A Brief Summary of How the Town Put the 2040 General Plan Together

The Staff report (which is 1,278 pages) for the upcoming Town Council meeting of 6-20-22, contains a tremendous amount of documentation as the Town Council begins to deliberate the draft 2040 General Plan and FEIR. However, there are two documents that were not included that are critical to understanding how the current draft of the Land Use Element came to be.

I have included the two documents for the Council’s review and to provide complete transparency. The two documents are : 1) minutes from the Town Council Meeting of November 17, 2020, where the Council provided direction on the Draft Land Use and Community Design Elements, and 2) minutes from the GPAC Meeting of November 19, 2020, where the GPAC formally acted on the direction provided by the Town Council.

Town Council Meeting of November 17, 2020

At this meeting, agenda item #7 was devoted to the Town Council providing direction to the GPAC as they discussed the Land Use Element and the Community Design Element. This agenda item came about at the request of the GPAC, since they sought additional direction on drafting these two critical elements of the 2040 General Plan. The minutes speak for themselves.

What needs to be emphasized is the Town Council gave clear feedback on the following points:

  • If the Town can plan for the number of housing units required by RHNA without increasing the allowed density in Low Density Residential areas,that would be preferred.
  • If the Town can plan for the number of housing units required by RHNA without changing the downtown/central business district, that would be preferred.
  • The General Plan should include policies that support low, very low and extremely low-income housing, possible through increased minimum densities or smaller units
  • The General Plan should encourage production of Missing Middle housing, especially when it can provide housing for middle- and lower-income households.(Note: For a family of 4 these income levels range from $84,250 to $168,500. See attached State Income limits)
  • Production of Missing Middle housing should be focused in areas that are within walking distance to commercial uses, such as the Opportunity Areas/Community Place Districts.

The minutes further reflect these were individual comments and there was no resolution or formal action taken since the agenda item limited the Council to only a discussion and providing feedback.

GPAC Meeting of November 19, 2020

After the Town Council meeting of November 17, the GPAC held a working session on November 19 to review and discuss the initial drafts of the Land Use Element and Community Design Element and to discuss the direction provided by the Town Council. It is important to point out that the GPAC meeting had a quorum of 8 members present, with 3 members absent, out of the 11-person committee.

Again, the minutes of the meeting speak for themselves. At the meeting, the Committee Chair called for a formal vote of the GPAC on the following question – Does the Committee agree with the statement, “if the Town can plan for the number of housing units required by RHNA without increasing the allowed density in Low Density Residential areas, that would be preferred”.

A “yes” vote would result in a Land Use Element that would not increase the allowed density in Low Density Residential Areas and a “no” vote would result in the allowed density in the Low-Density Residential Area being increased from 1 – 5 DU per acre to 1 – 12 DU per acre.

A vote of the 8 members present resulted in 3 “yes” votes, 4 “no” votes and 1 abstention. The 4 “no” votes resulted in an increase in density in Low Density Residential areas and the draft of the Land Use Element was unchanged. To be clear only 4 people out of a committee of 11 voted for this question, which is less than a majority of the Committee. It should also be pointed out that the Vice Mayor Barbara Spector, who attended the November 17 Council meeting voted “yes”, supporting the Council’s guidance given two days earlier. How this vote was allowed to stand is a complete mystery since a majority of the GPAC did not vote “no”. Such an important vote should never have been taken without the full committee being present and furthermore it is questionable whether the committee had the authority to disregard the clear direction of the Council on such a consequential issue and draft the Land Use Element based on the views of 4 committee members, 2 of whom were also current members of the Planning Commission.

As a result, the GPAC rejected the guidance the Town Council had just provided and went on their own path. Worse, based on the vote of only 4 people, the current draft of the land use element still reflects a massive up zoning of 1,891 acres of low-density residential land which is not required to meet the 6th cycle RHNA allocation. Only now, over 18 months later, is this issue finally back in front of the Town Council for discussion. The LGCA believes the GPAC overstepped their authority and have drafted and approved a Land Use Element that does not reflect the Council’s feedback, nor is it supported by a majority of the residents of the Town and would urge the Council to restore the low-density residential land use to the current 1-5 DU per acre.

 

Analysis of Land Use Changes required to meet the 6th Cycle RHNA allocation

The Staff report has a schedule that reflects one “potential housing” build- out scenario out of an infinite number of possible outcomes. Based on one set of assumed redevelopment percentages (there are an infinite number of potential housing build-out percentages for each land use) and the proposed new density standards for the land uses, the analysis indicates that a total of 3,280 units could potentially be developed over the next 20 years.

To place too much precision on the accuracy of one potential outcome of 3,280 units would be an error. The Town cannot control what gets developed, but the Town absolutely does control what is legally allowed to be built and the land uses through zoning laws. Based on staff data and using the adjusted land use densities proposed by the Planning Commission, the LGCA has computed the increased densities will allow a maximum development of approximately 12,000 units. This amount of development was not evaluated by the EIR and reflects an almost doubling of the number of housing units that currently exist today.

The Staff report also states that the Town must adequately plan for the potential development of 2,292 units over the next 8 years to comply with the 6th cycle RHNA allocation. This raises the obvious question, assuming no changes in the existing land use densities, how many of the 2,292 units could potentially be developed based on the 2020 General Plan? 

Here is how we have calculated the answer:

Units required by 6th cycle RHNA                                         2,292

Less:

ADU’s developed over next 8 years                                     200

Eligible Pipeline Projects from HE Site inventory                 202

Remaining balance RHNA                                                  1,890

Units available for development under existing GP             1,013

“Gap units”                                                                              877

This analysis shows the Town only needs to identify land sites that can be properly zoned to accommodate 877 additional units. The critical data element in this calculation is the available development capacity based on current zoning and the 2020 General Plan. The 1,013 units was reported in a September 16, 2021, staff report to the Town Council. We have attached the schedule (3904-unit land use) for the reader’s review.

Since the Town also has the requirement to plan development of units for very low- and low-income levels, the Town would zone these sites at a density of at least 30 DU per acre (the new default density) to allow the units to count against the 847 very low and low-income units RHNA allocation. At 30 DU per acre density, the Town would need to increase the density on approximately only 37 acres after taking into consideration most likely achievable building density.

Instead, the 2040 General Plan up zones all residential land use Town wide, totaling over 2,465 acres, by doubling the allowable density for low, medium, and high-density residential land uses. Clearly it makes no sense to up zone 2,465 acres of residential land if only approximately 37 acres need to be properly zoned to meet the 6th cycle RHNA allocation.

Relationship between the 6th cycle RHNA allocation of 2,292 and the Proposed Potential Development Scenario of 2,305 units

The Staff report also discusses the relationship of the 6th cycle RHNA allocation of 2,292 (1,993 plus a 15% buffer) to one possible potential build out scenario of 2,305 units. This is done by starting with 2,305 units from the development scenario, and then adding units associated with the production of ADU’s over the next 8 years, approved allowable development projects in the pipeline and units potentially developed in Hillside Residential.

Here is the analysis comparing the 6th cycle RHNA allocation to an 8-year development cycle for ADU’s and eligible pipeline projects:

Housing units potential development                                  2,305

Plus:

ADU’s built over 8 years                                                        200

Eligible Pipeline projects                                                       202

Hillside Residential                                                                116

Total Units adjusted for ADU and Pipeline                          2,823

Less:

6th Cycle RHNA and buffer                                                  2,292

Excess units available                                                            531

 

The Staff report also states in appendix 8, if the low-density housing designation reverted back to the existing 2020 General Plan level, 279 units would be deducted from the excess units. If this was done, there would be 252 excess units available (or an additional 12% buffer over RHNA) for potential development during the 8-year cycle.

Since the original direction provided by the Town Council was,  “If the Town can plan for the number of housing units required by RHNA without increasing the allowed density in Low Density Residential areas, that would be preferred” we urge the Council to keep the land use density for Low Density Residential land use at the existing 2020 General Plan level. There is simply no reason to up zone 1,891 acres of Low-Density Residential Land Use if it is not required, coupled with the fact that SB 9 provides additional development capacity for Low Density Residential land use that has not been included in any of the above analysis.

Relationship of 6th cycle RHNA allocation of 2,292 units to market demand for housing over the next 20 years

The last point we would like to address concerns the mistaken argument we have heard a number of Planning Commissioners and Members of the Town Council make regarding the need to plan for multiple RHNA Allocation cycles beyond the 6th cycle allocation. This argument has been used to justify up zoning all residential land uses Town wide in an effort to massively increase the maximum allowable development potential under new land use rules. As stated above, based on the latest data provided by Staff, the LGCA computes this maximum development potential to be approximately 12,000 units.

The Town published in the Land Use Alternative report two independent forecasts of the likely market demand for housing in Los Gatos between 2020 and 2040. The first forecast prepared by the State’s Department of Finance projected 1,529 units and the second forecast prepared by the Town’s Consultants (ADE) projected 1,954. The Land Use Alternative Report concluded “we project an increase of 4,446 people and 1,954 housing units between 2020 and 2040”.

Based on this, the GPAC provided guidance that the Town should develop land use alternatives that could provide space for future development around 2,000 residential units. Since the State is requiring the Town to have sufficient land zoned to allow for the potential development of 2,292 units, the State requirement trumps the market demand forecasts. Therefore, the Town must plan for 2,292 units even though this level exceeds all independent market demand forecasts. The important point is that there is no legal requirement or any independent forecast that requires the Town to plan land use beyond the development potential of 2,292 units.

We have heard a number of Planning Commissioners and Town Council members multiplying the 6th cycle RHNA allocation of 1,993 by 2 and stating that this would indicate that the Town must plan for the development potential of 3,904 units (see attached schedule) since the General Plan is for a 20- year cycle and the RHNA allocations are on an eight- year cycle.

This approach is fundamentally flawed first and foremost because there are no market demand studies that support this excessive level of growth and more importantly the RHNA allocation process was never intended to be a forecasting tool for future market demand. To prove the latter point, the 4th cycle (562 units) and 5th cycle RHNA (619 units) allocations totaled 1,181 units covering which covered a 16- year period. The 6th cycle allocation of 1,993 is almost 70% greater for only an 8 -year period. So why is this?

The answer is that the methodology to develop the 6th cycle RHNA allocation was built based on a state policy decision to accelerate housing production. Stated another way, the State is requiring local jurisdictions to properly zone enough residential land to allow for the development of housing that normally would be developed over a 20- year period over an accelerated 8- year period. This was intentionally done to address the acute housing shortage that exists today and to address chronic over-crowding and improve vacancy rates to a healthier level.

Doubling the 6th cycle RHNA allocation as an indicator of future housing needs is deeply flawed and has no merit in planning for smart growth in the Town.

Conclusion

The Town Council has received another letter from our attorney’s at Rutan and Tucker. The letter clearly outlines the LGCA concerns and proposes a number of very sensible solutions. We urge the Council to review the correspondence and embrace our recommendations. Given the limited time available during the public comment period at tonight’s Special Council meeting, please accept this email and other correspondence from our attorney and other LGCA members as our public comment on agenda item #1. We will not be speaking during the meeting since our concerns and suggestions have been adequately conveyed in writing to the Town Council.

 

Thank you.

Phil Koen

Los Gatos Community Alliance.

 

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