Title
Rezoning and Development Process State Law Changes and Text Amendments Update
Description
This report provides an update to the City Council on the status of the Planning and Development Department's (PDD) efforts to amend the Phoenix Zoning Ordinance to comply with recent state law changes and amend the Downtown Code.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
Report
Summary
In 2024, the Arizona State Legislature approved HB 2720, HB 2297 and SB 1162. Below is a brief description of each bill and the proposed text amendments to the Phoenix Zoning Ordinance to address the recent state law changes. The text amendments are scheduled to be heard by the City Council on November 13, 2024.
HB 2720: Accessory Dwelling Units; Requirements - requires municipalities to allow two Accessory Dwelling Units (ADUs) and a third if on an acre or more lot and qualifies as affordable. A municipality may not require an accessory dwelling unit match the exterior design, roof pitch or finishing materials of the single-family dwelling or require setbacks greater than five feet from a side or rear property line. Implementation is required by January 1, 2025; otherwise, the City is barred from making any type of restrictions regarding ADUs.
Z-TA-2-24-Y: Accessory Dwelling Units - the proposed text amendment includes three main components: 1) new and revised definitions; 2) revision of existing ADU regulations to comply with HB 2720, and 3) revision of lot coverage permissions for certain districts in order to comply with HB 2720.
New and Revised Definitions
HB 2720 requires that the City allow a minimum of one attached and one detached ADU per lot with a single-family home. Definitions for the following have been added:
ADU, Attached
ADU, Detached
The definition of “Accessory Dwelling Unit” has also been revised slightly to comply with HB 2720.
2. Revision of Existing ADU Development Standards
The following regulations have been revised to comply with the requirements of HB 2720, as follows:
The number of ADUs permitted is being increased from one to two ADUs per lot having a single-family home.
A third ADU is also permitted per lot when the minimum lot size is one acre, and at least one of the ADUs is considered “Affordable Housing” (requiring deed or other restrictions on the property).
Design review of ADUs no longer require that an ADU match the exterior design, roof pitch or finishing materials of the single-family dwelling.
Setbacks for both attached and detached ADUs have been reduced to five feet where adjacent to a side property line.
Short-Term Rentals in ADUs
This text amendment proposes to remove the current City prohibition of using an ADU as a Short-Term Rental (STR). Arizona Revised Statutes §9-500.39.B provides a limited list of items related to STRs which municipalities are permitted to regulate, and prohibiting use of an ADU as an STR is not included. Perhaps more importantly, HB 2720 includes a new item specifically regarding how a municipality may require that an owner reside on the property if more than one ADU on a property is licensed for use as an STR. A separate ordinance, modifying the STR licensing provisions of the City Code, Chapter 10, Article XVI - Short Term Vacation Rental to comply with HB 2720 is proposed.
3. Increase of Lot Coverage Permissions in the RE-43, RE-24, R1-14, and RE-35 Zoning Districts
With the requirement to allow two ADUs per lot (and possibly three), the lot coverage maximums in the RE-43, RE-24, R1-14, and RE-35 districts have been proposed to be increased by 10 percent; however, the one-story requirement for all buildings on the lot has not been altered. The revised coverage is as follows:
RE-43 lot coverage increases from 20 percent/30 percent if all structures one-story, to 20 percent/40 percent if all structures are one-story.
RE-24 lot coverage increases from 25 percent/30 percent if all structures one-story, to 25 percent/40 percent if all structures are one-story.
R1-14 lot coverage increases from 25 percent/30 percent if all structures one-story, to 25 percent/40 percent if all structures are one-story.
RE-35 (Subdivision Option) lot coverage increases from 25 percent/30 percent if all structures one-story, to 25 percent/40 percent if all structures are one-story.
HB 2297: Commercial Buildings; Adaptive Reuse - requires municipalities to allow 1) adaptive reuse of existing, “economically and functionally obsolete” commercial buildings by non-residential uses by right, and 2) multi-family conversion of existing commercial sites by right. Both permissions are required in “not more than 10 percent of the total existing commercial, office or mixed-use buildings within the municipality.” In order to qualify for the by-right permissions, a minimum of 10 percent of the dwelling units provided must be set aside for low-income (“Affordable”) or moderate-income (“Workforce”) housing for a minimum of 20 years after initial occupation, in addition to meeting other criteria outlined in the bill. Implementation is required by January 1, 2025.
Z-TA-3-24-Y: Adaptive Reuse and Multifamily Overlay District - proposed text amendment includes three main components: 1) new and revised definitions; 2) creation of a new Section 632, Adaptive Reuse and Multi-Family (ARM) Overlay District, and 3) revision of the overlapping TOD-1 and TOD-2 Overlay District requirements so as not to conflict with the new regulations.
1. New and Revised Definitions
HB 2297 requires that any multi-family development which develops under the provisions of the bill provide a minimum of 10 percent of the dwelling units provided as low- or moderate-income housing. The City of Phoenix typically uses different terms: “Affordable Housing” as low-income housing, which is for residents earning up to 80 percent of the area median income; and “Workforce Housing”, which is for residents earning from 80 percent to 120 percent of the area median income. These definitions are proposed to be added to the Zoning Ordinance, although “Affordable Housing” is already existing and is slightly revised for consistency.
HB 2297 also includes a requirement that an existing commercial building be “economically and functionally obsolete” in order to qualify for the provisions regarding adaptive reuse. The bill provides the definition, which in turn is proposed to be added to the Zoning Ordinance.
2. Creation of a new Section 632, Adaptive Reuse and Multi-family (ARM) Overlay District
The existing Section 632, High-Rise H-R1 District - High-Rise and High-Density District, applied only to the area long-since rezoned as Downtown Code (Chapter 12 of the Zoning Ordinance) and now is an archaic section of the Zoning Ordinance. This text amendment proposes to remove it and use its place in the Zoning Ordinance for the new ARM Overlay District.
HB 2297 requires that the City designate “not more than 10 percent of the total existing commercial, office, or mixed-use buildings within the municipality” for adaptive reuse and/or multi-family conversion, by right (i.e. no public hearings). However, there are eligibility criteria provided in the bill, which in turn are provided in the standards of Section 632.
Objective Standards
A municipality must require the following objective standards, but no more, to qualify for the by-right permissions of HB 2297:
An administrative site plan review process.
Determination of adequate public water and sewer to serve the site.
Compliance with all applicable building construction and fire codes.
Determination that any existing on-site building is “economically and functionally obsolete”.
A minimum parcel size of one acre, and a maximum size of 20 acres.
Requirement that a minimum of 10 percent of the provided dwelling units are either low- and/or moderate-income housing (affordable and/or workforce housing).
Height and Density
In addition to the Objective Standards, by-right multi-family development has requirements regarding permitted height and density:
Height may not exceed (but also not be less than) five stories, except where within 100 feet of single-family zoned properties, where the height may be limited to two stories.
Density shall be equal to the highest allowable density within one mile of the building to be redeveloped.
Exemptions
HB 2297 also includes exemptions for properties adjacent to an FAA-licensed airport and properties designated as historic. Section 632 is written to exempt HP and HP-L designated properties and does not include the Transit-Oriented Community (TOC) areas directly to the north and adjacent to Phoenix Sky Harbor International Airport.
Implementation within Transit-Oriented Communities
The new Section 632 includes the objective standards, height and density requirements, and exemptions as stated in HB 2297. The height and density provision will be discussed in more detail, as it is these provisions which led staff to suggest an overlay over the City’s designated TOCs.
The height requirement of HB 2297-five stories-is permitted within the Walkable Urban Code, starting with the T5:5 transect. Therefore, staff have proposed that development qualifying for use of the ARM overlay be permitted to develop in accordance with Chapter 13 (WU Code), T5:5 development standards.
The density requirement of HB 2297 is quite permissive, especially since adjacent portions of Downtown and properties zoned Walkable Urban Code have unrestricted (unlimited) density. Since that could lead to properties within a one-mile radius of a site developed under the provisions of HB 2297 also being allowed unlimited density, staff propose to allow unlimited density by right for projects subject to these regulations but only in areas already identified for unrestricted density and future conversion to Walkable Urban Code - the TOCs.
Permitted Uses
The ARM Overlay District does not add or prohibit any additional uses; it simply allows multi-family development and adaptive reuse to develop with more density and intensity, by right, within districts which already permit it. The proposed ARM Overlay District would not remove the underlying zoning classifications; rather, it would “overlay” the underlying zoning districts. A property currently zoned “C-2 HRI” would become “C-2 HRI ARMOD” if approved as proposed.
As an example, C-2 already permits multi-family development, but only to a maximum height of four stories with height stepback and other limits. It also limits the maximum density to approximately 15 dwelling units per acre. A property located within the ARM Overlay District could choose to develop up to five stories, with no density limitations, but with the overlay requirement of 10 percent affordable and/or workforce housing, in addition to the other objective standards for applicability, such as lot size. However, the overlay is proposed to be an enhancement to the existing zoning: a developer could choose to develop per the existing zoning requirements and not also not do any affordable or they could opt to develop per the ARM Overlay District, meet the affordable housing requirements and earn the additional height or density provisions of the ARM Overlay District.
Qualifying Buildings/Sites
As stated earlier, HB 2297 requires that the City allow by-right adaptive reuse and/or multi-family development on “not more than 10 percent of the total existing commercial, office, or mixed-use buildings within the municipality.” Staff have proposed an area appropriate for such development, but also with a high concentration of these types of uses and buildings. While the proposed area of the ARM Overlay District comprises 6.1 percent of the City’s total land area, it includes more than 20 percent of the properties within the City zoned R-5, C-1, C-2, and C-3, which are the primary districts where commercial, office, and mixed-use buildings are permitted. The provisions for adaptive reuse may also be applied on additional properties zoned for office park and light industrial uses (Commerce Park, A-1, and A-2) within the ARM Overlay District.
3. TOD-1 and TOD-2 Overlay District and other conflicts with ARM Overlay District requirements.
The Interim Transit-Oriented Zoning Overlay District One (TOD-1) and the Interim Transit-Oriented Zoning Overlay District Two (TOD-2) are existing overlay districts applied along the Valley Metro Light Rail corridor and will overlap with much of the area proposed for the ARM Overlay District. Staff propose that for projects developing under the provisions of the ARM Overlay District-use of Chapter 13, Walkable Urban Code standards-would not also be subject to the development standards of TOD-1 or TOD-2. This is consistent with properties rezoned to Walkable Urban Code, which have the TOD overlay removed when rezoning to WU Code.
The ARM Overlay District development standards would not override any other existing special planning areas having adopted regulatory plans, such as neighborhood plans, Specific Plans, or other overlay districts. Rather, the ARM Overlay District provisions can be applied when they do not conflict with any other regulatory standards of such special planning areas.
SB 1162: Residential Zoning; Housing; Assessment; Hearings - requires municipalities to add an exemption for government owned properties when processing written protest petitions for the three-fourths voting requirement and impose rezoning application review timeframes. Implementation is required by January 1, 2025.
Z-TA-8-24-Y: Rezoning Application Timeframes and Written Protest Petition Exemption - proposed text amendment includes two main components, both in Section 506: 1) addition of the exemption for government owned properties as related to written protest petitions, and 2) revision of the rezoning application review process to comply with timeframes mandated by SB 1162.
1. Government Owned Property Exemption
SB 1162 modified Arizona Revised Statutes §9-462.04 to add a new exemption of government owned property.
2. Revision of the Rezoning Application Review Process
SB 1162 modified the Arizona Revised Statutes to add a new section §9-462.13, which imposes timeframes for rezoning applications, as follows:
30 days for initial Administrative Completeness review.
15 days for resubmitted Administrative Completeness review.
180 days to either approve or deny application after application deemed Administratively complete.
The modifications by SB 1162 exempt historic districts/properties and Planned Unit Developments (PUD) from these timeframes. The modifications also address extensions to the prescribed timeframes, in a very restricted manner, as follows:
The City may initiate a single 30-day extension beyond the 180 days, for “extenuating circumstances”, which are not defined in the modified statute.
The applicant may request multiple extensions which may be granted by the City, but each extension is limited to 30 days.
Section 506.B.5 has therefore been revised to comply with the timeframe requirements of SB 1162.
Z-TA-5-22-4-7-8: Downtown Code
Background
In 2010, City Council approved the Downtown Code (Chapter 12 of the Zoning Ordinance) as the City’s first form-based code, which was a strategy of the 2008 Downtown Phoenix Urban Form Project (DPUFP). The goal of the DPUFP was “implementation of the community vision for an active, pedestrian-oriented and sustainable Downtown.”
In the 14 years since the original adoption of the Downtown Code, staff and various stakeholders (property owners, developers, residents) have identified challenges with requirements, processes, and conflicts with other portions of the Zoning Ordinance--many of which still exist. This text amendment seeks to address and remedy these challenges. This text amendment is scheduled to be heard by the City Council on November 13, 2024.
Purpose
The intent of the proposed text amendment is to update development requirements, fix process issues, eliminate ordinance conflicts, and clarify the language of the Downtown Code, while still implementing the vision of the DPUFP. It does so by amending related sections of the Zoning Ordinance to work better with Chapter 12, as well as rewriting Chapter 12 entirely (based upon the existing language and format) for ease of understanding and layout. No changes to property entitlements (i.e. height, density, lot coverage) have been proposed with this text amendment, except for the correction of some identified errors and typos. However, some development standards and sustainability bonus points have been revised not only to eliminate conflicts and confusion, but also to better implement the pedestrian-oriented environment envisioned by the DPUFP. The proposed text amendment also creates a new Technical Appeal process for certain technical requirements and clarifies and revises existing appeal processes with the goal of eliminating instances when requesting a modification to a single requirement that requires two separate and unrelated appeal processes.
The proposed text amendment includes four main components: 1) clarification and revision of appeal processes; 2) redirecting focus on the pedestrian environment, specifically the Streetscape and Frontage zones, with clarifications and revisions to development standards and use of right-of-way, 3) revising other standards of Chapter 12 to address feedback received and clarify intent, and 4) making Chapter 12 easier to use and implement through grammatical and format revisions.
Department
Responsible Department
This item is submitted by Deputy City Manager Alan Stephenson and the Planning and Development Department.