EXECUTIVE SUMMARY:
This report focuses on changes to the second draft of the 6th cycle Housing Element based on mid-review comments from the State of California Department of Housing and Community Development (HCD) received on February 7, 2024. This review aims to obtain feedback from the City Council and the public on the proposed changes before submitting them to HCD on March 8th. Revisions to the 6th cycle Housing Element are ongoing, and a revised second draft will be posted online at www.HOMECarmelByTheSea.com on March 1st for a 7-day public comment period.
Background:
The City of Carmel-by-the-Sea last updated the General Plan Housing Element in 2015 for the 5th cycle planning period of 2015-2023. Under state law, the Housing Element must be updated every eight (8) years in a manner consistent with the Regional Housing Needs Allocation (RHNA). The 6th cycle planning period is 2023-2031, and the City’s RHNA is 349 housing units. The Housing Element includes policies, programs, incentives, and objectives to achieve the City’s housing goals, including planning for the creation of 349 new housing units, and must be adopted by the local jurisdiction and certified by the California Department of Housing and Community Development (HCD) by December 15, 2023. A 120-day grace period follows, ending on April 15, 2024.
In 2022, Mayor Potter appointed a Housing Ad-Hoc Committee consisting of Mayor Pro Tem Bobby Richards and Councilmember Karen Ferlito.
On February 7, 2023, the City entered into a Professional Services Agreement with EMC Planning Group to assist the City with preparing the 6th cycle Housing Element Update.
On June 6, 2023, the Public Review Draft of the 6th cycle Housing Element was released for a 30-day public comment period.
On August 2, 2023, the 6th cycle Housing Element was submitted to the State Department of Housing and Community Development (HCD) for a 90-day review period.
On November 1, 2023, the City received HCD’s comment letter on the draft Housing Element.
On January 24, 2024, a second draft of the 6th cycle Housing Element was submitted to HCD for a 60-day review period.
On February 7, 2024, the City received mid-review comments from HCD and is preparing a revised second draft for submittal to the State on March 8th. The revised second draft will be posted online at www.HOMEcarmelbythesea.com on March 1st for a 7-day public comment period. Following the public comment period, the City will submit the revised second draft to HCD, who will complete the formal 60-day review, which concludes on March 24th.
Following the 60-day review, the City will either receive a letter of substantial compliance with state law or additional comments. Assuming the former, the City Council would be asked to adopt the updated Housing Element at their regular meeting on April 2, 2024. The document would then be submitted back to the State in advance of the April 15th deadline for certification. Once certified, the 6th cycle Housing Element will be submitted to the California Coastal Commission for final approval as part of our Local Coastal Plan.
If the City receives additional comments from HCD, a third draft of the 6th cycle Housing Element will be prepared and submitted for another 60-day review period. This process continues until the City receives a letter of substantial compliance.
Summary of Revisions:
During the initial 90-day review of the City’s updated housing element, HCD staff provided mid-review comments, giving City staff an opportunity to make some revisions before the formal comment letter was finalized. Similarly, upon submission of the revised housing element, HCD staff met with City staff and provided mid-review comments on their 60-day review. City staff has made changes to the revised draft, including more robust follow-up actions on various programs and the addition of six new programs. Notable changes are described in further detail below. For a list of the changes, refer to the Reader’s Guide (Attachment 1).
Actions to Implement Programs
Program 1.1.B, City Owned Sites identifies three city-owned properties (Sunset Center north and south parking lots and Vista Lobos) as future housing sites. The City is committing to comply with the Surplus Land Act in the development of these sites, adopt development standards for the Sunset Center north and south parking lots, release a Request for Proposals (RFP) by Fall 2024, enter into an agreement with a developer by Fall 2025, and entitle a project by Winter 2026. If these actions have not proven successful, the City commits to alternative actions, including conducting additional outreach to affordable housing developers, issuing a second RFP by Winter 2027, pursuing funding opportunities to assist with entitlement and building permit fees, and developing incentives for developers.
Program 1.1.D, Allow Religious Institution Affiliated Housing Development includes a zoning code amendment to allow religious institution-affiliated housing by-right as an accessory use to a permitted religious institution use. If an application for housing on a religious institution/faith-based site is not received by December 2025, the City commits to expand outreach efforts annually.
Program 1.3.B, Overnight Visitor Accommodation (Conversion) Development Transfer Rights include identifying older hotel properties for conversion to multi-family rental residences and transferring the hotel rooms to another site within the commercial district. The City commits to outreach to property owners and non-profit affordable housing developers annually to identify sites and funding opportunities. If no applications are received by June 2027, the City commits to partnering with a non-profit to identify eligible properties for purchase.
Program 1.3.D, Overnight Visitor Accommodation - Employee Housing Program incentivizes hotel owners/operators to provide one on-site affordable housing unit for an employee in exchange for one new hotel unit. If no applications are received by June 2027, the City commits to amending the municipal code to require an on-site deed-restricted affordable housing unit.
Program 1.4.A, Eliminate Unnecessary Use Permits, includes eliminating the use permit requirement for multi-family residential or mixed-use projects that include 33 dwelling units per acre or more and for underground floors used for parking, storage, or mechanical equipment. The City further commits to amending the use permit findings to remove subjective language and promote approval certainty.
Program 2.4.A, Housing Rehabilitation and Maintenance Information, includes the distribution of information on inspection services, housing rehabilitation programs, and alternative ways to finance home repairs. The City further commits to monitor and conduct outreach to residential units in need of rehabilitation and maintenance.
Program 3.1.C, Density Bonus is a State law that incentivizes the construction of affordable housing by allowing additional units to be built on a property. The City commits to updating its Density Bonus ordinance to reflect recent changes to State law and reevaluating its bonus density ordinance to provide clarity.
New Programs
Program 1.1.E: City Partnership with the Carmel Foundation to Develop Affordable Housing. This program commits the City to working with the Carmel Foundation for the development of 21 lower-income residential units at their existing campus. If by June 2027, building permits have not been issued, the City commits to absorbing the 21 lower-income units on city-owned sites.
Program 1.3.K: Forest and Beach Commission Required Findings. This program commits the City to reevaluate the findings for tree removals to ensure they are not a constraint to the development of multi-family housing.
Program 3.2.B: Housing Mobility. This program includes a suite of actions to expand affordable housing opportunities in lower-density areas, including facilitating housing on a religious institution/faith-based site, pursuing a home-sharing program, preparing pre-approved ADU building plans, offering reduced permit fees for ADUs and JADUs, providing housing resources in multiple languages, adopting a local universal design ordinance, and rezone parcels for up to 10 dwelling units per acre.
Program 3.2.C: Local Universal Design Standards. This program promotes accessible housing for all residents through developing Universal Design Standards that incorporate accessibility design features that exceed the California Building Code requirements.
Program 3.2.D: Family Friendly Housing. This program promotes multi-family housing designs for multigenerational households and provides regulatory incentives to encourage the development of larger units for households of four or more persons.
Program 5.1.D: Farmworker Housing. This program supports Monterey County’s efforts to educate the public on resources available for agricultural workers.
Other Revisions
Program 1.3.H has been changed from Prepare Checklist and Procedures for SB35 to Senate Bill 35 and Senate Bill 423 Processing Procedure. Previously, SB 35 did not apply to coastal cities. In October 2023, SB 423 was signed into law, expanding SB 35 to include coastal cities. The change takes effect on January 1, 2025. The City commits to establishing a procedure for processing qualifying projects.
Program 3.1.A: Mixed-Use Affordable Housing has been modified to include specific regional affordable housing organizations including, the County of Monterey Housing Authority Development Corporation (HDC), Woodman Development Company, Inc., Community Housing Improvement Systems and Planning Association, Inc. (CHISPA), Eden Housing, EAH Housing, and Mid-Peninsula Housing.
Program 3.1.F: Expedited Processing Procedures has been modified to include alternatives to story poles for assessing view impacts and engaging a consultant to review the Planning Division’s current permitting procedures to identify inefficiencies and make recommendations on process improvements to streamline the permitting process.
Program 3.1.G: Establish Minimum Densities has been modified to include a ministerial approval process and restrict the development of new single-family residential uses in commercial and multi-family districts.
Next steps and Timeline:
The revised second draft of the 6th cycle Housing Element will be posted on the City’s website on March 1st for the required seven-day public comment period and resubmitted to HCD on March 8th. Staff will remain in close contact with HCD staff during the review process to answer any questions or provide clarification.
On or before March 24, 2024, the city will receive a letter from HCD that either,
1) finds the draft Housing Element substantially complies with state law, or
2) requires further revisions and outlines what those revisions include.
If HCD finds the document in substantial compliance, the City Council can adopt the Housing Element and submit it back to HCD for certification. If revisions are required, City staff will review the comments, discuss any substantive changes with the City Council and the public, and resubmit the document for another 60-day review by HCD. This process continues until HCD finds the document to substantially comply with state law.
An initial study/mitigated negative declaration has been prepared for the 6th cycle Housing Element update and released for public review on February 23rd. The environmental document and 6th cycle Housing Element will be presented to the City Council concurrently for adoption.
Following the City Council's adoption of the 6th cycle Housing Element and HCD certification, staff will submit the document to the California Coastal Commission (CCC) as a Local Coastal Plan (LCP) Amendment. HCD does not require the City to obtain approval from the CCC before adopting or certifying the updated Housing Element.