REGIONAL HOUSING MANDATE COMMITTEE MINUTES

Transcription

1 REGIONAL HOUSING MANDATE COMMITTEE MINUTES Regular Meeting April 19, 2012 The Regional Housing Mandate Committee met on this date in the Council Conference Room at 4:02 pm. Present: Absent: Holman, Scharff, Schmid Burt Oral Communications Fran Kristofferson spoke regarding Palo Alto becoming out of balance. She said between having narrow roads, traffic congestion, and big houses being built, the charming town of Palo Alto was starting to deteriorate. Services have disappeared, which forced residents to get into their automobiles to look for services elsewhere, thus creating more air pollution and traffic congestion. Agenda Items 1. Review and Direction Regarding Draft Preferred Scenario for Sustainable Communities Strategy (SCS) and Regional Housing Needs Assessment (RHNA) Allocation Curtis Williams, Planning & Community Environment Director, spoke regarding the jobs and housing connection scenario release by the Association of Bay Area Government (ABAG) and Metropolitan Transportation Commission (MTC). He said in May the ABAG staff would begin the environmental review process and would continue through the remainder of the year. ABAG and the MTC would release the Environmental Impact Report (EIR) schedule towards the end of the year and in 2013 the Sustainable Communities Strategy (SCS) for the nine Bay Area Counties would be adopted. Staff felt it would not be necessary to provide additional comments to the agencies prior to May since they already had gotten input from the City. A few issues had lingering concerns regarding 1) demographics and economic assumptions, 2) distribution of housing allocations and jobs within Palo Alto by 2040, and 3) Stanford General Use Page 1 of 14

2 Permit and Unity Plan. He said 10-years ago Stanford s plans were adopted that included 2 million square feet of non-residential use and a potential use of 2,500 to 3,000 housing units. Approximately 1 million square feet of nonresidential space and 1,500 units planned through the County were not reflected in the numbers to 2040 or for the short-term housing period. He advised ABAG to look at the website that contained Stanford s report that included development and how much more could be done under the permit. Additionally they should review Palo Alto s unit allocation that should be put into the County s allocations that could impact the School District it served. Melissa Baten Caswell, Palo Alto Unified School District Board Member, stated it would make a difference to the School District if units had not been counted and were constructed or approved. Mr. Williams provided two colored maps that reflected Transportation Analyses Zones (TAZ) throughout the city that Palo Alto. The Valley Transit Authority (VTA) and ABAG used these zones to determine traffic issues that fed into traffic modeling. Chair Schmid asked if the zones reflected the census areas. Mr. Williams said no. Mr. Williams said one of the dilemmas was some of the areas encompassed Mountain View. Other areas were partly for the County and partly for Palo Alto. It was unclear what the actual numbers were that were allocated to Stanford, Mountain View, the County, and Palo Alto. Ms. Baten Caswell asked if the numbers were ABAG s projects. Mr. Williams said yes. The first number shown was the 2010 census, the second was the 2040 year growth number, the third number was the expected growth between 2010 and 2040, and the fourth number was the increase/decrease percentage growth. Almost all numbers in the Baylands area were for Mountain View and very little was Palo Alto s and that was along Bayshore Road. Vice Mayor Scharff said for clarity, the area on the other side of East Bayshore should be red instead of 0. Mr. Williams clarified it should not be 0. Vice Mayor Scharff said housing was undetermined for that area. Page 2 of 14

3 Mr. Williams said ABAG had made changes to the initial scenario a year ago, and the yellow or single-family zoned areas had a larger area of color. In the existing single-family developed areas and now seemed to be reflecting that those are not areas of growth. The new scenario focused on the true development along El Camino, Alma, and the Downtown area. Council Member Holman said the maps were very inaccurate for present day and raised concerns regarding accuracy for forecasting. Mr. Williams said the baseline job numbers were found to be inaccurate. Walter F. Kieser, Economic and Planning Systems (EPS), Berkeley, said the numbers were derived mechanically and that the formula uses were based on mathematic factors. He recommended that Staff complete the ground work in order to get accurate numbers. Mr. Williams asked Mr. Kieser to elaborate on the baseline issue. Mr. Keiser stated that ABAG tended to change things making it difficult to track the numbers. In one instance the number of jobs in Palo Alto increased by 20,000 from previous scenarios. He said accurate numbers were important in terms of what policies were being promoted on jobs or housing. One remedy would be to ask ABAG how they arrived at the numbers. Council Member Holman asked if 2010 numbers were census number. Mr. Williams said the housing numbers were but not the job numbers. The job numbers were a concern because of the increase of 20,000. Council Member Holman needed clarification on whether placement of housing and jobs on the map were accurate. Mr. Williams said ABAG had a spreadsheet that contained the household and job numbers allocated to a particular area. Mr. Keiser said the numbers were used for the transportation molding. Vice Mayor Scharff found the maps troubling. He felt a letter needed to be written to address the inaccuracy of the job numbers. He asked where the indicated jobs were located. Page 3 of 14

4 Mr. Williams said Research Park, California Avenue, portions of El Camino Real, Downtown area, Stanford Mall, Stanford Hospital, as well as portions of Midtown and the San Antonio Road area. Vice Mayor Scharff asked if there was a sense of the job numbers for those areas. Mr. Williams said Staff may have the numbers broken down by census. Vice Mayor Scharff said we should be able to respond with a letter requesting an indication regarding the job numbers and their location and the same for housing. Mr. Williams said the baseline for housing was fairly accurate. Mr. Keiser concurred with Mr. Williams regarding the accuracy of the housing numbers. Mr. Williams said ABAG and the City used the 2010 census as the baseline. Vice Mayor Scharff asked if the plan was to have Staff review the data to determine the number of homes for a particular area. Mr. Williams said yes. Staff would highlight any issues and in terms of the Regional Housing Needs Assessment (RHNA) housing number. Vice Mayor Scharff asked if the area where Wells Fargo on California Avenue was the new site where Stanford was going to build a large housing development. Mr. Williams said yes. Vice Mayor Scharff said it did not appear that it was included in the map. Mr. Williams said Staff would need to do an analysis and categorize the errors. Vice Mayor Scharff said the Council had voted to not put a Priority Development Area (PDA) on the El Camino Real or in the Downtown areas. The information he received from the Housing Methodology Committee meeting was that Growth Opportunity Areas (GOA) were being eliminated. He raised concern that if an area was not a PDA or GOA, they should not be reflected as such. Page 4 of 14

5 Council Member Holman said it was alarming that a map containing inaccurate information would be published. She noted that even if there were GOA s they were way off and inconsistent. Vice Mayor Scharff raised concerns regarding the Staff report that stated theta designated GOA s. He asked if that was correct. Mr. Williams said VTA controlled corridors and designated the entire El Camino Real corridor. Barbara Klausner, Palo Alto Unified School District Board Member, asked if ABAG had an explanation on how the numbers were broken out. Mr. Williams said it appeared that ABAG focused on the major corridors and train stations. Another factor was that ABAG would incorporate an area into their general plan if they felt the area had a large opportunity for growth. He said Mountain View was factored in even though it was not a transit corridor but had a general plan that showed a lot of growth in the area. Palo Alto needed to have ABAG focus on things that really stood out to encourage them to make corrections in their numbers. Board Member Baton Caswell raised concerns that the baseline information was incorrect. She asked if it would impact the future housing requirement for the School District if the jobs model was off or too high. If this was not an issue, where would the impact be and should the School District be concerned. Mr. Keiser said ABAG based their housing allocation in relationship to jobs and was referred to jobs-housing connection which had a mathematical connection. Mr. Williams said they were connected regionally. ABAG felt there were preexisting units available that could be added to the listing without new construction because of the economic status. Early in the process ABAG based the necessary housing units on available jobs. Staff explained that a large number of housing was not necessary to accommodate the jobs because of transit accessibility. Planning and Transportation Commissioner Susan Fineberg said she found it difficult to accept the analysis when the baseline was inaccurate and all the underlying assumptions were unrealistic. It was her understanding that the planning was done without the constraints of funding, infrastructure, and allowable land for building. A planning methodology did not exist to yield good outcomes. She questioned at what point would these become Page 5 of 14

6 mandates and at what point would the state remove the mandate constraints. The state s bond fund was almost depleted to fund new growth for building new schools. Once funds were depleted statewide, laws would need to be changed to deal with the impacts and would not be considered by the California Environmental Quality Act (CEQA) as long as they were state bond money for new school construction. When those funds hit zero, it would revert to the previous conditions where cities would need to consider the impacts. She wanted to know how the zoning in the Comprehensive Plan marry up with the mandates. Mr. Williams said ABAG s presentations noted that 80 percent of housing would be childless with more seniors and young professionals. Board Member Baton Caswell asked if there was an expectation planned for it. Mr. Williams said they were not showing unit types but it would seem that the average household would be factored in. Chair Schmid said the data was good. The current housing numbers were accurate; the jobs data were taken from the 2000 census, which included the number of home-workers. The 2010 census would be out in another year when employment data was available. Chair Schmid said in terms of where we are going with this. He said area 356, the downtown area, had 1,800 new housing units. He said the Council had recently discussed the Gateway project that was located directly across from transit in a walkable neighborhood and came up with zero new houses on a 5-story building. Finding 1,800 new units was a mystery. The second issue was the El Camino corridor, ABAG said they took half a mile from the corridor, had twice as many new housing units as either the California Avenue area or the downtown area. ABAG viewed this area as the key area growth and should be addressed in the City s housing contract. Mr. Williams said using the half mile corridor into Palo Alto had a narrow depth in the commercial properties Council Member Holman raised concerns that the EIR would come in at the end and ABAG would not be concerned about the environmental impacts in some of these areas. She questioned how to challenge the entire entity or process. Mr. Keiser said the purpose of his memo was to draw the attention to the fact that there were two assumptions built into the regional forecast that had Page 6 of 14

7 drivers. The first was the notion of national population growth. The model started with work being done on how population changed in the United States in the next 30-years. Most demographers agreed that population growth would be driven by the net in migration. The existing population was at zero population growth; it would hold steady but not increase. They referenced a variety of in-migration assumptions and recently chose one that was slightly lower. Based on actual events in this last period of time as the U.S. economy changed, these net in-migrations were questionable. For example, the work on illegal immigration suggested it was net zero; no one was entering the U.S. illegally. He continued to be concerned about that issue. They used that population number and presumed an employment profile based on existing patterns of employment. They took those jobs predicted from population and converted that to Bay area jobs based upon this so-called shift-share analysis. While he understood why ABAG and other transportation agencies used this methodology, from a technical perspective it was not well regarded because there was nothing fundamental about it. The methodology indicated the Bay area share of employment in high technology would be 2.56, which was a just a guess. He said there were historical trend lines, but fundamentally this employment was the other big question. The question was could the Bay area continue to garner those jobs. He was not confident that would happen. There was no evidence presented other than percentages. He felt they had made certain concessions and changes that generally decreased the numbers and made them more realistic, but he had questions about the veracity of the overall forecast. He was not confident that these actions would occur. These regional forecasts wound up on the ground and that's where he began asking questions. When these jobs were analyzed within a model, 70 percent of the created households had moderate or lower income. The housing affordability question was a constraint that had been ignored. He had reviewed the allocation and had the same questions as Staff. He hoped to have better information about the forecast. It was important to consider this fundamentally, and communicate that this was unlikely to occur. ABAG in this work was prescriptive. The plan was aspirational by definition, but at some point it had to be balanced. This model was a top-down model. The allocation for Palo Alto was determined based on formulas. If the City indicated one scenario would not happen, then ABAG had to find another place for it. That was part of the process. Historically ABAG had made these kinds of mistakes, even when it was not being prescriptive, and it did not have any particular bearing on RHNA or transportation funding or other issues. The City should consider that and ask what it was trying to accomplish here and how these potential policies would impinge on local autonomy. Page 7 of 14

8 Vice Mayor Scharff understood ABAG was given the numbers for housing and jobs. They did not develop the numbers themselves in terms of the amount to be allocated. Mr. Williams indicated Vice Mayor Scharff was thinking about RHNA. The housing numbers for the RHNA eight-year period came from the California Department of Housing and Community Development (HCD). Vice Mayor Scharff asked if RHNA information and ABAG information should be similar. Mr. Williams replied yes. Vice Mayor Scharff believed ABAG did not have much flexibility in terms of the housing numbers. The Bay Area had 1 million housing units, and ABAG split them among the nine counties. Mr. Williams explained ABAG received the number from HCD and divided it. ABAG had a separate 40-year projection. So the question became does this eight-year cycle fit within that in a reasonable way. ABAG believed the eight-year cycle fit into the 40-year projection, because it back loaded many of those units. Eight years from now, when the next set of housing numbers were compiled, there would be a readjustment of all this. That was one of the things that ABAG relied on. ABAG recognized there was some uncertainty, and every four years it would review this. Vice Mayor Scharff felt the City could not influence the numbers in the next month or two, but it could have a big impact on the four-year review. He was more concerned about the four-year number, because the foreclosure issue would have ended and ABAG would try to catch up. ABAG had given the City 2,000 units now, and he was concerned that it would give the City 4,000 or 5,000 units, when the original number was up to 4,000 units for this cycle alone. Mr. Williams indicated that depended on whether HCD had similar information. HCD, which was usually on the high side, seemed to be more conservative than ABAG. ABAG could review the information in four years, but the next numbers from HCD would be issued in six or seven years. Mr. Keiser stated HCD and ABAG would be more in sync, because they were going to allocate based upon a straight percentage of housing units allocated in the forecast. In the past those two things were not in sync, but in the future they would be. If ABAG determined there would be a certain amount Page 8 of 14

9 of new housing units in Palo Alto in this time, it would take one third and say that was RHNA. Vice Mayor Scharff asked what the top three issues were about which he disagreed with Mr. Steven Levy. Mr. Keiser explained the linchpin issues were the issue of net national inmigration. Vice Mayor Scharff inquired whether Mr. Levy had a response to that. Mr. Keiser indicated Mr. Levy said he was using one of the lower ends of the range. It was still higher than what could occur. Vice Mayor Scharff said Table 1 was the Pick and Myers data, and then there was historical annual information. Mr. Keiser reported the second issue was whether or not the industry analysis that took jobs from the forecast and brought them into the Bay area would happen in that way. Mr. Levy's forecast could be true, but there were many other ways of looking at that. He preferred a fundamental economic analysis to determine events occurring in technology jobs. Many technology jobs had migrated to San Francisco. There had not been much fundamental analysis. The third issue was assumptions made about household formation and size; Mr. Levy showed the efficiencies declining. Because of the economy, household sizes were actually increasing. Many things drove these relationships that were projected to be either stable or moving in a way that may not be true. Commissioner Fineberg stated any final answer from statistical analysis or empirical modeling had a degree of certainty. Any final answer had a probability of either being tightly packed around a mean or having outlying factors that could be over a huge range. Mr. Keiser noted that was a confidence interval. Ms. Fineberg felt the degree of confidence was zero when the formula had thousands of assumptions and the final answer was derived by dividing it by a number. If fundamental meant the answer was a guess, it was still a guess. Vice Mayor Scharff asked why the forecast used net immigration to the U.S. rather than to California. Page 9 of 14

10 Mr. Keiser explained that was the way this model was done, but there were many other ways to do it. It was a complicated tiering of assumptions built into the model. Council Member Holman noted a threat of not receiving transit funding if the City did not have a certified Housing Element. She stated transit funding would be limited given the State's financial situation, and asked if the City cared to comply with these numbers knowing that. She recalled statements about plans being consistent with the various jurisdictions' general plans. Mr. Williams reported one criteria for transportation grants would require a resolution from each city that it was feasible and would create a general zoning plan consistent with the SCS. They dropped that requirement in this latest round of criteria for the One Bay Area grant, but it could be revived in four or eight years. Otherwise, the housing consistency was part of the general plan for each city. Council Member Holman stated the One Bay Area presentation discussed affordable housing production and preservation, yet this whole program was contrary to the State's intention. The City did not receive much credit for preserving housing. For instance, if the Palo Alto Housing Corporation bought a 20-unit apartment building, tore it down, and constructed four units, the City would receive almost no credit for that. Mr. Keiser stated the City received no credit. Council Member Holman believed the City received a 20 percent credit or some minimal amount. Mr. Williams reported the City would receive something if it actually preserved something that was not restricted. Council Member Holman felt that highlighted another flaw. If the City followed the requirements, it would be in competition with AB32 and all the environmental goals of the State, because the environmental impacts would be horrific. Because of transportation and housing construction, various aspects of CEQA had been waived for certain purposes. It was a catch 22 situation. Mr. Keiser stated the numbers were not constrained by zoning or general plans. They were spatial. ABAG had reconsidered some of the density numbers. When ABAG reformulated this, it reduced some of the concentration shown in earlier plans, but the numbers remained unconstrained. Page 10 of 14

11 Chair Schmid felt a critical issue was the assumptions being made in the population and job market. They focused on sustainability and transitoriented solutions, but the edifice was built upon questionable assumptions. Two were noteworthy: 1) the California demographic assumptions and 2) the job assumption. Their entire model was based on net migration inward of 177,000 people per year. Those numbers were based on the State's projections of December 2010, which implied net migration of approximately 170,000 per year over the decade. When the census numbers were released, the State revised the net migration to 4,000 people per year over the decade. In the last six years, there had been an out-migration of 44,000 people. To assume future migration would average 170,000 people did not make sense. The job assumption was based upon a national population growth model with California maintaining its employment share. That implied no changes in productivity and that the ratio between economic growth and jobs remained the same. California was a seed bed of technology productivity in which fewer people could produce more. By leaving out that productivity element, an inflated number of jobs resulted to maintain current prosperity. He suggested writing ABAG and asking them to review its assumptions when the State demographic unit provided revised forecast numbers. He understood the School Board would have an enrollment discussion the following Tuesday. Mr. Williams indicated the packet contained a letter addressing issues with the One Bay Area grant program. Staff wanted to ensure those issues were registered before the vote in May. Chair Schmid recalled Staff had addressed the Safe Routes to School issue. Mr. Williams agreed the letter had addressed that, but it was no longer a problem. Council Member Holman inquired about the status of the Housing Element. Mr. Williams reported it was going back to the Planning and Transportation Commission (PTC) on May 9, 2012, and then it would be presented to the Council. There had been some discussion that it would come to the Regional Housing Mandate Committee (RHMC) before the Council. Vice Mayor Scharff indicated it should return to the RHMC. Mr. Williams stated the Housing Element that accompanied this would begin in 2013, after this was submitted. Certification of the current Housing Element qualified the City for transportation grants. Certification in the next Page 11 of 14

12 round would be easier to obtain, because the numbers were less and many of the identified sites would not be built in the next two years. Ms. Fineberg felt returning the Housing Element to the RHMC before the Council was good. Mr. Williams suggested the Housing Element should be the topic of the next meeting so that a letter could be sent prior to the Council's break. Chair Schmid noted the Housing Element provided details of the sites. Part of the Comprehensive Plan was to have a wider vision of housing. The biggest area of development on the map was south of El Camino, which was not on any of the City's concept plans. He asked if there was an indication of which districts would be affected by housing and of implications for infrastructure and other elements. Mr. Williams felt it could be helpful to the Comprehensive Plan process, but did not know if Staff could do that for the current Housing Element cycle. Housing sites for the Housing Element were presently zoned for residential. Chair Schmid suggested the RHMC should look at the longer term, a 30-year horizon. The Housing Element would take the City to 2014, but where did the City go after that. Mr. Williams saw that mostly in the land use element of the Comprehensive Plan, which contained the City's vision of both housing and non-residential development. Chair Schmid believed the SCS One Bay Area plan forecast events for the next 30 years. He inquired whether there was a format for the City to respond to that and could the RHMC play a role in that process. Mr. Williams answered yes. The RHMC had the specific tasks and input on the Housing Element, and the message to the agencies of the City's vision of the future. No Action Taken 2. Update and Direction on Final City Response Regarding One Bay Area Transportation Grant Program Criteria MOTION: Vice Mayor Scharff moved, Council Member Holman seconded, to send the April 19, 2012 letter. Page 12 of 14

13 Curtis Williams, Director of Planning & Community Environment asked that individual comments regarding the letter be sent to him. The letter was specific to the One Bay Area grant issue and criteria, but it had those issues from the Housing Element. Council Member Holman noted the Regional Housing Mandate Committee (RHMC) Members submitted comments to Staff on the prior letter, and Staff either did or did not incorporate the comments. Herb Borock asked if the letter was coming from the Council or the RHMC. Vice Mayor Scharff said the letter came from the Mayor. Mr. Borock indicated it should come from the City Council. The RHMC should make a recommendation to the Council and the Council should make the decision. Council Member Holman wanted to give the RHMC Members an opportunity to comment. Mr. Williams would not have time to write a CMR and put it on the Council Agenda. He suggested the letter be written for the City Manager's signature. This was the iteration of prior letters. SUBSTITUTE MOTION: Vice Mayor Scharff moved, Chair Schmid seconded, the letter be sent as is and if Council Members had nonsubstantive comments, they should be sent to Planning Director Curtis Williams by May 1, Vice Mayor Scharff felt the letter discussed the primary issue of the Housing Element. The City had a strong policy on that issue. The remaining topics covered by the letter were not controversial. Chair Schmid believed the RHMC had discussed the topics and the letter did not contain new information. Council Member Holman stated the topics in the letter had been addressed by the RHMC. SUBSTITUTE MOTION PASSED: 3-0 Burt absent Page 13 of 14

14 FUTURE MEETINGS Mr. Williams indicated Staff wanted to work with the Association of Bay Area Governments (ABAG) staff and internally to answer questions raised during the meeting. At the next meeting they should be able to determine the status and craft a response to ABAG. He would not be present for the scheduled May meeting and suggested changing the date. Chair Schmid agreed that changing the date would be better because of other conflicts. Mr. Williams asked if Staff should poll the Regional Housing Mandate Committee (RHMC) Members for a new meeting date. Chair Schmid replied yes. Vice Mayor Scharff asked if only the meeting for the following week would be continued. Mr. Williams indicated the RHMC would need a time for the next meeting and a time for the Standing Committee. ADJOURNMENT: The meeting was adjourned at 5:38 P.M Page 14 of 14