City staff update commission on housing-element amendment and implementation schedule; ADUs counted toward RHNA totals

City planning staff on May 20 updated the Carmel-by-the-Sea Planning Commission on the status of the citys six-cycle housing element amendment and outlined prioritized implementation programs staff expect to pursue to meet the citys regional housing needs allocation (RHNA).

Staff reported a revised housing element amendment was submitted to the California Department of Housing and Community Development for a 60-day review; staff said the city expects a formal comment letter by the end of the month and that they will seek Planning Commission hearings in June with City Council hearings planned for July. Following local adoption, staff will resubmit documents for final state certification.

How ADUs factor into RHNA
Planning staff confirmed ADUs built in Carmel count toward the citys RHNA total (349 units). Staff noted that while newly built ADUs are currently being counted toward the market-rate portion of the RHNA obligation (118 units), the larger and more difficult challenge is producing lower-income units required by the housing element. Staff said deed restrictions are the clearest mechanism to guarantee long-term affordability but acknowledged they are difficult to secure on private properties; the city is exploring incentives and alternative programs to encourage deed restrictions or other mechanisms that would qualify ADUs for lower-income RHNA credit.

Implementation priorities and schedule
Staff said the city is prioritizing programs that could produce housing quickly under the amended housing element, including hotel-to-residential conversions, a transfer-of-development-rights program, a mixed-income incentive program and a live-work program. Municipal code amendments (definitions, parking allowances, emergency shelter regulations) are being drafted and staff said they intend to return ADU ODDS to the commission in July with a full public draft and to bring municipal code amendments to the commission in August.

Representative quotes
"We did submit a revised housing element amendment to the state towards the end of March for their 60-day review," staff said, adding they expect a formal comment letter and then adoption hearings. "Once we receive that formal comment letter, we do expect it to be a substantial compliance letter, which means that we can proceed with our adoption hearings."

On counting ADUs toward the RHNA requirement, a commissioner asked whether ADUs that are later demolished are deducted from the state count. Staff clarified the citys obligation is to produce the required number of units; staff also discussed deed-restriction approaches used in other cities to preserve ADUs in perpetuity or for a long-term period.

Next steps
Staff said they are drafting ordinances and will coordinate with stakeholders (including the AHA group) on early drafts in June; the agency goal is to have ODDS and the local ADU ordinance in alignment by year-end and to pursue timely environmental review where required. Staff reminded the commission that some municipal-code changes and LCP (Local Coastal Program) considerations may require additional review and environmental documentation.

Authorities referenced include the State Department of Housing and Community Development (HCD) review process, the Local Coastal Program and state ADU statutes; staff said they will pursue necessary CEQA review as part of the amendment and ordinance process where exemptions do not apply.