Governmental Constraints by 99y21K2o

VIEWS: 8 PAGES: 29

									PISMO BEACH REGIONAL HOUSING ISSUES AND OPTIONS
                 Prepared for CRP 554
                    Andy Firestine
                   October 31, 2002




                                              1
                            TABLE OF CONTENTS

Table of Contents _______________________________________________________ 2
Table of Tables and Figures ______________________________________________ 3
Pismo Beach Regional Housing Issues______________________________________ 4
  Population Trends __________________________________________________________ 4
    Pismo Beach Historical Population ___________________________________________________ 4
  Growth Models _____________________________________________________________ 6
    San Luis Obispo LAFCO Model _____________________________________________________ 6
    DOF Trend Line Model ____________________________________________________________ 8
    Construction Industry Research Board Model ___________________________________________ 9
  Assessing Population Models _________________________________________________ 9
  Employment Trends _______________________________________________________ 10
    Businesses Located in Pismo Beach by Industry Category ________________________________ 10
    Employment Data for Pismo Beach __________________________________________________ 10
    Jobs Forecast for Pismo Beach _____________________________________________________ 11
  Projected Population by Income Category _____________________________________ 12
    Pismo Beach Median Household Income, 1999 ________________________________________ 12
    Pismo Beach Population Annual Increase by Income Category ____________________________ 12
  Population with Special Needs _______________________________________________ 13
    Pismo Beach Population with Special Needs ___________________________________________ 13
  Housing Market Conditions _________________________________________________ 13
    Pismo Beach Units per Structure ____________________________________________________ 13
  Housing Affordability by Income Groups ______________________________________ 14
    Pismo Beach Population by HCD Income Category _____________________________________ 14
    Pismo Beach Housing Affordability by Income Category _________________________________ 14
Constraints and Opportunities Analysis ____________________________________ 15
  Governmental Constraints __________________________________________________ 15
    Resource Policies ________________________________________________________________ 15
    Growth Restrictions and Impact Fees ________________________________________________ 17
    Retention of Existing Housing ______________________________________________________ 17
  Non-governmental Constraints _______________________________________________ 18
  Housing Resources _________________________________________________________ 18
       Land Analysis ________________________________________________________________ 18
    Pismo Beach SOI Annexations _____________________________________________________ 19
    Development Intensity for Pismo Beach SOI Land ______________________________________ 19
       Local programs _______________________________________________________________ 20
Solutions: Housing Programs and Policies _________________________________ 20
  Overview _________________________________________________________________ 20
  Specific Goals, Policies, and Objectives ________________________________________ 22
  Recommended Policy, Specific Goals, Policies, and Objectives _____________________ 25


                                                                                            2
  State and Local Efforts _____________________________________________________ 29

                  TABLE OF TABLES AND FIGURES
Pismo Beach Historical Population _________________________________________ 4
San Luis Obispo LAFCO Model ___________________________________________ 6
Pismo Beach Population Growth____________________________________________ 5
DOF Trend Line Model __________________________________________________ 8
Construction Industry Research Board Model _________________________________ 9
Businesses Located in Pismo Beach by Industry Category ______________________ 10
Employment Data for Pismo Beach ________________________________________ 10
Jobs Forecast for Pismo Beach ____________________________________________ 11
Pismo Beach Median Household Income, 1999 _______________________________ 12
Pismo Beach Population Annual Increase by Income Category __________________ 12
Pismo Beach Population with Special Needs _________________________________ 13
Pismo Beach Units per Structure __________________________________________ 13
Pismo Beach Population by HCD Income Category ___________________________ 14
Pismo Beach Housing Affordability by Income Category _______________________ 14
Pismo Beach SOI Annexations ____________________________________________ 19
Development Intensity for Pismo Beach SOI Land ____________________________ 19




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              PISMO BEACH REGIONAL HOUSING ISSUES
POPULATION TRENDS
        In 2002, Pismo Beach’s population stood at 8,675 persons, which makes it the
smallest city in San Luis Obispo. Since 1970, the city population has grown by 115
percent, while county has grown around 141 percent. Annually, Pismo Beach grew at a
rate of 2.34 percent, slower than the county rate of 2.70 percent. Pismo Beach’s last
period of rapid population growth came between 1986 and 1990. During the 1990’s,
Pismo Beach grew at a rate of 3.63 percent.


Table 1:

PISMO BEACH HISTORICAL POPULATION
Year                                City Population                            Annual Change
       1970                                    4,043                      -
       1980                                    5,300                                    2.74%
       1990                                    7,575                                    3.63%
       2000                                    8,551                                    1.22%
       2001                                    8,575                                    0.28%
       2002                                    8,675                                    1.17%
Source: Department of Finance.
        Looking at a diagram of Pismo Beach’s population growth, Figure 1, it looks as if
the population trend will continue in a linear direction as it has since 1971. Yet, this is not
likely due to a 2001 Pismo Beach Community Development Department approximation
that the city is 90% built out, an indication of the land constraints within the city, with
capacity for another 345 units. Further, the 1993 General Plan limits growth to three
percent per year.




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                          City Population          City Population Growth
                 9,000                                                      10.00%


                                                                            9.00%
                 8,500

                                                                            8.00%
                 8,000
                                                                            7.00%
                 7,500
                                                                            6.00%

                 7,000
                                                                            5.00%


                 6,500                                                      4.00%




    Population
                                                                            3.00%
                 6,000
                                                                                     Population Growth




                                                                            2.00%
                 5,500
                                                                            1.00%
                 5,000
                                                                            0.00%

                 4,500
                                                                            -1.00%

                 4,000                                                      -2.00%




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                                   Figure 1:




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                         Pismo Beach Population Growth
         In order to project future population trends and to be able to compare their
demand for housing to the SLOCOG allocated figures, three different models are used in
this analysis. Developed from the San Luis Obispo Local Agency Formation Commission
Sphere of Influence study, the first model uses 2002 Department of Finance data and
projects the population forward at a rate of two and three percent a year. It assumes a
figure of 1.56 persons per dwelling, which is derived from Census 2000 data (a
population of 8,551 divided by 5,496 total housing units). From this, the LAFCO was
able to project the total dwellings in Pismo Beach and the cumulative addition over time
in order to predict when the supply of developable land will be run out. For the purposes
of this analysis, the LAFCO analysis will be repeated at one, two, and three percent
population growth rates to 2010.
         A second model also was developed using Department of Finance population
figures. Adding a trend line to the 1971 to 2001 Department of Finance historical
population figures provides a historical measure of the demand for dwelling units in
Pismo Beach. It was analyzed using both a linear and an exponential trend line.
         A third model uses Construction Industry Research Board data from 1990 to
2001, which shows the residential construction authorized by permits. This model will
use the average dwelling units authorized annually to forecast the Pismo Beach’s
dwelling units to 2010. From there, the Census 2000 derived figure of 1.56 persons per
dwelling will be used to approximate the Pismo Beach population.
         These models will be assessed for their ability to meet the SLOCOG needs
allocation and the land use constraints found in Pismo Beach.

GROWTH MODELS
Table 2:

SAN LUIS OBISPO LAFCO MODEL
1% Growth
Year       Population       Dwellings       Additional Dwellings     Cumulative Dwellings
  2001              8,631           5,512              -                        -
  2002              8,717           5,567                       55                        55
  2003              8,804           5,623                       56                        111
  2004              8,893           5,680                       56                        168




                                                                                            6
  2005              8,981           5,737                      57                         225
  2006              9,071           5,794                      58                         282
  2007              9,162           5,852                      58                         340
  2008              9,254           5,911                      59                         399
  2009              9,346           5,970                      59                         458
  2010              9,440           6,030                      60                         518
2% Growth
Year      Population        Dwellings       Additional Dwellings    Cumulative Dwellings
  2001              8,631           5,512             -                       -
  2002              8,804           5,623                     111                         111
  2003              8,980           5,736                     113                         224
  2004              9,159           5,851                     115                         339
  2005              9,342           5,968                     117                         456
  2006              9,529           6,088                     120                         576
  2007              9,720           6,210                     122                         698
  2008              9,914           6,335                     125                         823
  2009             10,113           6,462                     127                         950
  2010             10,315           6,591                     130                    1,079
3% Growth
Year      Population        Dwellings       Additional Dwellings    Cumulative Dwellings
  2001              8,631           5,512             -                       -
  2002              8,890           5,678                     166                         166
  2003              9,157           5,849                     171                         337
  2004              9,431           6,025                     176                         513
  2005              9,714           6,206                     181                         694
  2006             10,006           6,393                     187                         881
  2007             10,306           6,586                     192                    1,074
  2008             10,615           6,784                     198                    1,272
  2009             10,933           6,988                     204                    1,476
  2010             11,261           7,198                     210                    1,686
Source: Derived from San Luis Obispo LAFCO, Department of Finance, Census 2000.
         Assuming that Pismo Beach does not annex any land, it will reach its build out
level in mid 2008 for the one percent model, early 2005 with the two percent model, and
early 2004 with the three percent model. At a one percent level of growth, Pismo Beach
will not build the 87 average annual units needed to meet the SLOCOG allocation.




                                                                                           7
Table 3:

DOF TREND LINE MODEL
Linear DOF Model
Year   Population      % Change   Dwellings   Additional Dwellings   Cumulative Dwellings
2001           8,631      -           5,512             -                      -
2002           8,767      1.58%       5,599                     87                        87
2003           8,922      1.76%       5,698                     99                        186
2004           9,076      1.73%       5,797                     99                        285
2005           9,231      1.70%       5,896                     99                        384
2006           9,385      1.67%       5,996                     99                        484
2007           9,540      1.65%       6,095                     99                        583
2008           9,694      1.62%       6,194                     99                        682
2009           9,849      1.59%       6,293                     99                        781
2010          10,004      1.57%       6,392                     99                        880
Exponential DOF Model
Year   Population      % Change   Dwellings   Additional Dwellings   Cumulative Dwellings
2001           8,631      -           5,512             -                      -
2002           9,064      5.02%       5,790                    278                        278
2003           9,290      2.49%       5,934                    145                        422
2004           9,521      2.49%       6,083                    148                        571
2005           9,758      2.49%       6,235                    152                        723
2006          10,001      2.49%       6,390                    156                        878
2007          10,250      2.49%       6,550                    160                   1,038
2008          10,506      2.49%       6,714                    164                   1,202
2009          10,767      2.49%       6,881                    168                   1,369
2010          11,035      2.49%       7,053                    172                   1,541
  Source: Derived from Department of Finance, Census 2000.
       Assuming that Pismo Beach does not annex any land, it will reach its build out
level in 2005 for the linear model and in 2003 for the exponential model. Both a linear
and exponential model of growth will allow Pismo Beach to meet the SLOCOG
allocation.




                                                                                           8
Table 4:

CONSTRUCTION INDUSTRY RESEARCH BOARD MODEL
CIRB Model
Year   Population      % Change   Dwellings    Additional Dwellings   Cumulative Dwellings
2001           8,631      -            5,512            -                       -
2002           8,695      0.75%        5,574                     62                       62
2003           8,792      1.11%        5,636                     62                      124
2004           8,889      1.10%        5,698                     62                      186
2005           8,986      1.09%        5,760                     62                      248
2006           9,082      1.08%        5,822                     62                      310
2007           9,179      1.06%        5,884                     62                      372
2008           9,276      1.05%        5,946                     62                      434
2009           9,372      1.04%        6,008                     62                      496
2010           9,469      1.03%        6,070                     62                      558
Source: Derived from Construction Industry Research Board, Census 2000.
        Assuming that Pismo Beach does not annex any land, it will reach its build out
level in 2007 with the Construction Industry Research Board model. It will not, however,
allow Pismo Beach to meet its allocation needs. It must, therefore, issue more permits
than its historical mean over the past decade in order to meet the SLOCOG allocation.

ASSESSING POPULATION MODELS
        Pismo Beach needs to have a population growth greater than one percent in order
for there to be enough demand for it to meet determined allocation need. It must supply
(build) more units than it permitted between 1990 and 2001, as is noted by the CIRB
Model. At issue are Pismo Beach’s land use constraints. Given the Community
Development Department’s land assessment, then at its current growth rates, Pismo
Beach will run out of land in the upcoming decade. In order to grow beyond its current
limitations, Pismo Beach will need to either annex land or increase densities and support
increased infill development. Given its historical character, created by many older houses
built in the early 20th century on small parcels, infill development will become a
contentious issue. Another consideration is legalizing many of the secondary units found
in the city.




                                                                                            9
EMPLOYMENT TRENDS
        The 1997 Economic Census offers insight into what businesses are located in
Pismo Beach.


Table 5:

BUSINESSES LOCATED IN PISMO BEACH BY INDUSTRY CATEGORY
Description                             Businesses                 Staff
Manufacturing                                                  3                 Not published
Retail trade                                                  93                       500-999
Professional, scientific, & technical                         15                         20-49
services
Administrative & support & waste                               7                       100-249
management & remediation
services
Health care & social assistance                               15                         50-99
Arts, entertainment, & recreation                              7                         50-99
Accommodation & food services                                 66                   1000-2499
Other services (except public                                  6                           5-9
administration)
Source: U.S. Census Bureau 1997 Economic Census: Zip Code Statistics for 93449
        Pismo Beach is dependent on tourism, and is dominated by hotels and other
supporting businesses. As such, many occupations in Pismo Beach are also related to
tourism. From Census 2000:


Table 6:

EMPLOYMENT DATA FOR PISMO BEACH
Occupation                                                                 Number Percent
Management, professional, and related occupations                            1,877        47.3
Service occupations                                                              656      16.5
Sales and office occupations                                                     947      23.9
Farming, fishing, and forestry occupations                                        11       0.3
Construction, extraction, and maintenance occupations                            234       5.9
Production, transportation, and material moving occupations                      242       6.1



                                                                                           10
Source: Census 2000.
       According to Census 2000, 3,967 persons in the civilian population were in the
labor market and had jobs, or about 46 percent of the population. Assuming that 46
percent of the population continues to be in the labor market and have a job until 2010,
the SLOCOG allocation model for Pismo Beach will result in the following jobs outlook:


Table 7:

JOBS FORECAST FOR PISMO BEACH
Year       Population               %               Jobs           Jobs created annually
    2001                    8,631       46%                3,970              -
    2002                    8,734       46%                4,018                           48
    2003                    8,870       46%                4,080                           62
    2004                    9,006       46%                4,143                           62
    2005                    9,142       46%                4,205                           62
    2006                    9,277       46%                4,268                           62
    2007                    9,413       46%                4,330                           62
    2008                    9,549       46%                4,392                           62
    2009                    9,684       46%                4,455                           62
    2010                    9,820       46%                4,517                           62
Source: Derived from Department of Finance, Census 2000.




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PROJECTED POPULATION BY INCOME CATEGORY
Table 8:

PISMO BEACH MEDIAN HOUSEHOLD INCOME, 1999
Income in 1999                                        Number                 Percent
Less than $10,000                                                      314                     7.4
$10,000 to $14,999                                                     334                     7.9
$15,000 to $24,999                                                     563                    13.4
$25,000 to $34,999                                                     502                    11.9
$35,000 to $49,999                                                     534                    12.7
$50,000 to $74,999                                                     758                    18.0
$75,000 to $99,999                                                     465                    11.0
$100,000 to $149,999                                                   467                    11.1
$150,000 to $199,999                                                   163                     3.9
$200,000 or more                                                       116                     2.8

Source: Census 2000.
       Assuming the percent of the population in each income category remains constant
from 2000 to 2010, the SLOCOG allocation can be used to determine growth in each income
category. This was done by adding 87 units annually and using the Census 2000 figure of
1.56 persons per dwelling unit, and then allocating that population figure to the different
income categories.


Table 9:

PISMO BEACH POPULATION ANNUAL INCREASE BY INCOME CATEGORY
Income Category             Percent      Annual Increase in Population (by SLOCOG Model)
Less than $10,000                  7.4                                                               10
$10,000 to $14,999                 7.9                                                               11
$15,000 to $24,999                13.4                                                               18
$25,000 to $34,999                11.9                                                               16
$35,000 to $49,999                12.7                                                               17
$50,000 to $74,999                18.0                                                               24
$75,000 to $99,999                11.0                                                               15




                                                                                               12
$100,000 to $149,999                11.1                                                            15
$150,000 to $199,999                 3.9                                                             5
$200,000 or more                     2.8                                                             4


POPULATION WITH SPECIAL NEEDS
          Pismo Beach has a population consisting of an older age demographic. As such, it
should plan for the special housing needs of senior citizens. From Census 2000:

Table 10:

PISMO BEACH POPULATION WITH SPECIAL NEEDS
Need                                                                   Number         Percent
With Social Security income                                                1,658             39.3
With Supplemental Security Income                                           116               2.8
With public assistance income                                                62               1.5
With retirement income                                                     1,025             24.3
Female householder, no husband present                                      270               6.4
Households with individuals 65 years and over                              1,529             36.1
Source: Census 2000.

HOUSING MARKET CONDITIONS
          Pismo Beach has 4,320 family households, according to Census 2000, and 5,493
housing units. A breakdown of the units in the structure comes from Census 2000:


Table 11:

PISMO BEACH UNITS PER STRUCTURE
Units in structure                               Number                               Percent
1-unit, detached                                                   2,925                 53.2
1-unit, attached                                                     576                 10.5
2 units                                                              197                     3.6
3 or 4 units                                                         242                     4.4
5 to 9 units                                                         170                     3.1
10 to 19 units                                                       167                     3.0
20 or more units                                                     130                     2.4
Mobile home                                                          775                 14.1



                                                                                              13
Boat, RV, van, etc.                                                    311                    5.7

Source: Census 2000.
          These figures suggest that Pismo Beach may need more multiple family housing due
to its aging population. Only 12.9 percent of the units in Pismo Beach would be considered
multiple family housing (3 or 4 units, 5 to 9 units, 10 to 19 units, and 20 or more units).

HOUSING AFFORDABILITY BY INCOME GROUPS
          According to HCD, very low income families are those who make less than 50
percent of the area median family income, low income families make less than 80 percent of
the area median family income, moderate income families make 120 percent of the area
median family income, and above moderate families make more than the moderate limit.
According to Census 2000, Pismo Beach’s population can be categorized as the following:


Table 12:

PISMO BEACH POPULATION BY HCD INCOME CATEGORY
                      Very low income    Low                Moderate Income        Above
                                                                                   Moderate
Pismo Beach                       24%                 16%                    15%              45%
Source: Census 2000.
          Further, the median family income is $61,036. Assuming that housing costs less than
30 percent of your income is reasonable to meet, and using the aforementioned HCD income
category definitions, the income categories have the following leveraging ability to afford
housing in Pismo Beach:


Table 13:

PISMO BEACH HOUSING AFFORDABILITY BY INCOME CATEGORY
                      Very low income    Low                Moderate Income        Above
                                                                                   Moderate
Annually                        $9,155            $14,649              $21,973           -
Monthly                          $763              $1,221               $1,831           -
Source: Derived from Census 2000.
          Also from Census 2000, the median cost of ownership is $1,761, while the median
rent is $845. The cost of ownership in Pismo Beach is greater than what a very low and low-


                                                                                               14
income family can reasonably afford, and approaches what is reasonable for a moderate-
income family. Even renting in Pismo Beach is more than what a very low-income family
can reasonably afford.
       These disparities suggest the need for more affordable housing in the City of Pismo
Beach. It must build more units than it permitted between 1990 and 2001, as is noted by the
population growth models. Yet, given the Community Development Department’s land
assessment, then at its current growth rates, Pismo Beach will run out of land in the
upcoming decade. Pismo Beach is mired with mounting constraints to the development of
affordable housing and an increasing demand for affordable units. Discussed in the following
section are governmental and non-governmental constraints and opportunities for the
development of affordable housing.


           CONSTRAINTS AND OPPORTUNITIES ANALYSIS
GOVERNMENTAL CONSTRAINTS
       Most of Pismo Beach’s governmental constraints try to maintain the integrity of
Pismo Beach. It is known as a small coastal city with an economy that is dominated by the
tourist industry. Because of this, Pismo Beach needs to determine what is important for the
collective community. While it may be in the interest of a few individuals to develop on the
hillsides overlooking Pismo Beach, it is probably not in the interest of the community to
develop these areas. In the Conservation and Open Space Element, from their 1993 General
Plan, Pismo Beach is distinguished as being one city in the larger California coastal
community. The City recognizes that its Conservation and Open Space element is the
opportunity in which to plan for resources that make Pismo Beach a distinctive part of the
coastal community.

RESOURCE POLICIES
       One important resource in Pismo Beach is the coastal foothill areas, which include the
Oak Park Heights area, the Northwestern Freeway Foothills and the Price Canyon Foothills.
For the most part, these lands remain undeveloped, but future annexations will push
development into the foothills. Because the foothills provide open space to the city, contain
sensitive wildlife habitat, and have an appealing look as a backdrop to the city, it is important



                                                                                              15
to have policies in effect to conserve what is most important. As such, the city developed
three policies within its 1993 General Plan:
        “Support retention of the existing restrictive low development intensity land use and
         resource policies of the county as they apply to these lands” (CO-12)
        “Request that any development reviewed by the County be requested to locate
         building sites outside the designated open space area” (CO-12)
        “Encourage and support efforts to acquire the area as permanent open space
         including: County park funds; creation of open space district; developer financial
         contributions; developer land dedications; private donations and loans; state and
         federal park funds.” (CO-12)
         In addition to these policies, Pismo Beach has additional restrictions on development
that occurs in these regions. Lands on the ocean facing slopes northwest of Pismo Heights
above the 200-foot contour line are designated as permanent open space. Further, no
development can occur on slopes greater than 30 percent, which is also designated as open
space.
         Development that still is allowed in the foothills, provided that it is under the 200-
foot contour and is less than a 30 percent slope, is still regulated by the need for erosion
plans, landscaping plans, preservation of sensitive habitats, minimal grading, and the
consideration of view-sheds. All of these constraints limit the availability of land that could
be used for affordable housing opportunities. In some sense, it becomes a compromise, a
choice between the character and the livability of Pismo Beach.
         Outside of the foothills lies another fundamental resource to Pismo Beach- its
coastline. Pismo Beach’s 1993 General Plan designates neighborhood-planning areas in the
land use element. Within each neighborhood-planning area are sets of policies and
regulations that constrain development. While it is not necessary to detail each
neighborhood-planning area, it is important to discuss common constraints found in planning
areas along the coastline. Bluff protection and setbacks are found in each of these areas,
which can be up to the 100-year bluff retreat line plus 100 feet. Also found in many of the
beachfront planning areas are height limitations, set at 15 feet, in order to protect public and
private properties view-sheds.




                                                                                                  16
GROWTH RESTRICTIONS AND IMPACT FEES
         Pismo Beach has a growth restriction, found in the Growth Management section of its
1993 General Plan. It limits the issuance of building permits for all types of units to a 3
percent annual increase. It should be noted that a similar restriction was also found in the
1983 General Plan, but it was not strictly followed.
         Other governmental constraints include impact fees, which are described in the
facilities and service element in the 1993 General Plan. These may be assessed for city
administrative services, fire services, library services, police services, schools, wastewater
services, and water.

RETENTION OF EXISTING HOUSING
         Pismo Beach recognizes the fact that its low-income and workforce housing is at risk
of being converted into condominiums or being demolished to be replaced with dwelling
units that are not affordable to the low or moderate income levels. Its housing element
reflects these sentiments, with policies to protect the conversion of rental housing, the
conversion of rental mobile home spaces to ownership spaces, and the demolition of rental
housing in and outside of the coastal zone.
         Low to moderate-income affordable units that are demolished outside of the coastal
zone must be replaced within the city on a one for one basis. Units are defined as low to
moderate-income if they have been rented at the affordable rates anytime in the past three
years.
         Inside the coastal zone are even more regulations. Like the policy for units outside of
the coastal zone, low to moderate-income affordable units must be replaced on a one for one
basis within three years of demolition. However, the definition of which units are affordable
units only covers rents over the past year preceding the application for demolition. Further, if
it is not feasible to replace the units in the coastal zone, then the units must be located within
three miles of the zone. If the conversion or demolition covers a structure with less than three
units or a conversion or demolition with more than one structure with less than ten units, the
developer may be exempt from this regulation. Also, if the purpose of the conversion or
demolition is for a nonresidential coastal dependent or coastal related intent, the developer
may also be exempt from this regulation.



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        It is unknown how this policy is enforced.
        Any future developments will be adding demand for infrastructure and services that
are already severely constrained. As such, the costs will be levied on the developer as impact
fees.

NON-GOVERNMENTAL CONSTRAINTS
        Other additional construction costs are related to the limited availability of parcels
within the city. City staff are currently working on a vacant land inventory. In order to build
a larger-scale, a developer may be faced with demolition costs or the costs of annexing
property to the city.
        Other constraints include water, which has not been a constraint thus far, but Pismo
Beach’s allocation may be reduced from its historical levels. Therefore, the supply of water
cannot be assured. San Luis Obispo Local Agency Formation Commission has found that the
potential water supply in Pismo Beach is about 3,236 acre-feet per year. It is currently 2,696
acre-feet per year. Demand for water is currently 2,156 acre-feet per year, which may
increase to about 2,673 feet at build-out. If the SOI properties are annexed (discussed in the
following section) the demand may increase to 3,324 acre-feet per year at build-out with the
SOI land.
        Pismo Beach’s wastewater treatment plant was built in 1955 and underwent additions
and modifications in 1973 and 1984. It has a capacity of about 1.5 million gallons per day
according to a SLO LAFCO study (2002). Current flows are about 1.3 million gallons per
day. Any additional development in Pismo Beach will add further demand for sewage and
further limit the capacity of the wastewater treatment plant.

HOUSING RESOURCES

LAND ANALYSIS
      Pismo Beach has a limited supply of raw developable land within the city. Future
developments will likely occur on lands annexed by the city. Since 1983, seven annexation
proposals have been submitted to the San Luis Obispo LAFCO. From the April 18th, 2002
Sphere of Influence Update for Pismo Beach by SLO LAFCO:




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Table 14:

PISMO BEACH SOI ANNEXATIONS
Date     Action        Proposal                          Acreage Status
8/87        SOI Revision      Oak Park Acres             155         Approved
1987        Annexation        Freeway Foothills          108         Inactive
11/29/88 Annexation           Ontario Ridge              93          Approved 7/20/89
8/10/92     Annexation        Mattie Road                115         Approved 4/19/93
12/2/97     Amend             Cottonwood                 441         Approved SOI only
            SOI/SOS                                                  6/30/98
6/12/97     Annexation        Los Robles                 182         Expired 6/12/98
2/5/01      SOI revision      Price Canyon South         470         Application withdrawn
                              Ranch
Source: San Luis Obispo LAFCO.
         According to SLO LAFCO, the 335-acre Cottonwood property and the 185-acre Los
Robles site comprise the current sphere of influence in Pismo Beach. SLO LAFCO proposed
the addition of the 20-acre Thille site and the 470-acre King South Ranch site. Also found in
the April 18th, 2002 Sphere of Influence Update for Pismo Beach by SLO LAFCO is the
development intensity for developing these lands:


Table 15:

DEVELOPMENT INTENSITY FOR PISMO BEACH SOI LAND
Site                    County Potential                       City SOI Potential
Los Robles del Mar            RL- 18 Residential units         338 Residential units
Cottonwood                    RL & AG- 16 Residential          120 Residential units
                              units
King South Ranch              AG- 2 Residential units          29 Residential units
Thille Coastal                RL- 2 Residential units          0 Residential units
Total                         38 Residential Units             487 Residential units
Source: San Luis Obispo LAFCO.




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LOCAL PROGRAMS
      Another potential source of development is through the downtown redevelopment
agency. Pismo Beach’s 1993 General Plan specifies that an area designated as a
redevelopment project area should include areas for mixed use development with affordable
housing.
        Other resources in Pismo Beach include provisions for the inclusion of affordable
housing within the city boundaries. Found in its housing element are policies dictating “that
developments of ten units or more shall provide at least 10 percent of the units for sale or rent
at a cost affordable to moderate income households” (H-10). In addition, in lieu fees,
determined by city ordinance, are assessed for developments of more than one unit but less
than ten units. Further, these rent controls are applied to successive owners of the property,
as the restrictions are noted on the deed. Policies also have been created for annexed
properties, which are similar to the above regulations.
        In addition to the in lieu fee funds, according to their 1993 General Plan, the city shall
consider using a portion of their transient occupancy tax for the development or rehabilitation
of affordable rental housing. Moreover, city land not identified or need for a public purpose
will be made available for affordable housing. Lands owned by other public agencies will be
assessed for their use in the development of affordable housing prior to their disposal, and the
city will seek funds to acquire these lands.
        With the passage of AB 1833, Pismo Beach will need to repeal its ordinance banning
secondary units. The act makes secondary units a ministerial decision, which will add
additional rental units to the City.


           SOLUTIONS: HOUSING PROGRAMS AND POLICIES
OVERVIEW
        Pismo Beach is fairly progressive in the adoption of appropriate and effective
affordable housing policies and programs. It is not, however, the city does not build
affordable housing. Rather, it is the developer who must decide whether to build affordable
housing in Pismo Beach.
        While the city can adopt policies and programs to include and build affordable
housing in Pismo Beach, if the City adopts policies and programs that require too much


                                                                                               20
affordable housing, burdensome in-lieu fees, or other lofty dedication costs, the developer
may decide to build elsewhere in San Luis Obispo County. On the other hand, if the city does
provide enough regulations for the inclusion and development of affordable housing, the
developer’s interest will be dictate what types of development are built in Pismo Beach.
Therefore, the City must find a balance between the developer’s interest and the need for
affordable housing.
       Concluding this assessment are a series of goals, policies, and objectives which seek
to improve current affordable housing programs and policies and to also suggest programs
and policies that Pismo Beach can create to increase affordable housing options in the city.




                                                                                               21
SPECIFIC GOALS, POLICIES, AND OBJECTIVES

CONSISTENCY (EXISTING)

                    Pismo Beach will maintain consistency between the General Plan,
GOAL
             state housing law, and the affordable housing policies and programs it
             develops.
                    Pismo Beach shall maintain consistency between the General Plan,
POLICY
             state housing law, and the affordable housing policies and programs it
             develops.
                    Maintaining consistency between the General Plan, state housing law,
OBJECTIVE
             and any affordable housing policies and programs is important. Inconsistency
             can impair the integrity of any policy or program and reduce its effectiveness
             in providing affordable housing.




IMPLEMENT INCLUSIONARY HOUSING REQUIREMENTS (EXISTING)

                    The City shall implement inclusionary housing requirements.
GOAL

                    Pismo Beach shall implement ordinance no. 2000-03, which amended
POLICY
             the inclusionary housing requirements and affordable housing incentives of
             Chapter 17.26 of the 1998 Zoning Code.
                    In the 1980’s, a growth control ordinance limiting the issuance of all
OBJECTIVE
             types of building permits to a 3 percent annual growth rate was not
             implemented. Since the City has been lax in controlling growth, it is
             important for the City to overcome any historical failure to act and
             implement their inclusionary housing requirements. Pismo Beach municipal
             code states that the application of inclusionary zoning to development shall:


                For each 10 residential units provide one affordable unit or
                For 5 or more residential units provide in-lieu fees equal to or more than




                                                                                         22
    5% of building permit value or
   For each 10 residential units dedicate 1 used dwelling or real property
    equal to or more than the applicable in-lieu fee or
   A combination of the above methods subject to City Council approval
   Projects which involve subdivision of residential lots only shall be
    required to either:
       Dedicate a number of lots equal to 10 percent of the total, or an
        equivalent land area, to the City for future development of low and
        moderate income housing; or
       Pay in-lieu housing fees established by the City ordinance or
       A combination of the above methods subject to City Council
        approval
       Residential projects in which the total development on the property is
        more than one unit but less than 20 units shall be required to either
        provide affordable units on the same percentage bases specified in
        item 1 or to pay in-lieu fees as established by City Ordinance. If
        affordable units are to be provided, the City may permit those units to
        be developed elsewhere at other appropriate sites within the City.
The percentages of this housing set aside shall apply to the total development
project and be proportionally included in annual phasing.




                                                                                23
USE OF AFFORDABLE HOUSING FUND (EXISTING)

             Pismo Beach shall use its Affordable Housing Fund to provide affordable
GOAL         housing.
             According to Pismo Beach municipal code 17.26.050 D:
POLICY

                     An In-Lieu Fee paid and collected pursuant to this Chapter
                     shall be deposited into an affordable housing fund. The
                     affordable housing fund shall be administered by the City's
                     Finance Director, and shall be used exclusively to provide
                     funding for the provision of Affordable Housing and for
                     reasonable costs associated with the development of
                     Affordable Housing, at the discretion of the City Council.


             Pismo Beach shall develop a plan to use the funds collected in the Affordable
             Housing Fund to develop affordable housing within the City of Pismo Beach.
             If this is not feasible due to the lack of available land, the City shall pursue
             using the fund to develop affordable housing in Grover Beach, Arroyo
             Grande, or unincorporated county land within twenty miles of Pismo Beach.
                     It is the intent of this goal to quickly make decisions and fund
OBJECTIVE
             the development of affordable housing. Pismo Beach shall not have
             an in lieu fee and a fund for affordable housing development that is
             not used for the purposes of affordable housing development. (It is
             unknown how large the fund is or what affordable housing it has
             funded).




                                                                                                24
USE OF DEDICATED LAND (EXISTING)

                     Pismo Beach shall use property dedicated to the City to develop
GOAL
             affordable housing.
                     Pismo Beach shall develop affordable housing on property dedicated
POLICY
             to it in lieu of paying fees or developing affordable housing. As an
             alternative, the city can choose to either transfer the property to a non-profit
             agency for the purposes of developing affordable housing or it can sell the
             property and put the funds in the Affordable Housing Fund. The City must
             decide the intended use property dedicated for affordable housing within 12
             months of receiving the property.
                     It is the intent of this goal to quickly make decisions and develop
OBJECTIVE
             property dedicated for affordable housing or to sell the property in order to
             increase the funding for affordable housing opportunities elsewhere. Pismo
             Beach shall not have an in lieu fee and a fund for affordable housing
             development that is not used for the purposes of affordable housing
             development.

RECOMMENDED POLICY, SPECIFIC GOALS, POLICIES, AND OBJECTIVES

ACCOMMODATION FOR SECONDARY UNITS (NEED)

                     Pismo Beach shall increase opportunities for secondary units in the
GOAL
             City.
                     In accordance with AB 1833, the city shall lift its ban of secondary
POLICY
             units. Approving a secondary unit shall be a ministerial act, and all pre-
             existing secondary units shall made legal provided that the unit is up to code.
                     Secondary units provide an opportunity for increasing affordable
OBJECTIVE
             housing in Pismo Beach. While the City banned secondary units due to a
             concern of secondary units being built on small lot sizes and the impacts
             secondary units would have on community character, AB 1833 effectively



                                                                                             25
puts housing affordability issues above community character concerns. Not
only will secondary units provide affordable rental units within Pismo Beach,
but it will also make it easier for property owners to afford their mortgage
payment.




                                                                               26
ACCOMMODATION FOR MIXED USE ZONING (NEED)

                   Increase the use of mixed use zoning in the City of Pismo Beach.
GOAL

                   Pismo Beach shall adopt a mixed use zoning district which can be
POLICY
            applied to land outside the downtown core. The City shall also reduce the
            parking requirements for the downtown mixed use zoning district.
                   Currently, the City of Pismo Beach has a downtown mixed use
OBJECTIVE
            zoning district, but it does not have a mixed use zoning district for use
            outside the downtown core. Mixed use zoning can be used to add affordable
            loft apartments above commercial and office space. Current zoning in Pismo
            Beach will not allow mixed use zoning outside of the downtown core. Not
            only should the City create a mixed use zoning district for use outside of the
            downtown area, it should consider applying mixed use zoning in the southern
            portion of the city where a lot of redevelopment is occurring. In addition, the
            City should consider applying mixed use zoning to future annexed
            properties, not only to increase affordable housing opportunities, but also to
            provide jobs and neighborhood services for the community.
                   Many developers may be reluctant to develop mixed use
            properties due to high parking requirements. The City needs to
            reanalyze its mixed use zoning parking requirements. Often, the
            demand for parking use between residential and non-residential uses
            is compatible. Commercial and office demands are generally day
            uses; where as residential demand occurs in the evening and night. As
            such, there is no need for the parking requirement to be the sum of
            the individual uses. The City should consider dedicating one parking
            space for each residential unit in a mixed use zone in addition to the
            parking needed for the commercial and office space.




                                                                                         27
POTENTIAL LOAN ASSISTANCE (NEED)

                     Provide housing opportunities for teachers, firefighters, and police
GOAL
             officers.
                     Pismo Beach shall create a first time homebuyer assistance program
POLICY
             that provides loan assistance to teachers, firefighters, and police officers.
                     Salaries have not kept up with the rapid increase in housing costs
OBJECTIVE
             over the past decade. In many instances, workers get priced out of a region.
             Over time, this may leave a city with a shortage of qualified teachers,
             firefighters, and police officers. In order for Pismo Beach to keep its basic
             services, the city shall create a first time homebuyer loan assistance program
             for teachers, firefighters, and police officers who have completed the
             probationary period and who make less than 120 percent of Pismo Beach’s
             median income adjusted for household size. Morgan Hill has adopted a
             similar policy, which Pismo Beach should use to model its own program.
                Minimum down payment of 5 percent
CONDITIONS
                Maximum loan amount of $50,000, or 10 percent of the purchase price,
                 whichever is less
                    Term of 20 years
                    Payments deferred for first five years. Thereafter, simple interest and
                     balance are amortized over remaining 15 years
                    Fixed rate interest, federal prime rate plus 0.25%
                    No prepayment penalty
                    Balance of loan must be repaid upon sale, transfer, or refinancing of
                     home
                Maximum house price of $500,000
                House must be located within the city limits of Pismo Beach
                Must be a primary residence for a first time homebuyer




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STATE AND LOCAL EFFORTS
       State efforts to mandate housing allocation figures across California have an
important objective. California will grow. It is the state’s intention to distribute what it feels
are fair and reasonable allocations across California in order for each jurisdiction to have a
sufficient amount of housing, and to be able to provide an adequate amount of affordable
housing units; however they have stirred controversy in many cities and counties. In many
cases, a local government feels that the state does not understand constraints that limit a city
or county’s ability to grow. Further, many cities and counties feel that the state cannot
mandate how much a jurisdiction should grow.
       A local government may better understand constraints and opportunities at its local
level, where as a state is less able, due to resource constraints, to understand constraints and
opportunities at the local level statewide.
       Over the short-term, local governments should not argue with the state over allocation
figures and the state’s ability to dictate growth across the state. Pismo Beach will likely be
able to build 87 units annually until 2008. However, over a period of ten to thirty years,
rather than mandating allocation figures statewide, the state can make the most of local
government’s knowledge of their local constraints and opportunities facing housing
development.
       If it were to develop greater collaboration between the state and local governments, it
would be able to develop better allocation figures that account for local constraints and
opportunities. Further, it would face less opposition at the local level if the local government
had contributed to the allocation process.




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