News To HCD: Santa Cruz YIMBY Comments on City of Capitola Draft Housing Element (July 2023)

Santa Cruz YIMBY advocates for abundant housing at all levels of affordability to meet the needs of a growing population in Santa Cruz County. We support sustainable growth, including along transportation corridors and activity centers and a commitment to lower Vehicle Miles Traveled by housing people near services and jobs.

The following are our comments on the City of Capitola’s 6th cycle Draft Housing Element - HCD Submittal - July 2023.

Housing Production

In the 5th cycle (2015-2023), Capitola permitted only 60 units, none of which were multifamily projects larger than four units (3). Extrapolated to the upcoming 6th cycle, this level of production is 4% of the 1336 units the City must plan for. In order to meet this target, Capitola needs to see production increase by 2000%. 

Capitola recently completed an Affordable Housing Fee Feasibility Assessment (4) which concluded that with current conditions, NO rental development pencils out: “Even without any inclusionary requirements or in-lieu/impact fee obligations, rental development appears to fall somewhat short of industry-standard return thresholds.”

Given the lack of substantial housing development in Capitola thus far, and without substantial changes to the status quo, it is difficult to accept the City's claims of future progress. The City’s draft Housing Element does not address the constraints on housing development nor does it incentivize key projects such as the Capitola Mall which represents nearly half of the expected Very Low and Low income units.

Capitola must better analyze the extent to which zoning and development standards are constraints on housing and adopt yearly monitoring to verify that development is occurring on schedule. If housing is not being developed on schedule, the City should have specific commitments e.g upzoning of specific areas listed in this Housing Element or modification of other zoning/development standards. 

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(3) HCD Annual Progress Report Dashboard
(4) Affordable Housing Fee Feasibility Assessment, 2021

Probability of Meeting Low Income Targets

Looking at Table 4-6: Comparison of Sites Inventory and RHNA (5) , Capitola has an overall buffer of 8.8%. CA Housing and Community Development (HCD) recommends a buffer between 15-30% (6). Only the Moderate income exceeds this range. The Lower income category has only a 4.7% buffer. The City will likely be required to identify additional sites under the No Net Loss law.

Capitola plans for 50% of units on nearly every parcel in the Site Inventory (7) to be affordable for very-low or low income households to meet their RHNA. However, they provide little evidence that this level of affordability will be realistically produced. As well, over 50% of the sites are non-vacant. Consistent with HCD’s guidance on use of >50% non-vacant sites (8) , Capitola should include findings that the use will likely be discontinued during the planning period including description of the substantial evidence on which the findings are based. This is only partially done (9).

Many of the parcels in the Site Inventory are too small, too big or have a realistic density that falls below Mullen density that supports feasible affordable housing.  For example, sites 71-76 do not meet the minimum required 20du/acre density for Lower income housing, so the City should not count these 24 lower income units.

The site inventory identifies a significant number of small parcels for consolidation and development, all of which are projected to accommodate low income units. The City acknowledges that “[s]everal of the non-vacant sites identified consist of multiple smaller parcels with different owners, and their development within the planning period will depend on whether they can be consolidated.” (10) The Site Inventory shows “NO” Developer Interest for most of these parcels.(11) For example, the site inventory includes sites on parcels which on their own do not meet the minimum 0.5 acre size presumed to be suitable for lower income development, listed as sites 18-20, and 43-44,, however all of the parcels that make up these “consolidated sites” candidates have separate owners. These sites represent land which the City has not demonstrated is suitable for lower income housing, and as such at least ten units of lower income housing should not be allocated to these parcels. The City’s consolidated sites program does not provide adequate incentives to encourage consolidation. The City should consider a more robust consolidation program that incentivises consolidation via policies like increased height, FAR, or temporary tax abatements for consolidated parcels.

The City also has assigned ten units of lower-income housing to state park land within the city limits (site #76): land which the city has no land use authority over, and for which there is no state program that allows housing development to occur.

The City is also using “recent development trends within Capitola”(12) to identify future affordable housing potential. The City has little development history to trend. Less than 12% of permitted units in the 5th cycle were very low income (VLI) or low income (LI) units. Six of these units were non-deed restricted ADUs and the other was a non-deed restricted single family home. The few sites with actual densities over 20 du in Table 4-2 “Actual Residential Densities” were built many years ago.

Capitola asserts (13) that the City's Affordable Housing Overlay (AHO) and local Density Bonus ordinances “are actually more successful in lowering per unit land costs than are across-the-board zoning changes that allow density increases,” however, neither has been used to build affordable housing and neither ordinance provides greater incentives than State Density Bonus law (SDBL). 

We appreciate that Capitola commits to updating the AHO in Program 1.1. The City should base this AHO update and its incentives on a development feasibility study. The City should commit to exceeding state law with their local Density Bonus Ordinance update in Program 2.5 Affordable Housing Development. We recommend that the city update it’s AHO to allow the state density bonus to stack on top of the AHO units, to facilitate additional density, waivers, and incentives for affordable housing projects.

Capitola’s existing affordable housing stock is at risk as well: 78% of Capitola’s housing stock is over 30 years old. Two of the larger rental properties with extremely low and very low income homes serving those with disabilities and seniors are now old enough that they may require rehabilitation in this cycle. The City should do more with Program 2.3 Preservation of Rental Housing than pursue one acquisition/rehabilitation project over the eight year period.

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(5) Draft Housing Element - HCD Submittal - July 2023, Page 4-30
(6) Housing Element Sites Inventory Guidebook, page 22
(7) Draft Housing Element - HCD Submittal - July 2023, Appendix D
(8) Housing Element Sites Inventory Guidebook, page 27
(9) Draft Housing Element - HCD Submittal - July 2023, Page 4-27
(10) Draft Housing Element - HCD Submittal - July 2023, Page 4-21
(10) Draft Housing Element - HCD Submittal - July 2023, Appendix D:2
(10) Draft Housing Element - HCD Submittal - July 2023, Page 4-25
(10) Draft Housing Element - HCD Submittal - July 2023, Page 3-3
(14) Capitola Municipal Code 17.40.020
(15) Draft Housing Element - HCD Submittal - July 2023, Page 2-41
(16) Draft Housing Element - HCD Submittal - July 2023, Page 5-11

Rezoning and Development Standards as Constraints 

We expect projects in the C-C, C-R, and MU-N zones to make use of State Density Bonus law for feasibility of development of affordable housing. Currently, Capitola zoning codes include constraints and limitations that could limit affordable multifamily or mixed-use housing from achieving assumed base densities. These include building height, FAR and parking requirements.

Program 1.6 “Development Regulations” must be more specific and go further. The City must do more than “consider” modifications and more often than once by the end of 2024. We recommend yearly monitoring to verify that the development is occurring on schedule, with specific intra-cycle commitments if not. Informed by Nexus study/feasibility analysis, these commitments could include:

• Upzoning of specific areas listed in this Housing Element
• Increased building height that enables the density that Capitola needs in the C-C and C-R districts, including the mall project or other mixed-use development.
• Increased FAR along other corridors emphasized in the site map (Capitola Rd, Clares St, and Bay Ave), as is the case with the 41st Ave corridor

Other commitments could be: 

• Tracking commercial occupancy, and if vacancy is too high, relax commercial requirements in favor of more residential, including live/work units
• Reduced parking requirements (see “Parking” below)

Capitola Mall

The Capitola Mall (“Mall”) is critical to Capitola’s current plan to meet its 6th cycle goals. The projected affordability of 50% low income (total 435 units) is unrealistic. If the City is in fact committed to seeing the Mall developed and misses this affordable target, the City has a daunting task to identify other sites under the No Net Loss law.

The funding of a study and creation of a committee do not adequately compensate for the hurdles to Mall redevelopment. Any redevelopment at the Mall still requires a “Development Agreement” and after that, “various entitlements would be required for residential development.” Through the Incentives for Community Benefits (17), Capitola offers the modest benefits of increased FAR (2.0) and height (50’) in exchange for items of significant cost as well as discretionary review. This clearly has not facilitated development along 41st Ave as intended.

In contrast, Capitola could seek permissive standards or streamlined approvals that make it attractive for a developer to build affordable housing on this site, including use of recently enacted state laws. As just one example, Capitola Mall is an ideal site for AB 2011 (18) which incentivizes affordable housing development on commercial properties. The City should include a program to develop a local implementation ordinance to incentivize the affordable housing on sites along the transit corridors that make up much of the City’s site inventory.

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(17) Capitola Municipal Code Chapter 17.88 INCENTIVES FOR COMMUNITY BENEFITS
(18) AB 2011 - California YIMBY

Affirmatively Furthering Fair Housing (AFFH) 

AFFH compliance includes the equitable distribution of affordable housing throughout a city. The City’s site inventory is heavily concentrated in the western portion of Capitola. The east side of Capitola has a large amount of R1 zoning and contains several schools and parks. In this area, the current site inventory identifies two church sites and one school site, totaling 14 units. On the Sites Inventory, none of these sites indicate developer interest (19)

Because all of Capitola is a high (or highest) resource area according to the 2023 TCAC map (20), AFFH goes beyond the site inventory to include housing programs and plans that enhance housing mobility and encourage development of new affordable housing. 

The City recognizes that its high-cost housing precludes many of its employees from living in Capitola which may contribute to the City’s comparatively low degree of racial and ethnic diversity (21). Adding missing middle affordable housing that is accessible to the Capitola workforce would reduce the need for these workers to commute from out of the area (22) and add to the diversity of the City.

Capitola can promote naturally occurring missing middle (23) affordable housing more equitably throughout the entire city. Capitola mentions missing middle housing in the Housing Needs Assessment, but the program to support this is simply exploration of “options”. We urge the City to adopt more specific and rigorous programs for missing middle housing which would include:

• If it is legal to build a 5000 square foot house for one family it should also be legal to build two 2000 square foot homes or three 1300 square foot homes in the same building envelope throughout Capitola. Consider amending zoning to permit 5 DUA on all parcels. This can be achieved without an EIR thanks to Senate Bill 10. (24).
• Expand Program 1.3 Accessory Dwelling Units (ADU) beyond website updates and one intra-cycle review, including an ADU bonus program to incentivize more affordable ADUs. 
• Update the City’s SB9 ordinance (25), including allowable square footage in alignment with underlying zoning rather than a limit of 800 sq ft each
• Revise Program 1.6 Development Regulation to include reduced front and rear setbacks and minimum lot size; increase heights, maximum lot coverage requirements.

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(19) Draft Housing Element - HCD Submittal - July 2023, Appendix D:3
(20) 2023 CTCAC HCD Opportunity Map
(21) Draft Housing Element - HCD Submittal - July 2023, Page 2-8
(22) Draft Housing Element - HCD Submittal - July 2023, Page 2-11
(23) Missing Middle Housing
(24) SB 10 - California YIMBY
(25) Capitola Municipal Code 17.75

Intra-cycle Reviews

Intra-cycle reviews and adjustments will be essential to housing production. In addition to an intra-cycle review for ADU development, several other intra-cycle reviews and commitments are critical if housing is not being developed on schedule:

• Update Program 1.1 Adequate Housing Sites and Monitoring of No Net Loss to track general RHNA progress with more specific commitments to revisions/incentives if not meeting goals
• Update Program 1.6 Development Regulations to include Nexus study/feasibility analysis and modification of zoning and development standards with more specific commitments (described above) if not meeting goals.
• Update Program 1.4 Mixed-Use Developments to review occupancy/vacancy levels of commercial spaces in mixed-use zoned areas. Consider modifications to residential levels, including live/work units or other alternative housing types of Program 1.5 Alternative Housing.

Parking

Parking requirements significantly contribute to the cost of housing. (26) Capitola recognizes that existing parking requirements are a constraint yet does not commit to reducing or eliminating this barrier to housing. The requirement of 2.5 spaces per unit (regardless of bedrooms or size) is unreasonable. We see the following opportunities as part of Program 1.6 Development Regulation or a separate program:

• Reduce parking minimums to no more than half a space per unit, uncovered.
• Reduce parking requirements for multifamily dwellings in C-C and C-R zones, especially for development along transit corridors or that include smaller units such as SROs. 
• Remove parking studies for mixed-use developments in favor of clearly reduced objective requirements.
• More explicitly align the intent to reduce parking for senior and special needs developments with AB 2162 which has by-right approvals and eliminates parking requirements.

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(26) Low-income renters pay a high, and hidden, price for city parking requirements | UCLA

Transit Oriented Development

Despite being home to the Capitola Mall Transit Center, Capitola lacks any current or planned high quality transit stops. In the 2040 MTP/SCS (27) the Capitola Mall was identified as such a site, however, it was subsequently removed in the 2045 MTP/SCS (28). Capitola should commit to working with AMBAG in the 2050 MTP/SCS (scheduled for June 2026) to designate the Capitola Mall as a planned high quality major transit stop. This designation would incentivise more sustainable, affordable, and equitable development in an area identified for large amounts of new housing in the 6th RHNA cycle.

Capitola’s Housing Element describes the Rail Trail. The RTC has multiple scenarios for a passenger light rail route. In all scenarios, a station would be located at 41st Ave and in most scenarios, an additional station would be on Depot Hill (29). The City should have a program to look at additional density along the Coastal Rail Trail, with a focus on these two station locations.

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(27) https://ambag.org/sites/default/files/2019-12/AMBAG_MTP-SCS_Final_EntireDocument_PDFA.pdf
(28) https://www.ambag.org/sites/default/files/2022-12/REVISED_AMBAG_MTP-SCS_Final_EntireDocument_PDFA_Updated121522.pdf
(29) https://sccrtc.org/wp-content/uploads/2015/11/ServiceScenarioMap.png

Site Inventory

The “buffer” of excess zoned capacity for lower income housing development currently sits at just 34 units. We have demonstrated that several of the sites the city relies on are not suitable for lower income development for various reasons (too small, allowable density too low, no land use authority, etc). A case can be made that the city actually has a shortfall of lower income housing opportunity sites. However, even if the city shows evidence that these sites are likely to be developed during the planning period, it is very likely that approval of the mall project, for which the city is counting on 370 lower income units, will not achieve the projected lower income unit count and cause the city to have a shortfall of lower income sites. We encourage the City to upzone additional parcels to raise the buffer sufficiently to accommodate lower income housing throughout the planning period.

The school and church parcels on the Sites Inventory indicate “NO” for developer interest, however, “development interest” is a justification for including them.

There are state-owned parcels on the site inventory without evidence that the state wishes to develop them with housing: 

• Department of Motor Vehicles location at 4175/4200 Capitola Rd.  (30)
• New Brighton State Beach (31)

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(30) Parcels 03411140 and 03411146
(31) Parcel 03620103

Other Opportunities

We noted other opportunities that could be included in the City's Housing Element, several building on recent accomplishments or in support of stated goals/policies:

Objective Standards

Capitola recently updated the Zoning Code to incorporate Objective Standards for multifamily and mixed-use residential developments. Use Objective Standards to: 

• Remove the hurdle of conditional use permits required for 90% of the total site inventory and 88% of low income units.
• Replace the subjective “balanced site design and architecture” for Policy 5.2 “Protect the integrity of existing single-family and multifamily neighborhoods”
• Capitola should update Program 1.4 to explicitly identify the types of projects eligible for ministerial approval by City staff, e.g. projects under 50 units or 100% affordable that meet Objective Standards.

Walkable Neighborhoods

• Capitola has a jobs/housing imbalance - there are a lot of commutes for Capitola employees IN to the City (See page 2-8). Capitola employees do not live near where they work. 
• Policies 5.1, 6.1, and 6.2 speak to walkable neighborhoods, alternative transportation, and a jobs/housing imbalance. 
• The City should add programs to Goal 5.0 (Neighborhood Vitality) and Goal 6.0 (Resource Conservation) to support these policies. 

Policies and Programs

• Many policies in the goals are not addressed with programs. 
• Programs need more specific dates and less ambiguous language (“review requirements,” “evaluate the feasibility,” “consider modifications”). Often the programs use the word “facilitate” without a corresponding “how” or commitment.
• Many of the programs are designed to bring code to state law, and that's it. None go beyond even as there is an urgent need to produce more affordable housing.

Detailed feedback

Chapter 2: Housing Needs Assessment

• Page 2-8 “The provision of housing that is affordable to the Capitola workforce would also reduce the need for these workers to commute from out of the area.”
  • This introduces the jobs/housing imbalance which is supported by other sections in this assessment and Policy 6.2 Strive to maintain a jobs/housing balance. There is no program for this policy.
• Page 2-26 “The City has been able to meet the demand for elderly rental housing,” 
  • This sentence does not mesh with the earlier one that says ] table 2-18 shows that “...housing problems and cost burden impact a majority of lower-income elderly households. Renter elderly households are particularly impacted, with 100% of extremely low, very low and low-income households facing housing problems compared to 36% of moderate- and above-moderate income elderly households.”

Chapter 3: Constraints on Housing Production

• Page 3-3 “Allowing for increased densities through the City’s Density Bonus Ordinance and Affordable Housing Overlay are important tools to reduce the per unit cost of land in the case of developments that include affordable housing units. These ordinances are actually more successful in lowering per unit land costs than are across-the-board zoning changes that allow density increases. “ 
  • Capitola does not have a history of using either of these (local) ordinances for affordable housing.
  • The current Housing Element does not include any Nexus study/updated feasibility analysis to inform changes to these constraints
• Page 3-4 “The City’s efforts to allow higher density housing construction and encourage the development of smaller square footage housing units are illustrated in the Capitola Green Building Program, the Accessory Dwelling Unit Ordinance, and the City’s Density Bonus and Affordable Housing Overlay Ordinances.”
  • It is not clear where these ordinances have resulted in significant development.
  • The city’s Density Bonus ordinance is less than current state law.
• Page 3-9 Table 3.3
  • Density is a constraint for Residential, maximum density should exceed Mullin density
  • FAR is a constraint for Mixed-Use and Commercial - it should be more than 2.0
  • Both are too low to achieve the affordability targets. 
• Page 3-10: Affordable Housing Overlay
  • There is no evidence of the AHO being used to build affordable housing.
  • The overlay does NOT provide greater incentives than State Density Bonus law (SDBL) and precludes the use of the SDBL. 
  • 20 du/acre is not likely workable for all-affordable
• Page 3-12, Table 3-4
  • Each of these Development Standards (FAR, min lot size, height, setbacks) should be reviewed, informed by Nexus study/feasibility analysis as part of Program 1.6 Development Regulations
• Page 3-12 “ The zoning code included Chapter 17.88: Incentives for Community Benefits. This chapter allows increased FAR and height in exchange for community benefits, such as affordable housing. The incentives are intended to facilitate the redevelopment of underutilized properties along 41 st Avenue. Qualifying projects may receive an increased FAR of 2.0 and increased maximum height of 50 feet.”
  • This ordinance introduces significant cost as well as discretionary review .This clearly has not facilitated development along 41st Ave as intended.
  • FAR of 2.0 and max height of 50’ are timid incentives. State density bonus law offers incentives through concessions and waivers.
• Page 3-13 - “Duplexes require two spaces per unit and multifamily dwellings of three or more units require 2.5 spaces per unit.” 
  • Capitola Parking Standards are too high! It’s clear why they “constrain development or limit density on a site”. This is a constraint that must be addressed.
• Page 3-16, Table 3-6
  • So much of the residential multifamily requires a conditional use permit. Reconcile with goal in Program 1.4 to use objective standards to streamline mixed-use - extend to include multifamily
• Page 3-17 and Page 3-18 “[Multifamily residential] is permitted with a conditional use permit in the C-C zone” and “Conditional use permit approval is common for mixed use development in many cities, due to the desire to ensure that uses are compatible and potential negative impacts of various uses sharing a site are mitigated”
  • Reconcile with goal in Program 1.4 to use objective standards to streamline mixed-use - extend to include multifamily
• Page 3-18 “ADUs that do not meet these requirements are subject to design permit review by the Planning Commission.”
  • Is this an opportunity to exceed state law with Capitola's local ADU ordinance? And to streamline more ADUs?
• Page 3-28 
  • The timeline presented here is very different from the HCD’s dashboard which indicates that Capitola has the longest or second longest timeline in every stage of construction in the county. 
• Page 3-31 “The City plans to work with nearby jurisdictions to retain and utilize the trail right-of-way, which runs along Capitola’s entire coastal edge, and which in the short-term will likely mean a walking/bicycle trail and in the long-term may include a light-rail system. The City’s opportunity sites are also oriented to take advantage of this future alternative transportation opportunity. “
  • There is no upzoning planned for the eastern portion of Capitola which includes the Rail Trail.
  • The RTC has multiple scenarios for a passenger light rail route. In all scenarios, a station would be located at 41st Ave and in most scenarios, an additional station would be on Depot Hill. We encourage a program to look at additional density along the Coastal Rail Trail, with a focus on these two station locations.

Chapter 4: Housing Needs and Opportunities

• Page 4-4 “ Density realization should not be construed as a result of the City’s development standards. In most instances, developers choose not to maximize the development potential of the subject property due to the economics and profitability of their investment.”
  • This is counter-intuitive.
• Page 4-5: Table 4-2: “Actual Residential Densities” and Pages 4-6 through 4-17
  • These are projects that do not conform to Capitola's base densities. 
  • Capitola should be using projects under Capitola's current zoning, not ones that are non-comforming from decades ago.
• Page 4-18 “Estimating Potential Units by Income Category”
  • 20 du, or the Mullin density is the minimum for affordable housing.
  • Note that many of the parcels in Capitola's Sites Inventory have a realistic density of <20du and are assumed to include 50% lower-income category homes.
• Page 4-20 ADUS “the City assumes a projection of six ADUs…”
  • Uncertain how Capitola arrive at this based on the approach of average production:
    • (3) in 2019, (5) in 2020, (8) in 2021 and (7) in 2022 is a total of 23 for 4 years
    • That would mean Capitola can expect 46 in 8 years.
  • The HCD dashboard (Construction:Structure Type) is very different
    • (3) in 2018, (2) in 2019, (2) in 2020, (5) in 2021 and (2) in 2022 is a total of 14 for 5 years
    • That would mean Capitola can expect 14 * 8/5 or 22 for the eight years. 
• Page 4-20 “the City will seek to streamline processing of proposed accessory dwelling units”
  • Isn’t this the law? There’s no program to do additional streamlining of ADUs.
• Page 4-23 “Five units each were assigned to both the Shorelife Community Church and Saint Josephs Catholic Church properties”
  • Is there evidence of interest? Have there been discussions with these congregational bodies?
• Page 4-24 Non-Vacant Sites “The City’s RHNA of 1,336 units is considered very high,” 
  • “Very high” relative to what? It is based on the AMBAG methodology which takes into account jobs, growth, etc.
• Page 4-24 Non-Vacant Sites “However, the non-vacant sites selected for inclusion in the inventory have been chosen because they represent the best opportunities to add significant numbers of units to the City’s housing stock” 
  • Since developers aren’t currently building housing, what will change to entice them to do so?
• Page 4-25 Non-Vacant Sites “These numbers have been derived by analyzing recent development trends within Capitola and the surrounding communities.” 
  • Capitola has little development from which to identify a “trend”
  • Since developers aren’t currently building housing, what will change to entice them to do so?
• Page 4-28 thru 4-30 Capitola Mall Site
  • Is Capitola determined that this project succeeds? What are the incentives the City is prepared to offer beyond funding a study and creating a committee?
  • Will make compliance with the No Net Loss law very daunting if the affordable component isn’t met.
• Page 4-28 “The City intends to establish a Development Agreement (DA)...”
  • Why this “added layer”? Why are there “various entitlements”?
  • Once again, the FAR and height increases are meager and require additional costs, etc. in the form of “community benefits”
  • How about more permissive standards and streamlining of the approval process?

Housing Plan - Goal 1.0 Housing Production 

• Program 1.1 Adequate Housing Sites and Monitoring of No Net Loss
  • starts with “Facilitate the development of 1,336 housing units over 8 years” without any actions.
  • Objective “Annually meet…to pursue housing development in the city” is vague language which is difficult to ascertain for success.
  • (good!) includes “Facilitate lot consolidation” and DOES include actions.
  • includes an update to the AHO by the end of 2025 - good to see it in the early part of the 6th cycle, but what informs the update is unclear.
• Program 1.1 Adequate Housing Sites and Monitoring of No Net Loss 
  • We recommend yearly monitoring to verify that the development is occurring on schedule, with specific intra-cycle commitments if not. Informed by Nexus study/feasibility analysis, these commitments could include:
• Upzoning of specific areas listed in this Housing Element
• Increased building height that enables the density that Capitola needs in the C-C and C-R districts, including the mall project or other mixed-use development.
• Increased FAR along other corridors emphasized in the site map (Capitola Rd, Clares St, and Bay Ave), as is the case with the 41st Ave corridor
• Program 1.1 Adequate Housing Sites and Monitoring of No Net Loss 
  • For a city with majority R1 zoning, the objective related to missing middle housing should be more specific and expansive.
  • The vague language of “explore and develop options to provide for missing middle housing… ” is not a clear commitment or outcome.
    • It could be tightened to: “Adopt options to provide for missing middle housing… “
• Program 1.3 Accessory Dwelling Units (ADUs) includes:
  • “Facilitate the development of 50 ADUs over 8 years.” without any actions.
  • “...the City will develop additional incentives, resources, and/or tools to encourage ADU development.” but does not include any specific commitments to address lagging ADU development.
  • Kudos on pre-designed/pre-approved ADU plans. Earlier Capitola mentioned ADUs that require permits, and also said something about streamlining ADUs. Nothing in here touches on that. 
• Program 1.4 Mixed-Use Developments
  • Add more specificity and dates.
  • Unclear how the “unforeseen barriers” and “additional incentives” will be identified/justified and addressed. 
  • Capitola should update Program 1.4 to explicitly identify the types of projects eligible for ministerial approval by City staff, e.g. projects under 50 units or 100% affordable that meet Objective Standards.
  • Include removing the conditional use permit requirement for residential multi-family in favor of objective standards. Note in Table 3-6 how much of mixed-use and multifamily requires a conditional use permit.
  • Review occupancy/vacancy levels of commercial spaces in mixed-use zoned areas. Consider modifications to residential levels, including live/work units or other alternative housing types of Program 1.5 Alternative Housing. If there are a lot of empty commercial space in MU-N zones, then a change to RH zoning should be considered.
• Program 1.6 Development Regulations: 
  • Development Standards (FAR, min lot size, height, setbacks) (see table 3-4 on page 3-12) should be reviewed, informed by Nexus study/feasibility analysis. Parking reductions should be in discussion everywhere.
  • There is only ONE deadline of Dec 2024 for the entire program!
  • Add yearly review of housing production Add intra-cycle assessment of zoning/development standards if they are lagging.
  • Align the feasibility of reduced parking for senior and special needs with AB 2162 which has by-right approvals and eliminated parking reqs.
  • “Revise parking standards to reflect that the City now allows parking studies to request flexibility for mixed-use developments” This seems a constraint. Please remove
  • “Consider development standards modifications, streamlined processing for applications related to the creation of affordable housing, and fee modifications for projects proposing affordable units that are required to apply for variations to the existing development standards.” - What is the timing? Also, please do not consider these concessions.
  • Make a bolder commitment to parking reform, i.e. reduction. Capitola has already admitted that Capitola's parking standards are a constraint.

Goal 2.0 Affordable Housing Development

• Program 2.3 Preservation of Rental Housing- “Pursue one acquisition/rehabilitation project over 8 years.” 
  • Which one? What’s the basis for selection/decision?
• Program 2.4 Housing Choice Vouchers: - 
  • “...with a goal of providing assistance to 240 households by December 2031” - How can Capitola actually enforce that? Will the city introduce a 5% HCV requirement to their inclusionary ordinance?
• Program 2.5 Affordable Housing Development- “Facilitate the development of affordable housing through the provision of regulatory concessions and density increases under the City’s Density Bonus Ordinance and the City’s Incentives for Community Benefit Ordinance.” 
  • What about state law? Streamlining?
  • Incentive for Community Benefit should be revisited to offset costs with incentives that exceed the State Density Bonus Law and remove discretionary review. (since rental currently doesn’t pencil out)
• Program 2.7 Housing Trust Fund
  • Add target due date(s).
• Program 2.8 Inclusionary Housing Ordinance - 
  • Capitola's current feasibility study says no type of rental housing development makes sense. Capitola should include objectives in this program to address the hurdles, which may include development standards like parking or constraints on height/FAR, etc
  • Add target due date(s).

Goal 3.0 Housing for Persons with Special Needs

• The relationship of programs to policies is unclear
• Program 3.1 Emergency Shelters and Low Barrier Navigation Centers
  • Only one objective has a due date and it’s the first year
  • Add specificity and due dates
• Program 3.2 Transitional and Supportive Housing:
  • good! Expand this to look at specific projects that can go beyond the 50 units max and request council approval
• Program 3.5 Housing for Extremely Low-Income Households:
  • Good: Provide regulatory incentives, such as expedited permit processing, and fee waivers and deferrals, to projects that include housing for extremely-low income households. Add due dates
• Page 5-19, Program 3.6 Childcare and Daycare Facilities.
  • Suggest that Capitola investigate and encourage family affordable housing developments to include childcare facilities as they can take advantage of the LIHTC program
  • Capitola already includes child care facilities in the Density Bonus Ordinance - what is the intended change with objective “By end of 2024, update Density Bonus Ordinance.”  

Goal 5.0 Neighborhood Vitality

• The relationship of programs to policies is unclear
• The programs are primarily about safety and code compliance, which doesn’t fit many of the policies.
• Goal 5.0 “...and the promotion of sustainable, livable neighborhoods in the face of increasing density.”
  • Dense neighborhoods are sustainable and livable. In fact, Capitola is trying to allay concerns about density with color pictures of housing developments. 
• Policy 5.1 “Ensure a compatible relationship between new housing and circulation patterns and encourage pedestrian and bicycle-friendly communities to minimize traffic impacts on quality of life”.
  • This speaks to the walkable neighborhoods, alternative transportation and jobs/housing imbalance. Capitola has a jobs/housing imbalance - there are a lot of commutes for Capitola employees IN to the City (See page 2-8). There are no programs to support these policies.
• Policy 5.2 “Protect the integrity of existing single-family and multifamily neighborhoods by promoting balanced site design and architecture.” 
  • Remove or replace with “protecting residents and neighbors by ensuring safe and sanitary conditions”. Or shape the program to use objective standards, not the subjectivity of site design and architecture.
  • There are no programs to support this policy.
• Policy 5.3 “Assist individual neighborhoods in establishing their own identity”
  • There are no programs to support this policy.

Goal 6.0 Resource Conservation

• This goal is missing a lot of programs to support these policies.
• Policies 6.1 and 6.2 speak to the walkable neighborhoods, alternative transportation and jobs/housing imbalance. 
  • Capitola has a jobs/housing imbalance - there are a lot of commutes for Capitola employees IN to the City (See page 2-8). There are no programs to support these policies.
  • This is a place to address some of the concerns Capitola included in earlier sections - diversity, commutes, traffic

Goal 7.0 Affirmatively Furthering Fair Housing

• (see comments earlier as well)
• This is one of the few Goals that has concrete dates (8 year metric column)
• The relationship of the programs to policies is unclear; the headings in the table don’t match the policies.
• The Eastern section of the city is considered “Highest” resource, 
  • Capitola's site inventory is focused on the western section.
  • How will Capitola have equitable production of affordable housing with so few sites on the eastern side?
  • Why are only 25% of the ADUs targeted for “highest resource areas” which is also the area with the least number of parcels in the Site Inventory?