Housing Element update presented to council, new potential sites included
By SARA HALL
During a study session this week, City Council heard a presentation on the Housing Element update and accepted staff’s direction of moving forward to include more than a handful of new potential housing sites for future planning purposes.
City staff presented the latest developments during the meeting on Tuesday (April 26) on the effort to update the 2021-2029 Housing Element, which is required by the California Department of Housing and Community Development in response to the 6th Cycle Regional Housing Needs Assessment allocation of 4,845 new housing units assigned to the city.
It’s all mandated by the state, emphasized Community Development Director Seimone Jurjis, they are forced to plan for the housing numbers set by the state. There are penalties if they don’t, he added.
“It’s a plan for the future of housing for the city,” Jurjis said. “This time around we’re planning for an enormous amount of housing, which will include affordable housing.”
They aren’t talking about any specific project, he said, it’s just planning for potential housing. It’s about where they can place housing, which will get rezoned in the future, and eventually it will go to a vote of the electorate, Jurjis explained.
“Where’s the future of housing?” is the topic of the discussion, he summarized.
They’ve been working on the RHNA process for a few years, trying to come up with a Housing Element that complies with the state mandates, said Councilmember Will O’Neill.
“The Housing Element only identifies where sites could potentially be for housing,” he said.
In order to implement that, the Land Use Element has to also be updated, he added. And the Greenlight initiative requires a vote of the people. So, a project would need to be approved by the voters before being developed and that would be challenging.
There is no specific project right now, O’Neill emphasized.
“It’s a long process here, it’s a long way off before you start seeing large-scale projects being submitted to us that would otherwise require a Greenlight,” he said.
It’s an important process because the city currently has about 45,000 housing units which have been built over approximately the last 100 years, O’Neill said. The state has told city to now plan for more than 4,800 more units over the next eight years.
“That’s what we’re dealing with,” he said.
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Houses in Newport Beach
Staff has been discussing and working on the housing element for a few years, first submitting the draft update in fall of 2021. They’ve gone back and forth with HCD, refining the document and responding to the state’s comments.
“We’re getting very, very close to getting certified,” Jurjis said. “We’ve talked to HCD…they’re working with us and trying to help us get to that finish line.”
Out of the 197 agencies in the Southern California Association of Governments, only nine have been certified as of Tuesday. From those, only one in Orange County is certified (City of Yorba Linda).
They also “distinctly heard a different tone” in recent discussions with the HCD reviewer, added Deputy Community Development Director Jim Campbell. They may be feeling pressure to get more jurisdictions certified, he commented, after seeing how few have completed the document to the state’s satisfaction.
They have to proceed as if the city is compelled to fulfill all of that housing, noted Councilmember Joy Brenner.
A recent auditor’s report to HCD is very critical about the process, she pointed out, and asked if there was any chance for relief through that.
“I’m hopeful, but I’m not going to hang my hat on any type of relief from the auditor’s report,” Jurjis answered.
They might indicate where the process is deficient and fix the issues for the future, but it won’t benefit the city right now, he explained. It might benefit the analysis they use to develop the housing model going forward, but not for the municipalities currently working through the process.
Pressuring the Legislature by targeting the report and requesting they look at it more seriously is a good idea, Jurjis added.
“It’s trying to get the Legislature vote to be more supportive of cities is the real impossible task,” Jurjis said. “We can put a huge amount of resources into this, but so far, what we’ve done already hasn’t been fruitful yet.”
“We’re trying to stay optimistic though,” he added.
During a study session on January 25, City Council agreed to keep Banning Ranch in the housing inventory – despite HCD rejecting it – as an additional option to pursue, but not include in the city’s mandated housing numbers.
In the draft Housing Element, the city indicated a potential for 591 affordable units and 1,475 total units on Banning Ranch. The January staff presentation included input received in a comment letter from the HCD. The primary takeaway was that HCD is not going to accept the proposed units at Banning Ranch.
So, council decided to proportionately distribute the units to the other housing study areas (Airport area, Coyote Canyon, Newport Center, Dover-Westcliff and West Newport-Mesa), but keep Banning Ranch in the inventory as an option to pursue as a possible back up, just in case they can get any housing opportunity sites approved, but not count it towards RHNA.
If they leave the 1,475 units in Banning Ranch and also disperse units across the other sites, the city is essentially over-planning for affordable units, councilmembers noted in January.
They re-submitted and received another comment letter from HCD on April 11.
The more recent comments note that the city has to do more work related to Affirmatively Furthering Fair Housing. They need to add local data, enhance discussion of sites in lower-resource areas and expand policy program with performance measures, Campbell explained.
They also have to examine the city’s residential in mixed-use areas. They aren’t really performing since the zoning was established in 2006, Campbell noted. The HCD letter directed the city to expand that narrative to justify the sites.
Housing for the disabled was another issue raised in the recent comment letter from the state. It primarily revolves around residential care facilities (seven or more occupants) and how they’re regulated, Campbell said.
They are currently working on tightening the city ordinance up, Jurjis added, and, according to HCD, the “neighborhood character” findings are a constraint to housing.
“We disagree with them,” Jurjis said.
That finding covers proximity (to parks, schools and outlets for alcoholic beverages), design standards (parking, lot widths, narrow streets and setbacks), concentration (only one or two facilities in each block) and distancing (separation of residential care uses).
Staff is not advocating removing any of the items required in the neighborhood character finding. But they have to deal with HCD and work on educating them about the city’s position on the matter. But city staff feels there is some middle ground, Jurjis said. They will review the items and potentially come up with more objective standards, he added.
“This is a big challenge for us,” Jurjis said. “We’re going to work through it and we feel confident we’re going to find a solution.”
City staff also discussed another challenge in a new state law.
Assembly Bill 1398 directly impacts the city, but they can’t comply as directed, Jurjis said. The law states that the adopted Housing Element must be “substantially compliant” by Feb. 11, 2022. Municipalities without a compliant document, including the city of Newport Beach, are subject to AB 1398’s penalty of forcing the city to implement all rezonings mentioned in the document by October, which is an “impossible task,” Jurjis said.
“We can’t meet this deadline, so we will fall out of compliance with AB 1398,” Campbell said.
The city has to complete the Environmental Impact Report, the general plan amendment that goes along with the Housing Element, develop the overlay zones and go to a vote of the electorate pursuant to the city charter, Campbell explained. It’s impossible to do that before the fall deadline.
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The city is working on updating its Housing Element
The next steps include working directly with HCD staff and, after the state department accepts the revisions, city staff will return to council for re-adoption, hopefully in August. Implementation of the Housing Element will take some more time, Campbell noted.
After the Housing Element is completed, the General Plan Steering Committee will work on updating the general plan with focus on the Land Use Element and zoning. Staff hopes it will go to an electorate vote in March 2024.
It will be “unchartered territory” if it’s not approved at that time, Campbell added. They might make amendments to the plan and return to the voters, which may or may not prove fruitful, he said. They might even need to seek judicial review of the actions.
“At the end of the day, we’re going to have to have a Housing Element that’s compliant with state law, despite what the voters might say,” Campbell said.
If they fail to get a compliant Housing Element, the city can end up being fined or even sued and forced to use a state-appointed receiver, who would take over the process currently being led by city staff.
“That, obviously, is what we’re trying to avoid,” O’Neill said.
That’s why it’s important not to include controversial projects, added mayor Kevin Muldoon, because that could cause the vote to fail and the court might throw out Greenlight.
Staff also presented a new list of requests from property owners, adding and removing sites/units for the city’s housing inventory. The requests included several changes to the list of potential sites, including: Police station at 870 Santa Barbara Drive, bank building at 1515 Westcliff Drive, car dealership near the airport at 2101 Dove St., hotel property at 500 Bayview Circle, commercial property at Bristol Street and Zenith Avenue, mixed-use at a marina at 2888 Bayshore Drive and some various sites within a country club property.
They aren’t looking to remove the fire station, Jurjis clarified, but the police station is scheduled for replacement within 10 years, which is why it’s on the list.
Since there were no comments opposing the updated list of potential properties, staff will move forward with what was presented, Jurjis said. Muldoon and Councilmember Diane Dixon specifically commented that they support the list.
These are property owners who asked to submit a request for potential planning, Muldoon explained. Essentially, the city opened it up for property owners to submit a plan for potential units to be placed on the site. Some would require a vote and some would require a zoning change, he said.
“It’s not necessarily that they’re going to be built, it’s that we plan for them to be built,” Muldoon said.
The hope is that the market will decide what actually gets built, he added, and those projects will be pleasing to the residents.
“We’re not micro-managing who comes to us and who submits a plan to us,” Muldoon said.
Council chambers were packed with more than 100 people, most in attendance for the Housing Element update. Of the 19 speakers for the item, the majority commented on Newport Beach Country Club being included on the list and spoke about their general support for the club. Speakers noted a number of benefits and urged officials not to approve anything that would eliminate the club.
NBCC was requesting a reduction from a previous submission at the tennis club and adding some units elsewhere on the property.
Although there is currently a dispute over who has the authority to make that decision for the NBBC property, the City Attorney Aaron Harp confirmed that they reviewed the operating agreement and arbitration decisions and found that Robert O Hill of Golf Realty Fund (who made the most recent submission with the reduction) is the managing owner and has the right to represent the interest of the owners. They are litigating these issues and the dispute may work out in another manner, but at this point that’s the staff recommendation, Harp said.
The city is not in the business of solving ownership disputes, O’Neill said, and if there is a judicial ruling before August, they can let the city attorney’s office know and go from there.
“I’m sorry, we can’t wait until your arbitration and litigation is over,” O’Neill said. “We have our own timelines and we have to abide by them.”
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Sara Hall covers City Hall and is a regular contributor to Stu News Newport.