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Home My WebLink AboutO 2026-003 ORDINANCE NO. 2026-003 AN ORDINANCE IMPLEMENTING HOUSING ELEMENT PROGRAMS A.1-2 AND A.10-2 BY AMENDING CHAPTER 16.36 RELATING TO ALLOWED RESIDENTIAL USES AND RESIDENTIAL DENSITY IN MIXED USE ZONES WHEREAS, on May 5, 2021, the California Department of Housing and Community Development (HCD) certified the sixth cycle (2020-2028) Housing Element of the City of Arroyo Grande (City); and WHEREAS, the Housing Element includes a variety of programs intended to achieve various identified housing goals; and WHEREAS, Housing Element program A.1-2 directs the City to amend the Municipal Code to remove the limitation of only live-work residential uses in the Traffic Way Mixed-Use zone by allowing a mixed use residential use type at up to 20 dwelling units per acre; and WHEREAS, Housing Element program A.10-2 directs the City to amend the Municipal Code to increase the maximum density for multifamily residential projects in the Office Mixed- Use (OMU), Gateway Mixed-Use (GMU), and Fair Oaks Mixed-Use (FOMU) zones; and WHEREAS, Housing Element program A.10-2 also directs the City to amend the Municipal Code to allow multifamily residential projects in the OMU, GMU, and FOMU zones with a Minor Use Permit; and WHEREAS, this ordinance amends Chapter 16.36 of the Arroyo Grande Municipal Code to amend the development standards for the TMU, OMU; FOMU, and GMU zones; and WHEREAS, on February 17, 2026, the Planning Commission conducted a duly noticed public hearing to consider the staff report, recommendations by staff, and public testimony concerning the ordinance. Following the public hearing, the Planning Commission voted to forward the ordinance to the City Council with a recommendation in favor of its adoption; and WHEREAS, on March 24, 2026, the City Council conducted a duly noticed public hearing to consider the ordinance, including: (1) the public testimony and agenda reports prepared in connection with the ordinance; (2) the policy considerations discussed therein; and (3) the consideration and recommendation of the Planning Commission; and WHEREAS, the City Council of the City of Arroyo Grande, at its regularly scheduled public meeting on March 24, 2026 introduced this Ordinance to amend Chapter 36 Title 16 of the Arroyo Grande Municipal Code; and ORDINANCE NO. 2026-003 PAGE 2 WHEREAS, all legal prerequisites to the adoption of the ordinance have occurred. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES ORDAIN AS FOLLOWS: SECTION 1. Incorporation. The above recitals are true and correct and are incorporated herein by this reference. SECTION 2. Environmental. The City Council finds that this ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Public Resources Code Section 21080.085 which exempts development code amendments that implement programs contained in an approved housing element. The City’s housing element was certified by the Department of Housing and Community Development on May 5, 2021, and the programs being implemented by this development code amendment do not meet the criteria for actions that do not qualify for this exemption. SECTION 3. Required Findings. In accordance with section 16.16.040(E) of the Arroyo Grande Municipal Code, the City Council hereby makes the following findings: 1. General Plan. The ordinance’s amendments to the AGMC are consistent with the General Plan and necessary and desirable to implement the provisions thereof. Specifically, Housing Element program A.1-2 directs the City to expand the allowable residential use types in the Traffic Way Mixed-Use zone to encourage the creation of housing units. This ordinance effectuates and implements program A.1-2 by allowing all multifamily use types and establishing development standards and permitting requirements for the use. Additionally, program A.10-2 directs the City to amend the Municipal Code to increase the maximum allowable density for multifamily projects in certain mixed-use zones and modify the permitting requirements for those projects . This ordinance effectuates and implements program A.10-2 by amending the development standards and the permit requirements these projects. For these reasons, the ordinance’s amendments to the AGMC are consistent with the General Plan and necessary and desirable to implement the provisions thereof. 2. Health, Safety, and Welfare; Illogical Land Use Pattern. Adoption of the ordinance will not adversely affect the public health, safety, and welfare as it updates the AGMC by modifying the types and intensity of multifamily housing in certain mixed-use zones where residential uses are already allowed . The increase in allowable density is an implementation of the City’s Housing Element. Implementation of these programs were analyzed in the Addendum to the General Plan Environmental Impact Report (Addendum). The Addendum determined that the project would not cause any new significant environmental impacts or substantially increase the severity of significant environmental impacts disclosed in the General Plan EIR and would not adversely affect the public’s health, safety, or welfare. Finally, this ordinance will not result in an illogical land use pattern as it is not amending the City’s zoning map and increases allowable density in mixed-use zones that contemplate multifamily housing that would benefit from existing infrastructure and services. ORDINANCE NO. 2026-003 PAGE 3 3. Consistency with Title 16. This ordinance is consistent with the purpose and intent of AGMC Title 16 because it does not alter or revise the type or intensity of allowed uses and ensures that the provisions thereof are consistent with the City’s Housing Element, which establishes a plan for managing growth and residential development in a manner that is consistent with the goals of the General Plan. Additionally, the implementation of these programs encourages residential and mixed-use development by increasing the allowable density and reducing the permit requirement from a conditional use permit to a minor use permit. 4. Environmental. See Section 2 above. SECTION 4. Code Amendment. Pursuant to Housing Element program A.1-2, Subsection 16.36.020.B of Section 16.36 “Commercial and Mixed Use Development Standards and Site Development Standards” of Chapter 16.36 “Commercial and Mixed Use Districts” of Title 16 “Development Code” is hereby amended as shown in the attached Exhibit “A-1,” and incorporated by reference. New text is displayed in underline and deletions are shown in strikethrough. SECTION 5. Code Amendment. Pursuant to Housing Element program A.1-2, Table 16.36.020(B) of Section 16.36.020 “Commercial and Mixed Use Development Standards and Site Development Standards” of Chapter 16.36 “Commercial and Mixed Use Districts” of Title 16 “Development Code” is hereby amended as shown in the attached Exhibit “A-2,” and incorporated by reference. New text is displayed in underline and deletions are shown in strikethrough. SECTION 6. Code Amendment. Pursuant to Housing Element program A.10-2, Table 16.36.020(E) of Section 16.36.020 “Commercial and Mixed Use Development Standards and Site Development Standards” of Chapter 16.36 “Commercial and Mixed Use Districts” of Title 16 “Development Code” is hereby amended as shown in the attached Exhibit “A-3,” and incorporated by reference. New text is displayed in underline and deletions are shown in strikethrough. SECTION 7. Code Amendment. Pursuant to Housing Element program A.10-2, Table 16.36.020(F) of Section 16.36.020 “Commercial and Mixed Use Development Standards and Site Development Standards” of Chapter 16.36 “Commercial and Mixed Use Districts” of Title 16 “Development Code” is hereby amended as shown in the attached Exhibit “A-4,” and incorporated by reference. New text is displayed in underline and deletions are shown in strikethrough. SECTION 8. Code Amendment. Pursuant to Housing Element program A.10-2, Table 16.36.020(H) of Section 16.36.020 “Commercial and Mixed Use Development Standards and Site Development Standards” of Chapter 16.36 “Commercial and Mixed Use Districts” of Title 16 “Development Code” is hereby amended as shown in the attached Exhibit “A-5,” and incorporated by reference. New text is displayed in underline and deletions are shown in strikethrough. ORDINANCE NO. 2026-003 PAGE 4 SECTION 9. Code Amendment. Pursuant to Housing Element programs A. 1-2 and A.10-2, Table 16.36.030(A) of Section 16.36.030 “Uses Permitted Within Mixed Uses and Commercial Districts” of Chapter 16.36 “Commercial and Mixed Use Districts” of Title 16 “Development Code” is hereby amended as shown in the attached Exhibit “A-6,” and incorporated by reference. New text is displayed in underline and deletions are shown in strikethrough. SECTION 10. Publication. A summary of this ordinance shall be published in a newspaper published and circulated in the City of Arroyo Grande at least five days prior to the City Council meeting at which the proposed ordinance is to be adopted. A certified copy of the full text of the proposed ordinance shall be posted in the office of the City Clerk. Within 15 days after adoption of the ordinance, the summary with the names of those City Council members voting for and against the ordinance shall be published again, and the City Clerk shall post a certified copy of the full text of such adopted ordinance. SECTION 11. Effective Date. This ordinance shall become effective 30 days after adoption. SECTION 12. Severability. Should any provision of this ordinance, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this ordinance or the application of this ordinance to any other person or circumstance, and, to that end, the provisions hereof are severable. The City Council declares that it would have adopted all the provisions of this ordinance that remain valid if any provisions of this ordinance are declared invalid. SECTION 13. Records. The documents and materials associated with this ordinance that constitute the record of proceedings on which the City Council’s findings and determinations are based are located at 300 E. Branch Street, Arroyo Grande, CA 93420. The City Clerk is the custodian of the record of proceedings. On motion by Council Member Maraviglia, seconded by Council Member Secrest, and by the following roll call vote to wit: AYES: Council Members Maraviglia, Secrest, Loe, Guthrie, and Mayor Ray Russom NOES: None ABSENT: None the foregoing Ordinance was adopted this 14th day of April, 2026. CAREN RAY RUSSOM, MAYOR ATTEST: JESSICA MATSON, CITY CLERK APPROVED AS TO CONTENT: MATTHEW DOWNING, CITY MANAGER APPROVED AS TO FORM: ISAAC ROSEN, CITY ATTORNEY ORDINANCE NO. 2026-003 PAGE 5 ORDINANCE NO. 2026-003 PAGE 6 EXHIBIT A-1 16.36.020 Commercial and mixed use development districts and site development standards. B. Traffic Way Mixed Use (TMU) District. The primary purpose of the TMU district is to provide for vehicle sales and services, related retail and office uses , and visitor serving facilities, and multi-family residential development convenient to both freeway traffic and vehicles or pedestrians from the nearby village area. Development standards and design guidelines are intended to enhance this specialized mix of uses at the southern gateway to Arroyo Grande which include automobile and small truck sales and service, equipment rental, repair and related services, offices, wholesale and retail sales including outdoor display, motels, restaurants and multi-family residences limited residential uses functioning as live-work units. The TMU district implements and is consistent with the Mixed Use land use category of the general plan. Refer to Table 16.36.020(B) for minimum site development standards and Table 16.36.030(A) for allowable uses. See design guidelines and standards for the vicinity of Traffic Way and Station Way for additional requirements. ORDINANCE NO. 2026-003 PAGE 7 EXHIBIT A-2 Table 16.36.020(B) Traffic Way Mixed Use (TMU) Minimum Site Development Standards 1. Maximum Density Mixed Use Projects New residential limited to live-work units in conjunction with allowed uses. Density determined by discretionary action. 25 dwelling units/acre 2. Minimum Lot Size 10,000 square feet (gross). 3. Minimum Lot Width 80 feet 4. Front Yard Setback 0 - 15 feet. Exceptions may include areas for outdoor sales determined through discretionary action. 5. Rear Yard Setback 0 - 15 feet. Wherever a lot in any commercial or mixed use district abuts a residential use or a lot in any residential use district, a minimum building setback of twenty (20) feet measured from the property line shall be required for proposed commercial use.). 6. Side Yard Setback 0 feet. Wherever a lot in any commercial or mixed use district abuts a residential use or a lot in any residential use district, a minimum building setback of twenty (20) feet measured from the property line shall be required for proposed commercial use. 7. Street Side Yard Setback 0 - 15 feet. Exceptions may include areas for outdoor sales determined through discretionary action. 8. Building Size Limits Maximum height is 30 feet or three stories, whichever is less; a maximum of 36 feet is allowable through the CUP process for visitor serving uses. Maximum building size is 50,000 square feet; a greater size may be allowed through the CUP process. 9. Site Coverage and Floor Area Ratio Maximum coverage of site is 75%. Maximum floor area ratio is .75. 10. Site Design and Signs See Design Guidelines and Standards D-2.11. Additional sign standards also in Chapter 16.60. ORDINANCE NO. 2026-003 PAGE 8 11. Off-Street Parking and Loading See Design Guidelines and Standards D-2.11 Exhibit 'A' for shared parking locations. See Also Section 16.56.020. Exceptions allowed by Section 16.16.120. ORDINANCE NO. 2026-003 PAGE 9 EXHIBIT A-3 Table 16.36.020(E) Gateway Mixed Use (GMU) Minimum Site Development Standards 1. Maximum density—Mixed Use Projects 25 dwelling units/acre (based on gross project area). 2. Maximum density—Multi-family housing 15 25 dwelling units/acre. 3. Minimum density (projects that do not front E. Grand Avenue.)* 75% of maximum density (measured on residential portion of horizontal mixed use project area or 50% of project area, whichever is less). 4. Minimum Lot Size 20,000 square feet (gross). 5. Minimum Lot Width 100 feet. 6. Front Yard Setback 0 - 10 feet. Exceptions for larger setbacks may include entrance courtyards, areas for outdoor dining, or for projects facing a residential district as determined through discretionary review. 7. Rear Yard Setback 0 - 15 feet. Parking encouraged. For projects abutting a residential district, corresponding residential setback shall apply. 8. Side Yard Setback 0 - 5 feet. For projects abutting a residential district, corresponding residential setback shall apply. 9. Street Side Yard Setback 0 - 15 feet. Exceptions may include areas for outdoor dining, or architectural/landscape features determined through discretionary action. 10. Building Size Limits Maximum height is 35 feet or three stories whichever is less; a maximum of up to 40 feet for mixed use projects by discretionary action on lots larger than 20,000 square feet and where the building is not adjacent to a residential district. See Design Guidelines and Standards for Mixed Use Districts. Also see Section 16.48.030(B)(5) and (6). Maximum building size is 102,500 square feet. 11. Site Coverage and Floor Area Ratio Maximum coverage of site is 75%. Maximum Floor Area Ratio is 1.5. ORDINANCE NO. 2026-003 PAGE 10 12. Site Design and Signs Commercial and mixed use projects larger than 20,000 sq. ft: 200 square feet of public accessible open space is required for every 5,000 square feet of office or commercial space exclusive of areas for parking and driveways. See General Commercial and Mixed Use Design Guidelines and Standards. General Plan Policies LU5-11. For mixed use projects, refer to Section 16.48.065. Additional sign standards also in Chapter 16.60. 13. Off-Street Parking and Loading See Design Guidelines and Standards. Parking is to be located behind buildings or to the side. Driveways along E. Grand Avenue shall be minimized by combining driveways, using alleys or designing development so that access is provided from local streets. See Section 16.56.020. ORDINANCE NO. 2026-003 PAGE 11 EXHIBIT A-4 Table 16.36.020(F) Fair Oaks Mixed Use (FOMU) Minimum Site Development Standards 1. Maximum Density Mixed Use Projects 25 dwelling units/acre (based on gross project area). 2. Maximum Density Multi-family housing 15 25 dwelling units/acre. 3. Minimum Density (projects that do not front E. Grand Avenue.)* 75% of maximum density (measured on residential portion of horizontal mixed use project area or 50% of project area, whichever is less). 4. Minimum Lot Size 15,000 square feet (gross). 5. Minimum Lot Width 80 feet. 6. Front Yard Setback 0 - 10 feet. Exceptions for larger setbacks may include entrance courtyard areas for outdoor dining , or for projects facing a residential district as determined through discretionary review. 7. Rear Yard Setback 0 - 15 feet. Parking encouraged. For projects abutting a residential district, corresponding residential setback shall apply. 8. Side Yard Setback 0 - 5 feet. For projects abutting a residential district, corresponding residential setback shall apply. 9. Street Side Yard Setback 0 - 15 feet. Exceptions may include areas for outdoor dining, or architectural/landscape features determined through discretionary action. 10. Building Size Limits Maximum height for mixed residential/commercial use is 35 feet or three stories whichever is less; a maximum of up to 40 feet for mixed use projects by discretionary action on lots larger than 20,000 square feet and where the building is not adjacent to a residential district. See Design Guidelines and Standards for Mixed Use Districts. Also see Section 16.48.030(B)(5) and (6). Maximum building size is 50,000 square feet. 11. Site Coverage and Floor Area Ratio Maximum coverage of site is 70%. Maximum Floor Area Ratio is 1. ORDINANCE NO. 2026-003 PAGE 12 12. Site Design and Signs See Design Guidelines and Standards. Please note General Plan Policies LU5-11. For mixed use projects, refer to Section 16.48.065. Additional sign standards in Chapter 16.60. 13. Off-Street Parking and Loading See Design Guidelines and Standards. Parking is to be located behind buildings or to the side. Driveways along E. Grand Avenue shall be minimized when possible by combining driveways, using alleys or designing development so that access is provided from local streets. See Section 16.56.020. ORDINANCE NO. 2026-003 PAGE 13 EXHIBIT A-5 Table 16.36.020(H) Office Mixed Use (OMU) Minimum Site Development Standards 1. Maximum Density Mixed Use Projects 20 dwelling units/acre (based on gross project area) 2. Maximum Density Multi-family Housing 15 25 dwelling units/acre 3. Minimum Density * 75% of maximum density (measured on residential portion horizontal mixed use project area or 50% of project area, whichever is less) 4. Minimum Lot Size 10,000 square feet (gross); 20,000 square feet for residential projects 5. Minimum Lot Width 100 feet 6. Front Yard Setback 0 - 10 feet Exceptions may include entrance courtyards and areas for outdoor dining determined through discretionary review. 10 feet is required for projects fronting a street opposite a residential district. 7. Rear Yard Setback 0 - 15 feet. Parking encouraged. 8. Side Yard Setback 0 - 5 feet. 9. Street Side Yard Setback 0 - 15 feet. Exceptions may include areas for outdoor dining, or architectural/landscape features determined through discretionary action. 10. Building Size Limits Maximum height for mixed residential/commercial use is 35 feet or three stories whichever is less. Also see Section 16.48.030(B)(5) and (6);Maximum building size is 50,000 square feet; a greater size may be allowed through the CUP process;(See OMU-D-2.20);Three-story building components allowed only with substantial transitional space and/or lower story elements adjacent to residential districts or uses. 11. Site Coverage and Floor Area Ratio Maximum coverage of site is 70%. Maximum Floor Area Ratio is 1 12. Site Design and Signs See OMU-D-2.20. Please note General Plan Policies LU5- 11. ORDINANCE NO. 2026-003 PAGE 14 For mixed use projects, refer to Section 16.48.065. Additional sign standards also in Chapter 16.60. 13. Off-Street Parking and Loading Section 16.56.020. ORDINANCE NO. 2026-003 PAGE 15 EXHIBIT A-6 Allowed Land Uses and Permit Requirements— LAND USE IMU TMU D-2.11 VCD HCO D-2.4 VMU D- 2.11 HCO D-2.4 GMU FOMU HMU OMU 1 D-2.20 RC 2 Specific Use Standards and other references F. RESIDENTIAL USES Multi-family housing not located within a mixed use project NP NP MUP NP CUP CUP/ PED MUP4 CUP/ PED MUP CUP (on lots > 20,00 0 sf) CUP (on lots > 20,000 sf) MUP NP Minimum density (75% of total density allowed by district) required by Housing Element is not required on lots fronting E. Grand Ave., E. Branch Street or in HMU or IMU districts. Multi-family housing in a mixed use project CUP NP CUP NP CUP CUP CUP MUP CUP CUP Minimum density (75% of total density allowed by district) required by Housing Element is not required on lots fronting E. Grand Ave., E. Branch Street or in HMU or IMU districts. OFFICIAL CERTIFICATION I, JESSICA MATSON, City Clerk of the City of Arroyo Grande, County of San Luis Obispo, State of California, do hereby certify under penalty of perjury, that the attached Ordinance No. 2026-003 which was introduced at a regular meeting of the City Council on March 24, 2026; was passed and adopted at a regular meeting of the City Council on the 14th day of April 2026; and was duly published in accordance with State law (G.C. 40806). WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 17th day of April, 2026. JESSICA MATSON, CITY CLERK