Petaluma

The City of Petaluma has been allocated 1,910 units (499 very low income, 288 low income, 313 moderate income, and 810 above moderate income units). Based on projected ADUs and entitled projects, the City has met all its RHNA for above moderate income units, with a remaining RHNA of 567 units (263 very low income; 102 low income; and 212 moderate income units). Using factors such as existing uses, zoning, and development standards, the City has identified an inventory of sites with potential for redevelopment over the eight-year planning period to fully accommodate the remaining RHNA. Specifically, vacant and underutilized sites identified with near-term development potential can accommodate 1,632 units (524 lower income units; 444 moderate income units; and 664 above moderate income units). The City is able to accommodate its full RHNA based on existing land use policy and zoning provisions. The City has endeavored to identify sites that that are located in areas with a VMT at or below the citywide average in order to reduce the carbon and ecological impacts of new development to support the City’s climate goals. To comply with the AB 1397 requirements for reusing sites that were identified in previous Housing Element cycles, the City will amend the Zoning Code to permit residential/mixed use projects on these reuse sites by right without discretionary review if the project includes 20 percent of units affordable to lower income households. To ensure that the City complies with SB 166 (No Net Loss), the City will monitor the consumption of residential and mixed-use acreage to ensure an adequate inventory is available to meet the City's RHNA obligations. To ensure sufficient residential capacity is maintained to accommodate the RHNA, the City will develop and implement a formal ongoing (project-by-project) evaluation procedure pursuant to Government Code Section 65863. Should an approval of development result in a reduction in capacity below the residential capacity needed to accommodate the remaining need for lower and moderate income households, the City will identify and if necessary, rezone sufficient sites to accommodate the shortfall and ensure “no net loss” in capacity to accommodate the RHNA. The City’s Residential Growth Management System (RGMS) caps the number of housing units at 500, exempting multi-family housing for the elderly, lower income households, and projects with fewer than 30 units. The RGMS has not had any material impact on limiting housing production except for its first few years of implementation in the 1970s, and it is not expected to impede the City in meeting its RHNA of 1,904 units for the 6th cycle Housing Element.

• Maintain an inventory of the available sites for residential development and provide it to prospective residential developers. Update the sites inventory at least annually. Fully accommodate the RHNA of 1,910 units (495 very low income; 288 low income; 313 moderate income; and 810 above moderate income units). • By January 2024, as part of an update to the General Plan, pursue land use and zoning strategies to allow the evolution of predominantly single- family neighborhoods to facilitate the development of a wider diversity of housing typologies as well as neighborhood services. • By January 2024, amend the Zoning Code to permit residential/mixed use projects by right without discretionary review on reuse sites from previous Housing Elements, if the project includes 20 percent of the units affordable to lower income households. • By January 2024, implement a formal evaluation procedure pursuant to Government Code Section 65863 to monitor the development of vacant and nonvacant sites in the sites inventory and ensure that adequate sites are available to meet the remaining RHNA by income category, and include this data in the annual Housing Element Progress Report. In 2025, conduct community education to discuss the impacts of the RGMS on housing production and housing needs, and initiate a process to review the RGMS for consistency with State law and identify mitigating actions if necessary.

Accessory Dwelling Units (ADUs) represent an important resource to providing lower and moderate income housing in Petaluma. To facilitate ADU production, the City will: • Dedicate a specific page of the City website to provide information on and resources for ADU construction. • Develop an ADU construction guide to clarify the process and requirements for permit applications. The guide will outline the required review by various departments, the fees required, and if a new address is required for the ADU. • Create a permit center to coordinate application and review processing by various departments. • Provide specific staff familiar with ADUs to respond to questions and offer office hours to answer questions, offer technical assistance, and provide seminars or other education to the public, and provide other support to those increased in creating ADUs and JADUs. • Consider reducing or waiving plan check fees if the applicant chooses one of the plans preapproved or pre-reviewed by the City. • Consider setting aside funding or offering other financial incentives to encourage ADUs to be made available at affordable costs to lower income households. A loan or grant may be offered to property owners in exchange for deed restricting ADUs as housing affordable for lower income households. • Develop an amnesty program for illegally constructed ADUs to legalize these units as long as these units are code corrected to meet health and safety, and building standards. A checklist will be developed to assist homeowners in assessing their eligibility/feasibility and in estimating costs before applying for amnesty. • Promote ADU-related programs and/or ADU construction in neighborhoods with a higher need for affordable housing, or relatively high capacity for ADU development. • As part of the Inclusionary Housing program review and update, allow ADUs in multi-family developments to count toward the inclusionary housing requirement (see Program 11). • Work with regional organizations to develop and implement best practices to support the conversion of garages into ADUs.

• Continue to promote and facilitate the development of ADUs through a partnership with a regional organization such as the Napa-Sonoma ADU Center, including through financial support of the Center. • Permit on average 16 ADUs or JADUs per year (128 ADUs or JADUs over eight years). If an average of 16 ADUs per year are not achieved by 2025, consider adopting additional measures that are supportive of ADU development. • By December 2023, create a streamlined process application and review process, update the City website to create a dedicated page for ADU resources, and develop an ADU construction guide. Update the ADU webpage semi-annually to ensure information addresses questions raised by applicants. • By December 2023, amend the ADU Ordinance as necessary, to address comments from HCD to comply with State law. • By December 2023, allocate staffing resources to expedite the ADU review and approval process and create a permit center to coordinate the review of ADU applications. • In 2023 and annually thereafter, pursue financial incentives to encourage affordable ADUs (fee waivers or direct subsidies) and allocate resources as appropriate, with the goal of achieving 16 affordable ADUs per year over eight years. • In 2024, evaluate and develop an ADU amnesty program, with the goal of converting 16 unpermitted units into ADUs that meet building codes, for an average of two unit per year. (This estimate is included in the 16 ADUs per year projected.) • In 2024, identify neighborhoods with capacity for ADU development and conduct targeted outreach. • Provide an annual update on ADU permit progress to Planning Commission and City Council.

The City will continue to support neighborhood vibrancy through flexible development standards. As part of the General Plan update process, the City will explore land use policy and development code changes to encourage the integration of mixed-use and residential development. These may include: • Conversion of nonresidential uses into housing. Strategies may include the waiving of additional parking requirements or the ability to pay into a parking assessment district. • Small lot development in Downtown Petaluma. Many Downtown parcels are small and consolidation for large-scale development may be challenging. To facilitate residential development in Downtown, consider allowing up to six units on small lots with 6,000 square feet and explore policies that facilitate small lot consolidation. • The minimum retail requirement may be a constraint to developing mixed-use buildings given the evolving retail and office markets. Currently, certain streets within SmartCode areas do not have minimum retail requirements. Explore and possibly expand areas where a minimum nonresidential component may be reduced or eliminated. • Due to the changing economy and impacts of COVID, regionally communities are experiencing changes to the commute patterns, level of home occupancy, and remote working. The City will evaluate the definition of live/work and work/live units and the provisions for such housing types to allow flexibility in various living and working arrangements. An emerging trend is to allow co-working spaces to fulfill the nonresidential component of mixed-use development. • Develop objective design standards for residential and mixed use development.

• By July 2023, adopt objective design standards and parking standards for multi-family residential and mixed use development (currently underway). • By December 2023, as part of the General Plan update, adjust the mixed-use development requirements and address zoning code constraints, such as parking, to support adaptive reuse of nonresidential spaces. Create 40 new units through adaptive reuse and conversion of nonresidential use, for an average of five units annually, representing the potential conversion of one to two second floor office uses per year. • By December 2023, adopt live/work standards to encourage a greater range of options. • By December 2023, update onsite parking regulations to reduce barriers to housing development and to support the City's affordable housing development and climate goals. Specifically, reduce the parking standards for small units (such as micro units, studio/efficiency units, and one-bedroom units) and based on location relative to transit and amenities.

The City will amend the Zoning Code to address the following to facilitate the development of a variety of housing types: • Parking: The City currently requires one space per bedroom but no fewer than 1.5 spaces per multi-family unit. These parking standards may be considered a constraint to large units (with three or more bedrooms) and small units (such as efficiency units). The City will establish updated parking standards for various housing types, including minimums and maximums where appropriate, consider the need for unbundling parking, and EV parking needs. Specifically, the City will reduce the parking standards for small units (such as micro units, studio/efficiency units, and one-bedroom units) and based on location relative to transit and amenities. • Density Bonus: The City’s Density Bonus must be updated to reflect recent changes to State law, such as AB 1763, which made several changes to density bonus requirements for 100 percent affordable projects, and AB 2345, that further incentivizes the production of affordable housing. • Residential Care Facilities: The City permits residential care facilities for six or fewer persons in residential and mixed-use zones. However residential care facilities for seven or more persons are not permitted in any residential zones, but are permitted or conditionally permitted on an upper floor or behind a ground floor fronting use in mixed use and commercial zones. Furthermore, residential care for the chronically ill and adult residential facilities are subject to additional restrictions (such as a maximum capacity of 25). The requirement for placing the facility on an upper floor and behind a ground floor street fronting use may constrain the development of larger residential care facilities. The City will evaluate this constraint and amend the Zoning Code to mitigate this constraint to facilitate the development of additional types of residential care facilities. Specifically, residential care facilities for seven or more persons will be conditionally permitted in residential zones, mixed use, and commercial zones subject to findings for approval that are objective and provide certainty in outcomes. The placement requirement for upper floor and behind a ground floor street fronting use will be removed. These revisions are in accordance with State interpretation of Affirmatively Furthering State Housing legislation. • Supportive Housing (AB 2162): While the City has already developed a procedure to process supportive housing pursuant to AB 2162, this 2023-2031 Housing Element includes a program action to amend the City’s Zoning Code to clarify that eligible projects are permitted in all multifamily zones and nonresidential zones (such as mixed use zones) that permit multi-family housing. • Low Barrier Navigation Center (LBNC): AB 101 requires that LBNCs be permitted by right in areas zoned for mixed-use and nonresidential zones that permit multi-family housing. The City will update the Zoning Code to reflect State law. A Low-Barrier Navigation Center (LBNC) is a "Housing First," low barrier, temporary, service-enriched shelter that helps homeless individuals and families to quickly obtain permanent housing. • Reasonable Accommodation: The City will work to develop a formal Reasonable Accommodation procedure to provide flexibility in the implementation of the City’s land use and zoning policies to address housing for persons with disabilities. Reasonable Accommodation requests should be considered via a ministerial process. Criteria for review and approval will be objective and facilitate certainty in outcomes. • Civic Facility: Consider amending the Zoning Code to permit residential uses in the Civic Facility zone and incorporate deed restrictions to ensure residential units are affordable. • Emergency Shelter Zoning: Evaluate and designate the appropriate residential and/or mixed use zoning districts where emergency shelters will be permitted by right and amend the Zoning Code to establish objective development standards pursuant to AB 2339. This new bill requires that the identified zones to meet at least one of the following: (1) vacant and zoned for residential use; (2) vacant and zoned for nonresidential use if the local government can demonstrate how the sites are located near amenities and services that serve people experiencing homelessness; or (3) nonvacant if the site is suitable for use as a shelter in the current planning period. • Employee Housing: Amend the Zoning Code to comply with Employee Housing Act (Health and Safety Code §17021.5 and §17021.6). Specifically, employee housing providing accommodation for six or fewer employees is deemed a single-family structure with a residential land use designation. Farm labor housing of no more than 36 beds or 12 units is deemed an agricultural land use to be similarly permitted as other agricultural uses in the same zone. • Single-Room Occupancy (SRO) Housing: Amend the Zoning Code to identify SRO as a permitted use in MU, R4 and R5 districts where high density multi-family housing is already allowed. • Open Space Requirement: Study open space requirements for comparable housing types in the region and reduce the open space requirements to align with regional trends and to ensure maximum allowable density in each district can be achieved.

• By December 2024, amend the Zoning Code to address specific issues as outlined above. • Create 100 new housing units for special needs groups, including for seniors, disabled, farmworkers, hospitality workers, and the homeless, representing approximately two affordable housing projects over eight years, at typical size of approximately 50 units per project utilizing LIHTC.

Throughout the state, and even nationwide, the shift to online shopping has resulted in changes to the retail landscape. Many shopping centers are being reimagined as vibrant residential/commercial mixed use development. However, redeveloping shopping centers presents some challenges, such as the large site scale, configuration of existing structures and parking areas, existing lease terms, CC&R provisions, shared parking agreements, and community desire to maintain and rejuvenate retail services. The City will establish policies and development regulations to enable a residential development through a range of approaches including: • Full redevelopment • Addition of residential uses in existing surface parking areas • Cluster residential development on underutilized portions of the site, and/or • Addition to or reconfiguration of the existing structures to include residential uses Specifically, policies and zoning development standards will be written to facilitate: • Subdividing, if necessary, of the parking areas to create developable parcels • Clustering of densities on portions of the parking areas • Shared access to existing structures to allow existing uses to remain while the parking areas are being redeveloped or reconfigured • Increase height limits and permit shared parking options • A strong sense of place and cohesive urban design both within the site and in relation to the surrounding neighborhood

• By March 2023, develop land use policies and development standards to facilitate shopping center redevelopment with a strong sense of urban design cohesion.

The City implements its local Inclusionary Housing program that requires 15 percent of the units in new development (of five or more units) to be rented or sold at prices affordable to lower low and very low and/or low and moderate income households. To facilitate housing development, the City will evaluate the Inclusionary Housing program to: • Assess the threshold for applying the inclusionary requirements, including the appropriate unit threshold for in-lieu options. • Establish specific alternative options for fulfilling the inclusionary housing requirements, such as payment of an in-lieu fee, donation of land, acquisition/rehabilitation and deed restriction of existing housing, preservation of affordable housing at risk of converting to market rate, or allowance of ADUs in multi-family development to count toward the requirement.

• Continue implementation of the Inclusionary Housing Program to create 1,000 affordable units (400 very low income; 400 low income; 200 moderate income) over eight years, inclusive of the 419 affordable units in the pipeline. • In 2024, evaluate the Inclusionary Housing program to ensure the in-lieu options, threshold and fee structure for in-lieu options are appropriate to facilitate housing development given the current market conditions. • At least every four years, review the in-lieu fee calculations to ensure the fees reflect current market conditions.

A major constraint to affordable housing development is the lack of funding. The City has established a Local Housing Trust Fund but has limited sources of revenue for the Trust Fund. Currently, available sources include fees generated from the Inclusionary Housing in-lieu fee, Housing-Commercial Linkage Fee, and Permanent Local Housing Allocation. With the City’s focus on on-site production of affordable units, the In-Lieu fee is not a significant revenue for the Trust Fund. The City is exploring participation in the Joint Powers Authority (JPA) with the City of Santa Rosa and the County of Sonoma. The JPA was created with the PG&E settlement funding from the 2017 and 2018 wildfires. The City will explore other funding sources, including: • General Fund • Transient Occupancy Tax • Short-Term Rental registration fee • Vacant Home Tax - Imposing a tax on homes that are unoccupied for an extended period • Employer Fee – Requiring major employers to contribute to affordable housing

• Ongoing exploration of additional funding sources for the Housing Trust Fund and pursue appropriate options by 2025.

In general, the concept of missing middle housing refers to two scenarios. One, housing is not affordable to middle income households. Two, the range of housing available in a community is missing housing types at medium densities. Often these two scenarios overlap, as affordability is correlated with density. Housing in Petaluma is generally not affordable to lower and moderate income households. Even middle income or workforce households, defined as households making up to 150% of the area median income, have difficulty locating affordable and adequate housing options. More than three-quarters of the City’s housing stock is comprised of single-family detached homes, a housing type that is generally not affordable to middle income households. The City will explore various strategies to promote workforce/missing middle housing. Potential strategies may include: • Transitioning single-family neighborhoods into 15-minute walkable neighborhoods by integrating neighborhood-serving uses, and live/work spaces with residential uses. This approach enhances housing options by introducing medium density housing into single-family neighborhoods, providing the middle income housing that is missing in the City's range of housing choices. To implement this goal, the City will explore several changes to the Zoning Code, including but not limited to: o Allowing neighborhood-serving nonresidential uses into residential neighborhoods, including co-working spaces o Redefining home occupation and live/work arrangements o Implementing SB 9 o Promoting small lot subdivisions and appropriately-scaled multi-family buildings • Allowing small complexes, up to six units, on lots of at least 6,000 square feet citywide. • Facilitating lot consolidation. • Establishing a requirement for an average unit size per development to balance between density and unit sizes and encourage the development of smaller units. • Pursuing the acquisition and deed restriction of apartments for middle income households.

• By December 2023, as part of the City's General Plan update, develop land use policies to facilitate the transitioning of single-family detached neighborhoods and to increase opportunities for medium density residential for middle income housing. • By December 2023, develop application and process materials for SB 9 applications. In the interim, work with applicants one-on-one to ensure the City is implementing State mandates. • In 2024, pursue opportunities with Joint Powers Authorities to acquire and deed restrict apartments as middle income housing. • Create 80 new units (duplex, triplex, fourplex, and small multi-family complex) in single-family and other lower density neighborhoods, for an average of ten units per year as part of the City’s efforts to create 15- minute neighborhoods.

In recent years, the City has been providing Community Development Block Grant (CDBG) funds to Rebuilding Together to provide major and minor rehabilitation services to lower income households. The City will continue to support nonprofit efforts for the improvement of housing conditions for lower income households, especially those with special needs. Eligible improvements include emergency health and safety housing repairs, energy conservation, and accessibility improvements. The City will also explore using available resources to assist disadvantaged neighborhoods in moving toward all electrical utilities and appliances per the City’s Climate Action and Adaptation Plan.

• Continue to provide funding for housing rehabilitation services to assist an average of 30 households annually or 240 households over eight years. • By 2025, pursue funding for decarbonization of housing for low income households to assist a minimum of 40 households over eight years. • Require that projects seeking local funding for housing rehabilitation demonstrate a commitment to electrification.

The City implemented rent stabilization for mobile home spaces in 1994 to ensure affordability for homeowners, most of whom are on fixed incomes. At the same time, rent stabilization is intended to allow mobile home park owners to maintain a fair and reasonable return. Rent stabilization applies to spaces that have a rental agreement term of 12 months or less. Annual rent increases are limited to the percentage change in the Consumer Price Index (CPI), but any increase is limited to a maximum of 6 percent. The City promotes the long-term affordability of the mobile home units through the following actions: • The land use classification of the seven mobile home parks in Petaluma is Mobile Homes. This classification protects the mobile home parks from possible future development by limiting the housing types to only mobile homes. Any proposed change would require a General Plan amendment. • Support the administration of the Mobile Home Rent Control Program that was implemented to provide rent stabilization for over 317 lower income mobile home park tenants, most of whom are elderly. (See Program_29: Tenant Protection Strategies that cover housing opportunities citywide.)

• Continue to support the affordability of mobile home parks by working with residents and property owners to monitor rents and ensure rent increases are economically feasible, in addition to putting in place tenant protections city wide. • Annually monitor mobile home park rents to ensure compliance with the Rent Stabilization Ordinance. • As requested, conduct mediation between tenants and mobile home park owners for rent increases. • By December 2023, update the Mobile Home Rent Stabilization Ordinance.