Item 23 - Density Bonus Agreement No. 2023-01: 4th and Grand (1212 E. Fourth Street)

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Ali Pezeshkpour, Planning Manager Page 4 requirements associated with "land use" and development standards.4 A concession may be sought not only to modify or eliminate a development standard but also to modify "zoning code requirements" (Gov. Code, § 65915, sub. (k)(1)). First, the applicable zoning classification is simply "Multi -Family Dwellings" (i.e., not "Mixed - Use"). Second, the ground floor commercial requirement is subordinate in function to the primary zoning classification of "Multi -Family Dwellings," relating primarily to the location of the commercial floor area. If the applicant chooses to request a concession to eliminate or modify the requirement for ground floor commercial, they may. The decision -making body must consider the requested concession pursuant to the SDBL. The City must grant (i.e., "shall approve") the specific incentives/concessions requested by the applicant unless the City makes written findings, based on substantial evidence, that the incentive/concession would (1) not result in a cost reduction, (2) have a specific adverse impact on health or safety (as defined), or (3) be contrary to state or federal law (Gov. Code, § 65915, subd. (d)). Because the City wrongfully rejected its concession request, the applicant has removed the two ground floor residential units and replaced them with commercial floor area. This has reduced the number of units in the overall project from 16 to 14, thus not achieving the full 27.5-percent density bonus to which the applicant is entitled. The cost of adding an additional story to the building to meet the ground floor commercial requirement and providing 16 units is presumably economically infeasible. Finally, the SDBL contains the directive that it "shall be interpreted liberally in favor of producing the maximum number of total housing units" (Gov. Code, § 65915, subd. (r)). Conclusion and Next Steps HCD encourages the City's efforts to prioritize housing affordability and to increase the overall supply of housing. However, the City must process development applications in accordance with the timelines established under the PSA and the HAA. Failure to do so results in project applications being deemed complete and consistent with local regulatory requirements by operation of law, as seen here. Moving forward, HCD expects the City to advance the Project to a meeting where it can be considered by the decision -making body. HCD would also like to remind the City that HCD has enforcement authority over the SDBL, HAA, and PSA, among other state housing laws. Accordingly, HCD may review local government actions and inactions to determine consistency with these laws. If HCD finds that a city's actions do not comply with state law, HCD may notify the California Office of the Attorney General that the local government is in violation of state law (Gov. Code, § 65585, subd. (j)). 4 "Development Standard" is defined in Government Code section 65915, subdivision (o)(2).