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4MEETING DATE: 11/4/13 ITEM NO: t j GAt ' COUNCIL AGENDA REPORT DATE: October 30, 2013 TO: MAYOR AND TOWN COUNCIL p FROM: GREG LARSON, TOWN MANAGER SUBJECT: INTRODUCTION OF A GENERAL PLAN AMENDMENT TO INCLUDE THE AFFORDABLE HOUSING OVERLAY ZONE SITES IN THE HOUSING ELEMENT TECHNICAL APPENDIX HOUSING SITES INVENTORY; AMENDING THE TOWN CODE TO INCORPORATE THE AFFORDABLE HOUSING OVERLAY INTO DIVISION 5 ARTICLE VIII OVERLAY ZONES AND HISTORIC PRESERVATION; ADOPTION OF AFFORDABLE HOUSING OVERLAY ZONE DESIGN GUIDELINES; AND APPLICATION OF AN AFFORDABLE HOUSING OVERLAY TO FIVE PROPERTIES GENERALLY LOCATED AT: A. KNOWLES DRIVE, EAST OF WINCHESTER BOULEVARD, APN 424- 32 -077 B. LOS GATOS LODGE, 50 LOS GATOS SARATOGA ROAD, APN 529 -24- 032 C. LOS GATOS LODGE, 50 LOS GATOS SARATOGA ROAD, APN 529 -24- 001 D. HIGGINS BUSINESS PARK, 400 BLOSSOM HILL ROAD, APN 529 -16- 071 E. LOS GATOS OAKS APARTMENTS, 517 BLOSSOM HILL ROAD, APN 529 -16 -042 RECOMMENDATION: After opening and closing the public hearing, and asking the Clerk Administrator to read the title of the proposed ordinance, it is recommended that the Town Council: 1. Accept the Planning Commission's findings and recommendations in the form of meeting minutes (Attachment 3) (no motion required). PREPARED BY: Sandy L. Baily, Director of Community Development 6 (Z Reviewed by: Assistant Town Manager Town Attorney Finance N: \DEV \TC REPORTS\2013\AHOZ TC 114-13 [FINAL].docx Reformatted: 5/30/02 PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: Affordable Housing Overlay Zone /A -12 -003/ GPA -13 -003 October 30, 2013 2. Adopt the Addendum to the General Plan Environmental Impact Report (EIR) with noted CEQA findings (Exhibit 10 of Attachment 1) (motion required). 3. Adopt the Resolution amending the General Plan Housing Element Technical Appendix Housing Sites Inventory (Attachment 6) (motion required). 4. Make the required finding that the proposed Zoning Code amendments are consistent with the General Plan and its Elements (Attachments 4) (motion required). 5. Accept the recommendation of the Planning Commission to adopt the amendment to the Zoning Ordinance of the Town of Los Gatos effecting the Zoning Code amendments (Attachment 5) (motion required). 6. Make the required finding that the proposed Zoning Code Map amendments applying the AHOZ designation are consistent with the General Plan and its Elements (Attachment 4) (motion required). 7. Introduce the five ordinances applying the AHOZ to five sites listed in this report (Attachments 7 through 11) (motion required). 8. Adopt the Resolution approving the Affordable Housing Overlay Zone Design Guidelines (Attachment 12) (motion required). 9. Move to waive the reading of the Zoning Code and Map amendment ordinances (motion required). 10. Move to introduce the Ordinance of the Town of Los Gatos effecting the Zoning Code amendments to the Town Code A -12 -003 (Attachment 5) (motion required). BACKGROUND: On January 22, 2013, the Town Council convened a public hearing to consider a proposed Affordable Housing Overlay Zone (AHOZ) which included five recommended AHOZ sites, AHOZ Design Guidelines, an Addendum to the 2010 General Plan EIR, two associated General Plan amendments, required Zoning Ordinance amendments, and resolutions to implement the AHOZ as required by the Town's State Certified Housing Element. As a result of considerable public testimony and discussion during the public hearing, Council continued its review of the AHOZ to a date uncertain and referred the matter back to the General Plan Committee and Planning Commission for reconsideration of the recommended AHOZ sites. As part of the Council direction, staff was asked to provide additional outreach to potentially affected neighborhoods of selected sites and to provide additional information regarding potential traffic and school impacts (Exhibit 11 of Attachment 1). The General Plan Committee has held six public meetings from February 27, 2013 to September 25, 2013 to review the AHOZ as directed by Town Council. The Committee reviewed the original 41 locations considered by the Town as potential AHOZ sites as well as 11 additional sites suggested by residents. General Plan Committee minutes from these meetings are attached for Council's reference (Attachment 12 -17 of Attachment 1). PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: Affordable Housing Overlay Zone /A -12 -003/ GPA -13 -003 October 30, 2013 On May 8, 2013, after reviewing sites recommended by staff and members of the public, the Committee reached a consensus to remove the Los Gatos Courthouse and three Oka Road sites from consideration as potential AHOZ sites and selected the following five sites for inclusion as designated AHOZ sites with a base density of 20 dwelling units per acre: • Southbay Development, Knowles Drive, east of Winchester Boulevard, APN 424 -32 -077 • Los Gatos Lodge, 50 Los Gatos Saratoga Road, APN 529 -24 -032 • Los Gatos Lodge, 50 Los Gatos Saratoga Road, APN 529 -24 -001 • Higgins Business Park, 400 Blossom Hill Road, APN 529 -16 -071 • Los Gatos Oaks Apts., 517 Blossom Hill Road, APN 529 -16 -042 On June 4, 2013, staff facilitated a neighborhood outreach meeting to share information with residents about the AHOZ, the sites selected by the Committee, preliminary traffic and student generation rates, and the upcoming Planning Commission and Town Council meetings. From August to September 2013, the General Plan Committee reviewed required changes to the previously drafted AHOZ Design Guidelines which reflected the deletion of the previous sites, inclusion of new AHOZ sites, and reviewed proposed development criteria that is required to be drafted into Zoning Ordinance Amendments to implement the AHOZ. On September 25, 2013, the General Plan Committee recommended approval to the Planning Commission and Town Council of the AHOZ Design Guidelines with the newly selected sites incorporated and the associated development criteria. DISCUSSION: A. Proiect Summary The technical changes required to implement an AHOZ program, as required by the State certified Housing Element and recommended by the General Plan Committee and Planning Commission include: • Adoption of a resolution updating the Housing Sites Inventory table and an associated map showing AHOZ sites in the Housing Element Appendix • Adoption of a resolution approving the AHOZ Design Guidelines which are separate from the AHOZ Zoning Ordinance standards • Adoption of an ordinance amending the Zoning Ordinance to include the proposed AHOZ standards and development criteria • Adoption of ordinances to change the Zoning Code Maps to reflect the recommended AHOZ sites • Adoption of the Addendum FIR PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: Affordable Housing Overlay Zone /A -12 -003/ GPA -13 -003 October 30, 2013 Staff and the Town's consultant have prepared the AHOZ materials to comply with the State HCD requirements and the direction given by the Town Council, Planning Commission, and General Plan Committee. A thorough description of the project is included with Attachment 1. B. Planning Commission On October 9, 2013, the Planning Commission reviewed the AHOZ program materials and unanimously forwarded the matter to the Town Council with a recommendation for adoption. PUBLIC COMMENTS: The public has been extensively involved with the General Plan Committee and Planning Commission reconsideration of the AHOZ and members of the public have participated at every meeting. The majority of the public concerns have related to the following: • The Town's ability to change the RHNA mandates • Geographic distribution of proposed AHOZ sites • Limiting densities to the minimum required by State HCD • Potential impacts to local school enrollments • Potential impact to roads or increased traffic • Notification of nearby neighborhoods Two members of the public spoke at the Planning Commission hearing. One speaker submitted written correspondence at the hearing (Attachment 2). Subsequent to the meeting the Town has received additional correspondence regarding this matter which is discussed below (Attachment 13). STAFF COMMENT: Subsequent to the Planning Commission meeting, staff met individually with one of the public members who spoke at the meeting and a business colleague of the other speaker. Following is a summary of those meetings. • Redevelopment of AHOZ Sites - One individual identified that his group's concerns regarding the future redevelopment of AHOZ properties. Due to the redevelopment concerns discussed, which may be addressed during Public Comments at the Town Council bearing, staff felt it was relevant to clarify this matter for the Town Council. As originally conceived, the Affordable Housing Overlay Zone (AHOZ) designation meets the State requirements to plan for accommodating additional units and is intended to provide property owners another option for how their properties could be used in the future in addition to the permitted uses authorized by the existing underlying zone designation and /or any planned development overlay already in place for the individual properties. The AHOZ does not preclude a property owner from developing a property PAGE 5 MAYOR AND TOWN COUNCIL SUBJECT: Affordable Housing Overlay Zone /A -12 -003/ GPA -13 -003 October 30, 2013 under the "non -AHOZ" underlying zoning or other overlay zones that are currently in place for a property, nor does it prevent a property owner from proposing to rezone property to another designation. The proposed AHOZ Zoning Ordinance standards only become relevant if a property owner initiated a development proposal with a significant number of affordable housing units in excess of what would be required by the Town's inclusionary requirements from the Below Market Price (BMP) program and elected to exercise the ability to use the AHOZ development standards and developer concessions available with the AHOZ overlay zoning designation. For reference, the BMP program typically requires market rate projects in excess of five units to provide between 10 -20 percent of proposed units as BMP rental or for -sale units that are affordable to low or median - income households. If an AHOZ designation is adopted for a property, the overlay would remain on the property unless the property owner or the Town initiated a rezoning process to remove the designation. Section 29.80.515 of the proposed AHOZ Zoning Ordinance notes that "Once the land has developed in the manner provided in the underlying zoning, the property owner shall relinquish the right to redevelop the land using the AHOZ overlay." This text was intended to prevent the potential over intensification of a site by partially redeveloping it using the underlying zoning and then seeking a subsequent AHOZ development approval to allow more intensive development. This section is not intended to preclude or limit a property owner from proposing to completely redevelop a site in the future by utilizing the AHOZ standards if there is already existing development on site at the time of the AHOZ site designation by the Town which already complies with the existing underlying zoning. Preventing the future redevelopment on sites with existing development would defeat the purpose of creating the AHOZ. It would also be inconsistent with the General Plan Committee site designation analysis which emphasized identifying sites with potential to accommodate additional housing units. • AHOZ Design Guidelines - The second speaker at the October 9, 2013 the Planning Commission meeting noted concerns regarding formatting, continuity, and clarity issues related to the Draft AHOZ Guidelines and illustrations. The Commission encouraged her to provide written comments to staff (Attachment 13). Staff concurs with one point in the submitted written comments that the recommended draft AHOZ Zoning Ordinance Amendment (Attachment 5) does not include a density bonus provision and that depending on the Town Council's action may be inconsistent with the recommended AHOZ Design Guidelines. Staff has provided a revised resolution (Attachment 12) which allows the Town Council to approve the AHOZ Design Guidelines and "directs the Town Manager to make any changes to Exhibit A that are necessary to maintain consistency with any referenced Town Code (Chapter 29 Zoning Regulations) Sections." PAGE 6 MAYOR AND TOWN COUNCIL SUBJECT: Affordable Housing Overlay Zone /A -12 -003/ GPA -13 -003 October 30, 1013 ENVIRONMENTAL ASSESSMENT: The proposed revisions to the AHOZ, which now includes lower densities, a reduce number of potential units, deletion of sites, better geographic distribution, and designation of new sites recommended by the General Plan Committee, results in fewer units and potentially less impacts than what was previously considered under the original 2010 General Plan EIR. The AHOZ program currently recommended by the General Plan Committee and Planning Commission has a maximum of 428 units, instead of the 621 units previously considered in 2010 and 2012. The environmental analysis prepared for the revised AHOZ project assumes a "worst - case" scenario that included up to 27 dwelling units per acre or up to 35- percent density bonus (577 units). However, the General Plan Committee and Planning Commission both recommended a base density of 20 dwelling units with no density bonus concession for developers. If their recommendation is accepted by Town Council, this would effectively limit potential AHOZ development to 428 units and would further lessen any potential impacts analyzed by the environmental consultant in the Addendum EIR (i.e. by another 149 fewer units). Pursuant to Section 21166 of the California Environmental Quality Act (CEQA) and Section 15162 of the State CEQA Guidelines, after an EIR has been certified for a project, if some minor technical changes to the previously certified EIR are necessary, preparation of an Addendum to the EIR is appropriate. A supplemental EIR is not required unless there is substantial evidence that modifications to the project would substantially increase the severity of the impacts identified in the previous EIR. Under CEQA, "substantial evidence" includes facts, reasonable assumptions predicated upon facts, and expert opinion supported by facts. As determined through the detailed analysis of the Initial Study checklist in Chapter II of the Addendum EIR (Exhibit 10), the approval of the AHOZ would not involve new significant environmental effects or a substantial increase in the severity of previously identified significant effects beyond those already identified in the certified Final EIR. No significant environmental impacts have been identified as a result of this project and an Addendum to the 2020 General Plan EIR was prepared (Exhibit 10). The Technical Appendix of the Addendum was not included in this report due to its extensive volume, and is available for review upon request. The proposed AHOZ considered changes or additions to the project analyzed in the 2020 General Plan EIR. However, the adoption of AHOZ and modification to the AHOZ sites and densities would not result in new potentially significant impacts beyond those identified in the 2020 General Plan EIR that was certified by the Town Council (see full analysis in the EIR Addendum). Therefore, pursuant to CEQA, an Addendum to the EIR was prepared. The deciding body should determine that: (1) a Final EIR for the Los Gatos General Plan 2020 was certified and adopted by Town Council on September 20, 2010; and, (2) based on the analysis in the Appendix G Checklist in the Addendum, adoption and implementation of the PAGE 7 MAYOR AND TOWN COUNCIL SUBJECT: Affordable Housing Overlay Zone /A -12 -003/ GPA -13 -003 October 30, 2013 AHOZ would not create any new or significant environmental impacts when compared to those studied in the Los Gatos General Plan 2020 EIR; and, (3) since the time that Council certified the FEIR in 2010, some changes or additions are necessary, but none of the conditions described in Section 15162 requiring preparation of a subsequent EIR have occurred. CONCLUSION: The recommended General Plan Amendment which revises a table and map exhibit in the Housing Element Technical Appendix, the proposed Zoning Ordinance amendments, and the five Zoning Code Map amendments are required to fully implement the AHOZ program as required by the Town's certified Housing Element and satisfies the State mandate that the Town has adequately zoned land and has planning in place to potentially accommodate the remaining un -met Regional Housing Need Allocation identified for Los Gatos during the 2007 -2014 Housing Element Period. The prepared Addendum EIR notes that the revised AHOZ program has reduced densities, fewer units, and less potential impact than what was previously analyzed in the 2010 General Plan EIR. FISCAL IMPACT: There will be no fiscal impact in that the cost would be covered by the existing fees for ministerial or discretionary review of permits /applications. ATTACHMENTS: Received Under Separate Cover 1. Staff Report to the Planning Commission for the meeting of October 9, 2013 2. Copy of Fred Lyon's speaker handout from the Planning Commission meeting of October 9, 2013 Received with this Report 3. Verbatim Minutes to the Planning Commission meeting of October 9, 2013 4. Required Findings 5. Draft Zoning Ordinance Amendment 6. Draft Resolution for General Plan Amendment GP -13 -003 7. Ordinance Applying the AHOZ Designation to APN: 424 -32 -077 8. Ordinance Applying the AHOZ Designation to APN: 529 -24 -032 9. Ordinance Applying the AHOZ Designation to APN: 529 -24 -001 10. Ordinance Applying the AHOZ Designation to APN: 529 -16 -071 11. Ordinance Applying the AHOZ Designation to APN: 529 -16 -042 12. Draft Resolution Approving Affordable Housing Overlay Zone Design Guidelines 13. Correspondence from Lee Quintana received October 23, 2012 SLB:EO:ct THIS PAGE INTENTIONALLY LEFT BLANK