TO:Andrew P. Powers, City Manager
FROM:Kelvin Parker, Community Development Director
DATE:March 19, 2024
SUBJECT: Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Road
RECOMMENDATION:
1. Adopt resolution to:
a. Find the project is Categorically Exempt from the California Environmental Quality Act (CEQA) Guidelines pursuant to Class 32 Section 15332 In-Fill Development Projects, and Section 15194 Affordable Housing; and
b. Approve Residential Planned Development Permit 2023-70014-RPD, Parcel Merger 2023-70001-TTM, Planned Tree Permit 2023-70125-PTP, and Landscape Plan Check 2023-70020-LPC; and
c. Declare that the project site is exempt surplus land, contingent upon the transfer of the property in accordance with the terms of the Disposition and Development Agreement, pursuant to California Government Code Section 54221(f)(1)(R).
2. Approve the draft Disposition and Development Agreement by and among the City of Thousand Oaks and Housing Land Trust Ventura County and People’s Self-Help Housing Corporation (384 N. Erbes Road), authorize the City Manager and City Attorney to finalize the agreement, and authorize the City Manager to execute the finalized agreement on behalf of the City.
3. Authorize the City Manager to act on behalf of the City whenever an administrative action is required to implement the terms of the Disposition and Development Agreement and associated documents, except for those matters that are reserved under state law to City Council or which the City Manager determines should be referred to City Council.
4. If requested by the Developer in writing, approve deferral of all City planning and permitting fees until Certificate of Occupancy, pursuant to the terms and conditions contained in the Development Impact Fee Deferral Program.
Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 FINANCIAL IMPACT:
No Additional Funding Requested. Staff time required to prepare the report and associated documents is included in the Adopted FY 2023-24 General Fund Budget. The City purchased the property for $10 million with the intention of transferring the property for the purposes of an affordable housing project to be developed at the site. City planning and permitting fees in the approximate amount of $100,000 may be requested by the developer to be deferred until Certificate of Occupancy. City development impact fees in the approximate amount of $1.3 million may be deferred until Certificate of Occupancy per the City Council approved temporary Development Impact Fee Deferral Program.
BACKGROUND:
The site was formerly used as a hospital until 1976 when the hospital was converted to a private school. The site was used as a school until the site was vacated in 2019. In 2021, the property was purchased by the City for $10 million ($8.8 million from the General Fund and $1.2 million from the Housing Successor Fund) with the intent to collaborate with an affordable housing developer for the development of the site for affordable housing.
On June 24, 2022, the City issued a Request for Proposals/Qualifications (RFP/Q) to more than 500 developers seeking project proposals for the development of affordable housing on the property. The City received three responsive proposals and City Council ultimately selected People’s Self-Help Housing Corporation (PSHH), to develop an affordable “for sale” housing project.
On February 28, 2023, the City and PSHH entered into an Exclusive Negotiating Agreement and the parties began negotiating the terms of the proposed transfer of the property and the development of the project through a Disposition and Development Agreement. PSHH and its development team, which is comprised of DeCecco Architecture, Housing Trust Fund/Land Trust VC, Ventura County Community Development Corporation (VCCDC), and McCarthy Companies, has worked with staff to develop the proposed project and draft the Disposition and Development Agreement.
Project Site and Setting
The project site consists of two parcels totaling approximately 3.86 acres at 384 Erbes Road, currently developed with a vacant school building, surface parking areas, and landscaping as shown below in Figure 1.
Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 The site is bounded by Single-Family Zone (R-1) to the east, Multi-Family Zone (R-3) to the west, across Erbes Road, Single-Family, Rural Agricultural Zone (R- A) to the north, and parkland to the south zoned Public, Quasi-Public, Institutional (P-L).
Figure 1: Existing Conditions
The topography of the site varies. The site along Hillcrest Drive is below street grade between 8-12 feet. The site has a better relationship with the street along Erbes Road due to the topography being a few feet higher than the street grade.
DISCUSSION/ANALYSIS:
This discussion provides a broad overview of the project details. A focused and detailed discussion on project features is contained in the staff report to the Planning Commission dated February 26, 2024 (Attachment #1).
Project Description
The project proposes a Residential Planned Development Permit (RPD-2023- 70014) to allow for the demolition of an approximately 26,500 square foot one- story school building (formerly used by Hillcrest Christian School) to accommodate the construction of 8 rowhouse buildings to accommodate 78 one hundred (100) percent affordable housing units. The proposed townhomes are three stories with attached garages.
Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 This request also includes a Parcel Map (TTM-2023-70001) with a proposed one- lot subdivision for condominium purposes. This map would consolidate Lot 11 (APN 670-0-250-210) and Lot 12 (APN 670-0-250-290) in Block 26 of Thousand Oaks Tract, in the City of Thousand Oaks, County of Ventura creating one parcel with a gross area of approximately 3.86 acres and a net area of approximately 3.69 acres.
A Protected Tree Permit (PTP-2023-70125) is included with this application for thirteen (13) existing protected trees located on the project site. Eleven (11) of these trees will be encroached upon during construction and require protection measures and monitoring. Two oak trees that are located adjacent to the proposed location for Building 1 are proposed for removal and replacement with mitigation trees. The total required trees for mitigation are eight (8) trees based on the 4:1 required replacement ratio.
In addition to the preservation of protected trees, a Landscape Plan Check (LPC- 2023-70020) has been submitted that includes a planting schedule as well as a variety of landscape improvements to enhance the outdoor space. The trees and plants that are proposed to adhere to Ventura County Fire Department (VCFD) requirements as well as being mindful of drought-tolerant selections.
Planning Commission
The proposed project was presented at the Planning Commission hearing on February 26, 2024 (Attachment #1). During the hearing, two public speakers commented on the project:
Two residents opposed the project concerned with noise and crime that the development might bring to the area, and if preferential consideration would be given to local residents.
During the hearing an email was sent from the neighbors to the southeast of the project site, the closest residence to the proposed location of Building
5. They stated concerns about privacy on their property and asked if there would be trees or retaining walls and if windows from the third floor of the building would be facing their backyard.
Planning Commissioners stated that the project was well designed and fills a need in the City. The Commissioners voted 4-0 to recommend approval to City Council.
On March 6, 2024, staff, the architect (Mark DiCecco), and the homeowners at 418 Glenwood Place met at the project site to discuss concerns provided via email on February 26, 2024. The architect has agreed to update the landscape plans for evergreen trees to be planted adjacent to the homeowner's rear property fence.
Additionally, the architect will be revising the plans to remove two windows facing the residence and reposition them to face the park. The closest balcony on Building 5 will also incorporate a barrier from view onto the homeowner's property.
Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 Concessions and Waivers
Pursuant to California Government Code Sections 65915-65918, the applicant has requested one (1) concession, based upon the applicant providing at least 10 percent of the total units for lower-income households, and one (1) waiver for this project. The requested concession is as follows:
A decrease in the open space requirement of 35 percent to be reduced to 9.19 percent.
The project has been designed to provide the minimum density required under the City’s General Plan to provide a housing-type product that respects the existing neighborhood. However, the reduction in open space is necessary to make the housing development financially feasible, as the reduction in open space will significantly reduce the project’s development costs. The project has incorporated design features intended to mitigate any potential impacts of the reduced open space. Taking advantage of its proximity to Estella Park, the project incorporates an ADA compliant ramp between the project and the park to provide connectivity to the park and residents’ immediate access to open space. Producing a more traditional townhome product, each unit has an attached garage. This resulted in more area devoted to driveways than a standard apartment block would. To make the project safer, the driveways are widened beyond VCFD standards for fire access. This further reduced the potential for larger open spaces. There are multiple outdoor common recreation areas with the project, however, a large portion of them do not count as open space because of their narrow width.
Although the project is considered to have just under 10 percent open space, the site itself is 26 percent landscaped.
Additionally, one waiver is being requested to deviate from the required development standards:
A decrease in the front setback from twenty feet (20’) to eighteen feet and 3 inches (18’3”), rear setback from thirty feet (30’) to ten feet (10’), exterior setback side (adjacent to Erbes Road) from thirty feet (30’) to fourteen feet and five inches (14’5”), and a request for the interior side setback (adjacent to residential properties) from thirty feet (30’) to twenty feet (20’).
Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 The waiver is being requested because strict application of the required setbacks could physically preclude the construction of the project as site limitations make it difficult, outside of the proposed configuration, to include the number of units needed to meet the required density under the General Plan. The land use designation allows a density of 20 to 30 units per acre and a height of 50 feet. This proposed project proposes 20 units per acre and will not exceed 40 feet in height.
The design with eight separate buildings will aid in accommodating appropriate access, and pedestrian connectivity by providing landscaped paseos and connectivity within the development that would yield a better-designed project that will provide a relationship with the street along Erbes Road.
Modifications
The proposal as it has been submitted, requests two (2) modifications to the Objective Design Standards (ODS) of the Thousand Oaks Municipal Code (TOMC)
1. Rowhouse Standard/Access – The main entrance to each dwelling must be accessed directly from and face the street (TOMC Section 9-4.2205 (e)(5)(i)); and
2. Rowhouse Standard/Outdoor Space – Useable, outdoor space must be provided behind each rowhouse unit with a fifteen percent minimum of the lot area and of a regular geometry with a minimum dimension of ten feet (TOMC Section 9-4.2205 (e)(5)(iii)).
As was further detailed in the Planning Commission Staff Report (Attachment #1), staff supports these requests for modifications due to the project minimizing grading, promoting pedestrian activity, and being consistent with the scale and character of neighboring projects.
Parking
Under Density Bonus Law, Government Code Section 65915(p), the parking ratios required for density bonus eligible multi-family apartment buildings are one (1) parking space per one-bedroom unit and one-and-a-half (1 ½) parking spaces for a two-bedroom unit, inclusive of parking for persons with disabilities and guests.
Thus, the project is required to provide 113 parking spaces. The proposed project provides 148 covered parking spaces and an additional 17 uncovered, including guest parking spaces, for a total of 165 parking spaces, which exceeds the parking requirements by 52 spaces.
Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 Disposition and Development Agreement and Transfer of Land The City is the current owner of the subject property, which was purchased in 2021 for $10 million with the intent to collaborate with an affordable housing developer to develop the property as affordable, for-sale housing. The City and PSHH entered into an Exclusive Negotiating Agreement to negotiate the terms of the property transfer and the development of the project through a Disposition and Development Agreement (DDA). The Proposed DDA is an agreement (Attachment #2) between the City and PSHH and Housing Land Trust Ventura County (Land Trust VC), a community land trust, and outlines the development of the project.
The DDA provides an initial period of two years for PSHH to obtain the required funding to develop the project, which is estimated to cost $49.6 million. Upon verification that PSHH has the required funding to construct the project, the City will transfer the property by grant deed to Land Trust VC. Concurrently with the conveyance of the property from the City to Land Trust VC, Land Trust VC and PSHH will enter into a 5-year ground lease for the property, whereunder PSHH will construct the project (Development Ground Lease - see Exhibit 10 to the DDA).
PSHH will have three years after the property is transferred to construct the 78 affordable units. Upon completion of each unit, Land Trust VC will sell the unit to an income-qualified household (Qualified Household and concurrently enter into a 99-year ground lease with the Qualified Household (Homeowner Ground Lease - attached to the DDA as Exhibit 11). Thus, the Qualified Household would own the unit and hold a 99-year lease on the land beneath the unit. In addition, each owner would own a 1/78th interest in the common areas. The owners are required under the DDA to establish a homeowner's association, and Covenant, Conditions and Restrictions (CC&Rs) will be drafted and reviewed by the City to provide for the ongoing maintenance of the development.
While the City expects the project to be constructed as planned, the DDA contains provisions to protect the City’s investment in the project. Specifically, the DDA grants the City, in the unlikely event that construction is not commenced or stalls after commencement, the right to reenter and retake possession of the property.
Similarly, the DDA includes provisions to ensure that the project remains affordable for 99 years. The property and ultimately the individual units will be subject to an enforceable restriction on the sale and resale of the units to Qualified Households through the recordation of various documents including the Agreement Containing Covenants, Homebuyer Ground Lease, Deed of Trust and Notice of Affordability Restrictions on the Transfer of Property (collectively, the Affordability Covenants).
Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 Affordability
The DDA requires the 78 units to be sold at an affordable purchase price, as defined in the DDA, to a Qualified Household. Specifically, 100 percent of the units must be affordable to persons and families of low or moderate income, with at least 75 percent of the units restricted to lower income households, including ten units specifically designated to meet specific requirements associated with the use of Lower and Moderate-Income Housing Assets Fund (LMIHAF). The unit mixture is identified in Table 1 below.
Table 1 – Affordable Housing Units
Number of Units Affordability Level Unit Type
6 Moderate Income 4 Bedroom
13 Moderate Income 3 Bedroom
2 Lower Income 4 Bedroom
17 Lower Income 3 Bedroom
30 Lower Income 2 Bedroom
2 Lower Income (HSC)* 2 Bedroom
8 Lower Income (HSC)* 1 Bedroom
*Per Section 34176 of the Health and Safety Code (HSC), City Council elected to retain the housing responsibility functions previously performed by the former Redevelopment Agency. The site was partially purchased using funds from the former Redevelopment Agency and 10 units represent an allocation for the funds used.
Targeted Housing Population
The residential project's target population and income level contains overlapping categories. Of the 78 units, 59 units will target households earning not exceeding 80 percent Area Median Income (AMI), and 19 units will target households earning between 80 percent and 120 percent AMI. Based on the current Ventura County’s AMI for a household of four, the project would serve a Lower-income household whose income is below $106,250 and a Moderate-income household below $148,200.
A total of 10 units are funded using Housing Successor Agency funds as well as the units required by the City’s Inclusionary Housing Ordinance and identified in Table 1 as HSC. Eight units will be fully ADA compliant and reserved for individuals with disabilities.
The Development Team will calculate the maximum sales price for each of the 78 units based on the specific affordable conditions and housing costs of that unit.
This price will be determined during the marketing of the units and will take into account factors such as the average mortgage interest rate and cost of fire insurance. The Sales Price Calculation Methodology, attached as Exhibit 12 of the Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 DDA, outlines how the maximum sales price must be calculated and provides an example of the initial maximum sales price calculation and parameters for the first buyer.
For subsequent buyers, the maximum resale price will be based on the change in AMI from the time of purchase to the time of resale. Home improvements or deferred maintenance will be considered in the maximum resale price calculation.
Any time a unit is resold, the new owner will also enter into a new 99-year Homebuyer Ground Lease with Land Trust VC.
In general, a unit is considered affordable to a Qualified Household if the buyer's housing cost does not exceed 30-40 percent of their gross household income for the specific affordable unit type.
City Financial Contribution
The City will be transferring the land for the project. The project is eligible to participate in the City’s temporary Development Impact Fee Deferral Program, adopted by City Council in October of 2023, which allows for deferral of City development impact fees until Certificate of Occupancy. Estimated City impact fees for the project total $1.3 million. In adherence with past practice on 100 percent affordable projects, City staff is also requesting pre-approval, in the event that the Developer requests deferral of all planning and permitting fees until Certificate of Occupancy. This deferral will, if requested, be made pursuant to the same terms and conditions of the Development Impact Fee Deferral Program.
Estimated City planning and permitting fees for the project total approximately $100,000.
Transfer of Land and the Surplus Land Act
Section 65402 of the California Government Code requires the Planning Agency to make a finding of General Plan conformance whenever a city proposes to acquire or dispose of property. On February 26, 2024, the Planning Commission reviewed the proposed property disposition and found that it was consistent with the General Plan.
The Surplus Land Act (California Government Code Section 54220 et seq.) is intended to make a local agency’s surplus land available to other public entities or affordable housing sponsors for the creation of affordable housing. To further that goal, the Surplus Land Act requires the City to declare property as “surplus land” or “exempt surplus land” before the City may dispose of the property. California Government Code Section 54221 identifies several categories of property that constitute “exempt surplus land,” which need not be made available to other public entities and affordable housing sponsors prior to disposition.
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8 California Government Code Section 54221(f)(1)(F) provides that property transferred for affordable housing pursuant to an open, competitive process is “exempt surplus land.” In compliance with this section, the City offered the property to affordable housing entities through an open, competitive process that specifically solicited proposals that complied with the affordability requirements of California Government Code Section 54221(f)(1(F). The proposal submitted by PSHH complied with this section.
On May 24, 2022, City Council adopted a resolution declaring the property exempt surplus land, contingent upon the property being transferred to an affordable housing entity in compliance with all of the applicable requirements of California Government Code 54221(f)(1)(F).
After City Council adopted a resolution declaring the property exempt surplus land, the Surplus Land Act was amended which, among other things, made minor changes to California Government Code Section 54221(f)(1)(F) and added additional categories of “exempt surplus property.” One of the new “exempt surplus property” categories, a transfer of property to a community land trust, provided that transfer meets all of the requirements of California Government Code Section 54221(f)(1)(R), is applicable to this project.
California Government Code Section 54221(f)(1)(R) requires that: the property be transferred to a community land trust; the property be developed for certain types of housing; the housing developed be available to income qualified households; and a deed restriction or other instrument ensuring the affordability of the housing be recorded on the property. As demonstrated above, the property is proposed to be transferred to Land Trust VC, a community land trust. The proposed DDA requires the property to be developed as for-sale, single family dwellings that will be available to Qualified Households. Finally, the units will be subject to an enforceable restriction on the sale and resale of the units through the recorded Affordability Covenants. Thus, the transfer of the property to Housing Land Trust Ventura County, pursuant to the terms of the proposed DDA, would satisfy all of the requirements of California Government Code Section 54221(f)(1)(R).
Environmental Review
The project was analyzed for conformance with the California Environmental Quality Act (CEQA). It has been determined that the proposed project is categorically exempt from the provisions of CEQA pursuant to Class 32 Section 15332 – In-fill Development, which consists of an urban infill development project that is less than five (5) acres, is consistent with the zoning classification as well as the General Plan land use designation. The site is located within an urbanized area and would be served by existing street access and all utilities and public Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd.
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8 services are available. The Community Development Department also analyzed the project under CEQA Guidelines Section 15300.2, and no cumulative impacts are anticipated as a result of the project. Additionally, the proposed project is also exempt under Section 15194 of the CEQA Guidelines – Affordable Housing Exemption. An environmental analysis was prepared that concluded that no impacts are anticipated in the areas of biological resources, traffic, air quality, noise, cultural resources, and water quality (Attachment #3). Furthermore, it has been determined that none of the six exceptions to the use of a Categorical Exemption applies to this project (CEQA Guidelines Section 15300.2).
Correspondence
As mentioned above, staff received an email during the Planning Commission Hearing (Attachment #4) with concerns about the proximity of Building 5 to their property.
Conclusion
City staff has evaluated the project in terms of compatibility with the surrounding neighborhood. Overall, the proposed project has been designed to meet the intent of the City’s standards, codes, and policies. City staff supports the requested concessions since they are necessary given the topographical constraints of the subject site and to facilitate the proposed affordable housing project. The proposed building design and site layout integrates well with surrounding development and has a cohesive architectural design meeting the City’s Architectural Design Guidelines. Based on the analysis and findings contained in this report, staff recommends approval of this project, subject to the conditions of approval in the attached resolution (Attachment #5).
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goals (FY 2023-24 and FY 2024-25):
B. Provide municipal government leadership, which is open and responsive to residents, and is characterized by ethical behavior, stability, promoting public trust, transparency, confidence in the future, and cooperative interaction among civic leaders, residents, business representatives, and staff, while recognizing and respecting legitimate differences of opinion on critical issues facing the City.
H. Participate in public-private and multi-jurisdictional opportunities to ensure residents have access to high levels of parks, recreation, education and leisure programs and services.
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8 J. Implement high quality revitalization projects within Thousand Oaks Boulevard and Newbury Road Areas; Develop a pedestrian-oriented, viable, and self- sustaining “Downtown;” and, continue to support production of long-term affordable housing.
PREPARED BY: Angela Georgeff, Associate Planner
Attachments:
Attachment #1 – Planning Commission Staff Report Packet of February 26, 2024
Attachment #2 – Disposition and Development Agreement
Attachment #3 – Environmental Report
Attachment #4 – Correspondence
Attachment #5 – City Council Resolution
CDD: 420-78/ag/H:COMMON/City Council/CC Agenda Items/2024/03192024/Proposed 78-Unit For-Sale Affordable Housing Project – 384 Erbes Rd. Staff Report.docx