Carmel‑by‑the‑Sea reviews housing‑element amendments including hotel‑to‑housing, ADU amnesty and church programs

CARMEL‑BY‑THE‑SEA, Calif. — City council members and planning commissioners met jointly on May 20 to review a draft amendment to the city—s housing element (revised Chapter 2 and a new Appendix C) and to provide direction to staff before a planned submission to the California Department of Housing and Community Development (HCD).

The draft packages five strategies intended to spread the city—s Regional Housing Needs Allocation (RHNA) obligations throughout the village rather than concentrating affordable units on two city‑owned parcels: (1) conversion of underperforming hotels to mixed housing using transferable “hotel keys,” (2) a downtown mixed‑income incentive to allow higher unit counts in exchange for a mixed income mix, (3) a live‑work conversion program for underutilized upper‑story and off‑street commercial spaces, (4) expanded accessory dwelling unit (ADU) credit including an amnesty and outreach program, and (5) outreach and technical support for religious facilities to house affordable units.

Why it matters: Carmel must show realistic sites and programs to meet a RHNA target of 349 units for this planning cycle; the amendment as drafted claims a total capacity of about 469 units as a buffer. Staff and community volunteers told the council they are pursuing a —7—day —8————friendly review— with HCD and plan to submit the revised chapters by May 30 for HCD—s preliminary review before formal submission and state certification.

What the programs would do

Hotel conversions: Tim Toomey, who led the hotel program presentation, described a market mechanism that would —decouple— hotel room rights or —hotel keys— from specific properties and allow those keys to be sold to affordable‑housing developers. Toomey presented a sample pro forma for a 19‑room example that used a $5.9 million hotel purchase, roughly $100,000 per unit in conversion costs and an assumed resale value for hotel keys at about $300,000 each; staff said the pro forma is conservative in some inputs…