STAFF REPORT. 1 ISSUE: 2 Consideration of a resolution to adopt the Draft Housing Element ("Housing 3 Element"). 4 5 RECOMMENDATION:

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1 rmill VALLEY] STAFF REPORT TO: FROM: VIA: SUBJECT: DATE: Mayor and City Council Danielle Staude, Senior Planner Vin Smith, Director ofplanning and Building Review and Adoption ofthe Housing Element and Finding ofexemption under the California Environmental Quality Act April 20, 2015 Approved for Forwarding: ~c..~e...", J~~cCann, City Manager Note: The Housing Element can be downloaded online at Hard copies are available for review at City Hall (26 Corte Madera Avenue) and the Public Library (375 Throckmorton) during normal business hours. 1 ISSUE: 2 Consideration of a resolution to adopt the Draft Housing Element ("Housing 3 Element"). 4 5 RECOMMENDATION: 6 Receive presentation, conduct public hearing and consider a resolution to adopt the Housing Element. 8 BACKGROUND: 9 General Overview 10 The City ofmill Valley is updating its Housing Element based on the State's 5 th Housing 11 Element Cycle, which represents the planning period for the San Francisco 12 Bay Area l. Housing Element law requires local jurisdictions to outline the housing needs 13 of their community for a given planning period and requires that each city adopt a 14 Housing Element as one of the seven required elements (or chapters) of a General Plan, 15 and submit draft and adopted elements to the Department of Housing and Community 'The nine county Bay Area includes Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma counties. 1 ITEM 6

2 16 Development (HCD) for review to ensure compliance with State law Mill Valley's current Housing Element ( ) was updated in October 2013 as part 18 of the MV2040 General Plan Update ("MV2040"), and included extensive community 19 outreach and participation. The two primary goals of MV2040 remain the same as 20 established in the 1989 General Plan, and are: To protect and enhance the natural beauty and small town character of Mill 22 Valley; and To encourage continued diversity ofhousing, income levels and lifestyles in the 24 community. 25 The Housing Element is intended to work toward these two primary goals by identifying 26 the City's housing needs (current and future); identifying constraints to housing; 27 identifying a capacity to accommodate the City's housing needs and developing a 28 Housing Plan to address these needs. 29 The main components ofa Housing Element are summarized in the graphic below: Analysis of existing housing need (all economic levels and those with special needs) based on population and employment trends, housing trends such as overcrowding/overpayment and housing availability and affordability, Chapter 3 and Appendix A) Assessment of below-market rate units at risk of being converted to market rate (Chapter 3) Analysis of future housing need based on RHNA, public services/infrastrueture and financial resources (Chapter 3) Governmental (e.g. approval process, discretionary requirements, permitting process, fees, zoning requirements and land use controls, Appendix B) Non-Governmental (e.g. financing, land and construction costs, Appendix B) Environmental (e.g. hillsides, floodplains, available land, Appendix B) Identification of new units (planned and built) during a RHNA cycle (Table 4.1, page IV-2) Site inventory ( capacity analysis ) identifying parcels that have potential to development during the RHNA cycle describing physical, environmental, location and parcel size to accommodate various housing types and income levels (Appendix C) Identification of adequate sites based on the above (Table 4.5, page IV-5) Review of previous Housing Element items (results and status, Appendix 0) Revise, incorporate and/or add housing goals, policies and programs based on constraints, review of previous programs and input from the community (Chapter 2) Quantified objectives for the number of housing units by income group to be constructed, rehabilitated and conserved (Table 2.2, page 11-41) 2 Article 10.6 ofthe Government Code (Sections ). HCD is required to review housing elements and report its written findings within 60 days for a draft-housing element (Government Code Section 65585(b» and within 90 days for an adopted element (Government Code Section 65585(h». In addition, Government Code Section 65585(c) requires RCD to consider written comments from any group, individual or public agency regarding the housing element under review. Source: 2

3 34 The Housing Element included several "Short-Term" Programs identified for 35 implementation in 2014 since the Housing Element was adopted in 2013 toward the end 36 of the 4 th Housing Element Cycle ( ). Staff is happy to report that within the 37 short timeframe since adoption of the current Housing Element ( ) significant 38 progress has been made on most ofthese "Short-Term" Housing Programs allowing the 39 City to qualify for HCD's streamlined review'. 40 Implementing the Housing Element as part of the General Plan is one of City Council's 41 priority projects, which includes: 1) Zoning Ordinance amendments and Multi-family 42 Design Review Guidelines development, 2) adopting a General Plan Policy and Program 43 Implementation Schedule, 3) adopting the Housing Element, 4) appointing 44 and beginning Sub-committee assignments, and 5) aligning the City's Core Values to 45 coincide with those generated by adoption ofmv State and Regional Framework 47 The Association of Bay Area Governments (ABAG) administers the Regional Housing 48 Needs Allocation (RHNA) process, including the development of a methodology and 49 determining how the total Bay Area regional housing needs numbers (generated by HCD) 50 is allocated to each city and county within the Bay Area. Each city and county's housing 51 needs are distributed by four income categories-extremely low, low, moderate and 52 above moderate income. 53 * The "Very Low Income" and "Low Income" schedules shown above were published by the U.s. Dept. of Housing and Urban 54 Development (HUD), effective 12/18/2013. The "Median Income" schedule shown above is based on the FY2014median family 55 income for Marin County, CA of $97,100 for a four-person household, issued by HUD effective 12/18/2013, with adjustments for 56 smaller and larger household sizes. The "Moderate Income" schedule shown above represents 120% of median income. For 57 additional information: As part of the RHNA process, the City is required to identify how it will accommodate 60 (not build) various housing types by income levels (very low, low, moderate and above 61 moderate). The table above identifies the City's RHNA numbers (or "regional housing 62 needs") for the past three Housing Element updates. To satisfy statutory requirements 63 that the City can accommodate its regional housing needs, the City is utilizing the 3 For many local governments, much ofthe information in housing elements found to be in compliance with the statute for the previous planning period is still current and/or particular conditions and circumstances have not significantly changed since the last update. Jurisdictions that adopted a housing element in the fourth cycle that HCD found in substantial compliance with State law may opt to use the Streamlined Update to show where changes were made in the previously adopted housing element. HCD review relies upon the element in compliance in the prior planning period and will be limited to changes that have occurred since the priorplanningperiod as indicated in the Streamlined Update template. HCD does not review areas that have not changed since their content continues to be sufficient to meet statutory requirements. (December 2012 Housing Element Update Guidance, 3

4 64 existing "Capacity Analysis" list (Appendix C) contained in the current Housing Element, which was developed and reviewed with considerable public input and 66 assistance of the Land Use & Mobility Working Group, General Plan Advisory 67 Committee, Planning Commission and City Council. While there has been some concern 68 generated from the community about this approach, the list and its implications, utilizing 69 a Capacity Analysis methodology allows great flexibility in the City's entitlement and 70 Design Review process when considering a development project. The Capacity Analysis 71 does not pre-approve or propose that properties develop. Instead, the Capacity Analysis 72 identifies sites that demonstrate the City's ability to accommodate (not build) its housing 73 needs. Traffic concerns, particularly on East Blithedale, which are of critical concern to 74 the City Council and our residents, have been raised in some public comments. These 75 concerns are valid and must be addressed as part of the development review process, 76 should any parcel in Mill Valley (regardless ofbeing on the list or not) wish to obtain a 77 development approval. With the adoption ofthe current Housing Element, the 78 City retains its authority for review/approval of any development project (including 79 housing). With the adoption ofthe proposed Housing Element , the City will 80 maintain this local control over review/approval of all development proposals. Again, 81 environmental review is also a required precursor to the approval of any development 82 project in Mill Valley. 83 As stated on page C-l of the current Housing Element, as well as the 84 proposed Housing Element, when describing the Capacity Analysis: 85 "The analysis does not imply that any ofthe units would be built in the future, or that 86 any ofthe sites or units are "pre-approved" for development. All future projects must 87 go through planning and environmental review (CEQA) processes as established by 88 the City and State. The Capacity Analysis is a strategy that looks at the community 89 as it is today, applies the existing development rules (emphasis added) and calculates 90 the resultant number ofhousing units that could reasonably be provided." 91 Housing Element Update & Review Process 92 The Draft Housing Element before City Council is similar to the well-accepted Housing Element as it was adopted less than 2 years ago in October 2013 after 94 extensive public involvement and discussion and much public review. Modifications to 95 the Housing Element are proposed to include updates to: 96 the Housing Element planning cycle and Regional Housing 97 Needs Allocation (RHNA) cycle; 98 new statistical data; 99 status ofimplementing Housing Programs (Chapter 2); 100 incorporating feedback received from the community in 2014, through the 101 implementation of various Housing Programs and hearings on the Housing Element; and 103 incorporating comments received from Planning Commission, legal review and 104 HCD. 105 HCD has submitted written communication indicating that the draft document satisfies 106 State Housing Element law. Adopting the Draft Housing Element within the statutory 107 deadline of May 31, 2015 (January 31, 2015, plus a 120-day grace period), allows the 4

5 108 City to remain on eight-year planning cycle. Staff should note that other Marin 109 communities, such as Sausalito, Novato, San Anselmo and San Rafael have taken a 110 similar approach in their recent Housing Element Updates. 111 The Draft Housing Element was released to the public in October 2014 for 112 review and comment (including an e-notification to over 8,000 s). On October 28, , the Planning Commission conducted a public hearing to collect public comments 114 and provide direction to staff on the Housing Element. At this meeting, four community 115 members provided comments to the Planning Commission on the Housing Element. 116 Staff then revised the Draft Housing Element based on Planning Commission review and 117 direction, which were mainly clerical edits, and on October 30,2014, staff submitted the 118 revised Draft Housing Element to HCD for review. At HCD's request, additional minor 119 clarifications were added to the Draft Housing Element (identified by "track changes" in 120 the proposed Housing Element and summarized below). Upon review of the 121 additional clarifications, the City of Mill Valley received written correspondence from 122 HCD indicating that the draft Mill Valley Housing Element satisfied the 123 State's statutory requirements (ATIACHMENT 3). 124 On January 27, 2015, the Planning Commission held a subsequent hearing to review the 125 Draft Housing Element. At this meeting, 6 persons provided comments on the 126 Housing Element. After hearing public comments and reviewing the Draft Housing 127 Element, Planning Commission unanimously passed a resolution (ATIACHMENT 4) 128 recommending that City Council review and adopt the Draft Housing 129 Element. (See Planning Commission's January 27 meeting summary in ATIACHMENT for details). 131 Meeting summaries and public comment letters received on the Housing Element from 132 October 2014-January 27, 2015 are contained in ATIACHMENT 5. The timeline for 133 document review to date is provided in the table below., _ 0 I Housing Element (HE) Update Process & Timeline 0 October 2013 October 2014 Oct. 28, 2014 Nov-Dec, 2014 Dec. 30, 2014 January 27, 2015 April 6, Housing Element Adopted with MV2040 Draft Housing Element available to the public Community meeting and PC Review HCD 60-Day "Streamlined" Review HCD letter indicating the City's HE meets state requirements PC Review; Approval of Document through Resolution PC15-02 City Council to review and consider adoption April-May 2015 Adopted Housing Element to HCD for final review 134 5

6 135 DISCUSSION: 136 To address the Housing Element cycle, Mill Valley is starting with the same 137 plan adopted in conjunction with MV2040 in October 2013 and updating it with current 138 background information, progress in implementing housing programs from the adopted 139 Element, and minor program refinements. As noted above, MV2040 and Housing 140 Element Update included extensive public input and review. As with the adoption of the 141 current Housing Element, the City retains its authority for review/approval of 142 any development project (including housing). The City will maintain local control over 143 review/approval of all development proposals, just as it does now under the current 144 Housing Element. 145 The Draft Housing Element has undergone two rounds of minor revisions 146 since it was originally released to the public in October ATTACHMENT contains the draft document reviewed and approved by the Planning Commission at its 148 January 27, 2015, meeting. ATTACHMENT 6 contains a memo describing minor 149 updates to the Housing Element, including the Acknowledgements section and Table C.l 150 numbering. 151 Community input as part ofthe Housing Element Update process is important to the City. 152 ATTACHMENT 5 contains Planning Commission meeting minutes and public 153 comments throughout the recent public review process, which are summarized below. 154 Changes as part ofthe Housing Element Update 155 Changes made to the document as part ofthe update include: 156 A. Addition ofone new program (Junior Second Units (program #9, page II-tO) 157 This program reflects interest in considering design and development standards to allow 158 the development ofjunior second units in town. 159 B. Status and progress toward implementing Housing Programs. This chapter 160 remains similar to the previous Housing Element -- the seven Housing Goals remain the 161 same with updates reflecting status toward implementing programs. Progress toward 162 implementing Housing Programs include: 163 Multi-familylMixed Use Design Guidelines and building standards 164 (Program #1, page II-2); 165 Inclusionary Housing Regulations and Affordable Housing Impact Fees 166 (Programs #14 and 15, pages II-15 and II-16); 167 CondominiumConversion Regulations (Program #4, page II-5); 168 Density Bonus (Program 24, page II-21); and 169 Special Needs Housing (previous program #25) has been eliminated from the 170 Housing Plan as this program has been fully implemented through City Council's 171 adoption ofthe Special Needs Ordinance in C. New Appendix E: Second Unit Survey 173 This appendix is new and summarizes the data collected from a second unit survey 174 conducted by City staff in September The data collected is used to determine the 175 assumptions that can be used for second units in determining RHNA allocations for new 176 second units (see Page IV-5 for details). 6

7 177 D. Track Changes. Revised language highlighted in track changes represents 178 language included to address Planning Commission and community comments received 179 at the October 28, 2014 Planning Commission meeting, and verbal comments received 180 from HCD on December 23, This document (with track changes) was 181 recommended for approval by the Planning Commission on January 27, Public Participation (Chapter I, page 1-7 arid 1-8 in track changes): HCD 183 requested additional information summarizing recent community participation 184 associated with the Housing Element Update. 185 Short-term Rentals (Chapter 2, pages 11-5 and 11-9). Language was added to 186 Program #4 indicating that the City will clarify "tear down" and consider 187 regulations or incentives for property owners to maintain their existing rental 188 housing as opposed to tearing down the building, renovating space to create 189 "luxury" rentals, and/or converting the space to ownership or commercial space. 190 Based on feedback received by the Planning Commission, language was added to 191 address concerns related to the increased number ofrental properties being used 192 for short-term vacation rentals. The Draft Housing Element includes an 193 assignment to discuss revising the Municipal Code to better regulate and/or limit 194 short-term rentals (less than 30 days), including second units in single family 195 residential areas, as a means preserving and increasing the availability of rental 196 properties for longer term residence (as opposed to vacation rentals). 197 Emergency Shelter Operations (Chapter 2, Program #30, page 11-25). State 198 law requires emergency shelters to be permitted by right. As such, Section ofthe Municipal Code will be modified, striking language requiring 200 an annual report and Planning Director approval. An amended ordinance 201 effecting these changes will be coming to Council for review and consideration 202 early this spring Public Comment 205 The City has received several public comments as part ofthe public review and Housing 206 Element update process. Below is a discussion, by category, ofthese comments. (We 207 have also prepared and published a "Fact Sheet" which addresses commonly asked 208 questions which is included as AITACHMENT 7 to this report). 209 Chapter 2: Housing Plan 210 Historic Preservation Guidelines and Incentives (Program #2, page 11-3). 211 Staffhas received comments requesting that the City set aside funding in order to 212 develop a formal list ofhistoric resources in Mill Valley to allow the City to work 213 toward the implementation of this housing program. The prioritization and 214 subsequent budgeting of all General Plan implementing programs will occur later 215 this calendar year when staffreports to City Council on the Implementation Plan 216 for MV Rental Housing (program #4, page 11-5) has been modified based on comments 218 received from Council, Planning Commission and the community regarding the 219 desire to maintain affordable rental housing, including second units. This concern 220 comes from a noticeable rise in rents and reduction of available long-term rental 7

8 April 20, 2015 City Council 5taff Report 221 units. The proposed objective goes beyond the previous Housing Element's work 222 ofimplementing the condominium conversion regulations, indicating that the City 223 will clarify "tear down" and consider regulations or incentives for property 224 owners to maintain their existing rental housing as opposed to tearing down the 225 building, renovating space to create "luxury" rentals, converting the space to 226 ownership or commercial space and/or renting out the residential space for short- 227 term vacation rentals. 228 Housing Advisory Committee Program #37, page 11-32). Staff has received 229 several comments about the creation ofa Housing Advisory Committee (some in 230 favor and some opposed). At this time, staff suggests maintaining the program 231 and allow City Council an opportunity to discuss whether such a committee is still 232 desired, its potential charge, including the proposed structure (possibly 2 Council 233 Members, 2 Planning Commissioners and 1 community member at-large), work 234 plan, and by-laws ofcommittee. 235 Chapter 4: Housing Resources 236 Staff has received numerous comments about this section ofthe Housing Element in 237 association with the Capacity Analysis (Appendix C). This chapter and Appendix C 238 remain similar to the previous Housing Element--documenting the City's resources 239 available to develop, rehabilitate and preserve housing in Mill Valley during the RHNA cycle. This includes identifying a capacity to accommodate new 241 housing based on General Plan Land Use and Zoning designations, as detailed in in 242 Appendix C. 243 The City is using the same approach as the last Housing Element to illustrate that the units identified as part ofthe RHNA cycle can be accommodated, and 245 does not require the City to rezone, increase already allowed densities or amend the 246 City's Land Use in order to do so. In Chapter 2 of the Housing Element, Table (page IV-2) provides a summary of the number of potential units suitable to 248 accommodate housing. 249 The City has received public comment suggesting that the City reduce the number of 250 sites in the Capacity Analysis and expressing other concerns relating to this tool. 251 Staff addresses the focus ofthese comments in the discussion on Appendix C below. 252 Appendix C: Capacity Analysis 253 The City's 2003 Housing Element utilized the traditional Housing Development Site 254 Inventory approach which identified a smaller list of potential development sites, 255 such as 8 Old Mill, and also referred to the Miller Avenue Precise Plan (it did not 256 designate actual sites nor the number of units for each site on Miller) to satisfy the 257 City's regional housing needs. More recently, as part of the current Housing Element, and again for the Draft Housing Element, the City 259 applied a very different and new methodology and approach to satisfying the City's 260 housing needs by utilizing a Capacity Analysis for the entire City. 261 The Capacity Analysis identifies a unit capacity within Mill Valley, to illustrate that 262 the City can accommodate new housing to satisfy the RHNA numbers based on 263 allowable development determined through the City's existing General Plan Land 264 Use and Zoning designations. The analysis identifies the potential additional 8

9 265 "capacity" on existing sites based on the evaluation and filtering ofover 5,600 parcels 266 based on the methodology described below. 267 The analysis remains the same as that developed by the community through MV and the Housing Element process, with a few sites removed due to 269 redevelopment associated with the site. The results also remain the same, illustrating 270 that the City has adequate capacity to meet this cycle's RHNA numbers without the 271 need to rezone or increase development intensities for properties. Should the site 272 redevelop with fewer units than reflected on the Capacity Analysis, which is fully 273 expected, staff can utilize the Capacity Analysis to illustrate that the City can satisfy 274 its RHNA based on other potential sites identified on the list Methodology (page C-2). The methodology for the Capacity Analysis 276 remains the same as developed by the MV2040 Working Group and GPAC 277 (and accepted by the Planning Commission and City Council) for the previous 278 Housing Element to identify all underutilized parcels based on an established 279 set of criteria or "filters", including land value, vacant or no living units on 280 site (for properties zoned single-family), average slope less than 50%, old 281 structures on site (built before 1982), not in the historic overlay, not recently 282 approved/constructed, not owned by public agencies (other than Mill Valley) 283 and not identified on the sites identified by the Open Space Priority 284 Committee (2002 Report). See page C-2 for additional assumptions to 285 determine the Mill Valley parcels qualifying to be included in the Capacity 286 Analysis Development Potentiall"Potential Number of Units" (page C-4): Within 288 this section ofthe Appendix, there are some important notes associated with 289 how capacity for a given site was determined. Rather than using maximum 290 allowable densities established through the City's zoning regulations and land 291 use designations, the analysis is based on realistic historic development 292 experience in Mill Valley (see page C-10 for examples of recent infill 293 development). 294 Single family zoned areas that are considered vacant by the Marin County 295 assessor that met the filtering criteria above (such as slope of lot) were 296 identified. 297 Multi-Family zoned areas were assumed at no more than 75% of the 298 maximum potential density established through the City's land use and 299 zoning designations. Sites that resulted in two or more units are listed. 300 Commercially Zoned areas were assumed to be potentially mixed-use 301 projects in nature (again, the existing zoning in commercially-designated 302 areas allow for residential and mixed-use development. This type ofuse 303 has been listed among the conditionally permitted uses in our commercial 304 zoning districts for more than 38 years) and only 50% of the lot size was 305 considered available to accommodate housing. Larger commercial sites 306 over a quarter acre after taking 50% of the lot size were given a lower 307 density of21 units/acre (rather than the maximum potential density of units/acre). For smaller sites, densities were assumed up to 29 units/acre 309 based on a maximum of 1 dwelling unit per 1,500 square foot of lot area. 9

10 (Note that the resulting densities of units/acre are based on the use ofhalfthe site; the true density of a redevelopment project is based on the entire square footage of the site which results in lower density ranges of units/acre for all ofthe commercial sites listed. Summary of capacity Analysis for Planning Period (Draft Housing Element, Table 4.3, page IV-S) Zoning District #of Potential unit Potential Income category parcels capacity Single Family RS, RP, RSP Moderate, Above Moderate Multi-Family RM, RMP 3 43 Very low, above moderate Commercial CoG, CoN, CoR, P-A Very low, moderate Total As noted in Appendix C, the Capacity Analysis does not imply that units must be built, or that any ofthe sites or units will be "pre-approved" for development. All projects will be treated equally and must go through Mill Valley's established rigorous discretionary review as part ofthe public planning and environmental review process. Development proposed will be required to follow the procedures set forth in the City's Municipal Code such as: public notice; satisfying land use requirements (minimum/maximum densities); meeting zoning requirements (type of use, setbacks, heights, parking, inclusionary housing, etc.); undergoing environmental review on the proposed project; and receiving Design Review approval for the proposed project. o Lots for Consolidation (page C-5). Sites were also identified for the potential of lot consolidation, due to the nature of Mill Valley's parcels which are small and very few vacant. RCD requested that the City identify those parcels with potential for lot consolidation as part of the Housing Element as a means ofaccommodating lower income housing as part of potential housing sites (a larger site can typically accommodate a wider range ofincome levels including low and moderate income housing). The size of parcels remains a concern for RCD in terms of accommodating the various levels ofaffordability for the City's housing needs, and therefore the sites for consolidation remain in the document. Similar to the sites list, the identification of lots for consolidation does not "pre-approve" a project or parcels for consolidation and/or development. (Note: see AITACHMENT 6, which correctly identifies those lots for potential consolation). o Additional Site Potential (page C-7). The Housing Element also includes a list of"additional sites" identified by the private advocacy group known as the Mill Valley Affordable Housing Committee. This list remains in the document, similar to Housing Element. It has been proposed that the list of additional sites illustrates site potential based on sustainability- 10

11 346 related criteria such as walkability, solar access and proximity to amenities. 347 These sites were not included in the Capacity Analysis as the sites do not meet 348 the filtering criteria established as part ofthe Capacity Analysis (see page C for details). 350 HCD has indicated that regardless of the type of group (non-profit or not), 351 ideas expressed by community members interested in fostering affordable 352 housing should be considered in the Housing Element process. It should be 353 noted that these sites are not considered part ofthe Capacity Analysis and do 354 not playa role in satisfying the City's housing needs. 355 Staff acknowledges that inclusion ofthis list in the Housing Element appendix 356 does present some confusion. In as much as the sites included on this list do 357 not meet the established criteria and are not considered in the Capacity 358 Analysis and present some confusion, deleting the list from the Housing Element is an option for Council consideration Request for Capacity Analysis Reduction. The Planning Commission and 362 City Council received several comment letters (ATTACHMENT 5) 363 suggesting that the City should reduce the number of sites reflected in the 364 Capacity Analysis (Appendix C) to present a capacity close to the number of 365 units in the Housing Needs Analysis (Table 4.1, page IV-2). The Fact Sheet 366 (ATTACHMENT 7) provides information on these concerns. In summary, the 367 number ofpotential units identified in the Capacity Analysis illustrate that the 368 properties under our long-standing zoning classifications and recent General 369 Plan Land Use designations are capable of accommodating this cycle's 370 RHNA. It should be noted that zoning has remained the same with respect to 371 potential land uses and potential development densities for more than years. The capacity for in-fill development beyond the designated RHNA ( new units) or "buffer" will provide the City with tremendous discretion and 374 flexibility in review and consideration ofdevelopment requests. For instance, 375 should a property owner or the City desire to have a site develop at a density 376 less than the capacity available, the City can make a finding, supported by the 377 Capacity Analysis that there are sufficient remaining sites in the City to 378 accommodate the City's housing needs. The City also has a policy in the 379 MV2040 Land Use Element allowing the City to reduce the intensity of 380 development on a parcel due to environmental considerations (such as slope 381 oflot or due to the creek setback) Preemption due to State Law While the Housing Element includes requirements of the State, the 385 implementation ofthe Housing Element rests solely upon the City. State law 386 continues to change, but local control and discretion in the approval of 387 development projects remains the same. Recent legislative activities, such as 388 SB743 and SB628 are very specific, and currently do not apply to the Mill 389 Valley community. (SB743 relates to mixed use projects in Transit Priority 390 Areas identified by the State, which Mill Valley has none, and SB628 is 11

12 391 related to infrastructure financing bonds which also are not in place in Mill 392 Valley. For the provisions ofsb628 to be applicable, the City would have to 393 initiate a bond measure and voters would have to approve such proposals). 394 Traffic Traffic concerns are of critical interest to the City Council and our residents, 396 and playa significant part in the review and consideration of development 397 applications. These concerns, along with other environmental issues, must be 398 addressed as part ofthe development review process. Traffic congestion is not 399 solely related to "new development," it is also related to a host of issues 400 including existing travel behaviors and infrastructure limitations, which 401 ultimately comes down to supply and demand. The issue of traffic remains a 402 high priority and topic for Council and the community, and will be discussed 403 at an upcoming Council meeting. Staffis also working on a nexus study that 404 will be presented to Council, which discusses an affordable housing impact 405 fee based on the number ofjobs generated by a given single family residence. 406 It can be assumed that some of these jobs generated by single family 407 residences also results in added vehicle trips, and is an important factor in the 408 discussion oftraffic congestion and identifying solutions CONCLUSION: 411 The Housing Element is intended to work toward two primary goals (listed below) ofthe 412 General Plan, one of which is the continued diversity of housing and income levels 413 within the City. The Housing Element addresses housing needs by creating a Housing 414 Plan (Chapter 2) and to identify sites to foster the housing needs ofthe community. The 415 Housing Element Update minimally changes the existing plan which was developed and 416 reviewed with considerable public input and assistance of the Land Use & Mobility 417 Working Group, General Plan Advisory Committee, Planning Commission and City 418 Council. 419 By no means does the Capacity Analysis (Appendix C) require development or "pre- 420 approve" projects. The analysis does illustrate that the City can meet its housing needs 421 based on the existing zoning regulations. While there has been some concern generated 422 from the community about this approach, the list and its implications, utilizing a Capacity 423 Analysis methodology allows great flexibility in the City's entitlement and Design 424 Review process when considering a development project. Any development project in 425 town must undergo public planning and environmental review as part of the local 426 approval process. The Capacity Analysis also does not provide any advantage or 427 development entitlement to a property included on the list. 428 ENVIRONMENTAL REVIEW: 429 City staff has coordinated with the City Attorney on the environmental review of the 430 Housing Element. The Housing Element remains very similar to the Housing Element-utilizing the same sites inventory to address RHNA (Housing 432 Element, Chapter 4 and Appendix A) and relying on the same Housing Programs for 433 implementation of Housing Element goals and policies. There is, in fact, only one new 434 program (Housing Element, Chapter 2, Program #9, Junior Second Units), which does 435 not substantively modify the City's land use. This new program can be judged with 12

13 436 certainty to carry no possibility that it will have a significant effect on the environment. 437 Thus, after careful review, it has been determined that "the project" ( Housing 438 Element) could not have significant impacts beyond those identified in the MV General Plan Environmental Impact Report (State Clearinghouse No ) and 440 therefore is exempt from further review under the California Environmental Quality Act 441 (Public Resources Code et seq.) and 14 C.C.R (b)(3) GENERAL PLAN CONSISTENCY: 444 State law requires the elements of the General Plan to be consistent. The Mill Valley Housing Element is consistent with all of the other elements ofthe General 446 Plan, in that it does not require any changes to the other elements, or modify land use or 447 densities. The goals, policies and programs in this Element reflect the policy direction 448 contained in other parts ofthe General Plan and are based on the two overarching goals 449 established in the MV2040 General Plan which are: 450 1) to protect and enhance the natural beauty and small-town character of 451 Mill Valley and 452 2) to encourage continued diversity ofhousing, income levels and lifestyles in 453 the community. 454 Various policies and programs established in Chapter 2 in the Housing Element are cross- 455 referenced with supporting policies in the other elements ofthe MV2040 General Plan NEXT STEPS: 458 Should City Council pass the Resolution (ATIACHMENT 1) adopting the Housing Element, staff will submit the Final Housing Element to HCD for certification 460 and file the Notice ofexemption with the County Clerk, as required by law ATTACHMENTS: City Council Resolution Finding that the Housing Element Update is Exempt 464 from CEQA and Adoption ofthe Housing Element Housing Element (Dated January 27,2015) HCD Review/Pre-certification Letter Planning Commission Resolution (PCI5-02) Recommending Adoption of the 468 Housing Element February 27, 2015 Planning Commission meeting minutes and public comment 470 letters; October 28, 2014 Planning Commission meeting minutes and public 471 comment letters; and recent public comment letters for the April 6, 2015 City 472 Council Meeting Staff Memo: Minor Clarification and Updates to the Draft Housing Element 474 (Acknowledgements and Table C.l) Fact Sheet ONLINE RESOURCES: 478 Planning Commission Staff Reports: (See 479 "meetings and events") 13