Ordinance 1998-0012- Rezoning from R-4 to R-2 (Area 5)

Ordinance 1998-0012- Rezoning from R-4/PD to R-3/PD (Area 6)

On July 14, 1998, the City Council adopted a workplan to consider the rezoning of properties within the R-4 and R-5 Zoning Districts and to consider the modification of development standards that affect appearance and ownership options of multi-family developments. In March of 1999, the City Council directed staff to amend R-4 and R-5 Zoning District development standards such as, but not limited to, height, setbacks, lot coverage and landscaping. This report sets forth recommendations regarding the potential rezoning for some of the R-4 zoned sites. This study issue was originally ranked number one out of five items to be studied by Community Development in 1998, and is a continuing item in 1999.

The approved workplan organized all of the R-4 and R-5 zoned properties as well as the high density sites in the Downtown Specific Plan and the Southern Pacific Corridor Site Specific Plan into study areas for ease of analysis and discussion (see Area Map, Attachment A). Four categories of study areas were established; a fifth category was added by the City Council (see Attachment B). The first group of properties considered for rezoning was Category I, which included Area 1 and a portion of Area 2. In July of 1998, the Council approved all Category I sites to remain in the R-4 and R-5 Zoning Districts. Sites in Category I are comprised of relatively new multi-family attached developments, including a Single Room Occupancy (SRO) facility; all of these developments are built at maximum R-4 and R-5 densities and are located along major roadways.

The focus of this report is on the potential rezoning of study areas in Category II. Category II includes Areas 4, 5 and 6. The following is a brief description of Areas 4, 5 and 6:

The impact of rezoning R-4 zoned sites to a lower density zoning district could affect the value of the real estate. For example, if a property currently allows development of up to two units and rezoning results in the permitted development of only one unit, this could impact the resale value of that site. However, the value of a property may also be related to surrounding land uses. In an area that is predominantly comprised of single family houses, maintaining the existing low density character and preventing a mix of residential uses could increase the property value of a single family house, especially since the current market for single family homes is very strong.

A notice of the Negative Declaration and the public hearings for this project was published in the Sun newspaper and mailed to all property owners and tenants within Areas 4, 5 and 6 of the R-4 Zoning Districts, as well as all property owners within 300 feet of the boundaries of each of these areas. A total of approximately 450 notices were mailed.

Additionally, prior to the public notice, an informational letter, fact sheet and various maps were sent to all property owners and tenants within Areas 4, 5 and 6. Staff also set up a web site on which previous staff reports, the letter and fact sheet were posted; this information was also located at the Library and the Community Center for review.

On April 22, staff held an informational meeting that 11 people attended. Property owners and tenants present at the informational meeting were representative of all three Areas. Staff has received approximately 20 phone calls or in-person inquiries from property owners and tenants of all three Areas. A variety of opinions have been expressed. Generally those occupying a single family house (both owner occupied homes and tenants) desire the neighborhoods to maintain a lower density character. Those property owners that have purchased property with the intent of redeveloping do not want the current density to be reduced. One letter and two e-mails have been received from the public to date (see Attachment M).

On May 24, 1999, the Planning Commission held a public hearing to consider the proposed rezonings (see Minutes, Attachment O). The Planning Commission supported the staff recommendation to maintain Area 4 within the R-4 Zoning District, rezone Area 5 to the R-2 Zoning District and rezone Area 6 to the R-3/PD Zoning District (5-0;1 absent). Two members of the public spoke; both were owners of property in Area 5. The first speaker, Mr. Nguyen, is the owner of an existing 4-plex and desires to redevelop the property with a four unit townhouse development (see letter in Attachment M); Mr. Nguyen expressed his desire for Area 5 to remain zoned R-4 or to delay the effectiveness of the new zoning to permit redevelopment of his property at the existing density (only two units would be permitted in the R-2 Zoning District). Mr. Nguyen has submitted a preliminary review application for staff review of the four unit development. An official application for this development has not yet been submitted. The second speaker, Mr. Rogers, expressed his desire for Area 5 to be rezoned to R-2 and to reduce the number of future multi-family developments in this neighborhood.

On May 26, 1999, the Housing and Human Services Commission reviewed the proposed recommendations for Areas 4, 5 and 6. The majority of the Housing and Human Services Commission expressed concern regarding the removal of R-4 zoned sites without rezoning other areas to R-4. They voted to support the staff recommendation for Area 4 (maintain R-4 Zoning) and Area 5 (rezone to the R-2 Zoning District) and voted not to rezone Area 6 (6-1; 6 absent). See the meeting minutes (Attachment O) and the Public Contact section below for additional discussion.

Staff recommends the following:

Maintain Area 4 within the R-4 Zoning District;

Rezone Area 5 to the R-2 Zoning District; and

Rezone Area 6 to the R-3/PD Zoning District.

In 1996, the City Council and Planning Commission expressed concerns regarding the suitability of high density residential development during a joint Study Session on the preparation of the Land Use and Transportation Element of the General Plan. The Land Use and Transportation Element discusses these concerns and includes an Action Statement requiring the City to study the potential for rezoning properties in the R-4 and R-5 Zoning Districts. The concerns include that development at the higher densities:

• may negatively impact neighborhoods and change the character of the community;
• should primarily locate in the vicinity of transit stops as a means to support and enhance ridership; and,

• may no longer be necessary given the full range of existing housing opportunities within the City.

Rezoning certain high-density sites may contribute toward shaping the future of the City, and will help maintain the low density character of specific existing neighborhoods that could be redeveloped at higher densities than what currently exists. General Plan policies require the provision of adequate housing. However, the General Plan also suggests that new development should harmonize with surrounding neighborhoods, and the need for additional housing should be balanced with other community values, such as preserving the character of established neighborhoods. There are R-4 and R-5 zoned sites that may be appropriate for the development of high density housing and there may be other sites that are not due to a variety of factors. For additional discussion on the impact of rezoning, see Attachment D.

The R-4 and R-5 Zoning Districts are the high density zoning districts in the City (as well as properties in high density blocks of the Downtown Specific Plan and the Southern Pacific Corridor Specific Plan) – see Area Map in Attachment A. They provide for residential development at densities of 28 to 51 dwelling units per acre. The R-4 density range permits up to 36 dwelling units per acre. However, because of the requirement to provide 10% of the units for Below Market Rate (applicable to developments of 10 units or more), density bonuses of 15% that allow up to 41 dwelling units per acre are possible in the R-4 Zoning District. Similarly, the R-5 density range permits up to 45 units per acre, with up to 51 units per acre given a 15% density bonus. In addition, R-5 allows for Single Room Occupancy Facilities (SROs) with no specified maximum density. The R-4 and R-5 Zoning Districts correspond to the High and Very High Density Residential General Plan land use designations. The development standards (height, setback, landscaping, open space, etc.) are the same for R-4 and R-5; the only difference in the development standards for the two zoning districts is density. Because density is the only difference in the development standards, it is possible that units developed in an R-5 Zoning District would be smaller in square footage than those developed in a R-4 Zoning District.

The City is comprised of about 5,175 acres of residentially zoned property; this accounts for 34% of the total City acreage. Within the City, 289 acres are zoned R-4 and R-5, accounting for about 5% of the residentially zoned property (1.7% of total City acreage – see pie charts in Attachment J). The R-4 and R-5 properties contain approximately 7,726 dwelling units; this represents approximately 14% of the existing housing units (including those under construction).

The approved R-4 and R-5 workplan organized all of the R-4 and R-5 zoned properties as well as the high density sites in the Downtown Specific Plan and the Southern Pacific Corridor Site Specific Plan into study areas for ease of analysis and discussion. Four categories of study areas were established; a fifth category was added by the City Council. The first group of properties considered for rezoning was Category I, which included Area 1 and a portion of Area 2 (see Area Map, Attachment A). In July of 1998, the Council approved all Category I sites to remain in the R-4 and R-5 Zoning Districts. Sites in Category I comprise relatively new developments (10 years or newer), including an SRO; all of these developments are built at maximum R-4 and R-5 densities and are located along major roadways.

The focus of this report is on the potential rezoning of study areas in Category II. Category II sites are located in Areas 4, 5 and 6 (see Area Map, Attachment A).

Goals, Policies and Action Statements of the Land Use and Transportation Element and the Housing and Community Revitalization Sub-Element of the General Plan address issues related to the development of housing. Statements in the Land Use and Transportation Element specifically related to this study are:

Policy B.4 Ensure that new development and rehabilitation efforts promote quality design and harmonize with existing neighborhood surroundings.

The Housing and Community Revitalization Sub-Element has been certified by the State, and any rezoning of R-4 and R-5 zoned properties could impact that status. However, with regard to Areas 4, 5 and 6 which are developed and contain few vacant parcels, staff does not believe the certification status will be at risk.

Any approved rezones will require subsequent amendments to the General Plan Land Use and Transportation Map. Staff recommends that amendments to the General Plan occur subsequent to the completion of the study and consideration of all of the R-4 and R-5 zoned sites if properties are rezoned.

This report focuses on the potential rezoning of Areas 4, 5 and 6 to either the R-3 or R-2 Zoning Districts or maintaining the current R-4 Zoning District. Based on the mix of existing land uses in these Areas and the location of these Areas, staff believes that rezoning these areas to the purely single-family zoning districts (R-0, R-1, R-1.5 and R-1.7/PD) or non-residential zoning districts would not be appropriate.

Attachments C through H include complete discussion and background on the following:

• Criteria for Assessing the Potential for Rezoning (Attachment C)
• Impact of Rezoning (Attachment D)
• Residential Densities and Land Uses (Attachment E)
• Sliding Scale in the R-3, R-4 and R-5 Zoning Districts (Attachment F)
• Property Development Standards (Attachment G)
• Accessory Living Units (Attachment H)

The following discussion provides analysis and recommendations for each of the three Areas.

Area 4 is located mainly on the north side of Ayala Drive; one property has frontage on the west side of South Bernardo Avenue (see Attachment K). Based on City records, Area 4 has been zoned R-4 since its annexation into the City.

Staff finds that the four apartment complexes located in an area developed with multi-family housing are appropriately zoned R-4. They appear to be viable, they are not located adjacent to any single family dwellings and they serve as a buffer to the non-residential land uses to the north along Evelyn Avenue.

If the Planning Commission, Housing and Human Services Commission and City Council determine that the current R-4 zoning is not appropriate, staff would only recommend rezoning to R-3 which is adjacent to this Area. If Area 4 is rezoned to R-3:

• All properties would become nonconforming with regard to density since all the properties are either within or above the permitted R-4 density.
• All properties may become further nonconforming with regard to development standards such as building height and setbacks.
• No building additions or expansion could occur if the building is nonconforming with regard to density.
• Redevelopment would result in 24 units per acre as opposed to the current maximum of 36 units per acre; different development standards would apply as well.
• A total of 126 units would be permitted where 173 units currently exist.
• Any site could be rebuilt with the same number of units, same setbacks, same lot coverage, etc. regardless of the zoning and the non-conformity status, in the event of damage due to fire or natural disaster.

Although rezoning Area 4 to R-3 would have little immediate impact on the property owners or the physical appearance of Area 4 since there are no plans to redevelop at this time, staff believes that maintaining high density housing is appropriate in Area 4. The development is existing and visually, the sites do not appear more dense than adjacent R-3 developments. Staff has spoken with a property owner and a representative of two of the four apartment complexes; they have stated that their properties are currently successful and they have no plans to redevelop at this time. Staff recommends that Area 4 remain in the R-4 Zoning District.

Area 5 consists of 119 properties located west of Mathilda, on blocks of Charles Street, Florence Street, Waverly Avenue, Pastoria Avenue, West Washington Avenue and Evelyn Avenue (see Attachment K). Based on City records, Area 5 has experienced a number of rezonings:

This Area is comprised of single family and multi-family dwelling units with property owners who have varied opinions as to the future of their neighborhood. Based on input provided by property owners and tenants at a neighborhood meeting held on April 22, 1999, as well as opinions expressed to staff subsequently, those with intentions of redevelopment prefer the existing R-4 zoning and those who intend to remain in their single family homes would like to see the single family character of the neighborhood preserved.

Based on the existing character, that the majority of Area 5 is developed at a density similar to the R-2 Zoning District (see Map, Attachment I), the future development potential and the majority of surrounding land uses, staff recommends rezoning this Area to the R-2 Zoning District. Additionally, General Plan goals and policies encourage the maintenance of lower density neighborhoods and ownership housing.

The R-2 Zoning District would:

• Continue to allow for a mixture of residential land uses, but would allow for fewer units if redevelopment of consolidated lots occurs.
• Allow a total of 199 primary units if all the lots were consolidated and the current property development standards were met (399 units in an R-3 Zoning District and 598 units in an R-4 Zoning District) – these figures do not include density bonuses.
• Allow for approximately up to 92 additional accessory living units.
• Would restrict 26 existing properties from redeveloping to duplexes but would allow for the addition of an ALU.
• Allow for future development at a lower density than what is ultimately permitted in this Area currently, but would continue to encourage some redevelopment and lot consolidation to encourage additional housing in proximity to the Downtown and public transportation.
• Result in future development that would be more compatible with the existing neighborhood due to the R-2 development standards, such as building height, lot coverage and landscape requirements.
• Create five additional non-conforming properties with regard to density.
• May reduce the incentives to improve older declining developed sites since less density would be permitted.
• The potential for BMRs will be decreased since lot consolidation of approximately 6 to 7 of the smaller parcels would be required to yield a development requiring BMRs (10 unit development or greater). Approximately three lots would require lot consolidation in the R-3 or R-4 Zoning Districts for a development with BMRs.

Area 6 consists of 28 properties located on blocks of Bayview Avenue, East Washington Avenue and East McKinley Avenue (see Map, Attachment K). Since 1946, Area 6 has also experienced a number of rezonings:

Based on the criteria discussed above, staff believes that rezoning this Area to R-3/PD would be appropriate since it would:

• Continue to allow for a mixture of residential land uses, but would allow for fewer units if redevelopment of consolidated lots occurs maintaining the existing lower density character of the Area.
• Allow for future development at a lower density than what is ultimately permitted in this Area currently, but would continue to encourage some redevelopment that would be adjacent to the Downtown and in proximity to public transportation.
• Result in future development that would be more compatible with the existing neighborhood due to the R-3 development standards, such as building height, lot coverage and landscape requirements.
• Not result in any additional non-conforming properties with regard to density.
• Serve as a transition between high density and commercial uses and low-medium densities of the R-2 Zoning District.
• Result in a decreased potential for BMRs since, four to five of the smaller parcels would require lot consolidation to yield a development requiring BMRs (21 of the 28 lots are less than 6,500 square feet).

Staff recommends retaining the Planned Development (PD) Combining District in this Area. Several properties have developed with Special Development Permits (SDPs) and will require an SDP for future changes.

Staff has spoken with six property owners and tenants in Area 6. They have expressed the desire for the area to maintain the existing lower density character and do not desire additional higher density development. Staff spoke with an owner of one of the apartment complexes who stated that the intentions are to maintain the existing apartment and not redevelop; however, the property owner was not comfortable with the prospect of a rezoning to the R-2 Zoning District. The R-3/PD Zoning District will reduce the potential for high density housing, while still maintaining the opportunity for the construction of additional units that would be more compatible with the existing low density character of the neighborhood.

Rezoning to the R-2 Zoning District would create additional non-conforming properties with regard to density, and may reduce the incentives to improve older declining developed sites. In general, seven to eight of the smaller lots would require consolidation to yield one development requiring BMRs. To rezone to a zoning district that only would permit single family detached dwellings does not seem to be appropriate in an area that already includes a mixture of housing types and is adjacent to the Downtown.

The impact of rezoning R-4 zoned sites to a lower density zoning district could affect the value of the real estate. For example, if a property currently allows development of up to two units and rezoning results in the permitted development of only one unit, this could impact the resale value of that site. However, the value of a property may also be related to surrounding land uses. In an area that is predominantly comprised of single family houses, maintaining the existing low density character and preventing a mix of residential uses could increase the property value of a single family house, especially since the current market for single family homes is very strong.

Based on the above analysis, staff finds that two of the three Areas are appropriate to rezone to a lower density residential zoning district. Area 4 which consists of high density apartments and is surrounded by other apartments and is not adjacent to any single family neighborhoods, is appropriate to remain in the R-4 Zoning District. Areas 5 and 6 are similar in composition of existing land uses including single family detached houses, apartments and condominium complexes, are appropriate to rezone. Area 5 which is larger and includes a greater percentage of existing single family homes and is located west of Mathilda, is appropriate to rezone to the R-2 Zoning District. Area 6 is adjacent to the R-2 Zoning District but is also adjacent to high density blocks and commercial uses in the Downtown. Staff believes rezoning Area 6 to the R-3/PD Zoning District would be appropriate.

A notice of the Negative Declaration and the public hearings for this project was published in the Sun newspaper and mailed to all property owners and tenants within Areas 4, 5 and 6 of the R-4 Zoning Districts, as well as all property owners within 300 feet of the boundaries of each of these areas. A total of approximately 450 notices were mailed.

Additionally, prior to the public notice, an informational letter, fact sheet and various maps were sent to all property owners and tenants within Areas 4, 5 and 6. Staff also set up a web site on which previous staff reports, the letter and fact sheet were posted; this information was also located at the Library and the Community Center for review.

On April 22, staff held an informational meeting in which 11 people attended. Property owners and tenants present at the informational meeting were representative of all three Areas. Staff has received approximately 20 phone calls or in-person inquiries from property owners and tenants of all three areas. A variety of opinions have been expressed. Generally those occupying a single family house (both owner occupied homes and tenants) desire the neighborhoods to maintain a lower density character. Those property owners that have purchased property with the intent of redeveloping, do not want the current density to be reduced. No letters from the public have been received to date.

On May 24, 1999, the Planning Commission held a public hearing to consider the proposed rezonings (see Minutes, Attachment O). The Planning Commission supported the staff recommendation to maintain Area 4 within the R-4 Zoning District, rezone Area 5 to the R-2 Zoning District and rezone Area 6 to the R-3/PD Zoning District (5-0; 1 absent). Two members of the public spoke; both were owners of property in Area 5. The first speaker, Mr. Nguyen, is the owner of an existing 4-plex and desires to redevelop the property with a four unit townhouse development (see letter in Attachment M); Mr. Nguyen expressed his desire for Area 5 to remain zoned R-4 or to delay the effectiveness of the new zoning to permit redevelopment of his property at the existing density (only two units would be permitted in the R-2 Zoning District). Mr. Nguyen has submitted a preliminary review application for staff review of the four unit development. An official application for this development has not yet been submitted. The second speaker, Mr. Rogers, expressed his desire for Area 5 to be rezoned to R-2 and to reduce the number of future multi-family developments in this neighborhood.

On May 26, 1999, the Housing and Human Services Commission reviewed the proposed recommendations for Areas 4, 5 and 6. The majority of the Housing and Human Services Commission expressed concern regarding the removal of R-4 zoned sites without considering the rezoning of other areas to R-4. The Commission expressed concerns regarding the loss of potential units as well as the loss of potential below market rate units. Commissioner Artis made a motion to recommend the staff and Planning Commission recommendation; this motion failed. A second motion was made and the Housing and Human Services Commission voted to support the staff recommendation for Area 4 (maintain R-4 Zoning) and Area 5 (rezone to the R-2 Zoning District) and voted not to rezone Area 6 (6-1; 6 absent - see the meeting minutes in Attachment O).

Staff and Planning Commission: Alternatives 1, 2c, 3b, 4a and 5

Housing and Human Services Commission: Alternatives 1, 2c, 3b, 4c and 5

Prepared by:

Dana Sonenberg Wolfe
Associate Planner

Reviewed by:

Fred Bell
Principal Planner

Reviewed by:

Trudi Ryan
Planning Officer

Reviewed by:

David S. Boesch Jr.
Director, Community Development

Approved by:

Robert S. LaSala
City Manager