CC SR 20230620 K - ESA PSA Amendment No. 2
CITY COUNCIL MEETING DATE: 06/20/2023
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to approve Amendment No. 2 to the Professional
Services Agreement with Environmental Sciences Associates to complete the City’s
2021-2029 Housing Element Update.
RECOMMENDED COUNCIL ACTION:
(1) Approve Amendment No. 2 to the Professional Services Agreement (PSA) with
Environmental Sciences Associates (ESA) (Attachment A) to increase the
agreement amount by $20,000 consisting of $14,000 and a contingency of $6,000
for a new contract sum of $288,089.48, extend the term to December 29, 2023,
and augment the scope of work to complete the City’s 2021-2029 Housing Element
Update in response to the comments received by California Department of
Housing and Community Development (HCD); and
(2) Authorize the Mayor and City Clerk to execute Amendment No. 2 to the
Professional Services Agreement with Environmental Sciences Associates in a
form approved by the City Attorney.
FISCAL IMPACT: The fiscal impact of the proposed amended agreement is $20,000
and will be funded from the unspent budget from various vacancies
in the Community Development Department.
Amount Budgeted: $250,000
Additional Appropriation: N/A
Account Number(s): 101-400-4120-5101 VR
(General Fund – Planning Division/Professional Services)
ORIGINATED BY: Jessica Bobbett, Senior Planner
REVIEWED BY: Octavio Silva, Interim Director of Community Development
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Amendment No. 2 to the Professional Services Agreement with ESA (page
A-1)
B. HCD Letter dated October 14, 2022 (page B-1)
C. ESA Amendment No. 2 Request Letter (page C-1)
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D. HCD Letter dated May 19, 2023 (page D-1)
E. Staff Response Letter to HCD dated June 7, 2023 (page E-1)
BACKGROUND:
On March 2, 2021, the City Council approved a one-year professional services agreement
with Environmental Sciences Associates (ESA) to complete the City’s 2021-2029 Housing
Element Update of the City’s General Plan, with an option to renew one additional year
at a contract sum of $238,749.48. On July 19, 2022, the City Council approved
Amendment No. 1 to the Professional Services Agreement with ESA to increase the
agreement amount by $29,340 for a new contract sum of $268,089.48 and to increase
the term to August 31, 2023. The ESA contract is concentrated on completing the Housing
Element policy framework.
In light of the breadth and scope of comments received by HCD in October 2022 on the
City’s Housing Element Update, the City Council is being asked to consider PSA
Amendment No. 2 with ESA.
DISCUSSION:
Since the execution of the agreements with ESA, great strides have been made to
complete the Housing Element Update, including:
• Public outreach and hearing efforts
o Community survey
o Social media campaign
o In-person and virtual open houses
o Joint City Council/Planning Commission meeting
o City Council hearing
o Subcommittee meeting
• Environmental review
o Initial Study/Mitigated Negative Declaration
• Draft Housing Element preparation and submittal to the California Department of
Housing and Community Development (HCD)
• City tour with HCD staff and Subcommittee members (May 2022)
• Adoption of the Final Housing Element, certification of environmental document
and resubmittal to HCD.
In October 2022, HCD issued a letter (Attachment B) determining that the City’s Final
Housing Element was not in compliance with state law and identified deficiencies in the
document that warranted additional revisions. Next steps for ESA in the development of
the Revised Final Housing Element document include:
• Work with Staff and the City’s Housing Element Ad-Hoc Committee in the
preparation of revisions to the Housing Element to address HCD comments.
• Coordinate with HCD representatives for informal review of the Housing Element
revisions.
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• Work with Staff to prepare any further revisions in response to HCD feedback,
prepare document for Planning Commission review and attend public hearing.
• Attend City Council hearing to review Revised Final Housing Element Update.
• Prepare and resubmit Revised Final Housing Element to HCD.
Given that the update process has been more involved than ESA originally scoped due
to both HCD requirements and input, ESA submitted contract amendment request No. 2
(Attachment C) to increase the agreement amount by $20,000 and to extend the term to
December 29, 2023. The amendment includes a $6,000 contingency in the event that
ESA is required to address additional rounds of HCD comments prior to the certification
of the Housing Element. The contingency amount would only be utilized upon
authorization by Staff.
Increasing the agreement amount by $20,000 will include $14,000 to cover costs
associated with an extended term and augmented scope of work to complete the City’s
2021-2029 Housing Element Update of the City’s General Plan with an associated $6,000
contingency to ensure sufficient budget that can be accessed upon City authorization.
The $6,000 is higher than the typical contingency given the HCD level of scrutiny and
uncertainties that are occurring during this cycle of Housing Elements. The contingency
is to ensure sufficient budget that can be accessed upon City authorization.
The $20,000 exceeds the amount the Community Development Department previously
budgeted for professional services to complete the Housing Element Update in the Fiscal
Year 2022-23 City budget. If the proposed amendment is approved by the City Council,
the $20,000 will be funded from the unspent budget from various staff vacancies in the
Community Development Department. It should be noted that the increase in budget is
specific to the policy framework component of the Housing Element Update.
The augmented scope of work is outlined in ESA’s contract amendment request, but
generally includes additional analysis to respond to extensive HCD comments,
participation in additional meetings, and increased project coordination. It should be noted
that ESA is focused on the Housing Element policy framework which does not include
any rezoning efforts that are required by state law for the Housing Element to be
considered compliant. Concurrently, there is another consultant, Dudek, Inc. that is
working on the rezoning effort. The City Council authorized a professional services
agreement with Dudek, Inc. in February 2023.
Staff believes ESA’s request is appropriate given the unprecedented HCD level of
scrutiny that is occurring as part of the 6th Housing Element update process for all
jurisdictions in the Southland. Staff is confident that the additional scope paves the way
for ESA to successfully complete the required updates to the document and help ensure
a compliant Housing Element can be re-adopted by the City Council.
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ADDITIONAL INFORMATION:
Timeline for Housing Element Completion
On May 19, 2023, HCD issued a letter (Attachment D) of inquiry regarding the status of
the City’s 6th cycle Housing Element update. The letter outlined the submission and
review history of the City’s submitted document and the consequences of noncompliance.
Staff submitted a response letter dated June 7, 2023 (Attachment E), providing a timeline
for the completion and submittal an updated draft housing element along with obtaining
compliance with State Housing Element Law. The project timeline that was identified in
Staff’s June 7th letter to HCD is included below. The timeline also identifies associated
tasks for project completion and applicable notes.
TIMELINE:
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Pursuant to Assembly Bill 1398 (Chapter 358, Statutes of 2021), a jurisdiction that fails to
adopt a compliant housing element within one year from the statutory deadline cannot be
found in compliance until any rezones necessary to accommodate a shortfall of sites are
completed. As such, the timeline above also includes information related to the required
rezoning effort of the 30 properties highlighted in the Housing Element’s Housing Site
Inventory. The rezoning component of the Housing Element is estimated to be completed
in July 2024 due to the comprehensive environmental (CEQA) analysis associated with
the preparation of a program level environmental impact report.
CONCLUSION:
Given the need for these services, Staff recommends the City Council approve
Amendment No. 2 to the PSA with ESA and to authorize the Mayor and City Clerk to
execute Amendment No. 2 in a form approved by the City Attorney.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action s are available for
the City Council’s consideration:
1. Do not approve Amendment No. 2 to the PSA with ESA and provide additional
direction to Staff.
2. Take other action, as deemed appropriate.
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AMENDMENT NO. 2
TO AGREEMENT FOR CONTRACTUAL SERVICES
THIS AMENDMENT TO THE AGREEMENT FOR PROFESSIONAL SERVICES
(Amendment No. 2) by and between the CITY OF RANCHO PALOS VERDES, a California
municipal corporation (City), and ENVIRONMENTAL SCIENCES ASSOCIATES, a
California corporation, and is effective as of June 20, 2023.
RECITALS
A. City and Consultant entered into that certain Agreement for Professional Services
dated March 2, 2021 (“Agreement”) whereby Consultant agreed to provide professional services
to complete the City’s 2021-2029 Housing Element Update of the City’s General Plan (“Services”)
through March 2, 2022, for a Contract Sum of $238,749.48.
B. Pursuant to Article 3.2 of the Agreement, the Consultant requested an extension of
the time period specified in the Schedule of Performance and the City provided written notice on
April 27, 2022, authorizing continuation of services through August 27, 2022.
C. Based on significant changes required to this cycle’s Housing Element, the
California Department of Housing and Community Development (HCD) has provided the City
with a great deal of comments, and finalizing the Housing Element has taken more time than
anticipated.
D. On July 19, 2022, the City Council amended the Agreement to extend the Term by
one year through August 31, 2023, expand the Scope of Work, and increase compensation by
$29,340 for a new Contract Sum of $268,089.48. The fee increase includes a $10,000 contingency
in the event that the consultant is required to address additional rounds of revisions based on HCD
comments prior to the certification of the Housing Element. The contingency amount would only
be utilized upon authorization by the City’s Contract Officer.
E. City and Consultant now desire to further amend the Agreement, as amended, to
expand the Scope of Work, and increase compensation by $20,000 for a new Contract Sum of
$288,089.48 and extend the Term through December 29, 2023. Such increase in the Contract Sum
includes a $6,000 contingency in the event that the consultant is required to address additional
rounds of revisions based on HCD comments prior to the certification of the Housing Element.
The contingency amount would only be utilized upon authorization by the City’s Contract Officer.
TERMS
1. Contract Changes. The Agreement is amended as provided herein. Deleted text is
indicated in strikethrough and added text in bold italics.
Section 2.1, Contract Sum, is amended to read:
“The total compensation, including reimbursement for actual expenses,
shall not exceed $268,749.48 (Two Hundred Sixty Eight Thousand Seven
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Hundred Forty Nine Dollars and Forty Eight Cents) $288,089.48 (Two
Hundred Eighty Eight Thousand and Eighty Nine Dollars and Forty
Eight Cents) the “Contract Sum”, unless additional compensation is
approved pursuant to Section 1.9.”
Section I of Exhibit “C” Schedule of Compensation, is amended to read:
I. Consultant shall perform the following tasks at the following rates”
TASK CONSULTANT
COSTS
SUBCONSULTANT
BAE COSTS
SUBCONSULTANT
MBI COSTS
A. Project Administration
1. Project Kick-Off Meeting $1,440 $1,610
2. Project Schedule
Development
$960 $1,140
3. Project Coordination $20,880
B. Housing Element
Amendment
Assessment and
Analysis
1. Evaluation of 2013-2021
Housing Element
$6,310
2. Housing Assessment and
Needs Analysis
$28,460
3. Adequate Sites Analysis $8,360
4. Housing Production
Constraints Analysis
$8,360
5. Housing Goals, Policies,
and Quantified
Objectives
$6,340
C. Public Engagement $3,480
1. Public Outreach Program
Development and Two
Community meetings
$3,610 $27,083.64
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TASK CONSULTANT
COSTS
SUBCONSULTANT
BAE COSTS
SUBCONSULTANT
MBI COSTS
2. Stakeholder Interview $3,610 $17,694.38
D. Planning Commission
and City Council
Workshops
$3,480 $6,245 $4,916.84
E. Draft 2021-2029
Housing Element
Update
1. Administrative Draft
Housing Element Update
$4,880
2. Public Draft Housing
Element Update
$3,060
3. Public Noticing $390
F. General Plan
Consistency and
Environmental Review
$6,276.22
1. General Plan Amendment $3,260
2. Environmental
Determination
$4,780
3. Draft Initial
Study/Mitigated Negative
Declaration
$17,860
4. Environmental Noticing,
Outreach, and Filing
$3,880
5. Final IS/MND $10,920
G. Public Hearings $6,960 $4,100 $3,163.40
H. Final Housing Element
Update
$20,280
$34,280
I. State Certification and
City Adoption
$2,050
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TASK CONSULTANT
COSTS
SUBCONSULTANT
BAE COSTS
SUBCONSULTANT
MBI COSTS
J. Printing, travel,
postage, etc.
$1,250 $1,500 $9,000
K. Meeting Platform
Hosting (Zoom,
GoToWeb, Teams, etc.)
$500
Contingency** $10,000
$6,000
Total $89,150
$95,150
$110,305
$124,305
$68,634.48
TOTAL $268,749.48
$288,089.48
** Contingency shall not be used without written authorization from the City’s Contract Officer.
2. Continuing Effect of Agreement. Except as amended by this Amendment No. 2,
all provisions of the Agreement, as amended, shall remain unchanged and in full force and effect.
From and after the date of this Amendment, whenever the term “Agreement” appears in the
Agreement, it shall mean the Agreement, as amended by this Amendment No. 2 to the Agreement.
3. Affirmation of Agreement; Warranty Re Absence of Defaults. City and
Contractor each ratify and reaffirm each and every one of the respective rights and obligations
arising under the Agreement, as amended. Each party represents and warrants to the other that
there have been no written or oral modifications to the Agreement, as amended, other than as
provided herein. Each party represents and warrants to the other that the Agreement, as amended,
is currently an effective, valid, and binding obligation.
Contractor represents and warrants to City that, as of the date of this Amendment No. 2,
City is not in default of any material term of the Agreement, as amended, and that there have been
no events that, with the passing of time or the giving of notice, or both, would constitute a material
default under the Agreement, as amended.
City represents and warrants to Contractor that, as of the date of this Amendment No. 2,
Contractor is not in default of any material term of the Agreement, as amended, and that there have
been no events that, with the passing of time or the giving of notice, or both, would constitute a
material default under the Agreement, as amended.
4. Adequate Consideration. The parties hereto irrevocably stipulate and agree that
they have each received adequate and independent consideration for the performance of the
obligations they have undertaken pursuant to this Amendment No. 2.
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5. Authority. The persons executing this Amendment No. 2 on behalf of the parties
hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to
execute and deliver this Amendment No. 2 on behalf of said party, (iii) by so executing this
Amendment , such party is formally bound to the provisions of this Amendment, as amended, and
(iv) the entering into this Amendment No. 2 does not violate any provision of any other agreement
to which said party is bound.
[SIGNATURES ON FOLLOWING PAGE]
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01203.0001/308425.2
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On __________, 2019 before me, ________________, personally appeared ________________, proved to me on the
basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature: _____________________________________
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
INDIVIDUAL
CORPORATE OFFICER
_______________________________
TITLE(S)
PARTNER(S) LIMITED
GENERAL
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
_____________________________________________
_____________________________________________
___________________________________
TITLE OR TYPE OF DOCUMENT
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NUMBER OF PAGES
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DATE OF DOCUMENT
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SIGNER(S) OTHER THAN NAMED ABOVE
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document.
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01203.0001/308425.2
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On __________, 2019 before me, ________________, personally appeared ________________, proved to me on the
basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature: _____________________________________
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
INDIVIDUAL
CORPORATE OFFICER
_______________________________
TITLE(S)
PARTNER(S) LIMITED
GENERAL
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
_____________________________________________
_____________________________________________
___________________________________
TITLE OR TYPE OF DOCUMENT
___________________________________
NUMBER OF PAGES
___________________________________
DATE OF DOCUMENT
___________________________________
SIGNER(S) OTHER THAN NAMED ABOVE
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document.
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STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
October 14, 2022
Ken Rukavina, Director
Community Development Department
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes, CA 9027518
Dear Ken Rukavina:
RE: City of Rancho Palos Verdes’ 6th Cycle (2021-2029) Adopted Housing Element
Thank you for submitting the City of Rancho Palos Verdes’ (City) housing element
adopted on August 11, 2022 and received for review on August 30, 2022. Pursuant to
Government Code section 65585, subdivision (h), the California Department of Housing
and Community Development (HCD) is reporting the results of its review. Our review
was facilitated by a conversation on October 11, 2022, with you, Octavio Silva, Deputy
Director/Planning Manager, Jaehee Yoon, Senior Planner and the City’s consultant Matt
Kowta.
The adopted element addresses many statutory requirements described in HCD’s
January 18, 2022 review; however, revisions will be necessary to comply with State
Housing Element Law (Article 10.6 of the Gov. Code), as follows:
1. Affirmatively further[ing] fair housing in accordance with Chapter 15
(commencing with Section 8899.50) of Division 1 of Title 2…shall include an
assessment of fair housing in the jurisdiction. (Gov. Code, § 65583, subd.
(c)(10)(A).)
Promote and affirmatively further fair housing opportunities and promote housing
throughout the community or communities for all persons regardless of race,
religion, sex, marital status, ancestry, national origin, color, familial status, or
disability, and other characteristics... (Gov. Code, § 65583, subd. (c)(5).)
Outreach: As noted in the prior letter, the City should summarize and relate its
outreach efforts to the AFFH analysis and modify or add goals and actions as
appropriate. Please see HCD’s prior review for additional information.
Assessment of Fair Housing: The element was not revised to address this
finding. Please see HCD’s prior review for additional information.
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Ken Rukavina, Director
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Contributing Factors to Fair Housing Issues: While the element included
additional information on contributing factors, as noted in the prior review, the
element should re-assess and prioritize contributing factors upon completion of
analysis and make revisions as appropriate. The analysis should result in
strategic approaches to inform and connect goals and actions to mitigate
contributing factors to affordable housing. Please see HCD’s prior review for
additional information.
Goals, Actions, Metrics, and Milestones: The element was not revised to address
this finding. Please see HCD’s prior review for additional information.
2. An inventory of land suitable and available for residential development, including
vacant sites and sites having realistic and demonstrated potential for
redevelopment during the planning period to meet the locality’s housing need for
a designated income level, and an analysis of the relationship of zoning and
public facilities and services to these sites. (Gov. Code, § 65583, subd. (a)(3).)
Identify actions that will be taken to make sites available during the planning
period with appropriate zoning and development standards and with services and
facilities to accommodate that portion of the city’s or county’s share of the
regional housing need for each income level that could not be accommodated on
sites identified in the inventory... (Gov. Code, § 65583, subd. (c)(1).)
Large Sites: The element now includes one site larger than ten acres (Site 4,
APN 7573-002-014 is 39.75 acres). The element states on page 201 that the City
estimates that approximately 24 percent of this site is developable, due to
environmental constraints and existing improvements on site that will likely
remain, for a net developable acreage of 9.54 acres. To count this site as vacant
the element must provide additional analysis and/or programs to further parcel
the site or other methods to facilitate the development of housing affordable to
lower-income households on large sites. In addition, Appendix E, site number 4
must show what portion of the site is being subdivided or parceled. As noted in
the previous letter, sites greater than ten acres are not eligible absent a
demonstration that sites of equivalent size and affordability were successfully
developed during the prior planning period or other evidence is provided to
demonstrate the suitability of these sites.
Realistic Capacity: The element provided additional information; however, it did
not provide an analysis demonstrating how the number of units for each site was
determined. As noted in the previous letter the element assumes most of the
residential development on sites proposed with a mixed-use overlay zone.
However, the element must still account for the likelihood of nonresidential uses
in this proposed zone, including an analysis based on indicators such as
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Ken Rukavina, Director
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development trends, performance standards or other relevant factors. Please see
HCD’s prior review for additional information.
Nonvacant Sites: As noted on the previous letter, the element generally mentions
some characteristics of redevelopment potential, however it should detail
indicators of property turnover on a site basis in Appendix D (Piasky Study). The
element should also discuss the extent the City’s regulatory framework
encourages redevelopment to residential uses and adjust programs as
appropriate. Please see HCD’s prior review for additional information.
In addition, if the housing element relies upon nonvacant sites to accommodate
more than 50 percent of the Regional Housing Needs Allocation (RHNA) for
lower-income households the housing element must demonstrate existing uses
are not an impediment to additional residential development and will likely
discontinue in the planning period. (Gov. Code, § 65583.2, subd. (g)(2).) Absent
findings (e.g., adoption resolution) based on substantial evidence, the existing
uses will be presumed to impede additional residential development and will not
be utilized toward demonstrating adequate sites to accommodate the RHNA.
Zoning for a Variety of Housing Types (Emergency Shelters): The element was
revised to clarify that emergency shelters are permitted without discretionary
action, identified and analyzed development standards for any potential
constraints on emergency shelters and clarified that emergency shelters parking
requirements will be updated pursuant to AB 139 (Chapter 335, Statutes of
2019); however, the element must still discuss any reuse or other opportunities
that could accommodate at least one emergency shelter.
Electronic Sites Inventory: For your information, pursuant to Government Code
section 65583.3, the City must submit an electronic sites inventory with its
adopted housing element. The City must utilize standards, forms, and definitions
adopted by HCD. Please see HCD’s housing element webpage at
https://www.hcd.ca.gov/community/development/housing-
element/index.shtml#element for a copy of the form and instructions. The City
can reach out to HCD at sitesinventory@hcd.ca.gov for technical assistance.
Programs: As noted above, the element does not include a complete site
analysis, therefore, the adequacy of sites and zoning were not established.
Based on the results of a complete sites inventory and analysis, the City may
need to add or revise programs to address a shortfall of sites or zoning available
to encourage a variety of housing types.
3. An analysis of potential and actual governmental constraints upon the
maintenance, improvement, or development of housing for all income levels,
including.. …land use controls… …and local processing and permit procedures...
(Gov. Code, § 65583, subd. (a)(5).)
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Ken Rukavina, Director
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Address and, where appropriate and legally possible, remove governmental and
nongovernmental constraints to the maintenance, improvement, and
development of housing, including housing for all income levels and housing for
persons with disabilities... (Gov. Code, § 65583, subd. (c)(3).)
Land Use Controls: The element was not revised to address this finding. Please
see HCD’s prior review for additional information.
Processing and Permit Procedures: The element was revised to include
additional information regarding the local processing and permit procedures;
however, on page 156 the element states that the existing permit and approvals
process might be considered a constraint on housing production. The element
should include additional analysis to clarify the constraint and include a program
to review and revise the processing and permit procedure as a constraint to
housing development.
Programs: As noted above, the element requires a complete analysis of potential
governmental and nongovernmental constraints. Depending upon the results of
that analysis, the City may need to revise or add programs and address and
remove or mitigate any identified constraints.
4. The Housing Element shall contain programs which assist in the development of
adequate housing to meet the needs of extremely low-, very low-, low- and
moderate-income households. (Gov. Code, § 65583, subd. (c)(2).
The element was not revised to address this finding. Please see HCD’s prior
review for additional information.
The element will meet the statutory requirements of State Housing Element Law once it
has been revised and re-adopted, if necessary, to comply with the above requirements.
As a reminder, the City’s 6th cycle housing element was due October 15, 2021. As of
today, the City has not completed the housing element process for the 6th cycle. The
City’s 5th cycle housing element no longer satisfies statutory requirements. HCD
encourages the City to revise the element as described above, adopt, and submit to
HCD to regain housing element compliance.
Pursuant to Government Code section 65584.09, a jurisdiction that failed to identify or
make available adequate sites to accommodate all of the previous cycle’s housing need
must zone or rezone adequate sites to accommodate all of the previous cycle’s unmet
housing need (8-units) within the first year of the next housing element cycle. In
addition, the City has a shortfall for the current 6th cycle housing need of 392 units in
which will be addressed through rezoning (Program 1). Pursuant to Assembly Bill 1398
(Chapter 358, Statutes of 2021), a jurisdiction that failed to adopt a compliant housing
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Ken Rukavina, Director
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element within one year from the statutory deadline cannot be found in compliance until
rezones to accommodate a shortfall of sites pursuant to Government Code section
65583, subdivision (c)(1)(A) and Government Code section 65583.2, subdivision (c)
(Prior Identified Sites) are completed.
Public participation in the development, adoption and implementation of the housing
element is essential to effective housing planning. During the housing element revision
process, the City must continue to engage the community, including organizations that
represent lower-income and special needs households, by making information regularly
available while considering and incorporating comments where appropriate. Please be
aware, any revisions to the element must be posted on the local government’s website
and to email a link to all individuals and organizations that have previously requested
notices relating to the local government’s housing element at least seven days before
submitting to HCD.
Several federal, state, and regional funding programs consider housing element
compliance as an eligibility or ranking criteria. For example, the CalTrans Senate Bill
(SB) 1 Sustainable Communities grant; the Strategic Growth Council and HCD’s
Affordable Housing and Sustainable Communities programs; and HCD’s Permanent
Local Housing Allocation consider housing element compliance and/or annual reporting
requirements pursuant to Government Code section 65400. With a compliant housing
element, the City will meet housing element requirements for these and other funding
sources.
For your information, some general plan element updates are triggered by housing
element adoption. HCD reminds the Town to consider timing provisions and welcomes
the opportunity to provide assistance. For information, please see the Technical
Advisories issued by the Governor’s Office of Planning and Research at:
https://www.opr.ca.gov/planning/general-plan/guidelines.html.
HCD appreciates the hard work and dedication the City’s housing element team
provided during the review. We are committed to assisting the City in addressing all
statutory requirements of State Housing Element Law. If you have any questions or
need additional technical assistance, please contact Alex Contreras, of our staff, at
alex.contreras@hcd.ca.gov.
Sincerely,
Paul McDougall
Senior Program Manager
B-5
626 Wilshire Boulevard
Suite 1100
Los Angeles, CA 90017
213.599.4300 phone
213.599.4301 fax
esassoc.com
April 24, 2023
Octavio Silva
Deputy Director of Community Development
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes, CA 90275
Subject: Rancho Palos Verdes Housing Element Update – Contract Amendment Request #2
Dear Octavio:
The ESA Team is continuing work on the City’s Housing Element Update and the associated environmental
analysis per our contract dated March 2, 2021, which was extended to August 31, 2023. The current contract
amount is $268,089.48 (original contract amount plus Amendment 1, including the associated contingency).
As you know, this has been a challenging Housing Element cycle in light of the unit allocations and HCD
scrutiny. As a result, the following is a list of tasks and associated budget that are necessary to complete Task
H, Final Housing Element Update (BAE):
1. Additional revisions to the adopted Housing Element to respond to HCD comments
2. Integrate City staff revision material with BAE revision material and prepare draft revisions to the
adopted Housing Element
3. Coordinate with HCD staff for informal review of the Housing Element revisions
4. Work with City staff to prepare further revisions in response to HCD feedback and prepare Planning
Commission Review Draft Housing Element Update (note that the budget assumes that HCD will not
require more than minor revisions/clarifications and will not require that new housing development
sites are identified to accommodate the RHNA).
5. Attend Planning Commission hearing to review the Draft Housing Element Update and make
recommendation to City Council (virtual attendance). The budget for this task assumes that the
Planning Commission will not recommend anything more than minor edits to the Housing Element
Update.
6. Attend City Council hearing to review the Final Housing Element Update (virtual attendance). The
budget for this task assumes that the City Council will accept/adopt the Housing Element Update as
recommended by the Planning Commission with limited to no changes.
7. Prepare and submit the Housing Element Update to HCD
BAE estimates a budget of $14,000 to complete the above tasks to obtain HCD certification of the Housing
Element Update.
Given the HCD level of scrutiny and uncertainties that are occurring during this cycle of Housing Elements,
BAE suggests the inclusion of a contingency budget in the event that the process is more complex than
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Octavio Silva
April 24, 2023
Page 2
anticipated. The contingency is to ensure sufficient budget that can be accessed upon City authorization. BAE
suggests a contingency of $6,000 to fund additional unanticipated work, upon authorization by City staff.
ESA understands that new sites are not being proposed at this time. Assuming changes are related to policy
the City could likely address the CEQA clearance in the staff report. However, if HCD does not concur with the
current approach, it may be necessary for the City to identify additional sites. If that is the case, then ESA
would likely need to review the Negative Declaration to identify if an Addendum would be necessary. Given
that the approach is not known at this time, and there is still a little remaining budget in other tasks, no
budget is included in this amendment request for environmental review.
Based on the above, the total request for Task H is $14,000, which would bring the total contract amount to
$282,089.48. With the contingency request of $6,000, the budget amendment request is $20,000, bringing the
total contract amount (original + amendment 1 + amendment 2 +contingency) to $288,089.48.
Should you have any questions, please feel free to contact me at (310) 266-8331.
Sincerely,
Luci Hise-Fisher, AICP
Project Manager
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STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
May 19, 2023
City Manager Ara Mihranian
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes, CA 90275
Dear City Manager Ara Mihranian:
RE: Failure to Adopt a Compliant 6th Cycle Housing Element – Letter of Inquiry
The purpose of this letter is to inquire about the status of Rancho Palos Verdes’s (City)
6th cycle planning period (6th cycle) housing element pursuant to Government Code
section 65588, subdivision (e). As you are aware, the 6th cycle update was due October
15, 2021.
Therefore, the City is out of compliance with State Housing Element Law (Article 10.6
(commencing with section 65580) of Chapter 3 of the Government Code). The
California Department of Housing and Community Development (HCD) is requesting the
City provide a specific timeline for (1) submitting an updated draft housing element and
(2) obtaining compliance with State Housing Element Law no later than June 9, 2023.
6th Cycle Housing Element Submission and Review History
The 6th cycle planning period for the City of Rancho Palos Verdes is October 15, 2021,
through October 15, 2029. The City failed to adopt a compliant housing element by its
6th cycle due date of October 15, 2021, pursuant to Government Code section 65588.
HCD records are as follows:
• On November 19, 2021, the City submitted a draft housing element to HCD for
review.
• On January 18, 2022, HCD issued a findings letter to the City noting multiple
revisions necessary for the housing element to be compliant with State Housing
Element Law.
• On August 15, 2022, the City submitted an element adopted on August 11, 2022,
to HCD for review.
• On October 14, 2022, HCD issued a second findings letter to the City noting
revisions were still necessary for the housing element to be compliant with State
Housing Element Law.
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City Manager Ara Mihranian
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AB 1398, Statutes of 2021
Please note, pursuant to Assembly Bill 1398 (Chapter 358, Statutes of 2021), a
jurisdiction that fails to adopt a compliant housing element within one year from the
statutory deadline cannot be found in compliance until any rezones necessary to
accommodate a shortfall of sites are completed. (Gov. Code, § 65583, subd. (c)(1)(A),
Gov. Code, § 65583.2, subd. (c).)
Consequences of Noncompliance
Various consequences may apply if the City does not have a housing element in
compliance with State Housing Element Law. First, noncompliance result in ineligibility
or delay in receiving state funds that require a compliant housing element as a
prerequisite, including, but not limited to, the following:
• Permanent Local Housing Allocation Program
• Local Housing Trust Fund Program
• Infill Infrastructure Grant Program
• SB 1 Caltrans Sustainable Communities Grants
• Affordable Housing and Sustainable Communities Program
Second, jurisdictions that do not meet their housing element requirements may face
additional financial and legal ramifications. HCD may notify the California Office of the
Attorney General, which may bring suit for violations of State Housing Element Law.
Further, state law provides for court-imposed penalties for persistent noncompliance,
including financial penalties. For example, Government Code section 65585,
subdivision (l)(1), establishes a minimum fine of $10,000 per month, up to $100,000 per
month. If a jurisdiction remains noncompliant, a court can multiply those penalties by a
factor of six. Other potential ramifications could include the loss of local land use
authority to a court-appointed agent.
In addition to these legal remedies available in the courts, under the Housing
Accountability Act (Gov. Code, § 65589.5, subd. (d)), jurisdictions without a substantially
compliant housing element cannot rely on inconsistency with zoning and general plan
standards as a basis for denial of a housing project for very low-, low-, or moderate-
income households.1
1 For purposes of the Housing Accountability Act, housing for very low-, low-, or moderate-income
households is defined as having at least 20 percent of units set aside for low-income residents or
100 percent of units set aside for middle-income residents. (Gov. Code § 65589.5, subd. (h)(3).)
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City Manager Ara Mihranian
Page 3
Conclusion
HCD recognizes that, ultimately, state housing laws are effective only with the
cooperation of local governments and understands staffing and resource constraints
that may hinder efforts to gain compliance. However, housing elements are essential to
developing a blueprint for growth and are a vital tool to address California’s prolonged
housing crisis. Accordingly, state law has established clear disincentives for local
jurisdictions that fail to comply with State Housing Element Law. To meet the 6th cycle
update requirements, the City must submit a draft housing element to HCD for review,
consider HCD’s written findings, adopt the housing element, and submit it to HCD for
review and determination of substantial compliance. (Gov. Code, § 65585.)
HCD will consider any written response before taking further action authorized by
Government Code section 65585, subdivision (j), including referral to the California
Office of the Attorney General.
If you have any questions or would like to discuss the content of this letter, please
contact Kevin Hefner of our staff at Kevin.Hefner@hcd.ca.gov.
Sincerely,
Melinda Coy
Proactive Housing Accountability Chief
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June 7, 2023 SENT VIA EMAIL
Department of Housing and Community Development
Division of Housing Policy Development
Melinda Coy, Proactive Housing Accountability Chief
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 85833
RE: Response to Failure to Adopt a Compliant 6th Cycle Housing Element- Letter
Inquiry
Dear Ms. Coy,
This letter is being written in response to your letter dated May 19, 2023 regarding the
above referenced inquiry. The City of Rancho Palos Verdes appreciates the information
outlined in the letter including State Law requirements for a complaint 6th Cycle Housing
Element; background on the City’s Housing Element submission and review; and the
consequences of a noncompliant Housing Element.
The City of Rancho Palos Verdes understands the importance of obtaining a complaint
Housing Element. We are committed to working closely with your office to achieve
compliance and to further assist in addressing the regional housing crisis. To this end, we
have met with Department of Housing and Community Development (HCD)
representatives for informal meetings on two occasions; even welcoming representatives
to a tour of the City in May 2022, to discuss document corrections. In March and Apr il of
this year, City Staff also provided Housing Element status updates to the City Council and
the Planning Commission, respectively, which included timelines and strategies for
completion. A copy of the March 7, 2023 City Council staff report (Attached) was
forwarded to Fidel Herrera with HCD that same day.
The unprecedented HCD level of review and technical analysis that is occurring as part
of the 6th Housing Element update process along with a high-level of turnover in City Staff
has presented some challenges in preparing a revised Housing Element document for
HCD resubmittal. AB 1398 provisions have also added an additional layer of complexity
to the updated process by requiring jurisdictions that fail to adopt a complaint housing
element within one year from the statutory deadline to complete rezoning of shortfall sites.
To assist in these efforts and other environmental review measures, the City Council
authorized a professional services agreement with Dudek, Inc. in February 2023 . Over
the past several months, the City’s consultant team conducted a comprehensive analysis
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of the City’s Housing Element Potential Housing Sites Inventory to refine and better
document the realistic capacity of each site along with tested building typologies, in order
to provide a response to one of HCD’s comments on our adopted Housing Element.
With all this now in place, we will be reinitiating discussions with HCD representatives to
make the necessary updates to the City’s adopted 6 th Cycle Housing Element. As
requested, below is a timeline outlining (1) submitting an updated draft housing element
and (2) obtaining compliance with State Housing Element Law along with associated
tasks.
Submittal of Updated Housing Element
Task Timeline Notes
HCD Informal Meeting No. 3 June 23, 2023 Pending HCD staff availability
Document Revisions by City
Staff (if needed)
July 7, 2023
HCD Informal Meeting No. 4
(if needed)
July 14, 2023 Pending HCD staff availability
Presentation of Housing
Element Revisions to
Planning Commission
August 22, 2023
Presentation of Housing
Element Revisions to City
Council for Re-Adoption
September 19, 2023
Resubmittal of Updated
Housing Element to HCD
September 22, 2023
Obtaining Compliance with State Housing Element Law (Rezoning Pursuant to AB 1398)
Zoning Amendments to
Remove Governmental
Constraints
March 2023- June 2024 Total 16-month effort from
rezoning kickoff to City
Council adoption. Progress
milestones indicated below.
1st Round of Public
Workshops
September 2023
Initial Study/ Notice of
Preparation/ Scoping
September 2023
2nd Round of Public
Workshops
December 2023
Program Level Technical
Analysis and Draft Program
EIR
Spring 2024
Planning Commission Review June 2024
City Council Adoption and EIR
Certification
July 2024
Submittal of Documentation
to HCD
July 2024
We look forward to working with your office on finalizing the City’s 6 th Cycle Housing
Element as outlined in the timeline above. We are confident that through our partnership
and collaboration, the City of Rancho Palos Verdes will have a compliant Housing
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Element in due time.
If you have any questions, please free to contact, Interim Director of Community
Development, Octavio Silva at (310) 544-5234 or via email at Octavios@rpvca.gov to
schedule a day and time to further discuss concerns.
Sincerely,
Ara Mihranian, AICP
City Manager
Encl: City Council Staff Report, Dated March 7, 2023
Cc: Barbara Ferraro, Mayor, City of Rancho Palos Verdes
Rancho Palos Verdes City Council
William W. Wynder, City Attorney, Aleshire & Wynder, LLP
Elena Gerli, Assistant City Attorney, Aleshire & Wynder, LLP
Octavio Silva, Interim Director of Community Development
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CITY COUNCIL MEETING DATE: 03/07/2023
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE:
Consideration and possible action to receive a status report on the City’s 6th Cycle
Housing Element Update.
RECOMMENDED COUNCIL ACTION:
(1) Receive and file a status report on completing the City’s 6th Cycle Housing Element
Update.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Octavio Silva, Interim Director of Community Development
REVIEWED BY: Same as below
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHMENTS:
The following attachments can be viewed via the links embedded in the staff report:
• Resolution No. 2022-49 – City Council-adopted Housing Element
• 6th Cycle Housing Element and associated Negative Declaration
• Potential Housing Sites Inventory
• October 2022 HCD letter finding the 6th Cycle Housing Element to be noncompliant
BACKGROUND AND DISCUSSION:
Each city, pursuant to Government Code §65300, is required to prepare and adopt a
General Plan for its jurisdiction with certain mandatory elements, including a Housing
Element. The Housing Element, which is required to be updated every eight years,
consists of: (a) an identification and analysis of existing and projected housing needs,
including the local government’s share of the regional housing needs; (b) an inventory of
resources and constraints relevant to meeting those needs; and (c) a program showing a
five-year schedule of actions to be taken to implement the Housing Element, including
how the local government plans to meet its share of the regional housing needs.
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In August 2022, the City Council adopted Resolution No. 2022-49, adopting the City’s
new 6th Cycle Housing Element and associated environmental review, which included a
Negative Declaration. The Housing Element includes the policies, strategies, and actions
to facilitate the construction of new housing and the preservation of existing housing
throughout the City for the planning period of 2021-2029. More specifically, the document
outlines the plan to accommodate the City’s Regional Housing Needs Assessment
(RHNA) allocation of a total of 639 new housing units in various income categories over
the planning period. In addition, the Housing Element also accommodates eight lower -
income units that that were carried over from the last planning period (2013-2021), for a
total of 647 new housing units throughout the City. The housing unit breakdown by income
category is as follows:
• Lower 400 units (minimum 30 dwelling units (d.u)/ acre required)
• Moderate 125 units (Higher density sites)
• Above Moderate 122 units (Sites zoned for densities less than30 d.u./acre)
It is important to note that the Housing Element only provides the regulatory framework
to accommodate and support the construction of new housing units; the document does
not, however, propose or approve any site construction. Future development of any
housing will require site-specific analysis andenvironmental review.
The adoption of the Housing Element was a result of a comprehensive process that
involved a joint study session with the City Council and Planning Commission in August
2021. The study session was followed by the completion of an extensive community
outreach effort that included both in-person and virtual events along with the issuance of
a community-wide survey. The input collected from this process assisted in the
development of the Housing Element’s Potential Housing Sites Inventory, which is a
listing of 30 properties in the City that can accommodate the City’s RHNA allocation. The
Potential Housing Sites Inventory includes properties throughout the City including
commercial corridors and vacant/underutilized lots, so as to avoid the concentration of
new housing units in any one area of the City.
The adopted Housing Element was subsequently forwarded to the California Department
of Housing and Community Development (HCD) for compliance review with state housing
law. In October 2022, HCD notified, via a letter, the City’s Community Development
Department that although the adopted Housing Element met many of the statutory
requirements, the document was ultimately not found to be in compliance. As part of its
review, HCD outlined additional document corrections required to be completed in order
to achieve compliance. HCD corrections include, but are not limited to, providing support
information related to affirmatively furthering fair housing efforts and clarifying the realistic
capacity of residential redevelopment outlined in the City’s Housing Element. Based on
this determination, the City’s Housing Element update process for the 6th Cycle is not yet
complete.
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In order to revise the document and resubmit it back to HCD, Staff must a) address HCD
comments on the City’s adopted Housing Element; and b) complete the rezoning of the
properties identified in the Potential Housing Sites Inventory.
A consequence of not having an adopted housing element within the statutory deadline
of October 2021 is that cities must rezone to accommodate RHNA within one year of the
deadline. As such, the rezoning of the City’s Housing Sites Inventory must be completed
prior to HCD deeming the resubmitted housing element to be in compliance with state
housing law. While Staff, along with the City’s housing consultant, Environmental
Sciences Associates, has continuously met with HCD representatives to discuss progress
on the Housing Element resubmittal and to address HCD’s comments, the Planning
Division does not anticipate an informal review of the revised Housing Element with HCD
representatives until this spring. HCD is requesting an informal review occur before an
updated version of the Housing Element is presented to the City Council again for
adoption, to ensure that their comments have been sufficiently addressed.
With respect to the rezoning effort, Staff is also working with another housing consultant,
Dudek, on the preparation of compliance measures associated with the 20 housing
programs identified in the City’s adopted Housing Element; two of the programs which
require rezoning activities. More specifically, Dudek will be completing the Mixed-Use
Overlay District along some of the City’s commercial corridors and zoning districts, and
the rezoning of vacant/underutilized properties throughout the City to accommodate for
more housing density as outlined in the City’s adopted Housing Element. The Planning
Division anticipates presenting draft rezoning information to the public this spring followed
by formal consideration by the Planning Commission and City Council as part of public
hearings. With the rezoning of the properties completed, the revised Housing Element is
anticipated to be resubmitted to HCD for a formal 60-day review of the document this
summer.
Local governments have much to lose if they fail to bring their housing elements into
compliance with state requirements. With a staff of 25 in its new Housing Accountability
Unit, HCD is resourced and ready to enforce state mandates on local housing plans and
policies. In April 2021, HCD provided guidance to cities and counties by statng that it is
authorized to “review any action or failure to act by a local government (that it finds)
inconsistent with an adopted housing element or housing element law. This includes
failure to implement program actions included in the housing element. HCD may revoke
housing element compliance if the local government’s actions to not comply with state
law.” Noncompliant housing elements could also impact local general plans, as they are
a required part of these foundational blueprints for land use planning . Localities that fail
to comply are subject to a range of penalties, including:
• Loss of permitting authority
• Streamlined ministerial approval process
• Lawsuits and attorney fees
• Financial penalties
• Court receivership
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ADDITIONAI INFORMATION:
South Bay Cities Housing Element Compliance
Of the sixteen cities in the South Bay Cities Council of Governments (including Los
Angeles), five cities have certified housing elements including the Cities of Hawthorne,
Lomita, Rolling Hills, Redondo Beach and Torrance.
CONCLUSION:
The 6th Cycle Housing Element Update has proven to be an arduous process unlike any
of the previous planning periods, with many local governments in the region still
navigating their way to achieving compliance. Rancho Palos Verdes continues to
demonstrate a good-faith effort to comply with state housing law via ongoing discussions
with HCD and the contracting of services to complete housing program requirements.
Staff is confident that the plan outlined above paves the way for compliance with HCD
and for the future of housing in the City.
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