be moved earlier in the planning period to ensure a beneficial impact. Examples include Programs H4 (ADU Toolkit with Preapproved Plans and DUO Units), H17 (Open Space Requirements), H18 (Review Development Fees).

Response 26: Revi
ewed all program timelines and moved up timelines for the following programs:

Attachment 2

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• Program H4 (ADU Toolkit) from 2026 to 2024 and added more specific timelines for each individual action
• Program H5 (Below Market Rate Housing Program) from ongoing to July 2024 • Program H10 (Housing Choice Vouchers Rental Assistance) from 2028 to 2026 • Program H11 (Home Improvement Program) from ongoing to 2023/2024 • Program H15 (Foreclosure Prevention Resources) from ongoing to 2023 • Program H17 (El Camino Real Specific Plan) from 2025 to 2023 • Program H22 (Adaptive Reuse) from 2026 to 2025
• Program H32 (Programs to Address Homelessness) from ongoing to 2023 and ongoing
• Program H36 (New Age-Friendly Housing) from 2026 to 2023 • Program H37 (Age in Place) from 2026 to 2024

HCD Comment 27: Additi onally, programs must have specific commitment to clear outcomes or deliverables. Several programs include actions with no description of how those actions will be implemented (e.g., “support”, “study”, “explore”, “evaluate”, etc.,). For example, Program H18 states that the City will "review and consider whether reductions to the park in-lieu fee... and development impact fees are appropriate". However, it does not state when and to what extent these fees will be reduced. Programs should be amended, to include specific commitment to a housing related outcome. Examples include Programs H3 (Increase Affordable Housing in High Resource Areas), H12 (Preservation of Government Assisted Housing, H16 (El Camino Real Specific Plan Active Ground Floor Requirement), H17 (Open Space Requirements) H18 (Review Development Fees), H19 (Adaptive Reuse), H20 (Preventing Displacement / Homelessness), H29 (Programs to Address Homelessness), H32 (New Age Friendly Housing), H35 (Prioritize Capital Improvement Program in low resource areas).

Response 27: Modifi
ed the following programs to include more specific commitments:
• Program H3 (Increase Affordable Housing Opportunities in High Resource Areas)
• Program H5 (Below Market Rate Housing Program)
• Program H6 (Affordable Housing Development Assistance) • Program H7 (Local Funding Assistance for Affordable Housing) *new • Program H8 (New Funding Mechanisms and Partnerships for Affordable Housing)
• Program H15 (Foreclosure Prevention Resources)
• Program H17 (El Camino Real Specific Plan Commercial Requirement) • Program H18 (Private Open Space Requirements)
• Program H26 (Renter’s Choice Ordinance)
• Program H27 (Right-to-Lease Ordinance)
• Program H28 (Relocation Assistance Ordinance)
• Program H29 (Emergency Rental Assistance Program)

2. Identify actions that will be taken to make sites available during the planning period with appropriate zoning and development standards and with services and facilities to accommodate that portion of the city’s or county’s share of the regional housing need for each income level that could not be accommodated on sites identified in the inventory completed pursuant to paragraph (3) of subdivision (a) without rezoning, and to comply with the requirements of Government Code section 65584.09. Sites shall be identified as needed to facilitate and encourage the development of a variety of types of housing for all income levels, including multifamily rental housing, factory-built housing, mobilehomes, housing for agricultural employees, supportive housing, single-room occupancy units, emergency Attachment 2

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shelters, and transitional housing. (Gov. Code, § 65583, subd. (c)(1).)

HCD Comment 28: As noted i n Finding A3, the element does not include a complete site analysis; therefore, the adequacy of sites and zoning were not established. Based on the results of a complete sites inventory and analysis, the City may need to add or revise programs to address a shortfall of sites or zoning available to encourage a variety of housing types.

Response 28: Modifi
ed Program H2 (Rezone Program) to reflect changes to the RHNA shortfall and rezone obligation based on edits to the sites inventory.

HCD Comment 29: As noted i
n Finding A4, the element requires a complete analysis of potential governmental and nongovernmental constraints. Depending upon the results of that analysis, the City may need to revise or add programs and address and remove or mitigate any identified constraints.

Response 29:

Modified or added new programs to address expanded constraints analysis, including:
• Program H4 (Accessory Dwelling Units): modified
• Program H18 (Private Open Space Requirements): modified • Program H19 (Review Park Dedication Requirements): new • Program H20 (Housing Development Plan Review Permit): new • Program H21 (Missing Middle Housing): new
• Program H23 (Zoning Code Amendments): modified
• Program H31 (Reasonable Accommodations and Code Updates): modified • Program H43 (Objective Design Standards): new

HCD Comment 30: In addition, P rogram H20 (Zoning Amendments) commits to amend zoning (“as necessary”) to ensure requirements for group homes (6 or fewer and seven or more persons) are consistent with fair housing requirements. These uses, in most cases, are either excluded from residential zones or subject to a use permit which typically acts as a constraint on housing for persons with disabilities. The Program should specifically commit to amend zoning to allow these uses in all residential zones and replace or revise procedures to promote objectivity and approval certainty.

Response 30: Progra
m H23 (previously H20) has been modified to state the following:

Amend the zoning code to permit group homes with more than six persons in all residential zones and revise procedures to promote objectivity and approval certainty.

Code, § 65583, subd. (c)(5).)

HCD Comment 31: As noted i n Finding A1, the element must include a complete Attachment 2

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assessment of fair housing. Based on the outcomes of that analysis, the element must add or modify programs. Programs to AFFH should go beyond status quo actions, include specific commitment, timing, geographic targeting and metrics or numerical targets and should, as appropriate, address housing mobility, encourage new housing choices in higher resource areas, improve place-based strategies toward community revitalization and protect existing residents from displacement.

Response 31: Modified or added new programs to address expanded fair housing assessment and identified specific commitment, timing, geographic targeting, and metrics, including:
• Program H3 (Increase Affordable Housing Opportunities in High Resource Areas):
modified
• Program H6 (Affordable Housing Development Assistance): modified • Program H7 (Local Funding Assistance for Affordable Housing): new • Program H9 (First-Time Home Buyer Programs): modified • Program H11 (Home Improvement Program): modified
• Program H13 (Preservation of Deed Restricted Housing): modified • Program H21 (Missing Middle Housing): new
• Program H23 (Zoning Code Amendments): modified
• Program H39 (Prioritize Capital Improvement Program): modified • Program H40 (Prioritize APA and Pedestrian Infrastructure): modified • Program H45 (East Sunnyvale Industrial to Residential Rezoning): new

5. The housing program shall preserve for low -income household the assisted housing developments identified pursuant to paragraph (9) of subdivision (a)... (Gov. Code, § 65583, subd. (c)(6).)

HCD Comment 32: Progra m H12 states an objective to preserve 46 at risk units and notes the importance of facilitating long-term preservation of existing below market rate housing, committing to “track affordability agreements” (p. 2-10). However, the program should make a specific and firm commitment to maintain the long-term affordability of these units, including compliance with all noticing requirements, coordination with qualified entities and assistance with funding and support, education and assistance for tenants.

Response 32: Modified P
rogram H13 (Preservation of Deed Restricted Housing)
(previously H12)

6. Develop a plan that incentivizes and promotes the creation of accessory dwelling units that can be offered at affordable rent... (Gov. Code, § 65583, subd. (c)(7).)

HCD Comment 33: Program H4 (ADU Toolkit) should commit to monitor permitted ADUs and affordability every other year and take appropriate action such as adjusting assumptions or rezoning within a specified time (e.g., 6 months) if assumptions are not realized. In addition, as noted in Finding A3, the Program should commit to amend the ordinance as necessary to comply with ADU law by a specified date.

Response 33: Modifi
ed Program H4 (ADU Toolkit)

C. Public Participation

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effort. (Gov. Code, § 65583, subd.(c)(9).)

HCD Comment 34: While The City m ade extensive efforts to reach the public, including hosting events and meeting with key stakeholders and summarizing community feedback, it should also discuss how input was incorporated into the housing element.

Response 34: E
xpanded the summary of community engagement on pages 1-4 through 1-6 and 1-11 to describe direct marketing efforts and expanded discussion on pages 1-13 through 1-16 to describe how input was incorporated into the Housing Element.

HCD Comment 35: In addition, HCD received comments with many meaningful and valuable suggestions related to the housing element and HCD strongly encourages the City to consider and address these comments, including revising the document as appropriate. Examples include park-in-lieu fees for lot splits, timing and affordability of housing in specific plans (e.g., Moffett Park Specific Plan), specific commitment with metrics to promote housing choices or affordability in relatively higher income neighborhoods, additional suitable sites (e.g., Village Centers along Hollenbeck Avenue and Homestead Road), parking and facilitating missing middle housing types throughout the City.

Response 35: Added di
scussion of public comments received during HCD review and stakeholder meetings on page 1-13 of Introduction chapter. Based on public comments received, revisions were made to accelerate timelines and strengthen implementation program languages and commitments, as well as reduce reliance on Moffett Park to meet the lower-income RHNA. Specifically, the City strengthened the commitment to identifying lower- income housing sites in higher resource areas (e.g., Village Centers), added a program to encourage missing middle housing, provided additional analysis on investments in underserved areas along with stronger program commitments to continue investments in these areas, and modified the sites inventory assumptions to reduce the percentage of lower- income units in the Moffett Park Specific Plan area. The City met with Livable Sunnyvale and SV@Home in early 2023 to discuss their comments in more detail and present proposed approaches to addressing comments.

Attachment 2

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utiliz
ed to address this requirement without any further analysis. The element should also provide evidence to support the assumption that 50 percent of units in the Moffett Park Specific Plan will be available to lower-income households.

In addition, as noted in the prior review, the element should support or adjust realistic residential capacity assumptions in the Downtown Specific Plan and El Camino Real Specific Plan. For the Downtown Specific Plan, the element should support the assumption of 100 percent of maximum base densities based on land use controls and recent trends by affordability. This analysis may utilize minimum density policies (Policy H-1.4) to address this requirement without further analysis.

Finally, the element was revised to cite 95 percent of maximum densities as realistic in the Lawrence Station Area Plan, 80 percent in the El Camino Real Specific Plan.

However, it still must analyze the land use controls including, but not limited to, open space requirements and parking minimums to ensure that maximum densities are feasible in these zones.

Suitability of Nonvacant Sites: The elem
ent was revised to include analysis related to
the potential for additional development on nonvacant sites based on several factors (e.g., improvement to land ratio, age of structure) and provided analysis on existing uses as well as market demand. However, the element should still support the validity of factors based on recent trends in development and prior uses.

In addit
ion, if the housing element relies upon nonvacant sites to accommodate more than 50 percent of the RHNA for lower-income households, the housing element must demonstrate existing uses are not an impediment to additional residential development and will likely discontinue in the planning period (Gov. Code, § 65583.2, subd. (g)(2).).

Absent findings (e.g., adoption resolution) based on substantial evidence, the existing uses will be presumed to impede additional residential development and will not be utilized toward demonstrating adequate sites to accommodate the RHNA.

Electronic Sites Inventory: For your information, pursuant to Government Code section 65583.3, the City must submit an electronic sites inventory with its adopted housing element. The City must utilize standards, forms, and definitions adopted by HCD.

Please see HCD’s housing element webpage at https://www.hcd.ca.gov/planning-and- community-development/housing-elements for a copy of the form and instructions. The City can reach out to HCD at [email protected] for technical assistance.

Zoning for a Variety of Housing Types (Sin
gle Room Occupancies (SRO)): The element
was revised to describe the parking requirements for Single Room Occupancies (p. 6-27).

However, given that this housing typology is designed to be naturally affordable, the requirement of 1 parking space per SRO unit over 250 square feet may be a constraint.

The element should evaluate parking and other development standards as potential constraints and modify Program H23 (Zoning Amendments) as appropriate to modify or establish development standards that encourage and facilitate SROs. In addition, the element could consider additional zones in Specific Plan areas, particularly the El Camino Real Specific Plan area, for this naturally affordable housing typology.

Attachment 2

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3. An anal
ysis of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, including the types of housing identified in paragraph (1) of subdivision (c), and for persons with disabilities as identified in the analysis pursuant to paragraph (7), including land use controls, building codes and their enforcement, site improvements, fees and other exactions required of developers, and local processing and permit procedures... (Gov. Code, § 65583, subd. (a)(5).)

Land Use Controls: The el
ement was revised to describe some of its development
standards in broad terms (p. 6-7 to 6-14). However, the analysis should analyze land use controls independently and cumulatively with other land use controls. The analysis should specifically address requirements related to floor area ratios, open space, setbacks, height limits, parking and limits on allowable densities. For example, the requirement of 1.5 parking spaces per studio apartment in the Downtown Specific Plan should be analyzed for its impact on housing choice and affordability. In addition, while the City’s open space requirements were described in more detail by zone, it may consider exploring strategies such as parklets and public open space that prevent these requirements from raising housing costs and can be used as shared amenities across the community. The analysis should still address any impacts on cost, supply, housing choice, affordability, timing, approval certainty and ability to achieve maximum densities and include programs to address identified constraints.

Fees and Exactions: The elem
ent was revised to discuss its sense of place fees and
how park dedication fees are calculated (p. 6-31). However, given the total number and magnitude of the fees being applied to residential development, the element should include a cumulative analysis of its total fees for different housing typologies (e.g., single-family vs. multifamily development) and modify policies and programs as needed.

In addition, the element was revised to include a table with park dedication by project type (Table 6-21), and it is unclear why single-family homes outside of subdivisions are exempt from these requirements. Finally, pursuant to public comments, the City should analyze its $72,560 park in lieu fee applied to all multifamily units. For additional information and a sample analysis and tables, see the Building Blocks at http://www.hcd.ca.gov/community-developme
nt/building-blocks/constraints/fees-and-
exactions.shtml.

Processing and Perm
it Procedures: The element was revised to provide further analysis of its permit processing procedures and added Program H20 to develop a Plan Review Permit, described as a ‘non-discretionary permit type’. However, on the June 15, 2023 call, it was confirmed that Plan Review Permits still require a Planning Commission hearing. This requirement should be analyzed for impacts on housing cost, timing and approval certainty, including describing the steps, typical timing and any other relevant factors. In addition, the element should clarify which housing typologies will be subject to the Plan Review Permit and which housing typologies are subject to the Objective design Standards outlined in Program H43.

Attachment 2

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B. Housing Programs

1. Identify actions that will be taken to make sites available during the planning period with appropriate zoning and development standards and with services and facilities to accommodate that portion of the city’s or county’s share of the regional housing need for each income level that could not be accommodated on sites identified in the inventory completed pursuant to paragraph (3) of subdivision (a) without rezoning, and to comply with the requirements of Government Code section 65584.09. Sites shall be identified as needed to facilitate and encourage the development of a variety of types of housing for all income levels, including multifamily rental housing, factory-built housing, mobilehomes, housing for agricultural employees, supportive housing, single-room occupancy units, emergency shelters, and transitional housing. (Gov. Code, § 65583, subd. (c)(1).)

As noted in Finding A2, the element does not include a complete site analysis; therefore, the adequacy of sites and zoning were not established. Based on the results of a complete sites inventory and analysis, the City may need to add or revise programs to address a shortfall of sites or zoning available to encourage a variety of housing types.

2. Address and, where appropriate and legally possible, remove governmental and nongovernmental constraints to the maintenance, improvement, and development of housing, including housing for all income levels and housing for persons with disabilities. The program shall remove constraints to, and provide reasonable accommodations for housing designed for, intended for occupancy by, or with supportive services for, persons with disabilities. (Gov. Code, § 65583, subd. (c)(3).)

As noted in Finding A3, the element requires a complete analysis of potential governmental and nongovernmental constraints. Depending upon the results of that analysis, the City may need to revise or add programs and address and remove or mitigate any identified constraints.

In addition, the following programs should be revised:

• Program H17 (Commercial Requirement) was revised to ‘implement a program to address the commercial requirement’ on 100 percent affordable housing sites in the El Camino Real Specific Plan. However, the Program should specifically commit to remove or reduce the commercial requirement across all housing development in the Specific Plan area.
• Program H18 (Private Open Space) was revised to ‘collaborate with developers and stakeholders to review and modify usable open space requirements’ in the R4 and R5 zone. However, given the total square footage required for open space, the element should be revised to make a specific commitment to significantly reduce open space requirements across several residential zones including R-2, R-3, and parts of the Downtown Specific Plan and the Lawrence Area Station Specific Plan, and clarify these standards will not constrain missing middle housing.

Attachment 2

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• Pr
ogram H19 (Park Dedication Requirements) was revised to broadly discuss reduced park dedication lieu fees for Dual Urban Opportunity (DUO) lot splits.

However, the element should expand the scope of fee reductions beyond DUO lot splits to other units, including but not limited to, multifamily units.

3. Promote and affirmatively further fair housing opportunities and promote housing throughout the community or communities for all persons regardless of race, religion, sex, marital status, ancestry, national origin, color, familial status, or disability, and other characteristics... (Gov. Code, § 65583, subd. (c)(5).)

As noted in Finding A1, the element must include a complete assessment of fair housing. Based on the outcomes of that analysis, the element must add or modify programs. Programs to AFFH should go beyond status quo actions, include specific commitment, timing, geographic targeting and metrics or numerical targets and should, as appropriate, address housing mobility, encourage new housing choices in higher resource areas, improve place-based strategies toward community revitalization and protect existing residents from displacement. For example, the element should include significant housing mobility and place-based strategies to promote inclusive communities and equitable quality of life.

C. Public Participation

Pursuant to public comments received from Holland and Knight, the City should clarify what additional steps are needed to approve projects at 1154 and 1170 Sonora Court , credited with 227 units in the sites inventory, as well as analyze its compliance with State Density Bonus Law, the frequency of meetings and hearings required to obtain a development agreement, and clarify what additional steps are needed to approve the City’s application for State Density Bonus Law.

Attachment 2

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RESPONSE TO JULY 21, 2023, HCD COMMENT LETTER ON

CITY OF SUNNYVALE DRAFT HOUSING ELEMENT
A. Housing Needs, Resources, and Constraints

While the element discusses the isolation of the regional housing need allocation (RHNA), including programs to the circumstances, it should quantify the RHNA by area or lack of RHNA by area or location and evaluate impacts or lack of impacts to better formulate an appropriate policy response. For example, the element was revised to explain the timeline for the Moffett Park Specific Plan area as well as some discussion of “built out areas”. However, while information was provided regarding the number of units by planning area, it should analyze why areas like the Downtown Specific Plan are expected to include only 224 units, versus the 4,815 units credited in the Moffett Park Specific Plan. In addition, the element was revised to clarify the Downtown Specific Plan’s maximum allowable housing per block, with densities as low as 7 to 16 dwelling units per acre. The element should analyze these maximum allocations for impacts.

Based on the outcom
es of this analysis, the element should add or modify programs.

Response 1: In response to this comment, additional analysis was added to the Fair Housing Chapter on pages 4-67 through 4-73 to illustrate existing housing units and RHNA capacity by census tract, and additional analysis. The analysis specifically provides more context for both Moffett Park and the Downtown Specific Plan areas. It should be noted that the comment that the Downtown Specific Plan is only expected to include 224 units is not entirely accurate. In addition to the 224 units of capacity on sites included in the sites inventory, there are an additional 887 net new units in pipeline projects in the Downtown, for a total capacity of 1,111 potential units Downtown. This is in addition to the more than 1,100 housing units already existing or under construction within the Downtown area. Moffett Park, on the other hand, does not have any existing housing units, as the Specific Plan was just adopted in July 2023, enabling residential development to happen for the first time in Moffett Park. For context, Moffett Park is more than 10 times the size of the Downtown Specific Plan area.

The Const
raints Chapter was also updated on page 6-11 to explain how density is measured in the Downtown Specific Plan and how there is potential for a greater variety of infill housing in the low-medium density residential neighborhoods of the Downtown beyond what is included in the inventory.

EXHIBIT E
Attachment 2

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2. An inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality’s housing need for a designated income level, and an analysis of the relationship of zoning and public facilities and services to these sites. (Gov. Code, § 65583, subd. (a)(3).)

HCD Comment 2: Realist ic Capacity: The element revised several parts of its realistic capacity assumptions and analysis, including information on the phasing guidelines for the Moffett Park Specific Plan Area. However, the element still must analyze how commercial requirements will affect realistic capacity in the City’s mixed use zones. In addition, the element should adjust its assumptions of 105 dwelling units per acre in the Moffett Plan Specific Plan area, given this requirement. Minimum densities may be utilized to address this requirement without any further analysis. The element should also provide evidence to support the assumption that 50 percent of units in the Moffett Park Specific Plan will be available to lower-income households.

Response 2: This comment implies that the assumption of 105 dwelling units per acre is applied to parcels where commercial development is required, but in fact, the only parcels where 105 dwelling units per acre area assumed are on the parcels zoned exclusively Residential where densities of up to 150 units per acre are achievable. The zones where commercial uses are allowed (i.e., Activity Center and Mixed Use) use much lower density assumptions to reflect the minimum required residential densities. The Activity Center requires a minimum residential density of 40 units per acre, meaning that projects in this zone are required to have at least 40 units of housing per acre. The Housing Element uses this minimum required residential density as the assumption. The Housing Element uses an assumption of only 37.5 units per acre in the Mixed Use zone, where the City Council, upon adoption of the Specific Plan, chose to enact a minimum residential density of 36 units per acre. Again, this means that within the Mixed Use zone projects are required to provide at least 36 units per acre. Both zones allow much higher densities for residential development, estimated at approximately 180 units per acre in the Activity Center zone and 150 units per acre in the Mixed Use zone. The Housing Element uses very conservative assumptions, relying on the minimum required residential densities in both zones. Additional text has been added to page 5-64 and 5-65 to clarify the minimum residential requirements in these zones.

HCD Comment 3: In additio
n, as noted in the prior review, the element should support or adjust realistic residential capacity assumptions in the Downtown Specific Plan and El Camino Real Specific Plan. For the Downtown Specific Plan, the element should support the assumption of 100 percent of maximum base densities based on land use controls and recent trends by affordability. This analysis may utilize minimum density policies (Policy H-1.4) to address this requirement without further analysis.

Response 3: The Hou
sing Element already includes a detailed analysis to support realistic density assumptions in the Downtown Specific Plan (see Table 5-5 of the Sites Inventory chapter). Nearly all developments in the Downtown in the past 15 years have met or exceeded base densities. In addition, the discussion of per block density limits in DSP has Attachment 2

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been expanded on page 6-11 of the Constraints chapter to clarify that this expression is merely another way to quantify allowable densities in DSP.

HCD Comment 4: Finall y, the element was revised to cite 95 percent of maximum densities as realistic in the Lawrence Station Area Plan, 80 percent in the El Camino Real Specific Plan. However, it still must analyze the land use controls including, but not limited to, open space requirements and parking minimums to ensure that maximum densities are feasible in these zones.

Response 4: Addi tional analysis was added to the Sites Inventory chapter (page 5-31) and the Constraints chapter (page 6-14) to demonstrate that the land use controls are not a constraint to achieving maximum densities in the LSAP area. In addition, more analysis was added beginning on page 6-26 of the Constraints chapter to display recent examples of projects in the El Camino Real Specific Plan and demonstrate that land use controls are not a constraint to achieving maximum densities.

HCD Comment 5: Suit ability of Nonvacant Sites: The element was revised to include analysis related to the potential for additional development on nonvacant sites based on several factors (e.g., improvement to land ratio, age of structure) and provided analysis on existing uses as well as market demand. However, the element should still support the validity of factors based on recent trends in development and prior uses.

In additi
on, if the housing element relies upon nonvacant sites to accommodate more than 50 percent of the RHNA for lower-income households, the housing element must demonstrate existing uses are not an impediment to additional residential development and will likely discontinue in the planning period (Gov. Code, § 65583.2, subd. (g)(2).).

Response 5: Add
ed Table 5-2 to the Sites Inventory chapter (page 5-7) with examples of recent housing developments on nonvacant sites with characteristics similar to inventoried sites (i.e., office, commercial retail strip, industrial). The expanded analysis also references applicable non-vacant site factors to support the validity of the factors used in the sites inventory methodology and to demonstrate that existing uses are not an impediment to redevelopment.

HCD Comment 6: Electr onic Sites Inventory: For your information, pursuant to Government Code section 65583.3, the City must submit an electronic sites inventory with its adopted housing element. The City must utilize standards, forms, and definitions adopted by HCD. Please see HCD’s housing element webpage at https://www.hcd.ca.gov/planning-and- comm
unity-development/housing-elements for a
copy of the form and instructions. The City can reach out to HCD at [email protected] for technical assistance.

Response 6: Comment noted. Once the inventory has been finalized it will be provided in the required electronic sites inventory form.

Attachment 2

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HCD Comment 7: Zoning for a Variety of Housing Types (Single Room Occupancies (SRO)): The element was revised to describe the parking requirements for Single Room Occupancies (p. 6-27). However, given that this housing typology is designed to be naturally affordable, the requirement of 1 parking space per SRO unit over 250 square feet may be a constraint. The element should evaluate parking and other development standards as potential constraints and modify Program H23 (Zoning Amendments) as appropriate to modify or establish development standards that encourage and facilitate SROs. In addition, the element could consider additional zones in Specific Plan areas, particularly the El Camino Real Specific Plan area, for this naturally affordable housing typology.

Response 7: Modified Program H23 to remove minimum parking requirements for SROs and clarified that “select mixed use zoning districts in specific plan areas” includes districts in the El Camino Real Specific Plan.

3. An analys
is of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, including the types of housing identified in paragraph (1) of subdivision (c), and for persons with disabilities as identified in the analysis pursuant to paragraph (7), including land use controls, building codes and their enforcement, site improvements, fees and other exactions required of developers, and local processing and permit procedures... (Gov. Code, § 65583, subd. (a)(5).)

HCD Comment 8: Land Use C
ontrols: The element was revised to describe some of its development standards in broad terms (p. 6-7 to 6-14). However, the analysis should analyze land use controls independently and cumulatively with other land use controls.

The analysis should specifically address requirements related to floor area ratios, open space, setbacks, height limits, parking and limits on allowable densities. For example, the requirement of 1.5 parking spaces per studio apartment in the Downtown Specific Plan should be analyzed for its impact on housing choice and affordability. In addition, while the City’s open space requirements were described in more detail by zone, it may consider exploring strategies such as parklets and public open space that prevent these requirements from raising housing costs and can be used as shared amenities across the community. The analysis should still address any impacts on cost, supply, housing choice, affordability, timing, approval certainty and ability to achieve maximum densities and include programs to address identified constraints.

Response 8: The an
alysis of land use controls was expanded with examples of how recent housing developments have complied with development standards in different areas of the City, including El Camino Real and Lawrence Station. The project examples added on pages 6-14 and 6-26 of the Constraints chapter also demonstrate that most projects exceed the open space standards. In previous revisions, the City clarified that the definition of usable open space includes a combination of private and public open space which provides flexibility to developers in how they meet the standards. However, the City has modified Program H18 to include a commitment to reduce open space requirements in R2 and R3 zones and ensure that standards would facilitate the development of missing Attachment 2

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middle housing. The City has also modified Program H21 and H23 to remove parking minimums pursuant to AB 2097 (i.e., Government Code Section 65863.2).

HCD Comment 9: Fees and Ex actions: The element was revised to discuss its sense of place fees and how park dedication fees are calculated (p. 6-31). However, given the total number and magnitude of the fees being applied to residential development, the element should include a cumulative analysis of its total fees for different housing typologies (e.g., single-family vs. multifamily development) and modify policies and programs as needed. In addition, the element was revised to include a table with park dedication by project type (Table 6-21), and it is unclear why single-family homes outside of subdivisions are exempt from these requirements. Finally, pursuant to public comments, the City should analyze its $72,560 park in lieu fee applied to all multifamily units. For additional information and a sample analysis and tables, see the Building Blocks at http://www.hcd.ca.gov/community-developm
ent/building-
blocks/constraints/fees-and- exactions.shtml.

Response 9: The Housing Element already includes a cumulative analysis of the total fees for single-family and multifamily housing on page 6-52 and for ADUs on page 6-54. The analysis concludes that fees make up 5 percent of the total cost for a typical single-family home, 14 percent for a small multifamily development, 11 percent for a large multifamily development and about 2 percent for ADUs.

For sing
le-family developments, the Park Dedication requirement is triggered by a parcel subdivision, which is associated with a net new unit of housing. Since most single-family projects are remodels or teardowns that do not involve a parcel subdivision, these projects do not trigger the Park Dedication requirement. Since Sunnyvale does not have any vacant land, most new single-family homes are either a substantial remodel or a tear down and rebuild of an existing unit and therefore do not trigger the Park Dedication requirement.

On page 6-39, the analysis was expanded to describe how the City is working to reduce Park Dedication In-lieu fees. Program H19 was also modified to include additional commitments to reduce fees for multifamily housing (see response to Comment 13, below).

HCD Comment 10: Proces
sing and Permit Procedures: The element was revised to
provide further analysis of its permit processing procedures and added Program H20 to develop a Plan Review Permit, described as a ‘non-discretionary permit type’. However, on the June 15, 2023 call, it was confirmed that Plan Review Permits still require a Planning Commission hearing. This requirement should be analyzed for impacts on housing cost, timing and approval certainty, including describing the steps, typical timing and any other relevant factors. In addition, the element should clarify which housing typologies will be subject to the Plan Review Permit and which housing typologies are subject to the Objective design Standards outlined in Program H43.

Response 10: Added language to Program H20 clarifying that Planning Commission review is subject only to objective standard.

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B. Housing Programs

HCD Comment 11: As noted i
n Finding A2, the element does not include a complete
site analysis; therefore, the adequacy of sites and zoning were not established. Based on the results of a complete sites inventory and analysis, the City may need to add or revise programs to address a shortfall of sites or zoning available to encourage a variety of housing types.

Response 11: The r evisions made in response to Finding A2 above did not result in any changes to the shortfall of sites. No program revisions are recommended.

2. Address
and, where appropriate and legally possible, remove governmental and nongovernmental constraints to the maintenance, improvement, and development of housing, including housing for all income levels and housing for persons with disabilities. The program shall remove constraints to, and provide reasonable accommodations for housing designed for, intended for occupancy by, or with supportive services for, persons with disabilities. (Gov. Code, § 65583, subd. (c)(3).)

HCD Comment 12: As noted
in Finding A3, the element requires a complete analysis of potential governmental and nongovernmental constraints. Depending upon the results of that analysis, the City may need to revise or add programs and address and remove or mitigate any identified constraints.

Response 12: As des cribed in responses to comments 7 and 8 above and in comment 13 below, the following programs have been modified to address potential constraints, • Program H18 (Open space) was modified to ensure that open space requirements are not
a constraint on missing middle housing, as described below. • Program H19 (Park Dedication Requirements) was modified to include additional commitments to reduce fees, as described below.
• Program H21 (Missing Middle Housing) was modified to remove parking standards near transit pursuant to AB 2097.
• Program H23 (Zoning Code Amendments) was modified to remove parking standards for SROs.

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HCD Comment 13: In addition, the following programs should be revised:

However, the element should expand the scope of fee reductions beyond DUO lot splits to other units, including but not limited to, multifamily units.

Response 13:
• Program H17 (Commercial Requirement). Additional analysis was added on page 6- 25 of the Constraints Chapter providing an example of how development projects have accommodated the commercial requirement within the El Camino Real Specific Plan Area. No revisions to the program are recommended.

• Program H18 (Private Open Space). Revisions were made to clarify that useable open space areas that meet the definition of landscaped areas may contribute towards both the usable open space and the landscaped areas, meaning the two are not necessarily cumulative. Program H18 was modified to include a commitment to reduce open space requirements in the R-2 and R-3 zone and to ensure that open space requirements are not a constraint on missing middle housing.

• Program H19 (Park Dedication Requirements). Modified Program H19 to include additional commitments to reduce fees for multifamily housing.

HCD Comment 14: As noted in Finding A1, the element must include a complete assessment of fair housing. Based on the outcomes of that analysis, the element must add or modify programs. Programs to AFFH should go beyond status quo actions, include specific commitment, timing, geographic targeting and metrics or numerical targets and should, as appropriate, address housing mobility, encourage new housing Attachment 2

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choices in higher resource areas, improve place-based strategies toward community revitalization and protect existing residents from displacement. For example, the element should include significant housing mobility and place-based strategies to promote inclusive communities and equitable quality of life.

Response 14: The Ci ty provided additional analysis and further clarification in response to Finding A1, above. The additional analysis did not result in any new conclusions related to fair housing that would necessitate new programs of revisions to existing proposed programs.

C. Public Participation

HCD Comment 15: Pursuant to publ ic comments received from Holland and Knight, the City should clarify what additional steps are needed to approve projects at 1154 and 1170 Sonora Court, credited with 227 units in the sites inventory, as well as analyze its compliance with State Density Bonus Law, the frequency of meetings and hearings required to obtain a development agreement, and clarify what additional steps are needed to approve the City’s application for State Density Bonus Law.

Response 15: The Ap
plicant and City Staff have resolved processing questions related to the proposed projects at 1154 and 1170 Sonora Court. At this time (October 2023), the environmental studies are nearing completion, and the project will be scheduled for November 2023 public hearings.

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Sunnyvale City CouncilDecember 12, 2023

Sunnyvale City Council
December 12, 2023