"making a j}()siti,'<: dijfer<:nce now" STAFF REPORT CITY COUNCIL MEETING OF MAY 6, 2008

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1 PUBLIC HEARING d "making a j}()siti,'<: dijfer<:nce now" STAFF REPORT CITY COUNCIL MEETING OF MAY 6, 2008 To: Fr: Re: David Jinkens, City Manager Teri Jamin, Community Development Director Draft City of South Lake Tahoe Housing Element Update Dt: April 25, 2008 RECOMMENDATION: Authorize staff to submit the Draft Housing Element to the State Office of Housing and Community Development for their review BACKGROUND AND DISCUSSION: Mintier & Associates have prepared a Background Report and Policy Document, which constitutes our 2008 Housing Element Update (see Attachment A), They will be in attendance on 5/6/08 to present this document to the City Council. In accordance with state law, once the draft document is reviewed by both the Planning Commission and City Council, it will be forwarded to the State Office of Housing and Community Development for their review and comment Responses to the State comments may result in modifications to the Draft Housing Element These modifications will be brought back to the Planning Commission and City Council for your review, At that time the draft negative declaration for the Housing Element Update will also be considered for certification by the Planning Commission and Council. On 3/31/08 a Stakeholder/Community Workshop was conducted. A summary of the input received is attached (see Attachment B), The City Planning Commission and General Plan Advisory Committee (GPAC) met on 4/17/08 to discuss this matter. Input provided included clarifications to Table 4-48 with respect to timeshare properties, placing a higher priority on addressing substandard mobile home parks, forwarding suggested TRPA code changes early enough to influence the Regional Plan Update, placing a priority on local housing needs vs, second homes, use of modular housing in Focus Areas 1-3, addressing the needs of the homeless and method used to acquire land for multiple family projects. Upon completion of this discussion the Planning Commission and GPAC unanimously recommended that the City Council authorize staff to submit the Draft Housing Element to the State Office of Housing and Community Development (HCD). Community Development Department Planning Division' 1052 Tata Lallf. South Lake Tahoe, CA (530) (530) FAX

2 One area of particular interest to the City is that we obtain a clear picture of the housing needs in South Lake Tahoe. Consistent with HCD's methodology, the Draft Housing Element includes the Regional Housing Needs Assessment RHNA) which is prepared by the Sacramento Council of Governments (SACOG). However, because South Lake Tahoe is not included in the Metropolitan TranspOIiation Plan (MTP), which is the basis for RHNA growth assumptions, and both recent history and TRPA assumptions about the future are highly growth constrained, this analysis does not represent the complete picture. Therefore staff requested that Mintier & Associated analyze the SACPG RHNA process and apply the methodology that was used for other jurisdictions to the City of South Lake Tahoe. This analysis proceeded by starting with TRPA's constraints, and then making alternative assumptions. Two cases evaluate an estimate of what RHNA methods would yield given the recent past TRPA constrained growth rate ( ), and the current forecasted TRPA constrained growth rate ( ). We begin with the smaller growth rate, the period TRPA assumes in this current forecast period some 29 allocations each year for a 7.5 year period starting in 2005, a total of218 units added to 14,150. This assumption of growth is a 0.19% annual average growth rate (AAGR). Using this very low growth assumption of TRPA, the SACOG methodology would divide by total regional growth of 151,050, and then multiply by 117,489, which is SACOG's total regional fair share. A second TRPA constrained base case can be derived from an AAGR of 0.27%, which is the historical and TRPA constrained growth rate achieved between 2000 and These first two cases in the table below can then be compared to other AAGR assumptions that are not driven by regional planning constraints. Two other AA GR assumptions providedfor purposes ofcomparison below are 1% and 2%, and do not reflect TRPA limitations. The 1% case would involve 908 units, or 121 units per year. The 2% case would involve 1,866 or 249 units per year. These are provided for discussion and contrast, and are not meant to indicate a demand or opinion. Note that as the City's growth assumption increased, the total regional growth for each line item in the table below was also adjusted slightly. Consequently, the estimated SACOG allocation is not a constant 77% of the "growth increment" column, but varies from 77.98% to 76.82%, which is of minimal impact." l-= Number of Units I Estimated growth SACOG Housing Unit Growth Rate increment Allocation Current Growth Assumptions (0.19% AAGR) 14,150 14, Assuming 0.27% Annually (based on growth rate) 14,150 14, Assuming 1% Annually 14,150 15,322 1, Assuming 2% Annually 14,150 16,579 2,429 1,866 From 2000 to 2007, the AAGR for housing units in California was 1.09 percent

3 Staff is recommending that this additional explanation be added following page 4-73 of the Draft General Plan Housing Element Background Report and Policy Document. This is the section that discusses future housing needs and the regional fair share allocation. Submitted by: ed by: Attachment A - Draft Background Report and Policy Document dated 3/17/08 Attachment B - Stakeholder/Communi~y Workshop #2 Summary 3/31/08

4 ATTACHMENT A DRAFT HOUSING ELEMENT BACKGROUND REPORT AND POLICY DOCUMENT Dated 3/17/08 Is available on the City of South Lake Tahoe website (cityofslt.us) or in the City Clerk's Office in hard copy for review at 1901 Airport Road Ste. 206.

5 City ofsouth Lake Tahoe Housing Element Update Stakeholder/Community Workshop #2 SUDlmary March 31, 2008 ATTACHMENT B Issues Concerns regarding responsiveness of City o Accountability o Follow through on implementation Regulations o Too many regulatory hurdles (e.g., PUC approval) Drives away developers (especially those with more modest projects) o Concerned about impact fees (reg. Constraints) o Difficulties developing moderate income households Need housing for Community College employee/students o Emphasis on the employees Recruiting employees severely limited by lack of housing Losing quality prospective employees New employees can't afford to live Gas prices too high Overcrowded conditions Not enough affordable housing to meet demand Current mitigation fees are too low Foreclosures - use for moderate income Need housing for the disabled, Iraq veterans and seniors, police force Need housing for year round resort and employee (e.g. 160 year round Heavenly employees) casinos employees. Heavenly employee housing (130 beds) not being fully used, despite 1500 seasonal employees. TRPA code constraints to development ofhousing Need local housing choices for moderate income families Lacking 4-5 acre sites for multi-family housing development, workforce housing, and first-time homebuyers Only unique housing projects getting built in SLT (e.g. those with big subsides and built by seasonal developers). New comers are discouraged from developing in Tahoe Basin (within TRPA) Effect of CTC ownership on board availability solutions Which cities have been most successful on developing affordable and work force housing, and what programs have they been using Need to explain funding sources in the background report Need temp emergency housing (Angora Fire) manufactured homes on vacant lots where people are rebuilding then use for employee housing Need to differentiate between second homeowner & vacation renter Need more for assisted living facilities because there is only one skilled nursing Barton Hospital. Importance of social infrastructure beyond just housing 80% of the housing stock are owned by second home buyers Local market down 10%, CA down 26% o Homes under $400,000 selling better than homes less than $400,000.

6 o More availability for homes greater than $400,000 Balance the percentage of vacation rentals versus homeownership to create a stable neighborhood o many homeowners needed to still be a nelghborhood? o Avoid hallowed out neighborhoods. There are a number of people living in SLT as renters for a long period of time who haven't been able to buy a home Need to figure out the right amount of second homeowners relative to full-time residents o At what point do we tum to a Vail in temls of percent of second homeov,mers Solutions Consider doing a housing needs assessment to address true need o State mandate v. actual need o Employer questionnaire o Join with other local jurisdictions in supporting BAE study (Kings Beach survey) - Casinos study Need to have a strong educational programs o Connect with private sector o Post infomlation on the City's website o City needs to be more proactive about providing info on funding sources Need central place for loan information o Provide information on regulations and permitting process Make clear to developers and homebuilders Emphasize tax credits programs Remove TRPA's regulatory barriers o Take advantage of P-7 process - "doors are open" Encourage higher density and mixed-use development Put pressure on State legislature TRPA's need for funding Require code amenciments for entire basin Conversion of old motels and mobilehome parks o Encourage conversion or redevelopment to open up land supply o Convert motels to one bedroom seasonal units o Need greater flexibility o RCAC has partnership Loan program for ownership o Overlay with community land trust o Encourage higher densities/mix use to make up for lost units Work with CTC to obtain land for moderate income housing Look into Enterprise FOlmdation in Maryland o Homeless, mental disabilities o Can develop corp. Support housing trust fund Encourage green sustainable housing Increase mitigation fees for housing Develop program to purchase foreclosures to use for moderate income o Foreclosures have a significant drop in value o Partnership w/ cities and lenders o Purchase for St. Josephs Land Trust Consider tearing down older homes for the land Encourage Co-housing projects similar to those in Tahoe City & Truckee, o Provides affordable rents and prevents social isolation

7 Community Reinvestment Act - What have the local banks done? On the website highlight the positive as well or identifying what else banks can do (West Coast banks). Donate land or money to County housing coalition o Started in 2006 didn't go very far o County support is missing, but the city has done a good job. Donation of cabin for tax refund to S1. Joseph Land Trust to be moved to another site Encourage alternative hollsing types (e.g., 4-story attached town houses) New Policies and Programs In response to issues raised at the workshop, we have added the following new policies and programs to the Housing Element Policy Document: Program 1-10 CLARIFYING THE DEVELOPMENT PROCESS The City shall provide information on the City website to clarify the development process for developerslbuilders who are looking to construct housing in South Lake Tahoe and are unfamiliar with the process. The website shall provide an outline of the various steps of the development process including the regulatory review and permitting processes. Responsible Party: Planning Division and Building Division Funding: Staff time, general fund Timeframe: FY 2009 Quantified Objective: NIl\. Program 2 21 PUBLICIZE FORECLOSURE ASSISTANCE PROGRAMS The City shall post information on the City website about existing tool-free hotlines, foreclosure counseling, foreclosure prevention programs, and other resources available for residents facing possible foreclosures. Responsible Party: Funding: Timeframe: Quantified Objective: Housing DiviSIOn Staff time, general fund FY 2008 NIA Policy 3-7 The City shall consider the feasibility of converting substandard mobile home parks and motels to higher-density affordable housing and/or mixed-use developments when such conversions could create additional affordable housing opportunities. Policy 7-7 The City shall consider using HOME funds to support the development of mixed-income housing.

8 Modifications to Existing Policies and Programs In response to issues raised at the workshop, we have added the following new language (in italics) to existing policies and programs to the Housing Element Policy Document: Program 2-7 INTER-JURISDICTIONAL COOPERATION FOR WORKFORCE HOUSING The City shall meet with surrounding jurisdictions in the Tahoe Basin to discuss workforce housing issues and develop cooperative strategies that address identified workforce housing needs. The City shall participate with jurisdictions on the North Shore in the Housing Needs Assessment to determine the actual housing needs ofthe local workforce. Planning Division and Housing Division Responsible Party: Funding: Staff time, general fund Timeframe: FY 2008 Quantified Objective: N/A Program 2-19 PUBLIC EDUCATION The City shall provide information such as a presentation/slide show (e.g., the Local Government Commission's Compact Development Compact Disc: A Toolkit to Build Support for Higher Density Housing) that describes the myths and realities of multi-family and affordable housing development. The City shall make the information available on the city website, and, when needed, the City shall make this presentation/slide show available to developers involved in local affordable housing projects and housing advocates. The City shall encourage local housing advocates to make presentations to local builders and developers, Chamber of Commerce, civic groups, and the local community. Additionally, the City shall publicize the Affordable Housing Resources page of the City's Housing Division website as a source of information on housing programs (e.g., brochure available at the planning counter). Responsible Party: Funding: Timeframe: Quantified Objective: Housing Division and Planning Division Staff time, general fund FY 2008 and ongoing N/A Policy 7-5 To create a balanced community, the City shall promote mixed-income neighborhoods by encouraging innovative design (e.g., second units, co-housing, halfplexes, zipper lots, zero-lot lines, alley-loaded parking, six pack subdivisions, live-work units).

9 NOTICE OF PUBLIC HEARING REGARDING CITY OF SOUTH LAKE TAHOE DRAFT HOUSING ELEMENT UPDATE NOTICE IS HEREBY GIVEN that the City of South Lake Tahoe City Council will be holding a public hearing on TUESDAY, MAY 6, 2008 at 9:00 a.m. (or as soon thereafter as possible and this matter may be continued to another meeting without additional notice) in the City Council Chambers located at the Lake Tahoe Airport, 1901 Airport Road, South Lake Tahoe, California to consider the Draft City of South Lake Tahoe Housing Element Update. The City Council is being requested to authorize City Planning Staff to submit the Draft Housing Element to the State Office of Housing and Community Development for the review. Interested persons are invited the meeting and present oral and/or written comments on the project application to the City Council. Any written correspondence prior to the meeting should be directed to the City Council in c/o Susan Alessi, City Clerk, 1901 Airport Road, Suite 206, South Lake Tahoe, CA The staff report will be available for review at the City Clerk's Office, 1901 Airport Rd., Suite 206, South Lake Tahoe, California, at the City of South Lake Tahoe Planning Department, 1052 Tata Lane, South Lake Tahoe, California or via the City's website at - City Spotlight-City Council Meeting Agenda/Agenda Packets three (3) calendar days prior to the meeting. /s/ Susan llcessi SUSAN ALESSI, CITY CLERK CITY OF SOUTH LAKE TAHOE 1901 AIRPORT RD., SUITE 206 SOUTH LAKE TAHOE, CA (530)