Public Comment on the Proposed Housing Element Amendment

Introduction and Purpose

I am submitting this comment as a Carmel resident and as Mayor, having followed the

Housing Element process closely over the past several years. I strongly support

housing production, including affordable units, in Carmel. We need them, and among all

those in need, our seniors are the most urgent priority. Long-time residents who built

their lives here are increasingly priced out as rents rise beyond fixed incomes. I also

want to thank the volunteers and staff members who have worked on this amendment

over the past couple of years. Their research and program development work was

valuable and can play an important role in Carmel’s future housing production.

Our overall objective should not be to meet minimum compliance thresholds, but to

deliver housing at a scale that meaningfully serves Carmel’s seniors, workforce, and

others in the community in a highly difficult housing environment.

Carmel’s Approved Strategy

Carmel’s Housing Element was approved by HCD based on a clear strategy: use city-

owned sites, engage experienced affordable and market-rate development partners

through a competitive Request for Proposal (RFP) process, and complement that

approach with creative programs such as mixed-use, live/work units, church-based

developments, and ADUs. That framework has precedent across California and was

designed to deliver results at the scale necessary to satisfy the required numbers.

The Proposed Shift

This proposed amendment shifts away from that strategy by removing city-owned sites

and the RFP process, relying primarily on refined versions of the smaller, voluntary

mixed-use programs and church sites. Removing the RFP process also removes the

ability to motivate developers to provide other civic resources as part of their projects.

The question is whether this revised approach can realistically produce the number and

type of housing units Carmel needs, not just what our assigned RHNA number requires,

and within the required timeframe.

City-Owned Sites as Strategic Assets

City-owned parking lots are highly valuable land and by most measures, the only

locations capable of addressing both our housing needs and our long-standing parking

constraints through integrated, structured solutions. It is not clear that there is broad

community consensus to remove these sites from consideration, particularly given the

widely acknowledged and growing parking challenges in Carmel today.

What We Risk Walking Away From

A well-structured RFP process using city-owned land is not just a housing tool. It is a

rare opportunity to solve multiple long-standing challenges at once. Could public-private

partnerships built around city-owned land deliver all of the following simultaneously?

• Dedicated senior housing with appropriate amenities and parking

• Workforce and affordable housing for first responders, teachers, artists, and

• other essential workers

• Market-rate housing that cross-subsidizes affordable units

• Underground parking for the additional housing units and the public to address

• one Carmel’s most chronic long-standing challenges

• Hotel rooms that could generate Transient Occupancy Tax revenue at a

• meaningful scale

• A new civic campus consolidating our aged police station, public works facilities,

  and perhaps City Hall staff into a modern one-stop center for city services

This is a once-in-a-generation opportunity. It is precisely the model well-capitalized

development partners bring to city-owned site RFPs across California. The City

contributes land value. The developer contributes financing, expertise, and market

relationships. Parking revenue and TOT income service development costs over time,

potentially eliminating the need to float general obligation bonds, draw on the general

fund, or seek property tax increases requiring approval by property owners.

Included in both the current and proposed plan is a practical and economically powerful

hotel key transfer strategy. Under this approach, older or underperforming hotel rooms

could be retired and converted into long-term housing, including both market-rate and

potentially deed-restricted units. Those hotel “keys” would then be transferred to new,

purpose-built hotel rooms on an appropriate site.

This creates a dual benefit. It increases housing supply by converting existing units into

residential use, with existing parking lots, while allowing new hotel rooms to be built in a

more suitable location where they can generate significantly higher Transient

Occupancy Tax (TOT) revenue. That increased revenue can help support public

improvements, infrastructure, and potentially offset development costs.

Critically, this strategy depends on having appropriately located sites to receive the

keys with sufficient scale, which city-owned properties are uniquely positioned to

provide. Without those sites, the hotel key program becomes a piecemeal basis and far

more difficult to implement at a meaningful scale.

By removing city-owned sites from this amendment before this approach is tested, we

risk closing the door on a once-in-a-generation opportunity.Feasibility of the Proposed

Program-Based Approach

The alternative approach outlined in the amendment relies heavily on ADUs, mixed-use

conversions, and other voluntary programs. While these tools can contribute

incremental units, their ability to deliver housing at scale, and to serve the intended

populations, is uncertain.

ADUs are assumed to play a significant role in unit production. However, ADUs are

typically not deed-restricted and are often used for purposes other than long-term

housing for seniors, workforce residents, or other priority groups. They may be used for

periodic stays by friends and family, home offices, 30-day rentals where permitted, or

higher-rent market uses. As a result, there is a meaningful risk that a substantial portion

of projected ADU production will not translate into housing that serves Carmel’s

identified needs.

The proposed plan also relies heavily on commercial-to-residential and live/work

conversions. While these may appear straightforward in concept, the practical realities

are often far more complex. Even a modest change of use, such as adding a residential

unit to an existing commercial space, can trigger significant building code requirements.

These may include full fire sprinkler systems throughout the entire structure, ADA-

compliant restrooms, accessibility upgrades, and other life-safety improvements.

These requirements can materially increase project costs, reduce usable space, and

extend approval timelines. Similar projects have taken over five years to move through

Carmel’s system. In some cases, they may render projects financially infeasible

altogether. As a result, there is a meaningful risk that a substantial portion of these

projected units will not be realized or will be delayed well beyond this planning period.

While innovative methods were used to survey downtown Carmel properties, in the end,

there appears to be no written confirmation that building owners are firmly committed to

participating in any of these programs and it doesn’t seem that the amendment has

accounted for this in its projections.

Parking Constraints and Real-World Project Experience

The proposed approach assumes that mixed-use and residential projects can be

delivered without on-site parking. Recent experience suggests otherwise. A recently

approved mixed-use project that would have produced some of the first apartment units

in decades faced significant community concern regarding parking impacts, ultimately

requiring the addition of parking that greatly increased project costs and created

significant delays.

This raises a practical question. If that project, which actually used city-approved

parking requirements, encountered resistance and added cost due to parking

constraints, how likely is it that a larger number of smaller projects, each adding

incremental demand to already constrained downtown streets, will move forward

smoothly and at scale? If these projects require added parking to gain approval, their

financial feasibility would be eliminated. If they proceed without parking, they risk

increasing pressure on an already limited public parking supply. Either outcome calls

into question whether this approach can reliably deliver housing units at the scale and

pace required.

Risk of Non-Performance

What is the Builder’s Remedy exposure if this approach falls short? If we do not meet

our obligations at scale, we risk losing local control over development in ways that could

have far greater impacts on community character than a well-planned project delivered

through an RFP process.

A Non-Binary Path Forward

This does not have to be a binary choice. The programs included in the amendment

have value and were part of the original strategy. The question is whether they should

replace the RFP approach or be layered alongside it. Pursuing both would provide

multiple paths to success and increase the likelihood that we meet our obligations. The

smaller programs could begin producing incremental units immediately while the RFP

process moves forward in parallel, providing near-term production alongside long-term

transformational capacity.

Questions for Consideration

Before adopting this amendment, I respectfully ask that the following questions be

addressed on the public record:

1. What is the realistic unit yield and income level of the proposed program-based

   approach, broken down by program type, and how many of those units are

   expected to serve seniors and workforce households?

2. What assumptions does this approach rely on regarding actual verified building

   owner participation, required code revisions, and staff processing capacity?

3. What analysis has been done of the true costs and feasibility of live/work and

   mixed-use conversions in Carmel’s permitting environment, including coastal

   zone considerations and change of use triggers?

4. Is there sufficient appropriately located land for the hotel key program to operate

5. at a scale that meaningfully contributes to our mandated numbers at the prices

   assumed?

6. What civic, fiscal, and community benefits would be foregone by removing city-

   owned parking lots from the sites inventory before a competitive RFP has been

   attempted?

7. Has the Builder’s Remedy risk been formally evaluated and disclosed to the

   public?

I would also ask whether the proposed amendment represents a credible and compliant

path to meeting Carmel’s housing commitments, or whether it introduces the very

compliance risk the original approved strategy was designed to avoid. Why not layer the

updated programs on top of the original city sites and RFP process to assure a higher

likelihood of success?

A Final Thought on Our Seniors

Carmel’s senior residents deserve to age in the community they helped build. That is

not a sentiment. It should be our planning obligation. The Carmel Foundation’s 50 units

represent a fraction of what is needed, and the gap is growing as rents rise and fixed

incomes do not keep pace. What if a well-structured RFP process for city-owned sites

could realistically deliver 150 or more additional senior units in a purpose-built setting

with appropriate services and amenities? A collection of scattered voluntary programs

heavily dependent on unregulated ADUs and complex commercial conversions is a far

less certain path to that same outcome. Which approach gives Carmel’s seniors the

best realistic chance of staying home? I would ask the Council to keep that question at

the center of this discussion.

Carmel has a genuine opportunity here, not just to meet a state mandate, but to solve

parking, civic facilities, senior and workforce housing, and long-term revenue generation

in a single integrated effort that could cost taxpayers nothing, all made possible

because it is our land that gives us this leverage. I hope we do not foreclose that

opportunity without fully understanding what we would be giving up.

Respectfully submitted,

Dale Byrne

Carmel Resident and Mayor of Carmel-by-the-Sea