REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on Introduction of Ordinances to Establish Objective Zoning, Subdivision, and Design Standards for SB 9 Residential Projects by Amending Chapter 17.05 (Subdivisions) of Title 17 (Development) and Amending Title 18 (Zoning) to Create Chapter 18.13 (Two Unit Dwelling Residential Development and Urban Lot Splits); and Address Affordability Recommendations of the Planning Commission for SB 9 Developments
Report
COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development
BACKGROUND
California Senate Bill 9 (SB 9), which became effective on January 1, 2022, requires ministerial review and approval of a housing development with two primary dwelling units on a single-family (R1) zoned property, the subdivision of an R1 zoned parcel, or both for projects that meet specific eligibility criteria. Ministerial review of an SB 9 application requires a process without discretionary review or hearing, where City staff is limited to ensuring that the proposed development meets all eligibility criteria and applicable objective zoning, subdivision, and design review standards.
Additional background information on applicability of SB 9, what SB 9 allows, and the ways in which jurisdictions may and may not regulate SB 9 proposals was provided in a staff report and presentation for the joint City Council and Planning Commission study session held on January 25, 2022. The staff report and presentation for the joint study session are included in the attachments to the May 25, 2022 Planning Commission staff report (Attachment 1).
Objective Standards
Any SB 9 proposal is subject to the City’s objective standards included within Title 18 (Zoning) and Title 17 (Development/Subdivision), provided that those standards:
1. Do not physically preclude the construction of two units of at least 800 square feet each, per property;
2. Do not conflict with SB 9 standards (e.g., setbacks, parking, etc.); and
3. Do not conflict with the ministerial review requirement for SB 9 projects.
Attachment 1 includes the City’s SB 9 Eligibility Checklist and Planning Application form, which identifies a list of general requirements for SB 9 proposals, including references to current objective standards. Objective standards may not include personal or subjective judgement and must be uniformly verifiable and knowable by both the applicant and public officials.
State law allows a local jurisdiction, on a limited basis, to adopt an ordinance that establishes objective development standards to regulate the implementation of SB 9 projects. At the joint study session, staff provided development standard examples from SB 9 ordinances of other cities, with preliminary recommendations for Santa Clara to implement its own requirements.
Joint Study Session
At the January 25, 2022 joint study session, staff identified and discussed several topics that SB 9 and/or the current Zoning Code in their current form do not specifically address including: parking, urban lot split standards, privacy, and neighborhood compatibility. The City may adopt standards to regulate these issues, as long as they are consistent with other SB 9 requirements. The attached draft ordinance is reflective of the discussion at the joint study session and includes proposed changes to the City Code, adding Chapter 18.13 (Two Unit Dwelling Residential Development and Urban Lot Splits) and amending Chapter 17.05 (Subdivisions).
Planning Commission
At the May 11, 2022 Planning Commission meeting, following the staff presentation, the Commission discussed the draft ordinance, including potential changes to several of the proposed development standards, and continued their discussion of four topics, summarized in the discussion section of the May 25, 2022 Planning Commission staff report. The proposed development standards are summarized in the discussion section of the staff report for the May 11, 2022 Planning Commission (Attachment 1).
The City’s current process for review of subdivisions includes a public hearing with approval by the City Council. Because SB 9 requires a ministerial review process, it is also necessary to make amendments to Chapter 17.05 to remove the public hearing requirement and to designate the City Engineer as the approver for SB 9 Urban Lot Split projects. Since the Planning Commission does not make recommendations on ordinances outside of Title 18 (Zoning), the proposed changes were provided to the Planning Commission for reference. A summary of the Planning Commission’s continued discussion and recommendation from their May 25, 2022 hearing is included in the discussion section below.
DISCUSSION
The Planning Commission’s discussion and recommendation focused on the following four topics:
1. Parking Design & Location
2. Front Yard Landscaping/Paving
3. Solar Access
4. Affordability
Parking Design & Location
As previously drafted, parking for an SB 9 project (whether required or provided voluntarily) must meet the City’s parking design standards including the requirement that the parking be covered (i.e., a garage or carport) and be located outside of the required yard areas. The Commission recommended the following changes:
A. Allow any required parking for an SB 9 unit to be uncovered only on lots below a certain size. Otherwise, any required parking must be covered. The Planning Commission directed staff to investigate and present to City Council a lot size for establishing whether required SB 9 parking may be uncovered (below the specified lot size) or covered (at or above the specified lot size).
B. For lots that qualify for their required parking to be uncovered, the Planning Commission recommended that those uncovered parking spaces could be accommodated on a driveway in the front yard.
The Planning Commission did not specify a lot size for the covered parking requirement, but rather directed staff to investigate an appropriate minimum threshold lot size. Staff evaluated potential SB 9 development scenarios for up to two SB 9 units of at least 800 square feet each, on lots with varying configurations ranging in size between 6,000 square feet (a typical R1 lot) to 2,400 square feet (40-percent minimum of typical R1 lot) to determine if a covered parking requirement would negatively impact the feasibility of constructing an SB 9 unit or units. Based on this analysis, staff determined that a 2,400 square foot lot would be the smallest lot which theoretically could accommodate two 800 square foot units (provided that they were 2-story) along with covered parking spaces. However, staff further concluded that it would be potentially redundant and/or ineffective to establish a specific exception from the covered parking requirement given the wording of SB 9, which allows feasibility to be determined for each project on a project-by-project basis.
Given that SB 9 requires jurisdictions to waive development standards that preclude development of two 800 square foot units, staff recommends retaining all development standards, including covered parking, for all lots and to rely upon the waiver process built into SB 9 to drop the covered parking requirement when it would impact feasibility. As recommended by staff, staff will review proposed SB 9 projects for conformity to all standards and review any applicant requests for waiving of standards, including covered parking, on a case-by-case basis. This approach allows staff to propose alternative configurations to achieve as many development standards as possible and meets the intent behind the Planning Commission’s recommendation, even though no specific textual modifications are proposed by staff.
Front Yard Landscaping/Paving
The Planning Commission recommended changing Section 18.13.060(i) of the draft ordinance to lower the minimum percentage of required front yard landscaping from 60-percent to 50-percent to allow additional paving, which would increase the opportunity for multiple on-site parking spaces on a driveway in the front yard, particularly on narrower lots. The typical width of a parking space is 10 feet. With a 50-percent landscaping requirement, a typical 60-foot wide lot could thus accommodate a 30-foot wide 3-car driveway or a 40-foot wide lot could accommodate a 20-foot wide 2-car driveway.
Solar Access
To preserve solar access on properties neighboring an SB 9 project site, the Planning Commission recommended inserting the following language, using the California Solar Shade Control Act (SSCA) as a model, into the proposed ordinance:
A. Add Section 18.13.040(c): After the installation of a solar collector, a person owning or in control of another property shall not construct or alter a residence so as to cast a shadow greater than 10 percent of the collector absorption area upon that solar collector surface at any one time between the hours of 10 a.m. and 2 p.m., Pacific Standard Time.
B. Include a definition of solar collector: “Solar collector” means a fixed device, structure, or part of a device or structure, on the roof of a building, comprising photovoltaic panels, that is used primarily to transform solar energy into electrical energy.
Affordability
To address the possibility of including an affordability requirement for a second unit constructed under SB 9, the Planning Commission made a separate motion recommending the City Council explore the opportunity for affordable housing under SB 9 with incentives for homeowners to enable more affordability and increase housing numbers. As is the case with the majority of Accessory Dwelling Units (ADUs), most SB 9 units that are limited to a maximum of 1,000 square feet, could similarly be considered affordable by design. Therefore, it may not be necessary for the City to establish an affordability requirement for SB 9 units. A September 2021 report by the Association of Bay Area Governments (ABAG) conservatively assumes that ADUs fall into the following income categories: 30-percent Very Low Income (0-50% AMI), 30-percent Low Income (51-80% AMI), 30-percent Moderate Income (81-120% AMI), and 10% Above Moderate Income (120%+ AMI). The City’s 2021 Annual Progress Report (APR) that was submitted to the California Department of Housing and Community Development (HCD) earlier this year reported ADU production based on these assumptions.
Since 2018, with the enactment of Assembly Bill 1505, cities have had the authority to impose inclusionary housing requirements. Gov’t Code § 65850(g). In response, in Santa Clara, the City enacted Chapter 17.40 of the City Code, requiring housing developments with 10 or more units to provide 15% of those units at affordable prices or rents. Residential developments with fewer than 10 units must either provide one affordable unit or pay an in-lieu fee pursuant to the affordable housing master fee schedule. Chapter 17.40 provides an exemption for single residential units, duplex units, and ADUs; for those dwellings, neither an affordable unit nor an in-lieu fee is required.
If the Council provides direction to establish an affordability requirement for SB 9 developments, that could take a number of different forms. The most ambitious option would be a requirement that every second unit built under SB 9 would have to be affordable (in other words, 50% of the homes on every lot). A less aggressive, but still significant, alternative would be to require one out of four units to be affordable when a lot is split using SB 9 and two homes are planned for each lot (so 25% of the homes would be affordable). A third option would be to impose an inclusionary housing fee only, treating SB 9 developments like any other housing development that has fewer than 10 units. And finally, the Council could establish an incentive program for development of affordable housing rather than imposing mandates.
If the Council chooses any option other than incentives or simply applying the existing Chapter 17.40 fees, it would be advisable to first prepare an economic feasibility study. Under a series of court cases, the City cannot enact an affordability restriction that is so significant as to be “confiscatory,” which means the property owner is denied a fair and reasonable return on his or her property. Although there is no fixed percentage at which an affordability requirement becomes “confiscatory,” it is relevant to note that any affordable housing ordinance that imposes a requirement above 15% is subject to review by the California Department of Housing and Community Development (HCD), which can require the preparation of an economic feasibility study. In addition, any new affordability requirements could constitute a constraint on housing development, which will need to be analyzed in the City’s upcoming 2023 Housing Element, which is also subject to HCD approval.
Given that the Council previously made the policy decision to exempt ADUs from the reach of the affordable housing ordinance, imposing an inclusionary requirement on SB 9 developments would represent a policy shift. If the Council decides to direct staff to return with an ordinance imposing an affordability requirement, staff recommends either imposing a fee under the existing ordinance, or deferring such a requirement until an economic feasibility analysis can be prepared. If the Council instead decides to ask staff to research an incentive program, and/or to not impose affordability requirements on SB 9 developments at this time, staff recommends that Council direct staff to prepare a simple amendment to Chapter 17.40 to clarify that it does not apply to SB 9 developments.
ENVIRONMENTAL REVIEW
Pursuant to California Government Code Sections 65852.21 (j) and 66411.7 (n), a local agency may adopt an ordinance to implement SB 9 and that ordinance shall not be considered a project under CEQA (Division 13 (commencing with Section 21000) of the Public Resources Code).
FISCAL IMPACT
There is no fiscal impact to the City other than administrative staff time and expense.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by publishing a hearing notice in the Mercury News on April 29, 2022 and in the Santa Clara Weekly on June 22, 2022. The Council agenda was also posted on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library. An email notification of this meeting and a link to the City’s SB 9 page with additional background information was sent to people that are subscribed to the Zoning Code Update topic through the City’s email subscription service GovDelivery.
A Planning Commission meeting was held on May 11, 2022 and May 25, 2022. A joint City Council and Planning Commission study session was held on January 25, 2022.
ALTERNATIVES
1. Waive first reading and introduce an ordinance to establish objective subdivision, zoning, and design standards for SB 9 residential projects by amending Title 18 (Zoning) to create Chapter 18.13 (Two Unit Dwelling Residential Development and Urban Lot Splits) with specified modifications to the draft ordinance as recommended by the Planning Commission related to front yard landscaping and solar access.
2. Direct staff to return with an alternate version of an ordinance to establish objective subdivision, zoning, and design standards for SB 9 residential projects by amending Title 18 (Zoning) to create Chapter 18.13 (Two Unit Dwelling Residential Development and Urban Lot Splits) with specified modifications to the draft ordinance as recommended by the Planning Commission related to front yard landscaping, solar access, and uncovered parking.
3. Direct staff to return with an alternate version of an ordinance to establish objective subdivision, zoning, and design standards for SB 9 residential projects by amending Title 18 (Zoning) to create Chapter 18.13 (Two Unit Dwelling Residential Development and Urban Lot Splits) with other modifications directed by the City Council.
4. Waive first reading and introduce an ordinance amending Chapter 17.05 (Subdivisions) of Title 17 (Development) to revise the subdivision process for SB 9 developments.
5. Direct staff to bring back an ordinance amending Chapter 17.40 (Citywide Affordable Housing Requirements) of Title 17 (Development) to add SB 9 projects to the types of developments subject to an affordable housing fee.
6. Direct staff to bring back an ordinance amending Chapter 17.40 (Citywide Affordable Housing Requirements) of Title 17 (Development) to clarify that the affordable housing requirements will not apply to SB 9 developments.
7. Direct staff to bring back a report on obtaining an economic feasibility analysis for purposes of later establishing an inclusionary housing requirement on SB 9 developments.
8. Direct staff to bring back a report on establishing an incentive program for affordable housing, without enacting new affordable housing mandates.
RECOMMENDATION
Recommendation
Alternatives 1, 4, and 5:
1. Waive first reading and introduce an ordinance to establish objective subdivision, zoning, and design standards for SB 9 residential projects by amending Title 18 (Zoning) to create Chapter 18.13 (Two Unit Dwelling Residential Development and Urban Lot Splits) with specific modifications to the draft ordinance as recommended by the Planning Commission related to front yard landscaping and solar access.
4. Waive first reading and introduce an ordinance amending Chapter 17.05 (Subdivisions) of Title 17 (Development) to revise the subdivision process for SB 9 developments.
5. Direct staff to bring back an ordinance amending Chapter 17.40 (Citywide Affordable Housing Requirements) of Title 17 (Development) to add SB 9 projects to the types of developments subject to an affordable housing fee.
Staff
Reviewed by: Andrew Crabtree, Director, Community Development
Approved by: Rajeev Batra, City Manager
ATTACHMENTS
1. May 25, 2022 Planning Commission Staff Report and Attachments
2. SB 9 Zoning Ordinance
3. SB 9 Subdivision Ordinance