Residential growth has been a major concern of Morgan Hill residents many times over the years. As a result of community action we are one of the only cities in California that put in place a residential development control system.
So how come we have an issue with what we see as runaway residential development over the last few years? Shouldn’t our growth control system curb all this?
We have put in place Measure S now which should return our rate of growth to pre-2008 levels, possibly below in the next few years.
The Explanation:
The Great Recession put a backlog of approximately 1,800 allocated residential units on the books which have exploded into construction since 2014.
Timeline of issue:
· 2008 (+/-): Construction virtually ceased when bank financing dried up due to the Great Recession.
· 2008 to 2014 (+/-): Allocations accumulated. Measure C required issuance of allocations to meet target population - between 250 and 300 allocations were issued each year even though no construction was taking place.
· 2014 (+/-) almost 1,800 allocations are in backlog due to repeated extensions.
· 2015 (+/-) bank financing freed up and construction begins at levels not seen since before 1977 (start of Measure E).
· 2015 to present: spike in construction is noticeable to community.
The Solution Would be Measure S:
The regularly scheduled RDCS update was developed primarily by the RDCS Working Group, Planning Commission, and City Council. We started the update in 2015 by which time we had already seen the effects of continually extending allocations, having a population cap that was also a target population (which had meant we were committed to provide allocations until met), and lack of ability to issue as few allocations as desired in a given year.
What We Did:
· The population cap of 58,200 by 2035 is a cap and not a target. We have no obligation to meet that number.
· As a planning commissioner I helped push for no more extensions. The Planning Commission discussed limiting extensions and I proposed that we offer a 30 month initial period (includes up to 24 months for environmental approvals) and then only a 1 year maximum extension after that. We voted it into the Measure.
· The City Council decided no more than 215 allocations would be issued in any given year and as few as zero could be issued at their discretion. If fewer than the 215 allocations are issued they are forever lost and cannot be made up in successive years. Note: Consultants had advised that anything less than 230 allocations could impact the city budget negatively (based upon loss of development fees).
We now have a growth control measure that solves the previous issues which allowed for the spike in construction and the associated perception that we are growing out of control. We are just growing all at once within the controls we, the voters, had put in place in 2004 - we have learned a lot since then.
The Inconvenient Truth…:
· We actually have to build, we cannot build zero units and get away with it for long.
· RHNA identifies how many homes in all affordability levels must be built within a given 8 year time span. In this 8 year cycle we were to have 928 units built. That means we have to build an average of 115 homes per year, of which 2/3 are to be affordable in cost just to meet a basic legal obligation - but we have an obligation under smart growth to provide a mix of housing to meet a community’s needs. Does providing only 1/3 of homes as regular market rate for the majority of the community make sense or do we build more to account for a balanced approach to housing?
· We can lose tax and grant money managed by the State. Possibly lose control over our permitting process if we don’t build to RHNA requirements.
· As a regional partner we have an obligation to build, morally and legally.
· Property owners have a right to do what they want with their land which includes developing it. In another community realtors successfully sued to force residential development. We may find out this year what an acceptable limit is to the people who have rights to build in our city.
Notes:
· Local builders, typically smaller companies based in Morgan Hill, are happy building maybe 10 -15 homes a year. This suited the low number of allocations a project would receive in any given year. It would take many years to complete a development (6 to 10 years not an uncommon expectation for a development of around 200 units).
· When allocations accumulated enough that large national companies took interest. Project were sold to them and build at a rate not possible by local builders. A large national builder might take only a few years to build an entire 200 unit development.
· Local builders appear to build a higher quality product, understand local development standards and the “Morgan Hill feel”.
Definitions:
Allocation: permission to build a single dwelling unit. Allocations are issued by the City Council upon recommendation of the Planning Commission. Under Measure C an allocation could be extended for multiple years. Under Measure S there will be only one 1 year extension allowed.
Density: The number of dwelling units that are developed per acre. Lowest density is Residential Estate GP (1 unit per 10 acres) to Residential Attached Medium (16 - 26 units per acre) to the limited Residential Downtown (24-46 units per acre) at the highest.
Dwelling unit: A single residential unit intended to house a single family. These could be a single family detached home or a single unit in a townhome or condominium development which are most typical in MH.
General Plan 2035: Overarching long range plan of how Morgan Hill develop in all ways until 2035. This includes housing development, circulation (roads), infrastructure, economic development, health & safety among other aspects of what we want to see in our city. It took almost 3 years and many, many public meetings to get this completed. The General Plan Advisory Committee (GPAC) advised the Planning Commission who met and advised the City Council after many, many community meetings.
Growth Control Measure E: 1st residential growth control ordinance that started in 1977 and established a target/ceiling population of 30,000 by 2000. Created the RDCS.
Growth Control Measure P: 2nd residential growth control ordinance that started in 1990 and established a target/ceiling population of 38,800 by 2010. Refined the RDCS.
Growth Control Measure C: 3rd residential growth control ordinance that started in 2004 and was to sunset in 2020. Established a target/ceiling population of 48,000 by 2020. Again refined the RDCS. This measure included the requirement to issue the number of allocations necessary to meet the population target/ceiling. We typically issued between 173 to 344 allocations per year which could earn extensions due to extenuating circumstances, like a severe economic recession.
Growth Control Measure S: 4th residential growth control ordinance adopted in 2016 and sunsets in 2035. Establishes a population cap of 58,200 at 2035. Established that a maximum of 215 allocations could be issued in any given competition year and as few as zero allocations could be issued. No more than one 1 year extension could be issued unless delay is caused by governmental agency. Measure S passed with 76.5% support of the voters in 2016.
Regional Housing Needs Allocation (RHNA): the state-mandated process to identify the total number of housing units (by affordability level) that each jurisdiction must accommodate in its Housing Element. As part of this process, the California Department of Housing and Community Development (HCD) identifies the total housing need for the San Francisco Bay Area for an eight-year period (in the current cycle, from 2015 to 2023). See: https://abag.ca.gov/planning/housingneeds/
Residential Development Control System (RDCS): Approved Measures (currently Measure S) are the voter approved RDCS. Measure S is now a legal voter approved ordinance (Municipal Ordinance Chapter 18.78)
Single family detached home: a stand alone home that we normally think about with one home on a lot, usually with a garage.
Morgan Hill Feel: Somewhat subjective sense that most residents want to have single family detached homes and others will accept multifamily homes. The feel is one of having usable yards in single family detached homes and lots of open space within multi-family developments. We want the feel of open space all around us with easy access to our parks and open space and a sense of a less crowded environment. This is used frequently in our discussions of planning developments.
Multi-family housing: typically townhomes and condominiums where you have more than two dwelling units attached.
In conclusion: the current boom cycle should peter out in 2 to 3 years unless the state makes us build a load of affordable housing which would be out of our control (which could happen).
Controlling residential growth is a complex set of issues involving community sentiment, real housing needs and the state’s requirement we build, business growth, property owner’s rights, and ability to meet the needs of growth with infrastructure improvements.
I believe we are growing the right way with smart growth practices. Please ask anyone who would debate you on the facts what they would do and then follow up with the myriad questions of legality of their plan, practicality of the plan, economic growth effects, and morality of the plan.
Please look at all of the issues this election cycle.
