California state law requires all cities to adopt a general plan for the physical development of their city (Gov. Code Section 65300). The plan must include certain topics, referred to as elements, one of which is the Housing Element. The Housing Element assesses current and projected housing needs for all economic segments of the community. It also includes policies for providing adequate housing and action programs to implement those policies. The Housing Element is updated on a schedule set by the State of California Department of Housing and Community Development (HCD). California is now in its 6^th housing element update cycle.

On April 8, 2024, the City Council adopted the 6^th cycle Housing Element (Attachment 1). The updated Housing Element was found to be in substantial compliance with State law (Gov. Code Section 65580 et seq) by HCD on April 25, 2024 (Attachment 2). To remain compliant, the city must implement the programs outlined in Housing Element Chapter 2, Goals, Policies, and Programs (Attachment 3).

The 6th cycle Housing Element includes the following five goals listed below. Each goal has associated policies and implementing programs. All programs have a timeframe in which implementation is to be accomplished.

Goal HE-1 Facilitate Housing Construction

· 4 policies, 20 programs

Goal HE-2 Protect Affordable Housing and Improve the Housing Stock

· 4 policies, 7 programs

Goal HE-3 Provide Opportunities for New Affordable and Other Special Needs Housing

· 3 policies, 15 programs

Goal HE-4 Exemplify Sustainable Development and Energy Conservation

· 1 policy, 2 programs

Goal HE-5 Publicize Housing Needs and Resources

· 2 policies, 5 programs

This workshop focuses primarily on programs, which are discussed in detail below, with a 2024 due date, many of which require amendments to Title 17 Zoning of the Carmel-by-the-Sea Municipal Code (CMC). The purpose of the amendments is to:

1) Remove regulatory barriers to the construction of housing,

2) Define various housing types, and

3) Provide incentives to construct affordable housing.

Future workshops will discuss implementing other programs, such as the accessory dwelling unit ordinance, density bonus ordinance, and objective design and development standards.

Summary of Topics:

Below is a list of Housing Element programs that require a zoning code amendment as an implementing measure with a December 2024 timeframe for completion.

· Program 1.1.C: Development on Small Sites

o   Evaluate the residential parking requirements in the Service Commercial (SC) and Residential & Limited Commercial (RC) zoning districts to help facilitate market-rate housing.

· Program 1.3.F: Employee Housing

o   Add a definition for employee housing that permits employee housing for six or fewer employees to be treated as a single-family structure.

· Program 1.3.G: Manufactured Homes on a Foundation System

o   Add manufactured homes as a permitted use in the R-1 zoning district subject to the same design and development standards to which a conventionally built single-family residential dwelling on the same lot would be subject.

· Program 1.3.J: Emergency Shelters

o   Define emergency shelters and clearly state they are permitted as a by-right use, requiring no discretionary review in the CC, SC, and RC commercial zoning districts.

· Program 1.3.K: Forest and Beach Commission Required Findings

o   Review and modify the Forest and Beach Commission required findings to ensure they are not an impediment to multi-family development on the basis of base floor area.

· Program 1.4.A: Eliminate Unnecessary Use Permits

o   Eliminate [Use Permit] requirements to remove the constraint to the development of multifamily residential units and licensed residential care facilities of seven or more persons.

· Program 2.1.A: Incentives for Mixed-Use Development

o   Increase the floor area bonuses from 15 to 25 percent for projects that include housing for Moderate, Low, or Very Low-income households (as defined in CMC 17.70).

· Program 3.1.C: Density Bonus

o   Amend the City’s Density Bonus provisions to be consistent with recent changes to State Density Bonus Law.

· Program 3.1.E: Reduced Parking Requirements

o   Waive parking in-lieu fees for affordable units,

o   Clarify program requirements in the Central Commercial (CC) zoning district, and

o   Reduce parking requirements in the Multi-Family Residential (R-4), Residential & Limited Commercial (RC), and Service Commercial (SC) zoning districts.

· Program 3.1.G: Establish Minimum Densities and Ministerial Approval Process

o   Establish a minimum density of 33 dwelling units per acre as part of the base zoning in the CC, SC, RC, and R4 zoning districts.

o   Restrict new single-family development in the CC, SC, RC, and R-4 zoning districts.

o   Modify development standards in the CC, SC, RC, and R-4 zoning districts to ensure the standards support the minimum density.

· Program 3.3.A: Zoning for Transitional and Supportive Housing

o   Add definitions for Transitional and Supportive Housing consistent with state law.

· Program 3.3.B: Low-Barrier Navigation Centers

o   Add a definition for Low Barrier Navigation Center, and

o   Develop by-right procedures for processing low-barrier navigation centers.

· Program 3.3.D: Single Room Occupancy (SRO) Units

o   Add a definition for single room occupancy unit.

Discussion of Proposed Amendments:

Below is the full text of the programs listed above from Chapter 2, Goals, Policies, and Programs of the adopted Housing Element, followed by a discussion of the proposed amendment. The following acronyms are used throughout the discussion:

HCD: Housing and Community Development, State of California Department of

CC: Central Commercial zoning district (the color Red on the zoning map)

SC: Service Commercial zoning district (the color Pink on the zoning map)

RC: Residential & Limited Commercial zoning district (the color Purple on the zoning map)

R-4: Multi-family zoning district (the color Orange on the zoning map)

UP or CUP: Use Permit or Conditional Use Permit

The Zoning Map is included as Attachment 5. You can also view the zoning districts using our online GIS Map:

https://planningsites.org/CarmelPlanning/

Program 1.1.C: Development on Small Sites

Small sites can be difficult to develop particularly when development standards don’t adequately take into account small lot dimensions. The City will continue to offer incentives and concessions that facilitate development on small sites in the commercial and multi-family districts, including density bonuses that allow for development up to 88 dwelling units/acre. Presently, CMC Section 17.14.060 (Central Commercial (CC) District Regulations Applicable) waives off-street parking entirely for apartments in the CC district. In the Service Commercial (SC) District, the required parking for an affordable housing unit is ½ space per unit and for senior housing it is ? space per unit. Senior housing also has a guest parking requirement of 1 space per 4 housing units. The City will further evaluate the residential parking requirements in the Service Commercial (SC) and Residential & Limited Commercial (RC) zoning districts to help facilitate market rate housing. Alternative parking programs such as bike and/or car share, or free or discounted bus passes, will be evaluated to offset reduced parking.

Proposed Amendment: The parking requirement for a “permanent residential use” in the RC and R-4 districts is 1.5 spaces per unit, which is 0.5 spaces higher than in the CC and SC districts.

Affordable housing in the CC, SC, RC, and R-4 already has a reduced parking requirement of 0.5 spaces per unit, while senior housing has a reduced parking rate of 0.3 spaces per dwelling unit plus 1 guest space for every 4 units.

To implement Program 1.1.C, staff proposes that the parking requirement for a permanent residential use in the RC and R-4 districts be reduced to 1 space per unit.

To offset the reduction in parking, alternative parking programs will be researched and presented at a future workshop.

Program 1.3.F: Employee Housing

As stated in Appendix A [of the Housing Element], there are no farmworkers or agricultural employment in Carmel-by-the-Sea. Accordingly, the City has not identified a need for specialized farmworker housing beyond overall programs for housing affordability.

In compliance with Employee Housing Act (Health and Safety Code § 17000 et seq.) Sections 17021.5 and 17021.6, the City of Carmel-by-the-Sea will amend the Municipal Code to include a definition for employee housing that permits employee housing for six or fewer employees to be treated as a single-family structure and permitted in the same manner as other dwellings of the same type in the same zone.

Proposed Amendment: To implement Program 1.3.F, staff proposes adding employee housing as a residential housing type in CMC Chapter 17.68 (Use Classifications) and 17.70 (List of Terms and Definitions) and identify it as a permitted use in the single-family residential district.

Program 1.3.G: Manufactured Homes on a Foundation System

The City currently permits manufactured homes on a foundation system on lots zoned for conventionally built single-family residential dwellings pursuant to state law Government Code 65852.3. Manufactured homes represent an affordable and cost-effective form of housing. The City will amend the Municipal Code to include manufactured homes as a permitted use in the R-1 zoning district subject to the same development standards to which a conventional single-family residential dwelling on the same lot would be subject.

Proposed Amendment: To implement Program 1.3.G, staff proposes adding manufactured homes on a permanent foundation as a residential housing type in CMC Chapter 17.70 (List of Terms and Definitions) and as a permitted use in Chapter 17.08 (Residential Zoning Districts). 

Manufactured homes are not currently prohibited and would remain subject to the residential design guidelines. This amendment clarifies that they are a distinct housing type that is allowed.

Program 1.3.J: Emergency Shelters

In compliance with AB 2339 Statutes of 2022, the City will amend CMC Title 17 to define emergency shelters and clearly state they are a permitted by-right use, requiring no discretionary review in the CC, SC, and RC commercial districts.

Proposed Amendment: An emergency shelter is covered in the City’s definition of Community Social Service Facilities (below) and is a by-right permitted use in three commercial zoning districts (CC, SC, and RC). Staff proposes the creation of a stand-alone definition of Emergency Shelters. The State Department of Housing and Community Development defines an Emergency Shelter as housing with minimal supportive services for people experiencing homelessness and limited to occupancy of six months or less. No individual or household may be denied emergency shelter because of an inability to pay.

Community Social Service Facilities. Any noncommercial housing facility, such as homeless shelters or emergency shelters, which may also provide meals, showers, and/or laundry facilities. Specialized programs and services related to the needs of the residents may also be provided. This classification excludes transitional housing facilities that provide long-term living accommodations.

Program 1.3.K: Forest and Beach Commission Required Findings

To remove potential constraints to the development of multi-family housing (as defined in CMC Chapters 17.68 and 17.70), the City will review and modify the Forest and Beach Commission required findings to ensure they do not impede multi-family development on the basis of base floor area.

Proposed Amendment: CMC Section 17.48.070 (Findings Required for Significant Trees) prohibits the removal of “significant” trees to facilitate construction or development unless specific findings are met. When removal is related to construction, it must meet one of the following two findings:

1. That removal of the tree is required to protect public health or safety; or

2. That the following four conditions exist:

a. The existing site is vacant or is developed to an extent less than one-third of the base floor area allowed by the zoning applicable to the site; and

b. The available land area of the site not occupied by significant trees (including land within six feet of the trunk of significant trees) does not adequately and practically provide space for development of at least one-third of the base floor area allowed by the zoning for the site; and

c. The issuance of a variance for development in one or more setbacks has been considered and would not provide a remedy or would be inappropriate due to a significant overriding inconsistency with another policy or ordinance of the LCP; and

d. Failure to authorize removal of the tree(s) would deprive the owner of all reasonable economic use of the property.

These findings have been identified as a potential constraint to multi-family housing development. To address the constraint and implement Program 1.3.K, staff recommends that a third finding be included that allows for the removal of a significant tree when removal is needed to facilitate the construction of multi-family housing.

3. That removal of the tree(s) is required to facilitate the construction of multi-family housing.

Program 1.4.A: Eliminate Unnecessary Use Permits

Multi-family and duplex housing units constituted approximately 13 percent of Carmel’s housing stock. The use permit (UP) (or conditional use permit (CUP)) requirement is implemented as an additional regulatory tool and adds extra regulations, review, and required findings, to a variety of development standards that affect multi-family development. Municipal Code Chapter 17.64 - Findings Required for Permits and Approvals, includes a broad list of applicable conditional uses and incentives. There are opportunities to reduce redundancies and facilitate residential construction while still enabling development to meet City regulations. For example, a use permit is required in:

• CMC Section 17.64.190, Residential Construction at Densities Between 33 and 44 Units per Acre;

• CMC Section 17.64.230, Affordable Housing – Residential Construction at Densities Between 45 and 88 Units Per Acre for developments the request a bonus density or a density bonus; and

• CMC Section 17.14.150, Building Height requires a use permit for additional underground floors used for parking vehicles, storage and mechanical equipment. The additional use permit requirement can affect how much parking can be accommodated and limit the number of units.

The City will eliminate [Use Permit] requirements to remove the constraint to the development of multifamily residential units, and licensed residential care facilities of seven or more persons. Additionally, the City will remove subjective language from the required findings for UP and adopt objective findings to promote approval certainty.

Proposed Amendment: To implement Program 1.4.A, staff proposes eliminating the requirement for a Use Permit as outlined in the program. Fewer discretionary land use permits reduce regulatory requirements, making review and approval of projects easier.

Eliminating the use permit requirement for residential construction at densities between 33 and 44 units per acre would not have a significant impact as the findings are already written as objective standards (see Table 1 below). However, the findings for residential construction at densities between 45 and 88 dwelling units per acre include a mix of objective and subjective findings (see Table 2 below). The subjective findings would need to be rewritten in such a way that they are entirely objective. This can be accomplished by developing Objective Design and Development Standards (ODDS) for multi-family projects. Staff released a Request for Proposals in December 2024 to engage a consultant in the development of ODDS. The deadline to submit a proposal has been extended to March 3^rd to allow for greater participation by consultants.

Table 1. Findings for residential construction at densities between 33 and 44 dwelling units per acre in the R4 District.

Table 2. Findings for residential construction at densities between 33 and 44 dwelling units per acre in the CC, SC, and RC Districts.

Table. 3 Findings for residential construction at densities between 45 and 88 dwelling units per acre (CC, SC, RC)

There are no special findings specific to underground floors.

Program 2.1.A: Incentives for Mixed-Use Development

Providing additional development capacity of any type increases project feasibility. In order to better incentivize affordable residential development, the City will amend the Municipal Code to increase the floor area bonuses from 15 to up to 25 percent for projects that include housing for Moderate, Low or Very-Low-income households. The City will also distribute informational materials promoting the floor area bonus and other applicable incentives.

Proposed Amendment: CMC Section 17.14.140 includes a floor area bonus for affordable housing (up to 15 percent) and courtyards/intra-block walkways (up to 10 percent). The maximum allowed bonus is 15 percent.

Staff proposes increasing the floor area bonus when affordable housing (as defined in CMC 17.70) is provided as follows,

· The floor area bonus for low-income units would increase from 10 percent to 15 percent.

· The floor area bonus for very low-income units would increase from 15 percent to 20 percent.

· The floor area bonus for moderate-income units would remain the same at 5 percent.

Staff also proposes that the amount of affordable housing required to obtain the bonus be adjusted as follows,

· Reducing the percentage of moderate-income units from 25 percent to 10 percent.

· Increase the percentage of very low-income units from 10 percent to 25 percent.

These adjustments incentivize lower-income housing units in exchange for the floor area bonus.

Increasing the floor area bonus would allow development in the CC and SC districts to increase from a maximum of 150 percent floor area ratio to 160 percent. On a 4,000-square-foot lot, this amounts to a 400-square-foot increase in floor area from 6,000 square feet to 6,400 square feet.

The maximum potential floor area ratio in the RC district would increase from 95 percent to 105 percent. On a 4,000-square-foot lot, this amounts to a 400-square-foot increase in floor area from 3,800 square feet to 4,200 square feet.

Program 3.1.C: Density Bonus

Density bonuses can provide a significant incentive to build affordable housing units. By increasing the number of units permitted to be built on a property, the financial investment required to bring the development to fruition has a higher likelihood of a return. Given the high cost of materials, labor and borrowing costs, increasing the number of units can make the housing project financially feasible. The City’s Density Bonus provisions must be updated to reflect recent changes to State law.

Pursuant to Government Code Section 65915, the City will amend the City’s Density Bonus provisions to be consistent with recent changes to State Density Bonus Law. Additionally, the City will further review and revise local bonus density ordinances to clarify the regulations and increase certainty of applicability.

Proposed Amendment: This item needs further research and will be brought back at a future workshop.

Program 3.1.E: Reduced Parking Requirements

Parking requirements increase costs to residential development and take up valuable space that can be used for housing. The City will continue to offer reduced parking requirements for affordable housing developments. Additionally, the City will waive the parking in-lieu fees for affordable units, clarify the program requirements in the Central Commercial (CC) zoning district, and reduce parking requirements in the Multi-Family Residential (R-4), Residential & Limited Commercial (RC), and Service Commercial (SC) zoning districts.

Proposed Amendment: The current parking requirement for affordable housing is 0.5 spaces per unit. This requirement is proposed to remain unchanged.

Staff proposes revising the language regarding parking in-lieu fees to exclude affordable housing from payment of in-lieu fees in the CC District, where on-site parking is not permitted.

In the SC, RC, and R-4 Districts, an affordable housing project would have to provide on-site parking, albeit at a reduced ratio of 0.5 spaces per unit.

The in-lieu fee would be applicable for market-rate housing if parking were not provided on-site, including in the CC district. To further incentivize housing, the city could consider waiving the in-lieu fee for all residential units regardless of income level.

The in-lieu fee is only required when a net increase in required parking is associated with a project.

As discussed above in Program 1.1.C, staff proposes that the parking requirement in the RC and R-4 Districts be reduced from 1.5 spaces per unit to 1 space per unit. Table 4 below summarizes the proposed changes to the parking requirements.

Table 4. Parking Requirements

Program 3.1.G: Establish Minimum Densities and Ministerial Approval Process

Establishing a minimum density can be utilized as a tool to ensure the limited available land in a City is used in an efficient manner and lower densities are avoided. The City’s intention for establishing a minimum density in the Commercial and Multi-Family Residential Districts is rooted in enabling the development of more dense housing in the City. Currently, the Commercial District (SC, RC, and CC) permits residential densities of 0-22 dwelling units per acre and the Multi-Family Residential District (R-4) permits a maximum of 33 dwelling units per acre. Effectively, establishing a minimum density in these districts will result in higher yields of residential units. Recent residential development in the City’s Commercial District have ranged in densities from 22-33 dwelling units per acre.

The City will revise the Municipal Code for commercial districts (RC, SC, and CC) and the multifamily residential (R-4) district to establish a minimum density of 33 dwelling units per acre, as part of the base zoning. Additionally, the City will restrict new single-family development in the R-4, CC, RC, and SC Districts. Existing single-family dwellings in these districts will be considered legal nonconforming uses.

In addition, and in compliance with Government Code 65583.2(h)(i), sites identified in the site inventory to accommodate the lower-income RHNA category, are subject to by-right development, requiring no discretionary review. By-right means a jurisdiction shall not require:

· Conditional Use Permit;

· Planned Unit Development Permit;

· Design review, other than Objective Development Design Standards; or

· Other discretionary, local government review or approval that would constitute a “project” as defined in Section 2100 [sic] of the Public Resources Code (California Environmental Quality Act “CEQA”)

The City is committed to modifying development standards in the commercial and multi-family districts to ensure the standards support the minimum density and do not function as a constraint to meeting the minimum density, as necessary.

Proposed Amendment: This amendment would establish a minimum density threshold of 33 dwelling units per acre in the CC, SC, RC, and R-4 districts. Objective design standards are currently underway through the RFP process.

Staff proposes that the findings to allow for a single-family dwelling in the SC and RC be eliminated (CMC Section 17.64.230) and that new single-family dwellings be prohibited. This would cause any existing single-family dwelling in the SC and RC districts to become legal nonconforming. A lawful nonconforming structure can be maintained, repaired, or altered so long as the nonconformity is not increased. Alterations, repairs, or remodeling that enlarge, extend, or increase a nonconforming feature of a building would be prohibited. The intent is to encourage redevelopment at a higher density to increase the city’s housing stock.

Program 3.3.A: Zoning for Transitional and Supportive Housing

Senate Bill (SB) 2 (2007) revised Housing Element law requiring that transitional and supportive housing be permitted as a residential use, subject only to restrictions that apply to other residential dwellings of the same type in the same zone. In compliance with SB 2, the City will continue to allow transitional/supportive housing as a residential use. The City’s Municipal Code permits transitional and supportive housing by-right in all districts that permit residential uses including the CC, SC, RC, and R-4 Districts, regardless of the number of persons the facility.

Proposed Amendment: Staff proposes adding definitions for supportive and transitional housing. The definitions provided by HCD are as follows:

Supportive Housing. Supportive housing means housing with no limit on length of stay, that is occupied by the target population, and that is linked to an onsite or offsite service that assists the tenant in retaining the housing; improving his or her health; and maximizing his or her ability to live, and, when possible, work in the community.

Transitional Housing. Transitional housing means any housing configured as a rental housing development, but operated under program requirements that require the termination of assistance and recirculating of the assisted unit to another eligible program recipient at a predetermined future point in time that shall be no less than six months from the beginning of the assistance.

Program 3.3.B: Low-Barrier Navigation Centers

Assembly Bill (AB) 101 (2019) provides a pathway to permanent housing for people experiencing homelessness. A “Low Barrier Navigation Center” is a housing first, low-barrier, service-enriched shelter focused on moving people into permanent housing. The shelter provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter, and housing. In order to comply with state law, the City will amend the Municipal Code to include the definition for “Low Barrier Navigation Center” and will develop By Right procedures for processing low barrier navigation centers.

Proposed Amendment: Staff proposes adding a definition of a low-barrier navigation center and allowing it by-right in the same zoning districts as emergency shelters. Operational standards can also be developed so long as they are objective. Government Code Section 65660 defines a low-barrier navigation center as follows:

A Housing First, low-barrier, service-enriched shelter focused on moving people into permanent housing that provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter, and housing. A Low Barrier Navigation Center may be non-congregate and relocatable. “Low Barrier” means best practices to reduce barriers to entry, and may include, but is not limited to, the following:

(1) The presence of partners if it is not a population-specific site, such as for survivors of domestic violence or sexual assault, women, or youth.

(2) Pets.

(3) The storage of possessions.

(4) Privacy, such as partitions around beds in a dormitory setting or in larger rooms containing more than two beds, or private rooms.

Local examples include Shuman HeartHouse in Monterey, Casa de Nocha Buena in Seaside, and SHARE Center in Salinas.

Program 3.3.D: Single Room Occupancy (SRO) Units

The Carmel Municipal Code will be amended to permit single-room occupancy units as a residential use subject only to those regulations that apply to other residential dwellings of the same type in the same zone. As such, City staff will complete the following schedule of actions to amend the Municipal Code:

• Draft a definition for "single room occupancy unit" to add to the zoning ordinance consistent with the Government Code (November 2024)

• Propose the zoning change amendment to the City Council for approval (December 2024)

Proposed Amendment: A Single Room Occupancy (SRO) unit is a type of affordable housing typically consisting of a single, small private room intended for one occupant. SRO units may share common facilities such as bathrooms, kitchens, or lounges. They are often found in older hotels, rooming houses, or purpose-built residences and serve as an important housing option for low-income individuals, students, and people transitioning out of homelessness.

To implement Program 3.3.D, staff proposes adding single-room occupancy units as a residential housing type in Chapter 17.68 (Use Classifications) and 17.70 (List of Terms and Definitions) and a permitted use in the commercial and multi-family districts.

Next Steps:

Subsequent workshops will be scheduled with the Planning Commission as needed. Formal approval of the amendments will be in the form of an ordinance. A draft ordinance requires a recommendation from the Planning Commission to the City Council at a public hearing. The City Council will hold two public hearings, referred to as a first reading of the draft ordinance and a second reading before adoption. Once adopted, the ordinance will be submitted to the California Coastal Commission as a Local Coastal Program (LCP) amendment.