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HomeMy WebLinkAboutReso 136-2023 (23-657) Dear Members of the Grand Jury, Thank you for the opportunity to comment on the report titled, “Accessory Dwelling Units: Affordable Housing’s Panacea or Prevarication?”. Please find our response to the findings and recommendations of the report below. I. Response to Findings F1. Due to recent changes in California ADU-related laws, local governments cannot condition ADU permits in San Mateo County on complying with affordability monitoring and verification. South San Francisco agrees with this finding. F2. San Mateo County and most of its municipalities rely on ADUs to meet their affordable housing commitments in their RHNA-6 plans. South San Francisco partially agrees with this finding. While South San Francisco has previously counted ADUs to meet affordable housing commitments in RHNA at the MODERATE, NON-DEED RESTRICTED category for Annual Progress Report purposes, it is one of many strategies to meet the City’s RHNA obligation. Specifically, South San Francisco has a total lower income housing RHNA of 2,093 very-low, low- and moderate-income units and using the accepted HCD formula for allocating ADUs, up to 304 of these projected units could be assumed for lower income housing production. This is approximately 15% of overall lower income units in South San Francisco’s RHNA allocation. Additionally, ADUs only make up 1.8% of overall projected RHNA capacity – the vast majority of development opportunities are spread throughout the City and South San Francisco only notionally relies on and applies ADU potential to meet RHNA Cycle 6. Total RHNA Summary Very- Low Units Low Units Moderate Units Above- Moderate Units Total Units RHNA 871 502 720 1,863 3,956 RHNA w/20% Buffer 1,045 602 864 2,236 4,747 Type Pipeline Projects 225 408 50 2,898 3,581 ADUs (Based on High Projection) 102 101 101 - 304 Opportunity Sites 546 1,319 580 10,663 13,108 Projected Total to Comply with RHNA 873 1,828 731 13,561 16,993 CITY COUNCIL 2023 FLOR NICOLAS, MAYOR (DIST. 3) MARK NAGALES, VICE MAYOR (DIST. 2) MARK ADDIEGO, MEMBER (DIST. 1) JAMES COLEMAN, MEMBER (DIST. 4) EDDIE FLORES, MEMBER (DIST. 5) SHARON RANALS, INTERIM CITY MANAGER DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT (650) 829-6620 FAX (650) 829-6657 E-MAIL [email protected] Additionally, South San Francisco has already developed and implemented the following programs as part of the adopted Housing Element Policies: x Revising our zoning codes to allow for increased density, which allow for housing that is naturally more affordable; x Commercial impact fees in place to generate affordable housing funds; x Operation of a two-year pilot program to provide ADU construction management through Hello Housing; x Streamlined permitting processes for affordable housing using State law; and x Inclusionary zoning requirements that require 15% of new units be rented or sold affordably. F3. Atherton, Hillsborough, Portola Valley, and Woodside rely on ADUs to meet as much as 80 percent of their affordable housing commitments in their RHNA-6 plans. Not applicable: South San Francisco is not named in this finding and therefore has no comment. F4. HCD has instructed San Mateo County jurisdictions to monitor and verify future ADU production and affordability every two years but has yet to specify how to verify whether very low-, low- or moderate-income households are occupying the ADUs as planned. South San Francisco partially agrees with this finding. We do not expect HCD to specify how to verify the income levels of ADU occupants. Additionally, HCD is only asking for verification at the initial time of occupancy. South San Francisco is planning on supporting a regional ADU monitoring effort through ABAG or 21 Elements, a long-standing collaboration among the 21 jurisdictions of San Mateo County. Additionally, South San Francisco has a draft Program in the adopted Housing Element per HCD input and revisions to address future ADU production and monitoring relative to RHNA expectations: Program CRT-6.1 – Continue to support the development of secondary dwelling units consistent with State Law and educate the community about these standards. City will continue to allow permissive design standards for ADUs with no parking required in most instances, reduced setbacks, larger units and ADUs allowed on both single- and multi-family zoned parcels. Actively promote participation in the City’s two-year pilot program Hello ADU for comprehensive project management support for ADU construction. City shall track compliance with ADU construction through the Annual Progress Report to reconcile trends with actual ADU permits issued and commit to new ADU promotion programs if ADU construction falls more than 30% off-trend. Responsibility: Department of Economic and Community Development – Planning Division; Planning Commission Time Frame: Annual reporting to HCD through the Annual Progress Report; if ADU production and affordability falls 30% below recent trend line assumptions, City shall adopt alternate measures (e.g., incentives, funding, development standard modification, rezoning) to maintain adequate sites to accommodate the regional housing need allocation by income group and promote ADU construction within six months. Funding Source: Staff time to promote program; City funding for promotion programs, additional construction management. F5. Other than Brisbane and Redwood City, San Mateo County and its jurisdictions have yet to articulate how they will monitor and verify ADU production or affordability. South San Francisco partially agrees with this finding. San Mateo County jurisdictions met on June 20, 2023 to discuss potential strategies for monitoring ADU affordability levels. South San Francisco is planning to support a regional ADU monitoring effort through ABAG or 21 Elements. We expect this monitoring effort to begin no later than two years after the Housing Element was due (early 2025). Additionally, South San Francisco has a draft Program in the adopted Housing Element per HCD input and revisions to address future ADU production and monitoring relative to RHNA expectations: Program CRT-6.1 – Continue to support the development of secondary dwelling units consistent with State Law and educate the community about these standards. City will continue to allow permissive design standards for ADUs with no parking required in most instances, reduced setbacks, larger units and ADUs allowed on both single- and multi-family zoned parcels. Actively promote participation in the City’s two-year pilot program Hello ADU for comprehensive project management support for ADU construction. City shall track compliance with ADU construction through the Annual Progress Report to reconcile trends with actual ADU permits issued and commit to new ADU promotion programs if ADU construction falls more than 30% off-trend. Responsibility: Department of Economic and Community Development – Planning Division; Planning Commission Time Frame: Annual reporting to HCD through the Annual Progress Report; if ADU production and affordability falls 30% below recent trend line assumptions, City shall adopt alternate measures (e.g., incentives, funding, development standard modification, rezoning) to maintain adequate sites to accommodate the regional housing need allocation by income group and promote ADU construction within six months. Funding Source: Staff time to promote program; City funding for promotion programs, additional construction management. F6. Without effective ADU monitoring and verification, it will be impossible to evaluate whether the jurisdictions are meeting their RHNA-6 obligations for low-, very-low, and moderate-income housing units. South San Francisco partially agrees with this finding. As stated above, South San Francisco is planning to support a regional approach to monitoring ADU affordability. Unless ADUs are specifically deed-restricted for very-low or low-income housing, South San Francisco will likely only consider ADUs under the moderate-income, non-deed restricted category for the Annual Progress Report to be conservative about RHNA compliance. South San Francisco is not actively relying on ADUs to meet RHNA Cycle 6 – instead, our vast and targeted housing programs and opportunity sites will ensure that the City meets its regional housing obligations. F7. ADU affordability and occupancy could be monitored by agencies such as HIP Housing which has proven systems and processes to verify occupancy of deed-restricted rental properties in San Mateo County. South San Francisco agrees with this finding. HIP is one potential partner agency. Many jurisdictions, including South San Francisco, provide funding to HIP Housing to operate their homesharing and other housing programs. As the regional efforts to monitor ADU affordability move forward the City will ensure that nonprofit partners like HIP are engaged in these efforts, including gauging their interest as potential operators of such a program. II. Response to Recommendations R1. San Mateo County and each City should immediately stop using ADUs to meet their State- mandated very low-, low-, and moderate-income housing targets in their Housing Element submissions until they have also proposed an effective monitoring system that verifies how newly developed ADU’s will be used. The recommendation will not be implemented because it is not warranted or is not reasonable. While South San Francisco shares the Civil Grand Jury’s goal to increase ADU affordability monitoring, it is not feasible to revise our Housing Element to eliminate the use of ADUs to meet affordable housing goals. The Housing Element was developed through a rigorous process of multiple years of public input and revisions. South San Francisco is close to a certified submission to HCD; it is not feasible or good policy for us to make a major change to our housing assumptions this late in the process. However, South San Francisco is committed to following state housing law and to supporting the development of an effective regional ADU monitoring program which will be operated by 21 Elements or ABAG. South San Francisco is also supporting the development of a new ADU nonprofit that will have programs to incentivize the production of affordable ADUs in San Mateo County. R2. By February 1, 2024, San Mateo County and each City should develop, adopt, and implement a verification system capable of monitoring and verifying how newly developed ADU’s are being used. Part of the recommendation has yet to be implemented but could be implemented in the future. However, part of the recommendation is not warranted. South San Francisco agrees that it is important to have high quality information about who is living in ADUs. The City may participate in the ABAG or 21 Elements ADU monitoring system. The potential monitoring is projected to launch in January 2025 and will likely survey people about their plans for their ADU at the time permits are issued. Due to homeowner privacy concerns and the cost of engaging with thousands of homeowners every year, it would not be practical to have an ongoing verification system that checks the income of every resident of every ADU in San Mateo County. R3. By February 1, 2024, San Mateo County and each City should develop and adopt incentives for ADU owners which could be offered in exchange for deed restrictions that would include requirements for ADU tenants to participate in independent monitoring. This recommendation has yet to be implemented but may be implemented in the future. South San Francisco agrees with the goal of adopting an affordable ADU program by means of a current program – the City subsidizes project management and design of ADUs for participating South San Francisco homeowners. The City is also learning more about the possible creation of an ADU nonprofit to serve San Mateo County jurisdictions and 21 Elements, working on behalf of the City, have been researching best practices. The draft work plan for the nonprofit calls for it to offer programs to incentivize the production of affordable ADUs and support homeowners in constructing ADUs in exchange for agreeing to rent at affordable levels. The nonprofit, which may partner with HIP Housing or SMCo HEART, is projected to launch in July 2024 and may be financially supported by San Mateo County jurisdictions as well as private philanthropy if possible. R4. By February 1, 2024, San Mateo County and each City should track the intended use of ADUs – rented or non-rented – during the permitting process and offer incentives in exchange for deed restrictions that require ADUs to be used as rentals. This recommendation has yet to be implemented but may be implemented in the future. As part of the monitoring program referenced in response to R2, South San Francisco may track the intended use of ADUs. South San Francisco may develop an incentive program that offers incentives in exchange for affordability requirements such as deed restrictions per the Housing Element program CRT 6.1, as reviewed by HCD, and as recommended by the City Council at a future date. Additionally, the City will utilize the two-year pilot program with Hello Housing for ADU construction management to provide data on the intended use of ADUs for a more holistic data point that can be shared with San Mateo County’s 21 Elements working collaborative. R5. By April 1, 2024, San Mateo County and each City should develop and adopt a new ADU affordability distribution formula specific to each jurisdiction to the extent they are used for meeting the very low-, low-, and moderate-income housing requirements in their RHNA housing elements. The recommendation will not be implemented because it is not warranted or is not reasonable. While we agree with the importance of an accurate distribution formula, given the relative small size of South San Francisco a more meaningful distribution formula can be attained by collecting data on ADUs constructed across all San Mateo County jurisdictions. South San Francisco] is supporting the creation of an ADU monitoring program through 21 Elements or ABAG which will collect data that can be used to revise the distribution formula based on actual observed income levels. The future non profit may partner with HIP Housing or SMCo HEART. The UC Berkeley study surveyed thousands of homeowners statewide with repeat mailing… the data was aggregate to reduce the margins of errors. The margin of error would be too large if we are only surveying a dozen or couple of dozen households. There is also no evidence in the data to suggest significant variation from city to city. The recommendations accepted by HCD of 30/30/30/10 had a significant cushion built in to ensure cities did not accidentally underproduce the amount of housing needed. R6. San Mateo County and each City should consider working together to address Recommendations 2 and 3. This recommendation has been implemented. San Mateo County jurisdictions work collaboratively through 21 Elements to develop, adopt, and implement housing policies and programs in the county. San Mateo County jurisdictions are already working together to address recommendations 2 and 3.