Public Review Draft Chapter 2

The City is responsible for enabling the production of housing by reducing regulatory barriers, providing incentives, and supporting programs that create or preserve housing, especially for vulnerable populations. To enable the construction of quality housing, the City has identified the following goals:

Goal HE-1 Facilitate Housing Construction

Goal HE-2 Protect Affordable Housing and Improve the Housing Stock

Goal HE-3 Provide Opportunities for New Affordable and Other Special Needs Housing

Goal HE-4 Exemplify Sustainable Development and Energy Conservation

Goal HE-5 Publicize Housing Needs and Resources

This section provides an overview of significant new policy and program directions being taken by the City of Carmel-by-the-Sea to address housing issues in the community and the larger Monterey Bay Area.

Affirmatively Furthering Fair Housing

The new policy direction that the City will undergo during the 6^th Cycle Housing Element Update involves addressing historic economic and racial segregation patterns. In 2018, the California Legislature established an independent state mandate to affirmatively furthering fair housing (AFFH). Affirmatively furthering fair housing is defined specifically as taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity by replacing segregated living patterns with truly integrated and balanced living patterns; transforming racially and ethnically concentrated areas of poverty into areas of opportunity; and fostering and maintaining compliance with civil rights and fair housing laws.

The City of Carmel-by-the-Sea is adopting new policies and programs through the update of this 6^th Cycle Housing Element, to align with the state’s new AFFH mandate. Policies and programs that support this alignment are identified with the letters “AFFH.”

Quantified Objectives estimate the number of units likely to be constructed, rehabilitated, or conserved/preserved by income level during the planning period. The Quantified Objectives do not represent a ceiling on development, but rather set a target goal for the jurisdiction to achieve, based on needs, resources, and constraints. These objectives will focus communication between the City and HCD with future Annual Progress Reports (APRs). HCD does not demand that all objectives must be met, rather, it is a goal that enables objective assessments about program effectiveness so that the City may make informed determinations to continue, modify, or delete programs with the next Housing Element update Cycle. Table 2-1, Quantified Objectives, provides an estimate of the number of units likely to be constructed, rehabilitated or conserved/preserved in Carmel-by-the-Sea.

Table 2‑1 Quantified Objectives Summary

SOURCE: City of Carmel-by-the-Sea 2023

NOTES: *The City has approximately 3,800 residential units, 50 (or about one percent) of which are affordable units. Each year the City processes approximately 100 building permits for remodels, additions, and other construction, which rehabilitates the existing housing stock. For the lower-income categories rehabilitation goals, the City assumes that one percent of the total permits processed will be for affordable units. Under these assumptions, the City would rehabilitate two units of affordable housing a year or approximately 16 units throughout the 2023-2031 planning cycle. This represents approximately 30 percent of the City’s existing affordable housing inventory.

**The City has no units at risk of converting to market rate during this planning cycle.

Community input has been and continues to be an integral part of the development of policies and programs for the 6th Cycle Housing Element. The purpose of this section is to set forth goals, policies, and programs to further the development of housing for all income levels in the community. The Implementation Programs listed below provide a workplan for programs to ensure timely implementation and tracking.

GOAL H1 FACILITATE HOUSING CONSTRUCTION

Policy 1.1: Ensure adequate sites are available to meet the City’s projected housing growth needs.

Policy 1.2: Continue to monitor and work cooperatively with regional agencies to augment infrastructure in a manner that provides adequate capacity for existing and new housing needs while preserving and improving the unique visual character of the City.

Policy 1.3: Reduce or eliminate governmental constraints on the provision of affordable housing. Direct public funding resources to the conservation of existing housing units in neighborhoods where continued residential use is appropriate.

Policy 1.4: Improve Development Review and Approvals Processes

GOAL H2 PROTECT AFFORDABLE HOUSING AND IMPROVE THE HOUSING STOCK

Policy 2.1: Maintain and encourage expansion of permanent residential housing stock in the Commercial, R-1, and R-4 Districts.

Policy 2.2: Preserve and protect the scale of established neighborhoods while encouraging property improvement.

Policy 2.3: Preserve and expand affordable and rental housing opportunities to enable local employees to live in the community where they work.

Policy 2.4: Preserve the existing housing stock

GOAL H3 PROVIDE OPPORTUNITIES FOR NEW AFFORDABLE AND OTHER SPECIAL NEEDS HOUSING

Policy 3.1: Incentivize affordable housing development, with an emphasis on affordable housing built to accommodate Extremely-Low Income residents. Encourage the private sector to produce affordable housing.

Policy 3.2: Recognize the special needs of persons with disabilities and the need to retain flexibility in the design review process to accommodate these needs.

Policy 3.3: Facilitate the provision of transitional and supportive housing in appropriate districts in the community.

GOAL H4 EXEMPLIFY SUSTAINABLE DEVELOPMENT AND ENERGY CONSERVATION

Policy 4.1: Support energy and water conservation programs to reduce the consumption of these resources in housing and to reduce housing costs.

GOAL H5 PUBLICIZE HOUSING NEEDS AND RESOURCES

Policy 5.1: Support and enforce fair housing laws. Expand fair housing choice by promoting housing opportunities and removing impediments to fair housing.

Policy 5.2: Promote public awareness and foster pride in the history of the village.

The City has a RHNA or growth need of 113 units affordable to Extremely Low- and Very Low-Income households. The City’s General Plan and Zoning Ordinances provide for housing types at appropriate densities to accommodate the RHNA. The City will encourage and facilitate the development of new units consistent with the RHNA be continuing to work with housing providers such as the Carmel Foundation and will actively find new organizations to partner with. The City also includes incentives and concessions outlined in Programs listed below including an Affordable Housing Overlay district outlined below.

Quantified Objective: 113 Extremely Low and Very Low-income housing units

Timeframe: June 2031

Responsible Party: Community Planning and Building Department

Funding Source: General Fund

(Formerly Program 3-3.1.a: Adequate Sites)

Publicly owned sites represent an opportunity to partner with a non-profit or developer to build affordable units. The City may enter into an agreement with a development partner that makes development of affordable units more financially feasible because the cost of the land is under City ownership. The City will actively investigate the feasibility of utilizing underutilized publicly owned sites (including Flanders Mansion, Sunset Center parking lots, Post Office parking lot, Vista Lobos, and surplus right-of-way) for housing development and partnering with housing providers to develop housing for lower-income households and/or senior housing on appropriate underutilized sites.

Quantified Objective: 50 affordable units

Timeframe: June 2029

Responsible Party: Community Planning and Building Department

Funding Source: General Fund

(Formerly 3-3.1.b: Surplus Sites)

Small sites can be difficult to develop particularly when development standards don’t adequately take into account small lot dimensions. The City will continue incentives and provisions that facilitate development on small sites, including waived or reduced parking requirements for affordable housing projects (0.5 parking spaces per unit), density bonuses that allow for development up to 88 du/ac, flexible or in some cases no required setbacks in the R-4 zone, and lot mergers. The City will also further evaluate the parking ratio and/or reducing parking requirements in the SC and RC zoning districts to help facilitate market rate housing. Alternative parking programs such as car share will also be considered to offset reduced parking.

Quantified Objective: 20 units

Timeframe: December 2024

Responsible Party: Community Planning and Building Department

Funding Source: General Fund

(Formerly 3-3.1.c: Development on Small Sites)

One of the major constraints to housing production in Carmel-by-the-Sea is the lack of water. Potable water is a fundamental infrastructure need for housing and is a limited resource in Carmel-by-the-Sea. Water is regulated by the State Water Resources Board (SWRB) and the Monterey Peninsula Water Management District (MPWMD). Few sites have available water credits sufficient to accommodate construction of additional residential units, and the City’s water allocation is limited as is the ability to service vacant sites with water service. The City will continue to work cooperatively with MPWMD to address water infrastructure limitations that affect the ability to serve new housing development.

The City will grant water allocation priority to those projects that assist the City in meeting its share of the regional housing need for lower- and moderate-income households and will adopt City policy to clearly reflect water allocation priority and incentives for extremely low and very low-income households.

Quantified Objective: 187 units

Timeframe: June 2025

Responsible Party: Community Planning and Building Department

Funding Source: General Fund

(Formerly Program 3-3.2: Address Infrastructure Constraints)

Ensuring the City’s infrastructure is modernized and can accommodate future growth is a critical charge of local governments. Much of the City’s infrastructure is nearing the end of its lifecycle and crafting Capital Improvement Programs that effectively manage infrastructure is imperative. Additionally, the City experienced significant power outages during the 2022-2023 winter season that negatively impacted the City at large. The City’s Public Works Department continues to improve City infrastructure including road maintenance and storm drains, through the City’s 6-Year Capital Improvement Plan process. The City will continue to work cooperatively with outside agencies, including the Pacific Gas and Electric Company, the Carmel Area Wastewater District, and California American Water, to continue to maintain and upgrade the City’s infrastructure.

Quantified Objective: N/A

Timeframe: 2030

Responsible Party: Public Works Department

Funding Source: General Fund

(Formerly Program 3-3.2: Address Infrastructure Constraints)

The City will continue to implement condominium conversion policy, which restricts the conversion of apartments to condominiums to preserve the lower-cost rental housing options, typical of apartments, within the City. Apartments cannot be converted to condominiums unless a new apartment is being created to offset the conversion.

Quantified Objective: Preserve rental units

Timeframe: June 2031

Responsible Party: Community Planning and Building Department

Funding Source: General Fund

(Formerly Program 3-5.3.a: Condominium Conversions)