Santa Cruz County
CA

Agenda Item
DOC-2019-620

Continued public hearing to consider resolution amending the General Plan/Local Coastal Program and accepting CEQA determination Notice of Exemption, and ordinance amending Santa Cruz County Code Chapter 13.10 to create the Permanent Room Housing Combining Zone District, and schedule final adoption of the ordinance for August 27, 2019, as outlined in the memorandum of the Planning Director (continued from April 23, 2019)

Information

Department:Planning: Sustainability and Special ProjectsSponsors:Planning Director Kathleen Molloy
Category:PLN SSP - Board LetterProjects:Master Calendar
Functions:Land Use & Community Services

Financial Impact

Zoning Plan Amendments and Use/Development Permits have been submitted for nine properties with interested and willing property owners and will be reviewed at a continued Planning Commission public hearing at a date uncertain following adoption of the PRH ordinance and General Plan/LCP amendments. The County has processed these discretionary applications concurrently with development of the ordinance. This process has had the benefit of reducing barriers to entry for eligible properties, encouraging property owners to work collaboratively with staff in developing the ordinance, and helping properties reach a conforming status so that these affordable-by-design housing units can be properly maintained. Future applicants for Zoning Plan Amendments and Use/Development Permits would pay for staff time associated with processing these discretionary permits. Any building permits required for new conversion of units or upgrades to existing units in order to meet PRH district requirements would be subject to relevant permitting fees. Staff is not proposing to charge affordable housing impact fees for Permanent Room Housing units, since these units are conversions from commercial space rather than new square footage, and the County charges an equal impact fee for commercial projects as for rental projects ($2 per square foot).

Board Letter

Recommended Action(s):

1)              Conduct continued public hearing to consider recommendation of Planning Commission Resolution 2019-07 and proposed amendments to General Plan/Local Coastal Program and County Code Chapter 13.10 that would enable and create a Permanent Room Housing (PRH) Combining Zone District;

 

2)              Affirm that the proposed amendments are exempt from CEQA;

 

3)              Adopt resolution amending the General Plan/Local Coastal Program and directing staff to submit the Local Coastal Program amendments to the Coastal Commission for certification;

 

4)              Approve the ordinance in concept; and

 

5)              Direct the Clerk of the Board to place the ordinance on the August 27, 2019 Board of Supervisors meeting agenda for second reading and final adoption.

 

EXECUTIVE SUMMARY

The proposed project implements Program 4.5 of the County’s General Plan Housing Element by establishing a Permanent Room Housing (PRH) Combining Zone District. This district would recognize conversion of obsolete visitor accommodations and care facilities to residential use. These properties can serve an important role in addressing the housing crisis because the converted units are affordable by design due to their small unit size. The Land Use Element of the General Plan and Chapter 13.10 of the County Code would be amended to establish the combining district. The project is exempt from CEQA review because there are no reasonably foreseeable environmental impacts from the creation of the PRH district. Amendments to Chapter 13.10 are Coastal implementing and will require Coastal Commission certification after County adoption.

 

On April 23, 2019, the Board of Supervisors held a continued public hearing to consider the proposed amendments to the General Plan/LCP and County Code, directed staff to make substantive changes to the ordinance, referred the modified amendments back to the Planning Commission, and continued the public hearing, pending Planning Commission review and recommendation. On June 12, 2019, the Planning Commission recommended that the Board of Supervisors approve the General Plan and County Code Amendments with certain changes as noted in Resolution 2019-07.

 

Staff recommends that the Board open the continued public hearing, adopt the attached resolution amending the General Plan/LCP and affirming the CEQA Notice of Exemption (Attachment A), and adopt in concept the attached ordinance (Attachment C) amending the County Code to enable and create the PRH Combining Zone District. Amendments to Chapter 13.10 are Coastal implementing, and the resolution also directs staff to submit the amendments to the Coastal Commission for certification. 

 

 

BACKGROUND

On June 12, 2018, the Board of Supervisors directed staff to proceed with the creation of a “Permanent Room Housing” (PRH) Combining Zone District, which implements Program 4.5 of the County’s 2015 Housing Element: “Explore regulatory options for recognizing and legalizing hotels/motels that have over time been converted to permanent occupancy.” There are two components to the PRH Combining Zone District policy initiative: General Plan/LCP amendments and County Code amendments. The General Plan/LCP Chapter 2 must be amended to enable creation of a new PRH Combining Zone District in the County Code. The PRH Combining Zone District would be incorporated into the County Code as new sections 13.10.424 through 13.10.429, which define PRH and clarify parameters and standards for parcel eligibility for inclusion in the PRH Combining Zone District. Also, County Code sections 13.10.170(d), 13.10.322, 13.10.332, 13.10.382(A), 13.10.400, and 13.10.700 would be modified to accommodate the new combining district.

On January 23, 2019, the Planning Commission held a public hearing to consider General Plan/LCP and County Code amendments for the PRH Combining Zone District, and on February 13, 2019 the Commission held a continued public hearing and recommended Board approval of amendments with certain changes to the proposed ordinance. On March 26, 2019, the Board of Supervisors held a public hearing to consider the Planning Commission’s recommendation and continued the public hearing to April 23, 2019 with direction to make additional changes to the proposed ordinance. On April 23, staff presented the Board of Supervisors with revised amendments reflecting Board direction and also responding to concerns voiced by Coastal Commission staff. The Board directed staff to further revise the proposed ordinance, referred the amendments back to the Planning Commission for review and recommendation due to the substantive changes that had been made, and continued its public hearing to May 21, pending the Planning Commission’s recommendation.

On May 8, 2019, the Planning Commission considered the Board’s changes to the proposed amendments. The Planning Commission continued this item to June 12, 2019 to give members of the public further time to review the Board’s changes to the amendments and allow staff to respond to the public’s questions regarding these changes. In addition, staff expressed intention to continue coordination with Coastal Commission staff to pursue a compromise that would allow Permanent Room Housing Combining District to apply within the Coastal Zone.

 

At the June 12, 2019 continued public hearing, staff presented the Planning Commission with additional proposed changes to the General Plan and County Code amendments based on coordination with Coastal Commission staff and public comments received. The Planning Commission recommended approval of the proposed amendments with Resolution 2019-07, with the following additional changes:

 

·              General Plan/LCP Objective 2.16: add the words “encouragement and provision” after “protection,” and remove the words “as feasible.”

·              SCCC 13.10.428(C)(2): Change the time allowed for repairs from 90 to 120 days.

·              SCCC 13.10.428(C)(5): Allow property owners to request five-year review starting at 4.5 years prior to the five-year due date.

·              SCCC 13.10.428(D)(1)(iv): Do not remove this section of the ordinance, and change the word “active” to “verified.”

·              SCCC13.10.428(D)(1)(v): Change the word “documented” to “verified.”

·              SCCC 13.10.428(D)(1)(vi): Change the word “documented” to “verified” and consult with the County Sheriff’s office to determine what wording would be most appropriate to achieve the intent of this finding for denial or revocation (that a crime has occurred on the property).

Planning Commission Resolution 2019-07 is provided as Attachment E, and links to the May 8 and June 12, 2019 Planning Commission staff reports are provided as Attachments F and G.

 

ANALYSIS

 

General Plan/LCP Amendments. The Planning Commission recommended the following changes to the proposed General Plan/LCP amendments from what was directed by the Board on April 23, 2019:

·              Policies 2.11.12 (Density Allowance for Permanent Room Housing Combining Zone District) and 2.12.4 (Permanent Room Housing Uses in Commercial Designations): Add “LCP” to indicate that these two General Plan policies, which enable the PRH district, are also part of the Local Coastal Program.

·              Objective 2.16 (Visitor Accommodations Designation): Add the words “encouragement and provision” after “protection” and remove the words “as feasible” in reference to low-cost visitor accommodations, to match wording in the Coastal Act.

·              Policy 2.16.9 (Conversion of Visitor Accommodations to Residential Use): Modify the second sentence of this policy to state “Absolutely prohibit the conversion of hotels or motels with ‘Visitor Accommodation’ or ‘Tourist Commercial’ zoning in the coastal zone.”

 

These changes were proposed as a result of Planning staff coordination with Coastal Commission staff to enable the creation of the PRH district in the GP/LCP while still meeting and not weakening LCP policies. A clean version of the General Plan/LCP amendments is provided as Exhibit 1 to Attachment A, and a strikeout-underline version is provided as Attachment B, with track changes indicating changes since April 23.

At the June 12 Planning Commission meeting, it was noted that there was still some disagreement between Coastal Commission staff and Planning Department staff regarding Policy 2.16.9. However, Coastal Commission staff has since indicated acceptance of the General Plan/LCP language as presented to the Commission on June 12 (see the Coastal Commission letter provided in Attachment I).

County Code Amendments. The Planning Commission recommended the following changes to the proposed ordinance from what was directed by the Board on April 23, 2019:

 

·              Exclude “VA” and “CT” zones within the Coastal Zone from PRH Combining Zone District.

The Coastal Act contains policies supporting affordable housing, but the Act also contains policies clearly prioritizing preservation of visitor accommodations, especially low-cost visitor accommodations that may be at risk of conversion to residential use. With these policies in mind, Coastal Commission staff anticipates being able to make the findings for approval of the PRH Combining Zone District within the Coastal Zone, provided that “Visitor Accommodation” (VA) and “Tourist Commercial” (CT) zoned parcels are excluded from eligibility. The proposed exclusion of these two zone districts is reflected in ordinance sections 13.10.322 (Commercial Uses Chart), 13.10.425 (Purposes of the District), and 13.10.426 (Designation of the District). There are currently two properties located within the Coastal Zone with applications to join the PRH Combining Zone District; neither of these parcels is zoned VA or CT.

 

·              Clarify definitions as related to the PRH Combining Zone District.

Ordinance sections 13.10.400 (Combining Zone Districts), 13.10.424 (Definitions), 13.10.425 (Purposes of the District), and 13.10.426 (Designation of the District) were modified so that new definitions are listed in one place in the code, in section 13.10.700, and to clarify that PRH applies to Type A (rather than all) visitor accommodations. The proposed PRH regulations were also modified to remove specific references to “assisted living facilities” or “convalescent homes” since these types of facilities are not defined in the County Code.

 

·              Streamline and clarify the purposes of the PRH Combining Zone District.

Ordinance section 13.10.425 (Purposes of the District) was streamlined to include three purposes that clearly state the intention of this district to preserve housing that is affordable by design and clarify what is intended inside and outside the Coastal Zone.

 

·              Modify short-term rental use standards.

Per Board direction at the April 23 public hearing, ordinance section 13.10.427(K) was modified to allow short-term rentals provided that short-term rental use is existing at the time of PRH application, the property owner is current in payment of transient occupancy tax (TOT), and a maximum of 30% of units are short-term rentals. The Planning Commission added further text to this ordinance section for clarification. In section 13.10.427(K)(2), the Commission clarified that “current in payment of TOT” means that any required TOT has been paid for the previous three years, and TOT may be paid retroactively.

Also, the Commission added section 13.10.427(K)(4) clarifying that new short-term rental units may be constructed if all other use and development standards are met. For instance, if a property was approved to join the PRH district with eight PRH units and two short-term rental units, that property owner could later apply for a building permit and modification to their use permit to construct an additional short-term rental unit provided that this unit did not convert an existing PRH unit, the number of short-term rental units did not exceed 30% of total units, and there is enough room for the additional unit without exceeding maximum density requirements and other site development standards.

Finally, given that the proposed ordinance once again allows short-term rentals in the PRH district, the Commission reinstated ordinance section 13.10.427(B)(3) regarding density for visitor accommodation uses.

·              Clarify inspection requirements and five-year review rules.

The Commission modified section 13.10.427(F) to clarify the requirements for passing the health and safety inspection, and added text to section 13.10.428(A)(4) to clarify that any required building permits would be related to issues identified during inspection. Also, the Commission updated ordinance section 13.10.428(C) to allow additional time for property owners to complete repairs that are identified during periodic inspections, and to allow property owners a one-year window (spanning from 6 months before to 6 months after the 5-year due date) to complete the required five-year reviews.  

 

·              Modify rental submittal requirements.

Per Board direction, the ordinance was updated to make submittal of proof of long-term rental information and rent charged per unit a requirement rather than an optional submittal. The Commission added an additional submittal requirement that applicants must indicate any deed restricted affordable housing or intention to enter into deed restricted affordable housing. This submittal requirement was added because this information will be helpful to Coastal Commission staff in making findings to approve PRH properties within the Coastal Zone.

 

·              Modify findings of denial or revocation.

The Commission recommends certain changes to the proposed findings for denial or revocation in section 13.10.428(D)(1). Specifically, in subsection (a) (formerly “i”), the text “untrue statements submitted on an application” was changed to “false statements intentionally submitted on an application,” to clarify that honest mistakes on an application form would not be a cause for permit denial or revocation.  Also, in subsection(c) (formerly “iii”), the word “inspection” was changed to “review” to clarify that this finding refers to the five-year review (which includes an inspection and other verifications).

 

In subsections (d), (e) and (f) (formerly “iv”, “v” and “vi”), the word “verified” has been added in recognition that cases are “active” once complaints have been filed and a case number has been assigned, but there has not been verification of a code violation or crime. Staff had suggested the word “documented,” but the Commission felt that the word “verified” more appropriately described the intent of this finding. For subsection (f) (formerly “vi”), the Planning Commission directed staff to coordinate with the Sheriff’s office to determine what wording would be most appropriate to achieve the intent of this finding for denial or revocation (that a crime has occurred on the property). Staff has drafted the following text for ordinance section 13.10.428(D)(1)(f), in cooperation with the Sheriff’s Office and County Counsel:

 

“Record of repeated visits by law enforcement to respond to criminal activity on the property, where the activity is attributable to the property owner, management, tenants or visitors.”

 

This proposed text clarifies what should be used as proof of criminal activity (record of repeated visits, rather than a criminal conviction), and clarifies that relevant crimes would involve activities attributable to people living at or visiting the property (rather than an act occurring on the property that is not attributable to owners, residents, or visitors, such as burglary or car theft). The Sheriff’s Office has noted that the exact wording is not critical, and their office will follow and enforce the final verbiage that is determined. 

 

·              Consider and modify process for revocation.

Per Board direction, a process for revocation was added to ordinance section 13.10.428(D)(2). The Planning Commission was generally in agreement with this process and recommended additional notice to property owners beyond the legally required 10-day notice initially proposed by staff, to ensure at least 60 days notice (30 days to respond to a notice regarding the basis for the recommendation for revocation, and 30 days notice for a revocation hearing).

 

The ordinance has also been updated to add Section V to correct a citation reference in Section 13.10.400 of the SCCC related to the Geologic Hazards Combining Zone District, as well as a small number of spelling and grammatical errors in the ordinance.

A clean version of the proposed County Code amendments is provided as Attachment C, and a strikeout-underline version is provided as Attachment D, with track changes indicating changes made since the Board last considered the proposed amendments at its meeting of April 23, 2019.

 

RECENT PUBLIC OUTREACH/PUBLIC COMMENT

Since the Board’s continued public hearing on April 23, 2019, the Planning Commission held a noticed public hearing on May 8 and a continued public hearing on June 12. Staff has also developed an email list of interested property owners and members of the public that have attended prior meetings and continues to keep this group informed.

Written comments received since April 23, 2019 are provided as Attachment H. Comments address specific concerns with text of the ordinance, as well as more general concerns that the ordinance has become overly restrictive to prospective property owners. Note that some comments received are in reference to the Bayview Hotel, which is not under consideration at this time; public hearings for individual property applications for the PRH Combining Zone District were continued to a date uncertain following final adoption of the General Plan/LCP and County Code amendments.

 

 

ENVIRONMENTAL REVIEW

Establishment of the PRH Combining Zone District is exempt from CEQA review per CEQA §15061(b)(3): “where it can be seen with certainty that there is no possibility the activity may have a significant effect on the environment.” The project consists of changes to the General Plan/LCP and County Code and is not associated with any specific parcel at this time. Nine property owners have applied to have their properties rezoned into the PRH Combining Zone District, pending approval of the General Plan/LCP and County Code amendments. Rezoning to the PRH Combining Zone District is reasonably foreseeable on these properties. All proposed PRH units on these properties are already in use as permanent housing. Therefore, there are no reasonably foreseeable environmental impacts from the creation of the PRH district. A CEQA Notice of Exemption has been prepared, which will be filed after the Board adopts the resolution (Exhibit 2 to Attachment A).

 

 

LOCAL COASTAL PROGRAM CONSISTENCY

The proposed amendments will not result in any loss of agricultural land, any loss of coastal access, or any negative impacts to public viewsheds within the Coastal Zone. PRH units would not be allowed on sites in the Coastal Zone with active visitor accommodations, and applicants with former hotels and motels in the Coastal Zone would have to demonstrate that visitor accommodation use has been functionally obsolete or economically infeasible in order to be allowed into the district. With the proposed changes to the General Plan/LCP and County Code amendments regarding excluding parcels in the “VA” and “CT” zones from the PRH Combining Zone District, Planning staff analysis indicates that the amendments meet the requirements of, and are consistent with, the County’s certified Local Coastal Program (LCP) and the California Coastal Act.

Coastal Commission staff has submitted a letter to the Board of Supervisors affirming Coastal Commission support of the proposed amendments, included as Attachment I.

 

 

 

Body

Strategic Plan Element(s)

The proposed amendments meet the County Strategic Plan’s “Affordable Housing” goal within the “Attainable Housing” focus area. This Combining District would legally recognize the conversion of existing motels, hotels and care facilities to multifamily housing. These housing units are affordable by design due to their small size.   

Meeting History

Aug 6, 2019 9:00 AM Video Board of Supervisors Regular Meeting

1) REOPENED the continued public hearing to consider recommendation of Planning Commission Resolution 2019-07 and proposed amendments to General Plan/Local Coastal Program and County Code Chapter 13.10 that would enable and create a Permanent Room Housing Combining Zone District (continued from April 23, 2019); closed the public hearing;

2) Affirmed that the proposed amendments are exempt from CEQA;

3) ADOPTED Resolution No. 179-2019 amending the General Plan/Local Coastal Program and directing staff to submit the Local Coastal Program amendments to the Coastal Commission for certification;

4) APPROVED the ordinance in concept; and

5) DIRECTED Clerk of the Board to place the ordinance on the August 27, 2019 agenda for second reading and final adoption

RESULT:ADOPTED [3 TO 2]
MOVER:Bruce McPherson, Fifth District Supervisor
SECONDER:Greg Caput, Vice Chair, Fourth District Supervisor
AYES:Ryan Coonerty, Greg Caput, Bruce McPherson
NAYS:John Leopold, Zach Friend

Discussion