Staff Report with attachments
PREPARED BY: Jocelyn Shoopman and Erin Walters
Associate Planner and Associate Planner
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Community Development
Director, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 12/20/2022 ITEM NO: 13
DATE: December 15, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Discuss the Housing Element Update and Provide Direction on Next Steps.
RECOMMENDATION:
Discuss the Housing Element Update and provide direction on next steps.
BACKGROUND:
The Town of Los Gatos is required to adopt an updated Housing Element for the period
covering 2023-2031 by January 31, 2023. The Housing Element is one of nine State-mandated
elements that must be included in every General Plan. The Housing Element assesses housing
needs for all income groups within the community and identifies implementation programs to
meet those housing needs. Unlike other General Plan elements, the Housing Element must be
updated every eight years, rather than every 10 to 20 years, must address statutory
requirements regarding its content, and is subject to mandatory review and certification by the
California Housing and Community Development Department (HCD).
Starting in early 2021, the Town has worked diligently through the required steps to comply
with State law with the goal of adopting a Housing Element prior to the January 31, 2023,
deadline. Attachment 1 presents a timeline outlining the ongoing efforts that have been
completed toward achieving this goal. In the event the Town does not have an adopted
Housing Element by January 31st, this report discusses the “Builders Remedy” and scheduling
options.
The primary purposes of this agenda item are:
(1) Provide direction on the Town’s potential modifications to the Housing Element in response
to the preliminary, unofficial comments to the Town from HCD;
PAGE 2 OF 8 SUBJECT: Housing Element Update and Next Steps DATE: December 20, 2022
BACKGROUND (continued):
(2) Provide direction on the Town’s potential modifications to the Housing Element in response
to the official HCD comments received by some other cities in the Bay Area; and
(3) Provide direction on the timing for Housing Element adoption.
DISCUSSION:
Preliminary Comments to the Town from HCD
Staff met with the Town’s HCD reviewer on December 13, 2022, to receive preliminary, verbal
feedback on the Draft Housing Element. The following topics were identified by the HCD
reviewer as requiring additional information and/or analysis. Many of these topics, listed
below, were discussed at the December 1, 2022, Housing Element Advisory Board (HEAB)
meeting as potential comments that the Town may receive.
1. The referendum status of the Land Use and Community Design Elements of the 2040
General Plan;
2. The housing needs assessment;
3. The site inventory;
4. The governmental and non-governmental constraints;
5. Affirmatively Furthering Fair Housing;
6. The implementation programs;
7. Documented compliance with State law, including, but not limited to transparency laws,
Senate Bill 330, and Assembly Bill 139; and
8. Additional information for the Pipeline Projects and the projections used for calculating
Accessory Dwelling Unit (ADU) and Senate Bill 9 (SB 9) projects.
Comments to Other Cities from HCD
In anticipation of the Town’s first review comment letter from HCD, staff reviewed comment
letters received by other jurisdictions, including, the cities of Campbell, Dublin, Menlo Park,
Mountain View, Redwood City, Saratoga, and Sunnyvale. Staff identified the following
recurring topics in the comment letters from other jurisdictions which the Town may also
receive and presented this information to the HEAB at their December 1, 2022, meeting. The
HEAB discussed each of the topics described below, agreed with staff’s recommended approach
to each issue, and provided a general consensus to the Town Council that the Draft Housing
Element as submitted to HCD be adopted by the statutory deadline of January 31, 2023.
PAGE 3 OF 8 SUBJECT: Housing Element Update and Next Steps DATE: December 20, 2022
DISCUSSION (continued):
Implementation Programs
1. Provide more definitive implementation timelines and objectives, quantified where
appropriate, for each Implementation Program.
2. An Implementation Program to modify the Town’s Density Bonus Ordinance for compliance
with Assembly Bill 1763, which became effective in January 2020. The Town’s Density
Bonus Ordinance was last modified in June of 2012.
3. An Implementation Program to modify the Town’s ADU Ordinance for compliance with
State law. For example, the Town’s current ADU ordinance requires that a new ADU in the
Hillside Residential (HR) zone comply with the primary structure setbacks for the rear and
side setbacks; whereas, HCD has previously provided correspondence to staff that the Town
may only utilize minimum rear and side setbacks of four feet.
Site Inventory List
1. HCD provided a comment in the City of Menlo Park comment letter that the Housing
Element could utilize a minimum density and this methodology may be accepted without
further analysis or methodology. The Town’s current methodology for calculating the
realistic residential capacity for the Site Inventory utilizes the typical density identified in
the 2040 General Plan Residential Buildout table. The following table demonstrates the
existing 2020 General Plan Land Use designations, the 2040 General Plan minimum density,
and the 2040 General Plan typical density. Should the Town choose to utilize a minimum
density for calculating the residential capacity of the Site Inventory, additional sites would
be required to be selected from either the Tier 2 or Tier 3 Site Inventory list.
2. HCD has deemed sites smaller than a half-acre as inadequate to accommodate housing for
lower-income housing unless it is demonstrated that sites of equivalent size and
affordability were successfully developed during the prior planning period or unless the
Housing Element provides other evidence to HCD that the site is adequate to accommodate
lower-income housing. The Town’s Site Inventory includes eight sites that are less than half
an acre (Site A-1, Site A-7, Site B-1, Site C-6, Site D-3, Site D-4, Site D-7, and Site G-1).
2020 General Plan
Designation
2040 General
Plan Minimum
Density (du/ac)
2040 General
Plan Typical
Density (du/ac)
Low Density Residential 0 4
Medium Density Residential 14 18
High Density Residential 30 36
Neighborhood Commercial 10 18
Central Business District 20 26
Mixed-Use 30 36
PAGE 4 OF 8 SUBJECT: Housing Element Update and Next Steps DATE: December 20, 2022
DISCUSSION (continued):
a. Site A-1 (50 Park Avenue) is identified in the Site Inventory; however, it has not been
identified as a site to accommodate lower-income housing.
b. Site A-7 (165 Los Gatos-Saratoga Road) is identified in the Site Inventory; however, it has
not been identified as a site to accommodate lower-income housing.
c. Site B-1 (APN 529-24-003) has been identified as a site to accommodate lower-income
housing units as it is consolidated with the Los Gatos Lodge property. The Town has
received a Property Owner Interest form for this property. Programs BF and BG of the
Draft Housing Element propose to amend the Zoning Code and General Plan to include a
Housing Element Overlay Zone to apply to the sites included in the Site Inventory to
increase the development standards. For this particular consolidated site, the minimum
density would be 30 du/ac. The HCD Housing Element Site Inventory Guidebook allows
jurisdictions to use a higher density (default density of 30 du/ac) as a proxy for lower
income affordability.
d. Site C-6 (16492 Los Gatos Boulevard and APN 532-07-085) is identified in the Site
Inventory; however, it has not been identified as a site to accommodate lower-income
housing.
e. Site D-3 (16240 Burton Road), Site D-4 (16270 Burton Road), and Site D-7 (14823 Los
Gatos Boulevard) have been identified as sites to accommodate lower-income housing
as they are located within the North Forty Specific Plan Area. Program D of the Draft
Housing Element proposes to amend the North Forty Specific Plan to increase the
density to more than 30 du/ac and to increase the total number of dwelling units
allowed in the Specific Plan. The HCD Housing Element Site Inventory Guidebook allows
jurisdictions to use a higher density (default density of 30 du/ac) as a proxy for lower
income affordability.
f. Site G-1 (445 Leigh Avenue) is identified in the Site Inventory; however, it has not been
identified as a site to accommodate lower-income housing.
3. HCD has stated that the Housing Element must demonstrate that existing uses are not an
impediment to additional residential development and will likely discontinue in the planning
period. The Site Inventory currently relies upon nonvacant sites to accommodate more
than 50 percent of the Regional Housing Needs Allocation (RHNA) for lower-income
households. Sites that are nonvacant have been included in the Site Inventory due to either
a Property Owner Interest Form being submitted to the Town, staff contact regarding
potential residential development, or submittal of a Conceptual Development Advisory
Committee application.
4. HCD has stated that in order for SB 9 housing units to be included as a strategy to
accommodate the Town’s need of above-moderate housing, additional analysis will be
required to be provided. The analysis may include, but is not limited to: experience; trends;
and market conditions that allow lot splits; and the likelihood of redevelopment, including
whether existing uses constitute an impediment for additional residential use to support
PAGE 5 OF 8 SUBJECT: Housing Element Update and Next Steps DATE: December 20, 2022
DISCUSSION (continued):
the proposed projection within the eight-year planning period. The Town has provided a SB
9 projection of 96 housing units within the eight-year planning period.
5. It is likely that HCD is aware of the 2040 General Plan referendum for the Land Use and
Community Design Elements, as demonstrated in their comment letter to the City of Menlo
Park regarding a voter initiative for a proposed ballot measure for single-family rezoning. In
response to the referendum to repeal the Land Use and Community Design Elements of the
2040 General Plan, the Draft Housing Element included Implementation Programs BF and
BG to amend the Zoning Code and General Plan for the sites that are included in the Site
Inventory. The amendments would consider modification of the development standards,
including, but not limited to the: density; lot coverage; floor area ratio; and height for the
parcels in the Site Inventory.
Public Participation
1. HCD has commented that Housing Elements need to describe the efforts made to circulate
the document to low-and moderate-income households, and organizations that represent
them, and to involve such groups and persons in the update of the Housing Element
throughout the process. Staff has also seen feedback requesting information on how the
Housing Element has targeted outreach efforts to renters. In response, staff and the
Housing Element consultant created an anonymous, online survey that is available on the
Town’s Housing Element Update website. Hard copies of the survey are available at the
Community Development Department counter, and the Town Library. Staff has also
reached out to West Valley Community Services and SV@Home regarding other community
outreach opportunities.
Direction on Scheduling Options
To provide context to the scheduling options and potential consequences, this section first
describes the Builder’s Remedy.
Builder’s Remedy
Under the Housing Accountability Act, jurisdictions who do not have an adopted Housing
Element that is in substantial compliance with State law by the statutory deadline (January 31,
2023, for the Bay Area) could be required to approve a residential development even if it does
not meet local General Plan and zoning regulations. The “builder’s remedy” has been in the
Housing Accountability Act since 1990 and pertains to residential developments that have at
least 20 percent low-income units or 100 percent moderate income units. In past Housing
Element cycles, HCD has applied a 120-day grace period past the statutory deadline for local
agencies to adopt a Housing Element. In early October 2022, HCD confirmed that no such 120-
PAGE 6 OF 8 SUBJECT: Housing Element Update and Next Steps DATE: December 20, 2022
DISCUSSION (continued):
day grace period will apply this cycle and any jurisdiction that adopts a Housing Element later
than January 31, 2023, will be subject to the Builder’s Remedy. This provision in the Housing
Accountability Act has been available for quite some time and in Los Gatos, no applications
have come forward during previous Housing Element cycles when the Town missed the
statutory deadlines for adoption of a Housing Element.
The statutory deadline for adoption of a Housing Element for the fourth cycle (2007-2014) was
June 30, 2009. The Town Council adopted the fourth cycle Housing Element on November 1,
2010. On April 8, 2011, the Housing Element was certified by HCD pending a resubmittal once
the element was adopted by the Town Council. On September 19, 2011, the Town Council
considered amendments to the Housing Element and continued the matter to a date uncertain
with direction to Town staff. On March 5, 2012, the Town Council adopted Resolution 2012-
008 amending the Housing Element based on modifications to meet State Housing Law
requirements. On September 20, 2012, the adopted Housing Element was found to be in full
compliance with the State Housing Element law by HCD. The statutory deadline for adoption of
a Housing Element for the fifth cycle (2015-2023) was January 31, 2015. The Town Council
adopted the fifth cycle Housing Element on May 5, 2015. On May 20, 2015, the Housing
Element was certified by HCD.
Staff fully recognizes that the current Housing Element cycle is unlike any past cycle. It is
possible that a developer could invoke the Builder’s Remedy in connection with a planning
application submitted in February if the Town Council does not adopt a Housing Element that is
in substantial compliance with Housing Element Law by January 31, 2023.
The Council’s options in response to the statutory deadline for adoption of a Housing Element
by January 31, 2023, are:
A. Adopt a Housing Element Prior to January 31, 2023
Adopt the current version of the Draft Housing Element as submitted to HCD on October 14,
2022, making the findings that the Housing Element is in substantial compliance with State
law. The Town expects to receive its comment letter from HCD on the Draft Housing
Element by January 12, 2023. Should the HCD comment letter be provided to the Town
prior to Council’s adoption, a memorandum in response to the HCD comment letter,
illustrating how each comment has been responded to and how it is in substantial
compliance with State law would be prepared; however, the extent of the work that may be
required to address those comments is not yet know. It is highly unlikely that staff and the
consultants have the time or resources to produce a redline version incorporating all of the
required changes.
PAGE 7 OF 8 SUBJECT: Housing Element Update and Next Steps DATE: December 20, 2022
DISCUSSION (continued):
If the Council decides to move forward with Option A, the Draft Housing Element would be
reviewed by the Planning Commission in early January for a recommendation to the Town
Council. Town Council would then consider adoption of the Draft Housing Element prior to
or on January 31, 2023.
A revised draft or adopted Housing Element must be submitted to HCD in response to the
initial comment letter. Subsequent reviews by HCD will take up to 60 days. Prior to
submitting a revised draft or adopted Housing Element to HCD, the Town must post the
revision on its website and 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 the revised Housing Element to HCD.
Based on HCD’s second review, it is possible that additional changes may be needed before
HCD would certify the Housing Element. This means that the Planning Commission and
Town Council hearings would need to be conducted again, using up two of the four allowed
General Plan amendments for this Element.
B. Adopt a Housing Element After January 31, 2023
The Town expects to receive its comment letter from HCD on the Draft Housing Element on
January 12, 2023. Modifications to the Draft Housing Element in response to the comment
letter would be made and brought forward to the HEAB for consideration and discussion. A
revised Draft Housing Element would be submitted to HCD for a subsequent review which
will take up to 60 days. Once HCD has notified the Town that the Draft Housing Element is
in substantial compliance with State law, the Draft Housing Element would be brought
through the formal adoption process with a recommendation from the HEAB and Planning
Commission, with the final decision by the Town Council. This option will be required, even
if the Town Council decides to provide direction to adopt the current version of the Draft
Housing Element prior to January 31, 2023.
PUBLIC COMMENT:
At the time of this report’s preparation, the Town has not received any public comment.
CONCLUSION AND NEXT STEPS:
Staff looks forward to the Town Council’s discussion and direction.
PAGE 8 OF 8 SUBJECT: Housing Element Update and Next Steps DATE: December 20, 2022
COORDINATION:
The Community Development Department coordinated with the Offices of the Town Attorney
and Town Manager in the preparation of this report.
ENVIRONMENTAL ASSESSMENT:
The Town Council’s direction regarding the next steps of the Housing Element Update is not a
project subject to the California Environmental Quality Act (CEQA). Environmental analysis for
the Housing Element will be completed in accordance with CEQA requirements.
Attachments:
1. Housing Element Update Process Timeline
HOUSING ELEMENT PROCESS TIMELINE
On April 21, 2021, the Town issued a Request for Proposals (RFP) for consultant services for
preparation of the 2023-2031 Housing Element. The Town received a proposal from one firm,
EMC Planning Group, Inc.
On June 15, 2021, the Town Council authorized the Town Manager to execute an agreement for
Consultant Services with EMC Planning Group, Inc. to prepare the 2023-2031 Housing Element
and associated public engagement and environmental review documents.
On August 3, 2021, the Town Council adopted Resolution 2021-032 to establish the Housing
Element Advisory Board (HEAB) to serve as an advisory board that provides input on specific
tasks associated with the Housing Element Update and established the role of the HEAB as
follows:
• Provide guidance on the development of the Housing Element Update;
• Provide an additional forum for public involvement;
• Forward milestone products to the Planning Commission and Town Council;
• Review the Draft Housing Element; and
• Make recommendations to the Planning Commission and Town Council.
On August 9, 2021, the Town participated in a Let’s Talk Housing Community Meeting for Santa
Clara County jurisdictions hosted by the Santa Clara County Planning Collaborative.
On September 21, 2021, the Town Council appointed four at-large members to the HEAB, in
addition to the existing nine members of the General Plan Committee (GPC).
On October 15, 2021, the HEAB held their first meeting to elect the Chair and Vice Chair and
adopt a meeting schedule.
On December 16, 2021, the HEAB discussed the Housing Element process, milestones, and
reviewed the Draft Housing Needs Assessment and Review of Previous Housing Element
appendices as contextual background information for future work by the HEAB.
On February 17, 2022, the HEAB reviewed and discussed the Housing Element Site Inventory
analysis process.
On March 31, 2022, a Community Meeting was held for the public to review and provide input
on potential sites for inclusion in the Site Inventory. At the meeting, the Balancing Act tool and
Housing Element Update website site surveys were introduced to the public.
On April 6, 2022, a Joint Study Session of the Town Council, Planning Commission, and HEAB was
held to discuss the production of affordable housing.
ATTACHMENT 1
On April 21, 2022, the HEAB provided feedback on additional sites to include in the Site
Inventory, in addition to the sites already identified by staff and the Housing Element
Consultant. Results from the Balancing Act tool and Housing Element Update website site
surveys were also shared with the HEAB.
On April 21, 2022, Property Owner Interest forms were mailed out to the property owners of the
sites selected in the Draft Site Inventory to garner their interest in providing housing on their
property. An electronic copy of the Property Owner Interest form was also made available on
the Housing Element Update website.
On April 24, 2022, Town staff hosted a booth at the Spring Into Green event at the Town Plaza to
provide the public an opportunity to discuss the Housing Element Update.
On May 5, 2022, the HEAB continued the discussion of the Site Inventory and provided feedback
on additional sites that should be included.
On May 19, 2022, HEAB recommended the acceptance of the Site Inventory as proposed within
Tier 1, with modifications to reduce the number of housing units within the North Forty, to add
the site located at 206 Knowles Drive, and to add the site located within the California
Department of Transportation right-of-way off of Oka Road. The sites identified by the HEAB at
their meetings of April 21, 2022, and May 5, 2022, were divided by staff into three tiers based on
the HCD checklist, property size, Zoning, General Plan land use designation, recently developed,
environmental constraints, public feedback, and Property Owner Interest forms that were
submitted to the Town.
On June 7, 2022, the Town Council considered the Site Inventory as recommended by the HEAB
and recommended approval of the Tier 1 sites as presented in the staff report with an
amendment to provide a unit projection for Senate Bill 9 projects. Since the recommendation of
the HEAB at their May 19, 2022, meeting, an additional Property Owner Interest form was
received for 15795 Los Gatos Boulevard and was added to the Tier 1 list. In addition, a letter
from the property owner for 15827 Los Gatos Boulevard was received requesting to be removed
from the Draft Site Inventory. In response, the Tier 2 site list was modified to remove the site.
On June 16, 2022, the HEAB reviewed and provided initial direction and modifications to the
Draft Housing Element Goals, Policies, and Implementation Programs.
On July 7, 2022, the HEAB continued to review and provide additional direction and
modifications to the Draft Housing Element Goals, Policies, and Implementation Programs.
On August 4, 2022, the HEAB completed review of the Draft Housing Element Goals, Policies,
and Implementation Programs and provided feedback for additional modifications.
On August 16, 2022, signatures were submitted to the Town in support of a referendum on the
Land Use and Community Design Elements of the approved 2040 General Plan.
On August 18, 2022, the HEAB reviewed and provided feedback for modifications to the Initial
Public Review Draft Housing Element prior to the release of the document for the required 30-
day public comment period.
On August 29, 2022, the Town released the Initial Public Review Draft Housing Element for a 30-
day public comment period which ran from August 29, 2022, to September 27, 2022.
On September 4, 2022, Town staff hosted a booth at the Los Gatos Farmers’ Market to provide
the public an opportunity to discuss the Initial Public Review Draft Housing Element during the
30-day public comment period.
On September 15, 2022, the HEAB received public comments on the Initial Public Review Draft
Housing Element during the 30-day public review period.
On September 27, 2022, the referendum signatures on the Land Use and Community Design
Elements of the approved 2040 General Plan were verified by the Santa Clara County Registrar.
On October 9, 2022, Town staff hosted a booth at the Los Gatos Farmers’ Market to provide
opportunity for the public to discuss the Draft Housing Element.
On October 14, 2022, the Town submitted the Draft Housing Element and a response to public
comments received during the 30-day public comment period to HCD for preliminary review. By
law, HCD has up to 90 days to complete its first review. The full document can be viewed at
EngageLosGatosHousing.com.
On October 20, 2022, the HEAB reviewed the Draft Housing Element that was submitted to HCD
for preliminary review, including a summary of all modifications that were made to the Draft
Housing Element. Modifications to the Site Inventory as reviewed by the Town Council on June
7, 2022, include:
• The addition of 401-409 Alberto Way as the property owner submitted a Property Owner
Interest form to the Town;
• The removal of 404 North Santa Cruz Avenue, 420 North Santa Cruz Avenue, and 430 North
Santa Cruz Avenue (Los Gatos Shopping Center) from the Site Inventory per the property
owner’s request and therefore deleted the North Santa Cruz Avenue Area;
• The removal of 16535 Camellia Terrace and parcel number 523-02-005 (El Gato Village) as
no Property Owner Interest form was submitted;
• Increased the housing density within the North Forty Specific Plan from 20 dwelling units per
acre to a minimum of 30 dwelling units per acre to align with Implementation Program D and
a public comment received from a member representing the interests of the property owner
during the 30-day public comment period;
• Revised the housing density used for the calculation of projected housing units in the Site
Inventory from the maximum density to the typical density, to be consistent with the 2040
General Plan Residential Buildout;
• Increased the maximum housing density within the Affordable Housing Overlay Zone (AHOZ)
from 20 dwelling units per acre to 40 dwelling units per acre to area to align with
Implementation Program BF;
• Modified the distribution for each income category to be consistent with the HCD Housing
Element Site Inventory Guidebook, which allows jurisdictions to use a higher density (default
density of 30 dwelling units per acre) as a proxy for lower income affordability;
• Created a Senate Bill 9 (SB 9) unit projection;
• Modified the number of housing units generated in the Pipeline Projects based on the
creation of a new SB 9 projection, Planning applications that have been withdrawn, and
projects that have received their Certificate of Use and Occupancy;
• Decreased the overall total number of housing units in the Site Inventory from 2,448 units to
2,371 units, as a result of the changes listed above; and
• Created a separate Appendix H, Site Inventory Form per HCD formatting requirements.
On November 9, 2022, Town staff hosted a booth at the Los Gatos Farmers’ Market to provide
the public an opportunity to discuss the Draft Housing Element that was submitted to HCD for
preliminary review.
On November 15, 2022, a Renter’s Survey was published on the Housing Element Update
website and made available in hard copies at the Community Development Department and
Town Library. The survey is available in English, Spanish, and Russian in both the electronic and
hard copy versions.
On November 17, 2022, the HEAB meeting was rescheduled by staff to December 1, 2022, due
to the meeting being cancelled as a result of the Town’s website being down and the agenda
being unavailable to members of the public.
On November 18, 2022, Town staff hosted an informational table at the Town Library to provide
the public an opportunity to discuss the Draft Housing Element and publicize the availability of
the Renter’s Survey.
On December 1, 2022, the HEAB discussed anticipated comments on the Draft Housing Element
based on comments other jurisdictions have received from HCD on their Draft Housing Element.
On December 11, 2022, Town staff hosted a booth at the Los Gatos Farmers’ Market to provide
the public an opportunity to discuss the Draft Housing Element.
On December 13, 2022, Town staff met with our HCD reviewer and received verbal, preliminary
input on the Draft Housing Element.