The inventory sites that have potential for residential developed can include non-vacant and underutilized sites (Section 65583.2(b)(3)). The element must include an explanation of the methodology for determining the realistic build-out potential of these sites within the planning period (Section 65583.2(g)).
Requisite Analysis
Local governments with limited vacant land resources or with infill and reuse goals may rely on non-vacant and underutilized residential sites to accommodate their regional housing need allocation. Examples include sites with potential for recycling; scattered sites suitable for assembly; publicly owned surplus land; portions of blighted areas with abandoned or vacant buildings; areas with mixed-used potential, substandard, or irregular lots that could be consolidated; and any other suitable underutilized land. Adopting policies to maximize existing land resources by promoting more-compact development patterns or reuse of existing buildings also allows a local government to meet other important community objectives to preserve open space or agricultural resources, as well as assist in meeting greenhouse gas emission-reduction goals.
If the inventory identifies non-vacant sites to address a portion of the regional housing need allocation, the housing element must describe the additional realistic development potential within the planning period. The analysis must describe the methodology used to establish the development potential and consider all of the following: 1) the extent existing uses may constitute an impediment to additional residential development, 2) the jurisdiction's past experience converting existing uses to higher density residential development, 3) the current market demand for the existing use, including an analysis of any known existing leases or other contracts that would perpetuate the existing use or prevent redevelopment of the site for additional residential development, 4) development trends, 5) market conditions, and 6) availability of regulatory and/or other incentives, such as expedited permit processing and fee waivers or deferrals.
Existing Uses
The housing element must demonstrate non-vacant and/or underutilized sites in the inventory that can be realistically developed with residential uses or more-intensive residential uses at densities appropriate to accommodate the regional housing need (by income) within the planning period. The housing element must describe all existing uses (such as surplus school site, operating business, nursery, etc.) and evaluate the extent these uses would constitute an impediment to new residential development. Among other things, this analysis includes considerations for the current market demand for the existing use, an analysis of any known existing leases or other contracts that would perpetuate the existing use or prevent redevelopment of the site for additional residential development, and could include other market conditions that would encourage redevelopment of the property like the condition or age of existing uses, or valuation. For example, an analysis might describe an identified site as being developed with a 1960’s strip commercial center with few tenants and, therefore, a good candidate for redevelopment, versus a site containing a newly opened retail center that is unlikely going to be available for residential development within the planning period.
Development Trends
The inventory analysis should describe recent development and/or redevelopment trends in the community. The housing element should also include a description of the local government’s track record and specific role in encouraging and facilitating redevelopment, adaptive reuse, or recycling to residential or more-intense residential uses. If the local government does not have any examples of recent recycling or redevelopment, the housing element should describe current or planned efforts (via new programs) to encourage and facilitate this type of development (e.g. providing incentives to encourage lot consolidation or assemblage to facilitate increased residential-development capacity).
Market Conditions
Housing market conditions also play a vital role in determining the feasibility or realistic potential of non-vacant sites and/or underutilized sites for residential development. The housing element should evaluate the impact of local market conditions on redevelopment or reuse strategies. For example, high land and construction costs, combined with a limited supply of available and developable land may indicate conditions “ripe” for more-intensive, compact and infill development or redevelopment and reuse.
Availability of Regulatory and/or other Incentives
The analysis should describe an existing or planned financial assistance or regulatory concessions or incentives to encourage and facilitate additional or more intense residential development on non-vacant and underutilized sites. Many local governments develop partnerships with prospective developers to assist in making redevelopment/reuse economically feasible. Examples of these incentives include: 1) organizing special marketing events geared towards the development community, 2) posting the sites inventory on the local government’s webpage, 3) identifying and targeting specific financial resources, and 4) reducing appropriate development standards. Absent a track record or development trends to demonstrate the feasibility of a recycling or redevelopment strategy, the housing element should describe existing or planned financial assistance or regulatory relief from development standards that will be provided to encourage and facilitate more intensive residential development on the identified underutilized sites.
Reliance on nonvacant sites to accommodate more than 50 percent of the RHNA for lower income households
If a housing element relies on nonvacant sites to accommodate 50 percent or more of its RHNA for lower income households, the nonvacant site’s existing use is presumed to impede additional residential development, unless the housing element describes findings based on substantial evidence that the use will likely be discontinued during the planning period. In addition to a description in the element, findings should also be included as part of the resolution adopting the housing element.
Helpful Hints
To demonstrate and quantify the residential development history of non-vacant and/or underutilized sites, local government could rely on its annual, general-plan progress reports. The project-by-project descriptions and resulting build-out yields could be used to demonstrate a track record for recycling and/or redevelopment of non-vacant and/or underutilized sites.