Update on Proposed "Investominium Amendment" (Chapter 24.16). For further background, please review the April issue of the "WATCH". As an incentive to developers to build more units, the "investominium" ordinance was created to allow developers to trade their 15% low income inclusionary units for 25% market rate rentals for ten years, and after ten years, the units would be sold. Since 1990, 264 such units have been built and the varying ten year deferral periods are expiring now and before October 2009. City Council members grappled with whether to keep the current ordinance which would place the units on the markets and displace the existing tenants or to choose the proposed amendments to the ordinance which would allow the units to continue to be rented to moderate-income families. This latter alternative would be financially feasible to the developer/owners and the now-existing tenants who do not want to be displaced. In the end, with one council member absent, the vote was 3-3 and no decision was made. "WATCH" as this comes before the Council again in May.

Update on Searidge McGregor Property in Seaclif. The 9-acre property at the State Park Drive exit is part of the Seacliff Village Plan. The three parcels of land, each just under 3 acres, are owned separately. One parcel is owned by St. John the Baptist Episcopal Church, one is owned by a private party, and the other parcel is owned by the Housing Authority. Since the last General Plan update in 1994, community members in the Seacliff area have been working on the future plans of the property but have mainly focused attention on the parcel of land zoned for commercial development by the private party.

On the April 16th Board of Supervisor's agenda, Parks and Recreation Director, Barry Samuel wrote a letter to the board discussing a strategy for the purchase and development of the currently zoned 3 acre parcel for a park. A community organization SNAP (Seacliff Needs a Park) has conducted a fund-raising campaign and has raised approximately $25,000 for the purchase, but according to Parks Director Samuel, the project would require multi-millions to purchase and develop. The other method of raising funds required is to levy a special tax on the property owners in a County Service Area (CSA), which would be specifically formed for the purpose of purchasing and developing a park in Seacliff. The proposed new CSA for the 3-acre McGregor Property would be defined by residents living in the boundaries of Highway 1 on the north, the ocean on the south, the Porter-Sesnon property on the west and Moosehead Creek on the east. There are approximately 1,788 residential parcels within this proposed CSA 11M and if taxed equally, each parcel would pay $70-$100 per year.

Because the mechanics of levying a special tax is time consuming and costly, prior to undertaking all the steps required for this strategy, the County staff is investigating the costs of hiring a professional to conduct a poll which would determine whether the residents of the Seacliff community are willing to tax themselves specifically for the purchase and development of the less than 3 acre McGregor property for a park. If the results of the poll indicate that the community is supportive of such a tax, the County would then initiate the process required to form a County Service Area which would require a two-thirds majority of the 1,788 property owners/voters to support the tax. County staff will be working with the Seacliff community group to develop a strategy to fund the costs of the poll. "WATCH".

On April 26th, at the Sesnon House, Marilyn Fravel, interim coordinator for Creative Solutions summarized that Clusters is the original group that was formed to deal with the three E's: Social Equity, a Vital Economy and Environmental Preservation. Their mission was a "Thousand Jobs for a Thousand People". Now, the Creative Solutions arm of Clusters, seeks "to develop creative solutions to increase the accessibility of housing for people with a range of incomes in Santa Cruz." The group is developing endorsement criteria for housing projects so that proposed housing development projects can receive endorsement from a community-backed group. Various local individuals as well as the Community Foundation and the Business Council have pledged funds to assist the Creative Solutions project in this endeavor. By October of this year, a grant application will be made to the Irvine Foundation to continue their goals.

The guest speaker at the Creative Solutions/Clusters meeting was Mark Deming, Principal Planner from the County of Santa Cruz. He discussed the Housing Element and how it progresses from the State to the Regional area to local and back to the State. The State of California Housing and Community Development Department (HCD) provides a "Fair Share" amount of units for each region. Santa Cruz, Monterey and San Benito County are part of the Association of Monterey Bay Area Governments (AMBAG). After several meetings, AMBAG decided to split about 23,000 units for the planning period of 2000-2007 between Santa Cruz County and Monterey County.

About 11,218 units have been allocated to Santa Cruz County including the County and its incorporated cities. These numbers will most likely be appealed by the jurisdictions as being too high. Scotts Valley and Watsonville are submitting letters to HCD with revised numbers. For example, Capitola's new Fair-Share allocation is over 1,100 units. Without the certified housing element in place, housing and community block grant funding would not be available to the jurisdictions who are not certified. There has been a lot of discussion on the amount that is lost and the figures vary. (In the example of Capitola, whose Housing Element had been certified up to now, approximately $648,000 in Community Development Block Grant Funds (CDBGF). (CDBGF have been allocated to them over the last three years.) Meanwhile, the Housing Element deadline for all jurisdictions is December 31, 2002. There is an extensive process, both in the preparation of the housing element numbers and the legal appeals action. California Environmental Quality Act (CEQA) review is required. Mark mentioned that when the State of California issues the numbers, they do not have to provide a CEQA review, but the local jurisdictions are required to provide the CEQA review. "WATCH" as Creative Solutions works to provide an 'endorsement criteria' for viable housing in Santa Cruz!

Public Hearing May 9, 2002 Regarding Six Month Moratorium. The public hearing on May 9th would discuss a 6-month moratorium that would halt all landscaping and hardscape along the Soquel Creek path. (The exact location specifications were not set forth at the meeting, nor in the minutes.) There was discussion regarding the City's ability to regulate landscaping and fencing along the path. City Attorney John Barisone informed the Council that his office is in the process of filing a quiet title action claiming prescriptive rights in the pathway. Council member Norton wants answers on what is considered the front yard or rear yard of properties along the river because rear yard fences can be higher than a fence in the front yard. "WATCH"!

Special Joint Study Session. A joint Study Session of the Capitola City Council, Planning Commission and Architectural and Site Review Committee gathered on April 3rd to focus on their "Vision" of Capitola. The meeting focused on three topics: Lot coverage issues; Prioritizing amendments to the zoning ordinance; and Variances or zoning changes.

• Lot coverage issues: Review the requirements for residential and commercial projects; regulations should reflect lot sizes, mass/volume of neighboring properties, character of the neighborhood, include this topic in discussions of the General Plan process.
• Prioritizing zoning ordinance amendments: One planner suggested that accessory structures, non-conforming calculations, and coastal zone exclusion items are a priority from the staff perspective; code enforcement and citations for tree removals; minor amendments for conditional use permits in the community commercial (CC) 41st Avenue, Neighboring Commercial (NC) Capitola Ave. and Commercial Residential (CR) Capitola Road, not to require public hearings; top priority in this category is revisions to the environmental sensitive habitat ordinance and the tree ordinance; historic committee meetings, and the mobile home/park transition/overlay zone discussion was discontinued because it requires a public notice and public hearing.
• Variances: Regulations should facilitate older homes (50 years or more) to be fixed and have additions, if they keep the design style; current ordinances promote "cookie-cutter" boxed-in houses; creative answers to parking issues; too many variances mean it's time to change the zoning ordinance; preserving the historical character of Capitola; design guidelines to be developed to allow, "floating setbacks" for project; design guidelines protecting neighbor's privacy; general idea was to define individual neighborhoods and their characteristics and then develop design guidelines allowing creativity while maintaining those neighborhood characteristics. The foregoing are ideas that will be addressed in the coming months ahead. "WATCH"!

In the second year of the 2001-2002 legislative session, C.A.R. will be pursuing a legislative agenda that incorporates not only sponsored bills, but also the pursuit of "targets of opportunity," or amendments to pending legislation. These "targets of opportunity" will be amended to ensure that: "smart growth" does not mean growth control; environmental issues do not impair the rights of property owners; tenants' rights legislation includes a recognition of property owners' rights; risk management gains of recent years are preserved; and unreasonable burdens on housing are avoided. Plan to attend Legislative Day in Sacramento June 5th, 2002 and participate in talking with your legislators. It's informative and very important-fun too! "WATCH" the legislators in action and find out how much CAR does for Realtors! Go on line to www.car.org, or call your local Association for details at 464-2000.

AB 1866 (Wright) Density Bonus. This bill provides that residential developments that qualify for a density bonus cannot be denied the bonus because local governments have enacted laws that have the practical effect of stopping the development. Parking, setback, lot coverage and other local requirements are just some of the ways that local governments assure that the density bonus law is rarely implemented. AB 1866 requires that a local government cannot adopt or enforce restrictions that have the practical effect of eviscerating the density bonus law-it puts the burden of proof on jurisdictions and permits courts to award attorney's fees in actions to enforce this provision. The bill also requires that if the local government determines that a density bonus is not needed to make a development affordable, that it is to be based on written and objective analysis. It also provides that the granting of the density bonus and the approval of a second unit on a single family zoned parcel are ministerial, not discretionary, which obviates the need for time consuming, costly hearings on proposals that are in compliance with local zoning and development standards. The bill clarifies that the law applies statewide so that the California Coastal Commission cannot claim they are exempt from the density bonus and second unit laws-thus, assuring low and moderate housing is built in the coastal zone. Finally, developers of low and moderate-income common interest developments will be able to seek the granting of a density bonus under the terms of AB 1866. Status: To be heard in Assembly Housing and Community Development Committee.

AB 1940 (Matthews) Land Use: Lot Line Adjustments. This bill was introduced in response to the passage of C.A.R.-opposed SB 497 (Sher) of 2001, which seriously restricts the ability of all types of property owners to conduct simple lot line adjustments for purposes of sale, lease, finance or estate planning. Shortly after the new law took effect on January 1, 2002, the Governor's Administration agreed to convene a task force at the Office of Planning and Research (OPR) to discuss the "unintended consequences" of the new law. This C.A.R.-sponsored bill, which currently makes a technical change to the new law, will be available to serve as the legislative "vehicle" for the outcome of the OPR task force discussions. C.A.R. will seek relief for various types of property owners at the task force. Status: In Assembly Local Government Committee.

AB 2247 (Salinas) Real Estate Signs. This measure permits a property owner or his or her agent to display temporary open-house and directional signs in public rights-of-way, as long as they are in agreement with the local governments reasonable dimension, design and traffic safety concerns. In many areas, local governments are restricting REALTORS® from placing directional open-house signs in their communities without specifying the reason for those restrictions or prohibitions. AB 2247 will preserve their ability to use these signs. Status: In Assembly Judiciary Committee.

AB 2292 (Dutra) General Plans: Residential Density. This bill prohibits a city or county from arbitrarily reducing the density of a housing development, unless the city or county can produce substantial evidence that the reduction is consistent with its adopted general plan, including its housing element. AB 2292 also requires a court to award attorney fees and costs of a suit to the plaintiff (builder/developer) if the court finds that an action of the city or county is in violation of these provisions. Building upon last year's C.A.R. sponsored bill, AB 369 (Dutra), this bill will discourage cities and counties from reducing the density of much-needed housing development projects from previously determined acceptable density levels. Status: To be heard in Assembly Local Government Committee.

AB 2546 (Nation) Common Interest Developments: Closed Shops. This bill prevents homeowner associations from unreasonably prohibiting an owner/agent from marketing and showing a property for sale, and it will prohibit associations from collecting or levying any fee or charge in connection with the sale or closing of escrow that exceeds the association's actual costs incurred. In addition, it bars an association from establishing an exclusive relationship with one or more entities through which sales or marketing of units or interests in the association must occur. C.A.R. decided to sponsor this legislation at its January 2002 Board of Director's meetings after receiving numerous complaints of "sweetheart" referrals in common interest developments and "gate fees" in excess of $400 charged to REALTORS® wishing to show these properties. Condos are the most affordable route to home ownership, especially in high cost areas. Abusive charges and marketing kickbacks are passed on to prospective buyers and hurt their ability to enter the market by increasing prices. Even worse, they come in the worst possible form - higher transaction costs - rather than unit price that might be recouped via later appreciation or resale. Status: To be heard in Assembly Housing and Community Development Committee on Wednesday, May 8th.

AB 369 (Dutra) Housing Supply. AB 369 allows the prevailing plaintiff (builder/developer) to receive reasonable attorney fees if the local government has turned down or "effectively" turned down a low or moderate income housing development when the builder/developer has complied with all of the local government development requirements such as general plan and zoning code requirements. This measure will prompt city attorneys to advise city councils and boards of supervisors that they must approve developments that are in compliance with the general plan and zoning codes. Ultimately, failure to meet these demands will subject the city or county to a financial responsibility of paying the developer's attorney fees. Status: Signed by the Governor, Sept. 4, 2001 (Chptr 237, Statutes of 2001).

AB 2734 (Pavley) Point-of-Sale Toilet Retrofit. The bill would require that water conserving toilets and showerheads must be installed in a residential property prior to sale on or after July 1, 2005. This same provision will apply to anyone transferring commercial or industrial property after July 1, 2004. While C.A.R. is not opposed to water conservation, it strongly opposes any attempt to enforce new and expensive obligations on homeowners by attaching mandates to their home sale transaction. As desirable as fixture retrofit might be, enforcing it by way of a new obligation at time of sale is a poor mechanism for achieving its intended targets-namely older housing stocks in need of upgrading. In fact, the houses and household that are most likely to be affected are "starter" houses, which turn over much more often than older more established housing. The bill affects all sales, and specifically makes REALTORS responsible as it applies to single family, multi-unit, mobile homes, and commercial property transactions. Even showerheads must be replaced, and the minimum penalty for violation is $500! AB 2734 adversely impacts housing affordability, which is presently at an all-time low in California. During the sale, both parties are usually stretched to maximum to afford a house, and even a minor increase in costs can derail both transactions. AB 2734 will exclude up to 12,000 prospective California homebuyers from of the market. Status: To be heard in Assembly Water, Parks, and Wildlife Committee on Tuesday, April 23rd. CAR Position: Oppose. (Note: If passed, this law may pre-empt the City of Santa Cruz' local ordinance and the County's Water Conservation Ordinance.)