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CC 04-16-2024 Item No. 12. 6th Cycle Housing Element Update_Staff PresentationCity Council April 16, 2024 6th Cycle Housing Element Update CC 04-16-2024 Item No. 12 Agenda Background Current Status –Conditional Certification Letter received from HCD (April 10) RHNA/Priority Sites Policies and Strategies Timeline and next steps Background What is a Housing Element? State-mandated Element of City’s General Plan Why update it now? Unlike other General Plan Elements required by State law to be updated every 8 years Purpose of the Update: Study and plan for housing needs in the community,across all income levels Background What does State law require? Public Participation Needs Analysis Review of prior Housing Element policies/programs Develop policies/programs to address current needs Housing Sites Inventory Who reviews and certifies compliance with State law? CA Department of Housing and Community Development (HCD) Related Updates Conforming changes: Other General Plan Elements –Land Use, Transportation, Specific Plans and appendices Rezoning –map and text State law requirements: Health and Safety Element Zoning amendments (emergency shelters etc.) Other –necessary to implement HE programs (e.g. Objective design standards for housing developments) Background 6th Cycle Housing Element update covers 2023 –2031 Planning Period. Certification deadline:January 31,2023 (passed). Six jurisdictions in Santa Clara County (15 cities/1 county)still do not have compliant Housing Elements 38 of 109 ABAG jurisdictions not in compliance 58 of 197 SCAG jurisdictions still out of compliance ABAG RHNA State-wide Housing Needs Determination made by HCD for each region within State Cupertino in 9 County ABAG region Santa Clara County 6th RHNA Cycle Income Group Units % of total Very Low Income (<50% of AMI)1,193 26.0 Low Income (50%-80% of AMI)687 15.0 Moderate Income (80%-120% of AMI)755 16.5 Above Moderate Income (>120% of AMI)1,953 42.5 Total 4,588 100 Affordable Units = 2,635 Cupertino’s 6th Cycle RHNA Background: 6th Cycle vs. 5th Cycle RHNA 4x higher in Cupertino--4,588 vs. 1,064 Few remaining undeveloped sites, reliance on redevelopment to meet RHNA 62 properties, 36 development sites 70% of properties 50 units/acre or more New legislation adds requirements in: Developing policies/programs Greater accountability to produce housing Site selection Less discretion approving housing developments Affirmatively Furthering Fair Housing (AFFH) More outreach and inclusion HE more like contract than standalone document. Background: Noncompliance What can happen if City does not have a certified Housing Element? Loss of local land use and zoning control – Builder’s Remedy projects Lawsuits and attorney fees Ineligibility for grant funding Financial penalties, court issued fines Streamlined ministerial approval of projects Court receivership appointing an agent to bring City’s Housing Element into compliance Affirmatively Furthering Fair Housing (AFFH) AB 686 (2018) defines AFFH as: “taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics.” Three community meetings focused on AFFH held May-September 2022 Affirmatively Furthering Fair Housing (AFFH) - Cupertino City is designated High or Highest Resource regarding Access to Opportunities Housing anywhere in City would regionally Affirmatively Further Fair Housing City must look to accommodate persons who currently do not reside here Meeting RHNA alone does not equate to satisfying AFFH (Missing Middle Strategy) What’s happened so far? 2021 Comm. Mtgs (Aug & Dec) Jt. Study Sessions (Apr & May) CC Mtg (Sept) HC Mtg (Dec) Jan – Jun 2023 Jul – Dec 2022 CC Mtgs (Aug, Nov) PC (July) CEP-SAC mtgs (Jul, Sep, Oct) Comm. Mtg (Jul, Sep) Jan – Jun 2022 PC mtgs (Jan, Feb, Apr, May, June) CC mtgs (Mar) HC mtg (Jun) CEP-SAC mtgs (Mar, Apr, May, Jun) Comm. Mtg (May) Jan –Mar 2024 CC Mtg (Jan) 1st Draft to HCD (2/4) Comments from HCD (5/4) 2nd Draft to HCD (10/16) Revised 2nd Draft to HCD (11/30) Comments from HCD (12/15) 3rd Draft to HCD (2/27) Revised 3rd Draft to HCD (3/28) Conditional Certification letter from HCD (4/10) Jul – Dec 2023 Income Group Units % of total Very Low Income (<50% of AMI)1,193 26.0 Low Income (50%-80% of AMI)687 15.0 Moderate Income (80%-120% of AMI)755 16.5 Above Moderate Income (>120% of AMI)1,953 42.5 Total 4,588 100 Affordable Units = 2,635 Cupertino’s 6th Cycle RHNA Buffer ~ 25 - 35% particularly for lower income levels recommended to ensure city does not have to update sites inventory before next HE update for “no net loss” purposes. RHNA + Buffer accommodates over 6,200 units. Sites Inventory: Pre-HE Submittal Robust discussions in 2022 at Housing and Planning Commissions and City Council Started with all potential sites throughout the City which: Met HCD size criteria: 0.5 – 10 acres Indicated owner interest Outside of fire hazard and geologic and other hazard zones – more environmental impacts Sites Inventory: Direction Pre-HE submittal More interest in accommodating housing west of De Anza Blvd and south of 85 Less interest in accommodating housing east of De Anza Blvd Locate housing sites to counteract declining school enrollment Avoid displacement of existing residents through redevelopment of residential properties Sites - August 2022 Policy Framework State laws: link land use and transportation (AB 32 and SB 375) Regional plans (Plan Bay Area 2050 and Regional Transportation Plan) align with state law AB 2011 (eff. July 1, 2023): Allows Residential development on Commercial-Office Corridors regardless of Zoning: Density and building height varies depending on lot size and width of transportation corridor Identifies min. development standards Ministerial, exempt from CEQA AB2011 with HCD size criteria Current Site selection strategy With Council direction in July 2023, site selection strategy adjusted based on: New State law realities – AB 2011/SB6 Proximity to transportation – AB32/SB375 Aligning with regional plans – PBA2050 & RTP City’s existing policies – LU-1.1 & CAP Consultant experience based on likelihood of site acceptance by HCD Development potential of site Size of sites – 0.5 acres (min.) to 10 acres (max.) Current Housing Element Priority Housing Sites Goals / Policies / Programs Required Programs and Policies Programs to provide Adequate Housing Sites Programs to Assist Lower-Income Housing Development Programs to Address Housing Constraints Programs to Conserve and Improve the Housing Stock Programs to Affirmatively Further Fair Housing Programs to Preserve ”at risk” Units Programs for ADUs/Second Units Housing Policy Areas Programs to Assist Lower-Income Housing Development – Examples: Support Grant applications; Provide technical support; Issue NOFA for BMR Affordable Housing Funds Programs to Address Housing Constraints – Examples: Adopt Objective standards, Continue fee waivers for affordable units and/or 100% affordable projects; evaluate Parking standards Housing Policy Areas (cont.) Programs to Conserve,Improve and Expand City Housing Stock – Examples: Requiring replacement of at least as many units as exist on a site; Disallow conversion of multi-family units to Single Family; CDBG funds for conservation/ improvements Housing Policy Areas (cont.) Programs to Affirmatively Further Fair Housing – Examples: Upzone sites adequately to allow accommodation of RHNA; Support teacher housing and ELI projects; Continue to support the development of ADUs and adopt "missing middle" housing policies, which offer opportunities with modest increases in density; Housing Policy Areas (cont.) Programs to Preserve ”at risk” Units – Examples: programs to meet with affordable housing operators annually. Programs for ADUs/Second Units – Examples: Continue to offer streamlined pre- approved plans; Evaluate and participate in local and regional efforts on ADU programs. Council Direction July 2023: In addition to refining site selection strategy, directed priority for housing policy areas among the following: Assist lower income households Address constraints Conserve and Improve Housing Stock Affirmatively Further Fair Housing Preserve “at risk” units ADUs/Second Units HCD Review Initial HCD comments Received May 4, 2023 General in nature, but comprehensive Asks for more analysis in several areas Some comments do not apply to City (e.g. manufactured homes/ADUs) No specific feedback on Sites Inventory, except pipeline (discussed earlier) Second Draft HCD comments Received December 15, 2023 Fewer comments and more specific in nature Still asks for more analysis in a few areas, particularly regarding sites’ development potential within 6th Cycle timeframe Some feedback on Sites Inventory, other than pipeline Recent informal comments from HCD Strengthen Missing Middle Policies for Fair Housing purposes (Strategy HE 1-3-6) Provide additional site analysis-Improvement to Land Value and support for sites where redevelopment is less certain Continue to streamline and promote development of ADUs Take more proactive approach to ensure housing is produced Settlement/Environmental Assessment February 2023: California Housing Defense Fund/YIMBY Law sue City for noncompliant HE by adoption deadline January 2024: Stipulated Judgment entered into, establishing schedule to complete HE update in compliance with State law Gov’t Code Sec. 65759(a)--CEQA does not apply to actions to bring HE into compliance with Court Order. Timeline and Next Steps April 2024 Letter from HCD – 4/12 HC Study Session PC recommendation Summer 2024 Fall 2024June 2024 Second reading – 6/4 May 2024 Council adoption – 5/14 Mar 2025 Prepare objective design standards Adopt objective design standards APR submitted