Arcata planning commission reviews draft inclusionary zoning and density-bonus ordinances

At its July 9, 2024 meeting the Arcata Planning Commission heard a staff presentation on two draft ordinances that would reinstate citywide inclusionary zoning and update the city’s density-bonus rules. Community Development Director David Loya summarized the drafts and said the proposed inclusionary code would be added to chapter 9.32 of the land-use code and that the existing density-bonus chapter (9.31) needed to be brought into alignment with state law.

Loya said the council had directed staff to provide a framework that in some cases uses alternatives: "You can either pick 3% or you can pick 6%, but then you also have to do 10% moderate income," and that many underlined passages in the draft were placed there explicitly as questions for the commission to consider. He noted the city had an inclusionary zoning ordinance in the past (adopted in 2008 and removed in 2014) and said, "We removed it in 2014. We're now bringing it back in 2024."

Commissioners focused on several technical and policy dilemmas that will shape how the rule operates in practice. Multiple commissioners questioned the council’s direction to trigger inclusionary obligations at 15 units instead of the higher threshold Commissioners had earlier favored. Chair Davies said, "I still feel like that is a good number myself," referring to a 30-unit trigger, while recognizing the council had chosen 15.

Commissioners also pressed staff on monitoring and compliance. Loya described a mix of approaches for legacy and new projects: city-subsidized projects typically include grant monitoring, while private-market inclusionary units are likely to be subject to periodic spot checks and to rely partly on tenant self-reporting. He gave the example of past projects the city sold to Housing Humboldt and said the city still holds some deed-restricted units.

On incentives and developer choice, staff proposed mirroring some density-bonus concessions inside the inclusionary ordinance so that developers would not be pushed to use density-bonus provisions simply to gain greater concessions. Commissioners asked whether developers could stack both inclusionary incentives and state density-bonus benefits; staff replied they could not, noting that a project would be subject to one path or the other.

A number of technical questions drew detailed answers. On fractional-unit rounding, Loya said state law can require rounding up: "as soon as you're 0.001 above a unit that you round up to the next unit." Commissioners asked whether a formal variance route should be included for projects that cannot "pencil" financially under the inclusionary requirements; several recommended adding explicit language that would permit the council to authorize a lower inclusionary requirement if a developer demonstrates a financial hardship, subject to discretionary review and proof.

Commissioner Joel cited external research — a UCLA/Turner Center analysis — and warned that "poorly calibrated inclusionary policies could lead to reduced housing production and higher rents." Commissioners acknowledged that risk, expressed caution about a low trigger, but also noted the council’s direction and the ability to revisit the threshold later.

On a contested draft provision allowing inclusionary units to have "less expensive finishes," commissioners objected that the phrase lacked definition and that it could result in lower-quality housing for lower-income tenants. The commission favored removing or clarifying that provision.

A smaller procedural proposal to raise the adaptive-reuse exemption threshold (from 20 units to a higher number such as 29–30) drew minimal opposition and was suggested as an editorial adjustment.

Staff closed by confirming it would incorporate the commission’s suggested edits — explicit language noting state law supremacy where relevant, clearer variance/relief language, removal or clarification of interior-finish reduction text, and the adaptive-reuse threshold change — and return the drafts for further review and formal public hearing.

Separately, the commission approved one consent item: a motion to correct the closing time of the June 25, 2024 minutes. The motion passed on a roll-call vote with six ayes.