D E S I G N , C O M M U N I T Y & E N V I R O N M E N T 1625 SHATTUCK AVENUE MEMORANDUM SUITE 300 BERKELEY, CA 94709 DA TE February 4, 2009 TEL: 510 848 3815 TO General Plan Update Steering Committee FAX: 510 848 4315 www.dceplanning.com FROM Design, Community & Environment RE Housing Element Update Kick-Off At its February 11, 2009 meeting, the Steering Committee will provide input on key issues relating to the Housing Element Update. This memorandum provides background information on the Housing Element for this meeting. Topics discussed below include the basics of California Housing Element law, Novato’s existing Housing Element and Novato’s recent housing accomplishments. A. California Housing Element Law California Government Code Article 10.6 requires that each City and County adopt a Housing Element as one of the seven required elements of the General Plan. The Housing Element is different from the other required elements of the General Plan in that it must be updated every five years and is subject to detailed statutory requirements. Also, unlike other elements, the Housing Element must be submitted to the California State Department of Housing and Community Development (HCD) for review and certification. HCD certifies a Housing Element when it finds that the element is in compliance with all requirements of State Housing Element law. 1. Required Housing Element Contents State law includes a list of information and analysis that must be included in a Housing Element. HCD will not certify a Housing Element that does not include this required content. Some of the key content that Novato’s Housing Element must contain includes: ♦ A summary of the population and housing characteristics that contribute to the present and future housing need in Novato. ♦ A description of constraints on the development of housing in Novato. ♦ An evaluation of the existing Housing Element. ♦ An inventory of sites to accommodate Novato’s identified housing need. ♦ Programs to promote housing opportunities for all Novato residents. Offices in Berkeley and Ventura D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 2 ♦ A statement of quantified objectives that estimates the number of housing units by income level to be constructed, rehabilitated and conserved in Novato by 2014. 2. Regional Housing Needs Allocation As stated above, Novato’s Housing Element must demonstrate that the City can accommodate its identified housing need for all income levels over the next five years. This “housing need” is the number of housing units assigned to Novato by the Association of Bay Area Governments (ABAG) through the Regional Housing Needs Allocation (RHNA) process. For this Housing Element Update, Novato’s RHNA is 1,241 total dwelling units. Table 1 shows Novato’s RHNA broken out by income level. One of the key tasks for the Housing Element Update is to identify sites within Novato to accommodate these 1,241 units over the next five years. TABLE 1 NOVATO'S 2007-2014 REGIONAL HOUSING NEEDS ALLOCATION (RHNA) Extremely Very Above Low Low Low Moderate Moderate Total Dwelling Units 137 138 171 221 574 1,241 The income levels identified in the table above are based on the Marin County Median Family Income (MFI). In 2008, the MFI in Marin County was $91,000. Income levels for four-person households are defined as follows: ♦ Extremely Low Income: Households with income less than 30 percent of MFI (under $27,300). ♦ Very Low Income: Households with incomes less than 50 percent of MFI (under $45,500). ♦ Low Income: Households with incomes between 51 percent and 80 percent of MFI ($45,500 to $72,800). ♦ Moderate Income: Households with incomes between 81 percent and 120 percent of MFI ($72,800 to $109,200). ♦ Above Moderate Income: Households with incomes greater than 120 percent of MFI (over $109,200). 3. Changes to Housing Element Law since 2001 Since the adoption of Novato’s existing Housing Element in 2001, the California legislature has enacted numerous new laws related to Housing Elements. The Housing Element Update will need to comply with the requirements of these new laws. The most important new laws include: ♦ AB 2348: Requires a more detailed inventory of sites to accommodate projected housing needs. D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 3 ♦ SB 520: Requires analysis of constraints to housing development, maintenance and improvement of housing for persons with disabilities. ♦ AB 1233: Establishes that in the case that a prior element failed to identify or implement adequate sites, the local government must zone or rezone to address this need (in addition to the new projected need) within one year of update. ♦ AB 2634: Requires the quantification and analysis of existing and projected housing needs of extremely low-income households. ♦ SB 2: Requires local jurisdictions to strengthen provisions for addressing the housing needs of the homeless, including the identification of zones where emergency shelters are allowed as a permitted use without a conditional use permit. B. Novato’s Existing Housing Element The update to Novato’s Housing Element will revise, refine and expand upon the existing Housing Element. Thus, an understanding of the contents of the existing Housing Element will be important. Novato’s existing Housing Element can be viewed in its entirety at http://www.ci.novato.ca.us/cd/gp/gpchap3.html. The existing Housing Element includes all of the required contents discussed above. The Element is divided into five sections: ♦ Section 1: Introduction and overview of State law requirements for Housing Elements. ♦ Section 2: Background analysis of housing needs in Novato. ♦ Section 3: Assessment of housing opportunities in Novato. ♦ Section 4: Summary of key findings from the analysis of housing needs in Novato. ♦ Section 5: Vision, goal and objectives, policies and implementing actions. Sections 3 and 5 are the most important for the Housing Element Update and are discussed below. 1. Section 3: Housing Opportunities Section 3 of the existing Housing Element identifies Novato’s ability to meet the City’s RHNA for the prior planning period (1999-2006). As shown in Table 2, Novato’s RHNA was 2,582 units, more than double the RHNA for the 2007-2014 planning period. TABLE 2 NOVATO'S 1999-2006 REGIONAL HOUSING NEEDS ALLOCATION (RHNA) Above Very Low Low Moderate Moderate Total Dwelling Units 476 242 734 1,130 2,582 D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 4 Between January 1999 and the adoption of the existing Housing Element in March 2003, 1,258 units affordable to very low, low and moderate income households had already been approved or constructed, as had 1,307 above-moderate units, resulting in a remaining unmet need of 194 affordable units. Appendix B of the existing Housing Element is an inventory of potential development sites available to accommodate this unmet housing need. A map identifying the location of these sites will be provided at the February 11 Steering Committee meeting, along with information on the number of sites that were developed during the prior 1999-2006 planning period. 2. Section 5: Housing Vision and Goal Section 5 of the existing Housing Element identifies the housing vision and goal for Novato. The following statements comprise the vision for housing in Novato: 1. People can live, work and play here. 2. We have housing choices to fit different needs. We have built mixed-use projects in our downtown, above parking lots, within commercial areas and near transit. 3. We have maintained the age and economic diversity of our population. We are socially integrated and our kids can still live here. We value human dignity and our cultural and economic diversity. 4. There is creativity in design and types of housing. 5. We have support systems and housing in place to help the disenfranchised (homeless, elderly, disabled, and others in need). 6. There is a distinct difference between the urban and rural areas of our community. The natural environment is beautiful and fragile natural systems work well. 7. Our town is friendly, with lots of interaction and community involvement, and there is coordination with other jurisdictions to address important housing issues in creative and effective ways. The following statement is the goal for housing in Novato: Provide for a variety of housing opportunities for all economic segments of the community through new construction and maintenance of existing housing for an economically and socially diverse population, while preserving the character of the community. Low and moderate income housing of all types (including mobile homes, mobile home and recreational vehicle parks) will be given special consideration. At the February 11 meeting Steering Committee members will be asked to comment on these vision and goal statements. Specifically, Steering Committee members will be asked to provide feedback on whether this statement still reflects current community needs and values. D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 5 3. Section 5: Housing Objectives, Policies and Implementing Actions Section 5 of the existing Housing Element also includes a substantial number of specific objectives, policies and implementing actions. These objectives, policies and actions address the following 14 topics: 1. Sense of Community and Creation of Successful Partnerships 2. Equal Housing Opportunities 3. Housing Design 4. Existing Housing and Neighborhoods Preservation 5. Housing, Jobs and Transit Linkage 6. Variety of Infill Housing Choices 7. Mixed Use Housing 8. Affordable Housing Sites and Incentives 9. Inclusionary Housing 10. Accessory Dwelling Units 11. Special Needs Housing 12. Special Needs Support Programs 13. Funding and Financial Equivalent Incentives for Housing 14. Effective Implementation and Monitoring City staff and consultants are currently evaluating the effectiveness of programs contained in the existing Housing Element and will prepare a matrix identifying the status of each program and the extent to which the City has achieved specific objectives. At a future Steering Committee meeting, currently planned for May 2009, the Steering Committee will review this matrix and provide feedback on modifications to existing objectives, policies and programs for the updated Housing Element. C. Novato’s Housing Accomplishments This section describes Novato’s housing development and production accomplishments from 1999 to 2006. 1. Housing Production Between January 1999 and December 2006, 2,966 housing units were built or approved in Novato, as shown in Table 3. This number is larger than in past Housing Element periods because of the development in Hamilton. This number exceeds Novato’s 1999-2006 RHNA by 15 percent (379 units). Novato exceeded its RHNA for the low-income and above moderate-income affordability levels. In fact, Novato issued building permits for over twice as many low-income units as prescribed by its RHNA, which is a unique and noteworthy accomplishment. D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 6 Table 3 compares Novato’s housing production for 1999-2006 with the rest of Marin County. Novato has attained a higher percentage of its RHNA at all affordability levels compared to that of the other jurisdictions in the county. TABLE 3 COMPARISON OF RHNA WITH ACTUAL BUILDING PERMIT ALLOCATIONS, CITY OF NOVATO AND MARIN COUNTY, 1/1/1999 TO 12/31/2006 Marin County and Other Jurisdictions City of Novato (excluding Novato) Income Permits Percentage Permits Percentage Level RHNA Allocated of RHNA RHNA Allocated of RHNA Very Low 476 297 62% 765 231 30% Low 242 527 218% 376 224 60% Moderate 734 496 68% 992 544 55% Above 1,130 1,646 146% 1,800 1,807 100% Moderate Total 2,582 2,966 115% 3,933 2,806 71% Source: 2007 Novato Annual Housing Report, City of Novato and A Place to Call Home, ABAG, 2008. 2. Deed-Restricted Unit Production A total of 1,490 deed-restricted affordable housing units have been developed in Novato within the past five years. Approximately 4 percent, or 67 of the total deed-restricted units, are affordable to very low income households with persons with disabilities. Approximately 30 percent, or about 450 units, of the deed-restricted units are senior housing. A majority of these units are located in redevelopment project areas, as described below. 3. Redevelopment Agency Contribution Novato’s Redevelopment Agency (RDA) works closely with the Planning Division to preserve, rehabilitate and develop affordable housing in the city and to meet the goal of the Housing Element. Of the 418 redevelopment project areas in California, the Novato RDA is the only redevelopment agency that has committed 100 percent of its tax increment bonding capacity to affordable housing. The RDA manages 1,100 acres composing three redevelopment project areas: Hamilton, Novato and Downtown. Approximately 1,021 deed-restricted affordable units in Novato have been built in these three redevelopment areas. The Hamilton Redevelopment Area includes the largest affordable housing development in Marin County, including: ♦ Meadow Park, containing 315 deed-restricted ownership units; ♦ the Creekside and Bay Vista apartments, with 297 affordable rent-restricted units; ♦ 60 transitional housing units; ♦ 67 senior condominiums at Villa Entrada; ♦ New Beginnings homeless shelter, providing 80 beds; and ♦ Next Key single-room occupancy housing and jobs training. D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 7 To date, the Novato RDA has issued approximately $48 million in redevelopment-related debt, of which $34 million, or over 70 percent, went towards affordable housing in the former Hamilton Army Airfield. The remainder of the debt was used to support the development of Vintage Oaks ($9 million) and fund Grant Avenue streetscape improvements ($5 million). Most other RDAs spend about 20 percent of their funds on affordable housing and 80 percent for other projects. In addition, the Novato RDA has provided over $1 million to the Novato Human Needs Center for housing assistance related programs. 4. Program Achievements Following is a list of selected accomplishments that relate to specific programs in the existing Housing Element. The corresponding program number from the existing Housing Element is identified in parenthesis following each accomplishment. ♦ Green building standards for single family detached units were approved in 2004, and green building standards for multi-family units were approved in 2005. (Program 3.C). ♦ Novato acquired Wyndover Apartments, which were existing affordable housing units, in order to maintain their on-going affordability. (Program 4.E). ♦ Novato implemented its RDA housing programs and has completed redevelopment of Hamilton Airfield. (Program 6.A). ♦ Novato provided financial assistance for predevelopment costs for the Hamilton Senior Housing and Assisted Living facilities, which has a potential for 25 very low income units. (Program 6.C). In addition, the City has already contributed $350,000 in predevelopment funds to the proposed 61-unit very-low-income Warner Creek Senior Housing Development (Diablo). Amidst the City's current fiscal challenges, an additional $1.15 million has been pledged for the development based on final land use approval. ♦ Novato identified additional residential and non-residential sites appropriate for housing and is developing residential units at the Whole Foods project and senior housing at Diablo (Eden). (Program 6.D). ♦ Novato facilitated and/or funded the development of co-housing, cooperatives, and similar collaborative housing development, such as the Next Key project, a 32-unit Single Room Occupancy (SRO) development. (Program 6.H). ♦ Appropriate standards and zoning were implemented for the Next Key SRO development. (Program 6.J). ♦ Parking standards were updated for Downtown Novato. (Program 6.M). ♦ Mixed use development standards were implemented in Downtown Novato. (Program 7.A). D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 8 ♦ Novato’s inclusionary (affordable) housing ordinance is very stringent in terms of affordability requirements and percentage of affordable units per project. This ordinance was recently updated (Program 9.A). D. Novato’s Current Housing and Population Characteristics This section briefly summarizes some of the most relevant data on current housing and population characteristics in Novato. Novato has about 52,800 residents today. Between 2000 and 2008, Novato has grown more rapidly than either Marin County or the Bay Area as a whole, as shown in Table 4. Novato’s population increased by 11 percent, while both the county and Bay Area grew by less than 5 percent. A majority of the City’s recent population growth resulted from redevelopment of Hamilton Army Airfield. TABLE 4 POPULATION AND HOUSEHOLD TRENDS 2008 % Change % Change 1990 2000 (Est.) 1990-2008 2000-2008 Novato Populationa 47,585 47,630 52,839 +11.0% +10.9% Householdsa 18,236 18,524 20,750 +13.8% +12.0% Avg. Household Sizea 2.59 2.52 2.50 Tenure Owner 62% 68% 68% Renter 38% 32% 32% Marin County Population 230,096 247,289 252,413 +9.7% +2.1% Households 95,006 100,650 102,541 +7.9% +1.9% Avg. Household Size 2.33 2.34 2.35 Tenure Owner 62% 64% 63% Renter 38% 36% 37% Bay Area Population 6,023,559 6,783,760 7,092,031 +17.7% +4.5% Households 2,246,236 2,466,019 2,556,790 +13.8% +3.7% Avg. Household Size 2.61 2.69 2.72 Tenure Owner 56% 58% 58% Renter 44% 42% 42% a For all 1990 figures, population, households, and household size based on 1990 U.S. Census. Sources: Claritas, 2008; 1990 U.S. Census SF-1; BAE, 2008. D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 9 Novato is expected to continue to grow by about 16 percent over the next 30 years, while ABAG projects that the county population will climb by only 12 percent. Projections for the Bay Area show faster growth overall, with a 27 percent increase in population by 2035. Novato has slightly more families than the County and Bay Area. Novato’s families comprised 67 percent of households, compared to 60 percent in the County and 65 percent in the Bay Area. Over the last two decades, Novato has experienced a significant gain in homeownership. Between 1990 and 2008, the percentage of homeowners increased from 62 percent to 68 percent. Novato’s homeownership rate remains above countywide and regional levels. As of 2008, 63 percent of County households and 58 percent of Bay Area households own their home. Novato households are more affluent than their counterparts in the Bay Area, but less affluent than countywide households. As shown in Table 5, Novato households earned a median income of $77,074 in 2008, 4 percent more than the median income in the Bay Area and 10 percent less than the County median. Historically, Novato has been one of the more affordable housing markets in Marin County. As of October 2008, Novato had a median home sales price of $433,500, a 32 percent drop over the last 12 months (including single-family homes and condominiums). In comparison, Marin County as a whole had an October 2008 median sales price of $875,000, representing a 32 percent loss in value from the previous year. Homeownership remains out of reach for many Novato residents. As shown in Table 6, very low-income households could only afford 3 percent and low-income households could only afford 5 percent of single-family homes for sale in Novato from April through October 2008. Moderate-income households could only afford 15 percent of single-family homes. Condominiums were somewhat more affordable. Very low-income and low-income households could afford 18 percent and 68 percent of condominiums, respectively, while moderate-income households could afford 86 percent of condominiums on the market. For rental housing, analysis suggests that very low-income households would encounter difficulty finding an affordable home in Novato. These households can afford a monthly rent of $1,373, compared to an average market rate rent of $1,662 for a three-bedroom, two-bathroom apartment that would comfortably accommodate a four-person family. Low- and moderate-income households can afford monthly rents that exceed average market rate rents. As such, these households would have less difficulty finding an affordable rental unit in Novato. D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 10 TABLE 5 HOUSEHOLD INCOME DISTRIBUTION, 2008 Annual Novato Marin County Bay Area Household Income Number % Number % Number % Less than $15,000 1,176 5.7% 6,622 6.5% 208,322 8.1% $15,000-$24,999 1,172 5.6% 5,668 5.5% 163,949 6.4% $25,000-$34,999 1,307 6.3% 6,284 6.1% 177,443 6.9% $35,000-$49,999 2,505 12.1% 10,433 10.2% 291,229 11.4% $50,000-$74,999 3,957 19.1% 16,603 16.2% 450,515 17.6% $75,000-$99,999 3,115 15.0% 13,129 12.8% 362,903 14.2% $100,000-$149,999 3,918 18.9% 18,511 18.1% 474,017 18.5% $150,000-$249,999 2,583 12.4% 14,023 13.7% 292,620 11.4% $250,000-$499,999 746 3.6% 6,468 6.3% 89,355 3.5% $500,000 and over 271 1.3% 4,800 4.7% 46,437 1.8% Total 20,750 100.0% 102,541 100.0% 2,556,790 100.0% Median Annual $77,074 $85,779 $74,256 Household Income Source: Claritas, 2008; BAE 2008. D E S I G N , C O M M U N I T Y & E N V I R O N M E N T PAGE 11 TABLE 6 AFFORDABILITY OF MARKET RATE HOUSING IN NOVATOa For-Sale Rental Percent of Single- Percent Family of Condos Maximum Maximum Homes on on Market Affordable Average Affordable Market w/in w/in Price Monthly Market b c c d e Income Level Sale Price Price Range Range Rent Rent Very Low Income $229,577 3% 18% $1,373 $1,662 (Up to 50% AMI) Low Income $367,404 5% 68% $2,222 $1,662 (Up to 80% AMI) Moderate Income $462,807 15% 86% $2,809 $1,662 (Up to 120% AMI) a Affordable sale price and rent based on a four-person household income, as defined by CA HCD for Marin County. b Assumptions used to calculate affordable sale price. Annual interest rate (fixed): 66% Freddie Mac; 10-year avg. Term of mortgage (uears): 30 Percent of sale price as down payment: 20% Initial property tax (annual): 1.10% Mortgage insurance as percent of loan amount: 0.00% Annual homeowner's insurance rate as percent of sale price assuming $150K coverage: 0.16% (CA Dept. of Ins., avg.) Percent of household income available for Principal, Interest, Tax & Insurance (PITI): 30% c Based on all full and verified sales of units in Novato between April 15, 2008 and October 31, 2008. d Assumes 30 percent of household income spent on rent and utilities, based on Marin County Housing Authority utility allowance. e For three-bedroom, two-bath units in Novato, per RealFacts. Based on rent survey from second quarter 2008. Sources: DataQuick, 2008; RealFacts, 2008; Marin County Housing Authority, 2008; CA HCD, 2008; BAE, 2008.
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