CITY COUNCIL REGULAR MEETING AGENDA PACKET 2-3-26

Page 2 of 4 This report proposes the City Council adopt a policy framework for consideration of such requests, based on the potential merits of proactively considering potential re-zones. Staff's recommendation is to create a structured process that would allow for periodic early consideration of whether potential re-zone projects should be allowed to move forward to submit a formal development application. Past Approaches In the last ten years or so, re-zone requests have generally been considered on a relatively limited basis: either through collective re-zoning of several properties as part of a plan update, or outside of these updates through the Council-adopted two-year work plan. In recent years, the 8-year Housing Element cycle has been the primary vehicle for consideration of residential re-zoning, based on the State’s requirements to identify and zone for housing to meet the Regional Housing Needs Allocation (RHNA). In the most recent Housing Element process, 19 sites were identified and re-zoned through an evaluation process that considered conformity to Housing Element law (sites selection criteria, densities suitable to contribute to the lower- and moderate-income inventory), as well as location (e.g. transit proximity, clustering/distributions), neighborhood compatibility, and other factors. The creation of the Johnson Drive Economic Development Zone (JDEDZ) was the most recent example of a large-scale commercial re-zoning effort. Outside these types of broader rezonings, past City Councils relied on the two-year work plan process to receive and consider requests to rezone property. No clear criteria were established to evaluate such requests, although factors such as project type, density and location, staff workload, and developer presentations on the benefits or qualities of specific projects were discussed during the work plan process. The most recent work plan process was revised to take a more systematic approach, focusing on the implementation of the 5-Year Strategic Plan and related City Council-identified priorities. In addition to advancing key policy goals of the City Council (e.g. Economic Development, financial sustainability), the work plan reflects the constraints of limited staff and financial resources by prioritizing the most important efforts, alongside items that must be completed based on regulatory requirements, past or ongoing project investments, or because they are urgent or time-sensitive. Only one site-specific re-zone, for the Zaheri (auto-mall) property was included in the project prioritization, as a "Tier 1" - Active Priority. Regulatory Context Several recent state laws have limited the scope and degree of discretion given to local jurisdictions, particularly when reviewing residential projects located on sites already zoned for housing, and generally limiting such review to confirming conformance with objective development standards. Once zoned, projects have the ability to use State Density Bonus Law to request concessions and waivers of those standards when found to be a constraint to development at zoned densities. In general, commercial projects are subject to far fewer legislative constraints, and the City can exercise greater discretion at various approval steps, whether through a commercial rezoning or requirements to process a subsequent Conditional Use Permit, although such conditions or requirements need to be reasonable and tied to identified project impacts. A proactive decision to offer discretionary rezoning, whether for a commercial or residential Page 74 of 80