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sr-062612-4aCity Council Meeting: June 26, 2012 Agenda Item: To: Mayor and City Council From: David Martin, Director of Planning and Community Development Subject: Neighborhood Conservation Recommended Action Staff recommends that the City Council: 1) Review and comment on the recommended approach; and 2) Direct staff to proceed with implementation of Neighborhoods Conservation within the Zoning Ordinance Update. Executive Summary Neighborhood Conservation is a core value identified in the City's Land Use and Circulation Element (LUCE), adopted July 6.2010. As one of eight "Framework Elements," it places strong emphasis and includes a number of related goals and policies intended to protect and conserve the character, scale and quality of life in Santa Monica's neighborhoods. Neighborhood Conservation, as envisioned by LUCE, redirects intensive residential market pressure away from existing neighborhoods through the creation of new housing opportunities along the City's boulevards and transit corridors. The plan also proposes strategies designed to give residents more control over the type of changes occurring in their neighborhoods. The Zoning Ordinance Update currently underway provides the opportunity and tools for implementing Neighborhood Conservation goals and policies with the following possible measures: • Revised development standards and design guidelines for neighborhood compatibility; • Process revisions to address design review as it pertains to neighborhoods; • Revised demolition process requirements; and • Flexibility for parking and development standards when preserving a resource. Additionally, a special effort has been directed at developing a concept for implementing Neighborhood Conservation Overlay Districts as one of the most promising tools to preserve neighborhood character. As drafted, this concept would define a process to allow communities to identify distinct physical characteristics that reinforce neighborhood identity. The overlay district could incorporate development standards or design guidelines reinforcing those characteristics in the event of new development. This process could be enabled through the adoption of the Zoning Ordinance update. Staff would work with individual neighborhoods that express an interest in the process. Background Each of the city's eight neighborhoods has distinctive characteristics. The city's neighborhoods comprise the vast majority of the city's land area and include a range of diversity. Implementing Neighborhood Conservation would require a fine - grained approach to address different neighborhoods and types of issues. The physical characteristics of Santa Monica's residential neighborhoods, market conditions, and how residential areas are regulated through the zoning ordinance are all factors that influence neighborhood conservation and its implementation. The pie chart in Attachment 1 shows the percentage of units in the City within each type of zoning designation. The chart shows that the majority of units within the City are zoned R2 or R3. Development standards within the zoning code provide a powerful tool to address many neighborhood concerns. Several actions taken by the City Council during the past decade continue to provide some protection from development forces in certain zoning designations. The majority of single - family residential neighborhoods (zoned R1) have undergone modifications to development standards to address "monster mansion" concerns, most recently in September 2006. Revisions to the standards have addressed many threshold concerns regarding height, massing and the overall size of single - family homes in the regulated neighborhoods. Also in 2006, Ordinance No. 2207(CCS) was adopted as part of the "Strategic Zoning" effort. This ordinance modified design and development standards for several residential and commercial zones, and reduced maximum allowable densities and /or height limits for R2, R3, R4, R2R, and R3R zones. Although it is difficult to sort the 2 influence of the more restrictive zoning from the effects of the economic downturn starting in 2008, a cursory review of the trends indicate that the lower thresholds have slowed redevelopment in the multi- family neighborhoods. Specific city - generated data concerning building trends in the neighborhoods is necessary to inform these observations. Attachment 2. using Los Angeles County Assessor data, shows the macro view of residential units built citywide over the past 25 years. The new buildings shown from 2006 -2008, ranging from approximately 150 -250 units per year, are likely indicative of a large array of projects that had secured funding, issued permits, or were already under construction at the time of the "Strategic Zoning" initiative and the economic downturn. By 2009 and 2010, a very different picture emerged, with only 34 housing units recorded in 2009 and 22 units recorded in 2010. Attachment 3 shows where housing units have been built in Santa Monica over the last 25 years, illustrating a clear shift towards housing downtown in the late 1990s, and hints of mixed -use development in Santa Monica's commercial zones in 1998, 2000, 2006, and 2007. The Housing Element update commencing later this calendar year will provide a vehicle for more detailed analysis of housing trends within the city. Meanwhile, additional measures are discussed below as ways to address neighborhood character concerns articulated through the LUCE process. Discussion LUCE Neighborhood Conservation Policies and Programs The Zoning Ordinance Update process provides an opportunity for implementing Neighborhood Conservation programs and policies outlined in the LUCE. The LUCE Neighborhood Conservation strategies 3 Aio,of COnsem6 n © Expo Rabms —Expo line AREAS OF CONSERVATION a include a menu programs and policy solutions as way to conserve and protect the neighborhoods. Each strategy is discussed below along with the primary implementation measures through the Zoning Ordinance. Neighborhood Conservation Strategies: 1) Neighborhood Compatibility 2) Modification of Demolition Regulations 3) Neighborhood Conservation Overlay District (NCOC) 4) Incentives for Preservation 5) Preservation of Character - Defining Resources 6) Complete Neighborhoods 7) Increased Connectivity 1) Neighborhood Compatibility: Implementation through the Zoning Ordinance Update: Development standards & design guidelines Process Revisions - Noticing requirements Enabling ordinance Flexibility for parking and /or development standards when preserving a resource Incentives for preservation, Transfer of Development Rights (TDRs), development standards governing substantial remodels Mixed use design and development standards and use regulations Community benefits and circulation - related development standards The Zoning Ordinance Update will define how new standards, guidelines, and the accompanying review process works. The new Zoning Ordinance will include standards that control the height, massing, setbacks, and open space of new development to help with compatibility. It will also address transitions between new and existing structures. However, these controls can lack the specificity needed to address quality and character objectives. Creating a system that results in successful administration of design guidelines over new development is a major objective of the Zoning Ordinance Update. Existing neighborhoods have patterns of 4 scale, materials, and forms that typical development standards are unable to express. Although design guidelines are advisory, they are a better tool for this task. A specific concern expressed through the LUCE process is the need to delineate building envelopes that preserve access to light, air and open space. 2) Modification of Demolition Regulations One of the strategies for neighborhood conservation is to review how buildings are noticed and permitted for demolition. The Zoning Ordinance Update will examine specific criteria and procedures and is likely to recommend new public noticing requirements. Additionally, new demolition regulations could apply for properties within a Neighborhood Conservation Overlay District, as described below. 3) Neighborhood Conservation Overlay Districts The ability to move forward with the creation of Neighborhood Conservation Overlay Districts (NCOD) would be possible through enabling legislation in the Zoning Ordinance Update. Staff has developed a concept framework and performed initial outreach for a program that could provide an additional regulatory tool for preserving and enhancing defined elements of residential neighborhood character. Whereas historic preservation focuses on architectural quality and /or historic significance, a neighborhood conservation district would focus on broad patterns of physical, aesthetic and architectural features, with the goal of preserving and enhancing the major attributes of a neighborhood, while allowing sanctioned change. The focus is on maintaining certain standards in the district that are shared among residences and provide neighborhood character. A Neighborhood Conservation Overlay District (NCOD) is a zoning tool designed to conserve and enhance those distinctive features of a residential neighborhood which create a unique sense of place. An NCOD allows neighborhoods to tailor development standards and protections to reflect the special character of the area. 5 The NCOD's regulatory framework may be very specific or very broad. The conservation district ordinance may be as rigorous as preserving specific stylistic elements or as broad as simply defining the standards for new development and additions and /or demolition within the area. The area must possess distinctive features which create a cohesive, identifiable character to a neighborhood and may be characterized by: ® Building Features: scale, size, type of construction, or distinctive building materials reflecting a concentration of structures of similar scale, period of construction and /or use of materials characteristic of the date or style of construction. ■ Site Planning: lot layouts, setbacks, street layouts providing a similarity of siting characteristics of a single period or style of construction. ® Architectural Features: a concentration of structures reflecting a repetition of treatment of stylistic elements, including but not limited to roofs, porches, windows, wall articulation, and building ornamentation. ■ Streetscape or Natural Features in the neighborhood A NCOD enabling ordinance would specify the necessary findings, application procedures, and define the approval process for accepting a NCOD. Attachment 4 provides sample Neighborhood Conservation Overly District processes and criteria, for discussion purposes. In concept, the ordinance would define criteria for eligibility, such as the minimum size of an overlay district (i.e. minimum number of lots), a. requirement for contiguous boundaries, consistency with the LUCE, and a requirement that identified distinctive features can be clearly emphasized through the application of development standards and /or design guidelines. A specific neighborhood conservation ordinance would be based upon findings documented in a Conservation Plan developed in partnership between neighborhood residents and the City. Once approved by the Planning Commission as eligible, staff would work with the area in question to develop the standards or M guidelines that would help conserve the appropriate physical characteristic. A neighborhood informational meeting would be held during this process, and ultimately the overlay district would go before the Planning Commission and City Council for approval. Adoption of a Neighborhood Conservation Overlay District would be accomplished through an amendment to the zoning map. 4) Incentives for Preservation Through the Zoning Ordinance Update process, staff is exploring incentives, such as reduced parking standards and modification to other standards for structures that may be on the list of potential historic resources but are not potentially eligible for Landmark status. 5) Preservation of Character - Defining Features While the Neighborhood Conservation Overlay District strategy is a mechanism available to collection of parcels, staff is also exploring mechanisms for preserving character - defining features of individual structures. One avenue of pursuit is refining development standards and definitions in the Zoning Ordinance that address demolition procedures, which are closely tied to the definition of "Substantial Remodels." Staff is exploring changes that could include review of structures on the list of Potential Historic Resources proposed for remodeling to determine if their character is being substantially modified. If so, noticing requirements could be imposed, similar to the process for full demolitions, to ensure adequate review of replacement projects. Transfer of Development Rights (TDR) is an additional tool called out in the LUCE to assist in encouraging neighborhood conservation. Essentially, the owner of such a property sells the excess development capacity (or "rights ") to another land owner, in a location designated for receiving additional capacity. However, as discussed below, most of the City's multifamily residential zones are currently built at a capacity 7 above what zoning allows, indicating that there may not be sufficient development rights allowed through the current zoning code to successfully implement a TDR program in residential zones. There are many variables that factor in to the likelihood of whether or not a parcel of land will be redeveloped, which is both an underlying concern driving neighborhood conservation, as well as a measure of the extent to which additional neighborhood conservation tools, such as Transfer of Development Rights (TDRs), will be successful. Some of bigger factors include the overall economic climate, what zoning allows, and the existing characteristics of the parcel, including whether or not it has an existing improvement, and how profitable it may be. Further, more complex factors include rent control status, historic status, permit review process, perceptions of public safety in the neighborhood, and proximity to amenities (parks) or detractors (heavy industrial sites). To help better understand the how likely further redevelopment in residential zones will be, the following "capacity analysis" for multifamily residential districts compares the number of existing units on each parcel with the theoretical maximum capacity allowed by zoning and the State affordable housing bonus law. The analysis employs the following methodology: • Only parcels in existing residential zones, with an existing residential use were included (R1 was not included, as the likelihood of subdivision of its larger lots is quite low). • The total capacity assumes each parcel takes advantage of the 35% maximum State density bonus law. • Preferential permits, which allow higher densities for 100% affordable housing and similar projects, are not included. • Only maximum density limits were used as a factor; other development standards such as open space and parking space requirements, setbacks, upper -story stepbacks, or including 50% of adjacent alleys as part of the site area were not included. e Table 1: Residential Zone Capacity for Additional Housing ZONE Assumed Density (SF /unit) # parcels residential use # parcels under capacity # parcels over capacity # parcels at capacity capacity with 35% density bonus R2 2000 8280 908 3029 4343 -2199 R2 -A 2000 20 4 2 14 1 R2113 1500 116 65 30 21 304 R2111 1500 115 77 16 22 164 R3 1500 1959 143 1276 540 -2143 R3 -A 1500 7 1 5 1 -67 R3R 1250 10 7 3 0 -158 R4 900 566 9 370 187 -262 OP1 4000 157 2 94 61 -105 OP2 2000 2029 450 818 761 -425 OP3 1500 116 3 77 36 -171 OP4 1250 357 4 27 326 -588 13732 1673 5747 6312 -5649 12% 42% 46% Negative numbers shown in the far -right column in Table 1 indicate by how much the existing number of units in each zone exceed the density limits allowed by the zoning designation for that zone. In the case of R26 and R21R, the existing number is lower than allowed by zoning, thus a positive capacity for additional units is shown, although the chances of this capacity being taken advantage of in these zones is low due to their existing conditions, context, and additional development standards. As the bottom row indicates, only 12% of residential parcels in Santa Monica have a lower number of units than allowed by existing density limits, while most are at or above allowed limits. These conditions create some complication for the potential successful implementation of a TDR program in residential areas. Because these capacities are so low, it is unlikely that TDRs could be applied in these zones. They could still be useful for the 1,673 parcels that are below zoned capacity, and in commercial and downtown areas, P7 but further analysis by economic and real estate experts would be needed to gauge the potential extent of success. 6) Complete Neighborhoods The Zoning Ordinance Update is also a vehicle for implementing the LUCE framework element of 'complete neighborhoods." Mixed -use development standards, design guidelines and use regulations will be addressed in the Zoning Ordinance to implement the LUCE objectives to create local services within existing districts and foster new local- serving retail in areas of the City that are currently lacking such services. 8) Increased Connectivity The LUCE calls for encouraging connectivity between and among residential neighborhoods and nearby boulevards through the provision of improved pedestrian walkways, greenways, plazas, bikeways and open space. These improvements are being pursued through a variety of mechanisms, including further definition through area planning processes, negotiation of community benefits through the Development Agreement process, as well as specification of circulation - related development standards within the Zoning Ordinance Update. Recommendations The Zoning Ordinance Update will include design guidelines and a revised design review process that will more carefully address how new buildings fit into their surroundings. Staff recommends that implementation of the Neighborhood Conservation Overlay District be incorporated into the Zoning Ordinance Update process along with the other measures discussed in this report. This also provides the advantage of allowing neighborhoods and planners to build off of the new standards and guidelines. 10 Alternatives The City Council could consider directing staff to develop a draft Neighborhood Conservation Overlay District enabling ordinance for Council deliberation as a separate process from the Zoning Ordinance Update process (either in advance of or following the adoption of the Zoning Ordinance process). Next Steps Staff will continue to develop program components to respond to Neighborhood Conservation concerns through the Zoning Ordinance Update and other mechanisms addressed in this report. Financial Impacts & Budget Actions There is no immediate budgettfinancial impact to this policy decision. Prepared by: Ellen Gelbard, Assistant Director Jory Phillips, Deputy Director - Special Projects Approved: Forwarded to Council: D vid Martin Rod Gould Director, PCD City Manager Attachments: Attachment 1: Existing Residential Units by Zoning Designation Attachment 2: Residential Units Built Citywide, 1986 -2010 Attachment 3: Residential Units Built by Area, 1986 -2010 Attachment 4: Sample Neighborhood Conservation Overlay District Process 11 Attachment 1: Existing Residential Units by Zoning Designation (Source: LA County Assessor) C3 R1 13% MR2 RV Em R2R 39 H 112-A mRMH OPI O• O• 10% Em OP3 s R4 a C f� jlf , C / t1 MK • I fr t m C2 6 a C6 Attachment 2: Residential Units Built Citywide, 1986 -2010 (Source: LA County Assessor) Attachment 3: Residential Units Built By Area', 1986 -2010 (Source: LA County Assessor) 1. All residential zones have been combined, as have commercial zones outside of downtown. Downtown zones were combined, and the category called "other" includes places like the Airport, LMSD, and the M1 zone. Projects currently going through the review process are not reflected in this chart; however, they would show a continued de- emphasis on development in residential areas. ATTACHMENT 4 SAMPLE NEIGHBORHOOD CONSERVATION OVERLAY DISTRICT PROCESS (for discussion purposed only) STEP 1 - Initiation An application may be initiated by: • Written request of at least 20 residents and /or property owners within the proposed district representing at least 50% of the lots. • A majority vote of the Planning Commission • A majority vote of the Landmarks Commission STEP 2 -Application Requirements NCOD applications shall include: • Applicant names, contact information and signatures. • Precise boundaries indicated on a map provided by staff, and indicate all streets, sides of streets, or alley areas. These boundaries must be consistent with NCOD criteria. • Name and addresses of all property owners in the district. • List of Neighborhood Association officers and contact information. • List of all homeowner associations (HOA) and contact information. • Appropriate filing fee • Statement of Justification: • Description of the neighborhood and /or property characteristics and features worthy of conservation, including cultural history and any significant trees and other landscape features. • Explanation of how the application meets NCOD criteria and why such a designation would be in the best interest of the neighborhood and the City as a whole. ■ Documentation: o Photographs, publications, histories and supporting material documenting such neighborhood characteristics. STEP 3 - Feasibility Review /Determination of Eligibility When an application has been received from residents and or property owners, the Planning Commission will review the application, the planning staff analysis, and will determine the eligibility of the area based on the following criteria: ■ Clear documentation of distinctive characteristics shared by properties within the proposed boundaries and why they are worthy of conservation. 12 • Clear documentation of the broad cultural or social /historic significance of proposed area to the community at large, • Consistency with LUCE principles and recommendations. In the event of multiple applications, the Director shall recommend, based on staff resources, the order in which they will be processed. Should the Planning Commission determine that the application does not meet the criteria above; the decision will be sent to the signed applicants explaining their determination. Applicants may appeal the decision to the City Council. STEP 4 - Information Meeting Once an application has been accepted, staff sends notice to all residents and property owners within the proposed boundaries, as well as residents and property owners of lots with 300 feet of the district boundary informing them of the application and the process to follow. STEP 5 - Neighborhood Planning Process A planning staff coordinator will be appointed to work with the neighborhood to develop the neighborhood plan and ordinance. • Staff will work with the neighborhood to identify preliminary recommendations, possible regulations and /or incentives. • Staff will hold a series of community meetings at key points in the planning process. • Staff will report findings to the community. • Staff will be responsible for all notices of the meetings, which will be open to the public. STEP 6 - Neighbor Plan & Ordinance. Based on these steps, two documents are prepared by staff: • The Neighborhood Conservation Plan, and • The Neighborhood Conservation Ordinance which contains proposed regulations. STEP 7 - Schedule Public Hearings ■ Public briefings and hearings will be scheduled before the Planning Commission and the City Council. ,IN