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2022-06-21 CC Agenda Packet - PRESENTATION - ITEM D17 -Affordable Housing Strategic PlanAffordable Housing � Strciteglcplon Overview G1T Y O� � O �SEG��4 ➢September 1, 2020: RFQ released for Affordable Housing Development & Administrative Services Provider ➢ February 16, 2021: ENA with Many Mansions (MM) to be the City's Affordable Housing Services Provider ➢October 5, 2021: Executed a Professional Services Agreement with MM to provide an Affordable Housing Strategic Plan (AHSP) ❖ Emphasis on meeting Regional Housing Needs Assessment (RHNA) goals ➢MM worked with city staff/consultants to review the Housing Element (HE); Pacific Coast Commons Development Agreement, & participate in various pro -housing strategies ➢ March 24, 2022: Reviewed AHSP options at Planning Commission study session ➢AHSP will augment and effectuate the Housing Programs identified in the HE ➢ Nonprofit Affordable Housing Builder, Property Manager & Service Provider ➢ 43 years of experience ➢ 70+ staff members and volunteer Board of Directors ➢ Owner/property manager of 17 affordable housing apartment communities in Southern California ❖ Over 650 apartment homes ❖ 11500+ low-, very low- and extremely -low income residents served ❖ Leader in Supportive Housing ➢ 4 developments (>200 apartments) in construction & another 400+ affordable apartments in development ➢ Provide free, life enriching service programs for residents ➢ Affordable Housing Developer of Year (2020) i R Hillcrest Villas - 60 apartments for families, Thousand Oaks City Requirements (RHNA) Regional Housing Needs Assessment (RHNA) Income Category Extremely/Very Low Income (ELI/VLI) Low Income (LI) Moderate Income Above Moderate Income Total Note: The City has a RHNA allocation of 207 very low income units (inclusive of extremely low income units). Pursuant to State law (AB 2634), the City must project the number of ELI housing needs based on Census income distribution or assume 50% of the VLI units as extremely low. Assuming an even split, the City's RHNA allocation of 207 VLI units may be divided into 104verylow and 103 ELI units. However, for purposes of identifying adequate sites for the RHNA allocation, State law doesn't mandate the separate accounting for the ELI category. Source: Southern California Association of Governments (SCAG), 6th Cycle Final RHNA Allocation Plan, 2021. ➢ Deed restricted housing for moderate -income (<_$153,240), low- income (<_$94,560), or very low-income (<_$59,100) households based on family size & median income level for L.A. County ➢ Includes housing for many of our essential workers ➢ Residents pay —30% of the monthly household income for rent & utilities ➢ Applicants undergo a more vigorous qualification process (e.g. criminal history check) than market -rate developments ❖ MM will help monitor the City's affordable housing units ➢ Often built by nonprofits or civically -minded for -profits ➢ Design, quality, and amenities meet or exceed market -rate developments "P fti ::_: i J"100 i"°''• Ormond Beach Villas- 40 apartments for veterans, ➢ Often have "free" on -site services Oxnard Hillcrest Villas - 60 family apartments, Thousand Oaks Hacienda de Feliz - 25 family apts., Thousand Oaks Walnut Street - 24 family apartments, Moorpark 0-10. �7-01 all Ormond Beach Villas - 40 veterans' apartments, Oxnard Mountain View - 77 family apartments, Fillmore Rancho Sierra - 50 senior apartments, near Camarillo ➢No apartments built in the City over the past 40 years ➢Zero affordable housing units per Gov. Code § 65583 (A) (8) ➢Naturally occurring affordable housing often is or becomes dilapidated, overcrowded, or lost to market forces ➢40% of residents are moderate -income (includes 25% that are low-income) ➢7.8% (1,306) of residents are living in poverty, 7.8% (1,306) are disabled, & 0.3% (>50 people) are homeless ➢ Median sales price for a SFH is —$1.5 million ➢At a maximum affordable purchase price of $359,325, it is unlikely that a moderate - income household could afford even a small condominium Bene it ordabl e usIng''" 1. Allows lower -income persons, seniors, and children who grew up in El Segundo to stay in their community 2. Improves educational outcomes of lower -income adults and children 3. Reduces incarceration and recidivism 4. Improves health outcomes 5. Permanent supportive housing for the homeless produces significant savings on healthcare and public safety systems (police/fire) 6. Boosts local economic activity via construction -related employment, plus ongoing jobs and consumer -driven jobs in the local economy 7. Access to affordable housing improves an employer's ability to attract and retain employees and remain competitive the in global economy WYONt"Nag- r7A-p - V public Outreach Fttc ➢ Community meeting on April 13, 2021 ➢ Development of a city webpage for the HE Update Nor- ➢ Community survey - over 500 survey participants F ➢YouTube video regarding HE Update ➢Social media (Facebook, Twitter, City's website, etc.) ➢ Postcards to agencies, local businesses, nonprofits, and religious facilities ➢ Notices published in El Segundo Herald on April 8, May 13, and June 10, 2021 ➢Joint Planning Commission/City Council meeting on June 14, 2021 ➢ Planning Commission review of Housing Element on September 30, 2021 and January 13, 2022 ➢ City Council review and adoption of the Housing Element on February 1, 2022 ➢ Planning Commission study session on the AHSP on March 24, 2022 WFAM MLWF2W Please rank from 1-5, with 1 being your first choice, in what area of El Segundo should new housing be built? 1st 2nd East of PCH (Imperial to El Segundo Blvd-) 22.9 Smoky Hallow Along PCH (imperial to rd EI5egundo BI4d,) 4th East Imperial Ave. 5th 0howntown 28% Accessory Repurposing of Repurposing of Workforce Workforce Housing on Repurposing of Dwelling Units office and office and housing in the housing in church sites surplus school (ADUs) commercial commercial Smoky Hollow Downtown property (if sites to sitesto ever identified residential accommodate by the School uses mixed uses District)for residential uses Husiness C� :RI 0 • Loss of talent is a significant issue for employers here in El Segundo ' Inability to get top talent is a significant issue for employers here in El Segundo ' Without talent, companies cannot thrive no matter how business friendly the city of El Segundo is • Employees don't want to get pushed to live further from their office base - either surrounding cities or distant suburbs ' Employees, and this employers, thrive on an integration of work / life within the same city • If we cannot solve housing issues, companies will not choose to remain here in El Segundo for an extended .perl.od,of..time I IIJU011 IFj Llt.l I ILI IL I I lJFjl UI 1 IJ ➢ Accessory Dwelling Units (ADU) — Program 3 ❖ Develop incentives/tools to facilitate ADU construction by 12/31/23 (goal of 80 ADUs in 8 yrs.) ❖ In 2022, update City website with more ADU resources, such as grants for homeowners to build ADUs ❖ Beginning in 2022, pursue available funding to facilitate ADU construction, including affordable ADUs ❖ Monitor ADU const. trends in 2024 & make necessary adjustments to incentives/tools w/in 6 months ➢ Inclusionary Housing Ordinance and Affordable Housing Strategy— Program 4 ❖ A study session with the City Council was conducted on 311122 & an Inclusionary Housing Policy has been deferred for further study. ❖ Other considerations to encourage affordable housing: streamlined processing of permit applications; waive or defer development fees; consider reducing certain development standards (such as parking requirements); and/or provide financial assistance to nonprofit developers to the extent possible ❖ Develop Affordable Housing Strategic Plan by June 30, 2022 Housing Element Programs (Continued) ➢ Upzoning Identified Sites in HE - Program 5 ❖ By 10/15/22, rezone sites for 29-unit RHNA shortfall from the last Housing Element, amend ESMC to provide by right approval if project provides >_20% LI units, develop objective design standards for residential dev. consistent with SB 330, & rezone sites for the current RHNA shortfall ❖ By October 15, 2024, rezone adequate sites to address RHNA shortfall and update Downtown Specific Plan to include additional opportunities for residential development. ➢ Lot Consolidation — Program 7 - Develop strategies to encourage the development & consolidation of small lots, especially for affordable housing (by 10/15/24) ➢ Program 8 - ESMC Amendments ❖ By 6/22 complete ESMC revisions to address density bonus (AB1763 & AB2345), SRO (Micro Units), and transitional housing as part of the City's SB 2 grant efforts. ❖ By 12/23 complete ESMC revisions to address provisions for SH & consider an administrative subdivision process for projects with <_10 units. i ne Ht is weir none ana a great start, but it is not enough to proauce sufficient units to meet the City's RHNA goals. Why? ➢ The Site Inventory properties are privately owned, and the owners may not be willing to sell at a feasible price. ➢ The City is primarily built out and many existing parcels are too small (even if assembled) to be feasible. ❖ Based on land costs, escalating construction costs, rising intere! rates, and governmental funding requirements that favor larger projects, it is necessary to build > 30 units (really 50+ units) for feasibility as an affordable housing development. •:* Apart from the approved PCC project, only a few sites can accommodate more than 30 units. Thus, AH via the HE up - zoning will have to accommodate most of the lower -income units. iLow I 4135-017-900 0.6 210 Perm St 9 Mde t7 10 Above 0 Total 19 4135-022-025 0.3 817 E Franklin Ave 3 6 0 9 4135-022-026 0.2 Maryland St/ Franklin Ave 4 0 0 4 4135-022-027 0.2 Marvland St/ Franklin Ave 4 0 0 4 4135-022-028 0.2 Ma eland St/ Franklin Ave 4 0 0 4 4135-022-035 2.8 205 Lomita la 38 0 113 q 4135-023-023 0.5 717 E Grand Ave if, 3 0 19 5 4136-017-W 0.6 361 Richmond St 10 0 12 22 4139-017-004 0.3 1755 E Swamote Ave 10 0 0 10 6 - 4139-017-M 1.8 835 N Pacific Coast Highway �7 0 15 72 Z 4139-017-043 0.9 1804 E Sycamore Ave 14 20 0 34 4139-018-001 0.7 703 N Pacific Coast Highway 11 10 - 28 $ 4139-018-002 0.3 739 N Pacific Coast Hi hwav 12 0 0 13 4139-018-003 0.3 755 N PCH 7 6 0 13 4139-025-075 0.2 PCH/ HollvAve 3 0 5 8 4139-025-073 0.6 Indiana St / E Holly Ave 4 0 19 23 4139-025-074 0.4 Indiana St /E Holly Ave 4 0 30 34 't I I 2 4139-025-076 0.3 E Holly Ave / N PCH 4 - 0 19 23 4139-024-057 arsaZI NI 0 48 54 4139-024-058 1. PCH 11 0 78 1 89 Total 1 14.0 264 1 93 233 1 590 a.a Y: M-rl iii.•i ri ❑. i.. R E Ida rip o.a A- N Pill, 4vn E F'irn q:o El§egundo NHE Grand avc �, Gr a$tl.Avo ® r r 1 —J'; ...... L' El Segundo Blvd i Case Study: Pacific Coast Commons ➢ The first apartment project approved in 30+ years ➢ Risky/costly - needed a specific plan, general plan amendment, zone change, zone text amendment, etc. ➢ Large (263 units is > than 2X the amount in all the rezoning sites) ➢ Dense (90 Units/Acre vs. the 30/50 Units/Acre for the rezoning sites) ➢ Tall (up to 6 stories vs 32 ft./2 stories in all residential zones) ➢ Only able to accommodate 12% of the total units as LI (including just 1% or 3 units as VLI) vs. the 20% LI needed for by right approval of the rezoning sites. ➢ After the PCC, the City will still need to facilitate the creation of 204 VLI units & 70 LI units ➢ Very low-income (VLI) units rarely created by voluntary market forces & need government incentivizes Conclusion: It's very unlikely that market -rate developers will be able to meet the city's RHNA goals, especially the VLI units. So, more must be done if the city wants to achieve its RHNA goals and avoid future penalties or loss of control from the State. Use of the City's Affordable Housing (AH) Fund (—$5.3 million) to encourage affordable housing development ➢ Provide financial assistance to nonprofit developers ➢ Land Banking ➢ Pay developers to add and/or maintain affordable housing units 2. Explore the creation of Inclusionary Housing Guidelines 3. Explore restructuring Park Vista to obtain RHNA credit (via deed restrictions, reg. agreement) 4. Encourage multifamily residential consistent with the RHNA MU-0 zone in the Downtown Specific Plan as walkable developments reduce traffic, increase consumerism, and help attract younger professionals 5. Consider designating a Civic Center property as surplus and open opportunity for affordable housing 6. Allow multifamily residential consistent with the RHNA MU-0 zone in all commercial zones 7. Explore a religious institution overlay 8. Explore the use of Enhanced Infrastructure Financing Districts (EIFDs) to raise funds for the AH Fund 9. Explore obtaining a State Pro -Housing Designation 10. Explore mechanism(s) that enable consistent contributions to the AH Fund Such mechanisms may include commercial linkage fees and other in -lieu fees for new developments 11. Waive or defer development fees for affordable housing 12. Create a Local Housing Trust Fund to assist in the financing of affordable housing 13. Establish alive/work preference (as part of new housing policies) 14. Make new affordable housing developments available to low- and moderate - income residents in perpetuity (as part of new housing policies) Opportunities to CreatelPresery Affordabla�lr�sin wwmYva. 10L';'� amp ®rq■Wasa rMvuwia r�vs�vwa -�""'�^r warm veYa,� error. ��� � � y ��� =was omce�� wwvaWw wwr.'a f r ' � � wmrr � vweYra m°vae� omyrr i ■wgrmY � � � e ' ��� � moats® rarer � rra■o wgmew� wlulCa ■ YmY� e,E p e er■e rmrrm •I/a;rr warumr °Yw�� [ mmprera °Ii1*®qb m�*®lR r. wae.rae sroa. s�rar � r Y�rr � mm. 6L, g i r:ffirro ■� ^� a �aYy tv�r■ • ■vr �asmrr ®�a� ewrrur � j °� �mn OP / . p oron� ➢Revise the Affordable Housing Strategic Plan (AHSP), if needed ➢Publish the final AHSP by July 31St, 2022 ➢City Council to direct staff to implement elements of the AHSP throughout the 6t" Cycle of the Housing Element (2021-2029) ps, "Srfiw4i Reduce Unlock Land Unnecessary Regulation 01 40AM Faster Innovation in Construction Technology I Reduce Risk Ensure Adequate Capital at Reasonable Mates " 3'